[111th Congress Public Law 148]
[From the U.S. Government Printing Office]



[[Page 124 STAT. 119]]

Public Law 111-148
111th Congress

                                 An Act


 
 Entitled The Patient Protection and Affordable Care Act. <<NOTE: Mar. 
                       23, 2010 -  [H.R. 3590]>> 

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, <<NOTE: Patient 
Protection and Affordable Care Act.>> 

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short <<NOTE: 42 USC 18001 note.>> 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 
follows:

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 
                                Americans

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.

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        ``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.
Sec. 1253. Effective dates.

        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 
           State.

                 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 
           programs.
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.

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            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 
           programs.
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 
           protocols.
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 
                                Supports

Sec. 2401. Community First Choice Option.
Sec. 2402. Removal of barriers to providing home and community-based 
           services.
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.

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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 
           Project.
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 
           programs.

     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.

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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 
           requirements.
Sec. 3110. Part B special enrollment period for disabled TRICARE 
           beneficiaries.
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 
           services.
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) 
           payments.
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 
           individuals.
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.

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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 
           of drugs.
Sec. 3308. Reducing part D premium subsidy for high-income 
           beneficiaries.
Sec. 3309. Elimination of cost sharing for certain dual eligible 
           individuals.
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 
           technical assistance.
Sec. 3502. Establishing community health teams to support the patient-
           centered medical home.
Sec. 3503. Medication management services in treatment of chronic 
           disease.
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 
           information.
Sec. 3508. Demonstration program to integrate quality improvement and 
           patient safety training into clinical education of health 
           professionals.
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 
           benefits.

      Subtitle B--Increasing Access to Clinical Preventive Services

Sec. 4101. School-based health centers.
Sec. 4102. Oral healthcare prevention activities.

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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 
           restaurants.
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 
           services.
Sec. 4302. Understanding health disparities: data collection and 
           analysis.
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.
Sec. 5002. Definitions.

          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 
           project.
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.

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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 
           services.
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.

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                   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 
                                Providers

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 
           research.

  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 
           program.
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. 6702. Definitions.
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.

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Sec. 7002. Approval pathway for biosimilar biological products.
Sec. 7003. Savings.

   Subtitle B--More Affordable Medicines for Children and Underserved 
                               Communities

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 
           program.

                          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-
           2.
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 
           organizations.
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 
           Act.
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.

[[Page 124 STAT. 129]]

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 
           Innovation.
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 
           facilities.
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 
           system.
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) 
           programs.
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 
           delivery.
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 
           program.
Sec. 10336. GAO study and report on Medicare beneficiary access to high-
           quality dialysis services.

               Subtitle D--Provisions Relating to Title IV

Sec. 10401. Amendments to subtitle A.
Sec. 10402. Amendments to subtitle B.
Sec. 10403. Amendments to subtitle C.
Sec. 10404. Amendments to subtitle D.
Sec. 10405. Amendments to subtitle E.
Sec. 10406. Amendment relating to waiving coinsurance for preventive 
           services.
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.

[[Page 124 STAT. 130]]

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 
           professionals.
Sec. 10909. Expansion of adoption credit and adoption assistance 
           programs.

       TITLE I--QUALITY, AFFORDABLE HEALTH CARE FOR ALL AMERICANS

   Subtitle A--Immediate Improvements in Health Care Coverage for All 
                                Americans

SEC. 1001. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT.

    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 <<NOTE: 42 
        USC 300gg-4-- 300gg-7, 300gg-25-- 300gg-28.>> as sections 2725 
        through 2728, respectively;
            (3) by redesignating sections 2711 through 2713 <<NOTE: 42 
        USC 300gg-11-- 300gg-13, 300gg-9.>> as sections 2731 through 
        2733, respectively;
            (4) by redesignating sections 2721 through 2723 <<NOTE: 42 
        USC 300gg-21-- 300gg-23.>> as sections 2735 through 2737, 
        respectively; and
            (5) by inserting after section 2702, the following:

[[Page 124 STAT. 131]]

                    ``Subpart II--Improving Coverage

``SEC. 2711. <<NOTE: 42 USC 300gg-11.>> NO LIFETIME OR ANNUAL LIMITS.

    ``(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.

``SEC. 2712. <<NOTE: 42 USC 300gg-12.>> PROHIBITION ON RESCISSIONS.

    ``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).

``SEC. 2713. <<NOTE: 42 USC 300gg-13.>> COVERAGE OF PREVENTIVE HEALTH 
            SERVICES.

    ``(a) In General.--A group health plan and a health insurance 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

[[Page 124 STAT. 132]]

        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.

``SEC. 2714. <<NOTE: 42 USC 300gg-14.>> EXTENSION OF DEPENDENT COVERAGE.

    ``(a) In General.--A group health plan and a health insurance 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.

``SEC. 2715. <<NOTE: 42 USC 300gg-15.>> DEVELOPMENT AND UTILIZATION OF 
            UNIFORM EXPLANATION OF COVERAGE DOCUMENTS AND STANDARDIZED 
            DEFINITIONS.

    ``(a) In <<NOTE: Deadline.>> 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 individuals.

    ``(b) Requirements.--The standards for the summary of benefits and 
coverage developed under subsection (a) shall provide for the following:

[[Page 124 STAT. 133]]

            ``(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); and
                          ``(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 <<NOTE: Deadline.>> 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

[[Page 124 STAT. 134]]

        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 <<NOTE: Deadline.>> 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 <<NOTE: Fine.>> 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 <<NOTE: Regulations.>> 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.

[[Page 124 STAT. 135]]

            ``(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).

``SEC. 2716. <<NOTE: 42 USC 300gg-16.>> PROHIBITION OF DISCRIMINATION 
            BASED ON SALARY.

    ``(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.

``SEC. 2717. <<NOTE: 42 USC 300gg-17.>> ENSURING THE QUALITY OF CARE.

    ``(a) Quality Reporting.--
            ``(1) In general.--Not later than 2 years after the date of 
        enactment of the Patient Protection and Affordable Care Act, the 
        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.--

[[Page 124 STAT. 136]]

                    ``(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 requirements.
                    ``(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 section.

    ``(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 <<NOTE: Deadline.>> later than 2 years after 
the date of enactment of the Patient Protection and Affordable Care Act, 
the Secretary shall promulgate regulations that provide criteria for 
determining whether a reimbursement structure is described in subsection 
(a).

    ``(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.

``SEC. 2718. BRINGING <<NOTE: 42 USC 300gg-18.>> DOWN THE COST OF HEALTH 
            CARE COVERAGE.

    ``(a) Clear <<NOTE: Reports.>> Accounting for Costs.--A health 
insurance issuer offering group or individual health insurance coverage 
shall, with

[[Page 124 STAT. 137]]

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 <<NOTE: Public information. Web posting.>> 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).

``SEC. 2719. <<NOTE: 42 USC 300gg-19.>> APPEALS PROCESS.

    ``A group health plan and a health insurance issuer offering group 
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;

[[Page 124 STAT. 138]]

            ``(2) provide <<NOTE: Notification.>> 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.''.

SEC. 1002. HEALTH INSURANCE CONSUMER INFORMATION.

    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. <<NOTE: 42 USC 300gg-93.>> HEALTH INSURANCE CONSUMER 
            INFORMATION.

    ``(a) In <<NOTE: Grants.>> 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 
        process;
            ``(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.

[[Page 124 STAT. 139]]

    ``(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.''.

SEC. 1003. ENSURING THAT CONSUMERS GET VALUE FOR THEIR DOLLARS.

    Part C of title XXVII of the Public Health Service Act (42 U.S.C. 
300gg-91 et seq.), as amended by section 1002, is further amended by 
adding at the end the following:

``SEC. 2794. <<NOTE: 42 USC 300gg-94.>> ENSURING THAT CONSUMERS GET 
            VALUE FOR THEIR DOLLARS.

    ``(a) Initial Premium Review Process.--
            ``(1) In <<NOTE: Effective date.>> 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 <<NOTE: Web posting.>> 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 <<NOTE: Effective 
                date.>> with plan years beginning in 2014, the 
                Secretary, in conjunction with the States

[[Page 124 STAT. 140]]

                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 Exchange.

    ``(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.''.

SEC. 1004. <<NOTE: 42 USC 300gg-11 note.>> EFFECTIVE DATES.

    (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.

[[Page 124 STAT. 141]]

      Subtitle B--Immediate Actions to Preserve and Expand Coverage

SEC. 1101. IMMEDIATE <<NOTE: 42 USC 18001.>> ACCESS TO INSURANCE FOR 
            UNINSURED INDIVIDUALS WITH A PREEXISTING CONDITION.

    (a) In General.--Not <<NOTE: Deadline. Time period.>> 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);

[[Page 124 STAT. 142]]

                          (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 <<NOTE: Criteria.>> 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

[[Page 124 STAT. 143]]

        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 <<NOTE: Procedures.>> 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 
        paragraph (1).
            (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.

SEC. 1102. <<NOTE: 42 USC 18002.>> REINSURANCE FOR EARLY RETIREES.

    (a) Administration.--
            (1) In general.--Not <<NOTE: Deadline. Time period.>> 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,

[[Page 124 STAT. 144]]

                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 plan.

    (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 <<NOTE: Certification.>> 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

[[Page 124 STAT. 145]]

                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).

[[Page 124 STAT. 146]]

SEC. 1103. IMMEDIATE <<NOTE: Deadlines. 42 USC 18003.>> INFORMATION THAT 
            ALLOWS CONSUMERS TO IDENTIFY AFFORDABLE COVERAGE OPTIONS.

    (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.--
            (1) In general.--Not later <<NOTE: Deadline. Standard 
        format.>> than 60 days after the date of 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 subsection (a).

    (c) Authority To Contract.--The Secretary may carry out this section 
through contracts entered into with qualified entities.

SEC. 1104. ADMINISTRATIVE SIMPLIFICATION.

    (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.--

[[Page 124 STAT. 147]]

            (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 following:
            ``(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:

[[Page 124 STAT. 148]]

                    ``(A) The entity focuses its mission on 
                administrative simplification.
                    ``(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 1996.
                    ``(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 <<NOTE: Regulations.>> 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 <<NOTE: Deadlines.>> 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

[[Page 124 STAT. 149]]

                                    ``(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 <<NOTE: Public comments.>> 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 <<NOTE: Deadlines.>> plan certification.--
                    ``(A) Eligibility for a health plan, health claim 
                status, electronic funds transfers, health care payment 
                and remittance advice.--
                Not <<NOTE: Certification.>> 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, 
                enrollment and disenrollment in a health plan, health 
                plan 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

[[Page 124 STAT. 150]]

        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 the Secretary.
            ``(5) Compliance with revised standards and operating 
        rules.--
                    ``(A) In general.--A <<NOTE: Certification.>> 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 <<NOTE: Deadlines.>> 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.

[[Page 124 STAT. 151]]

                    ``(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 Secretary.
                    ``(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 Information Technology.
            ``(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 <<NOTE: Deadline.>> 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

[[Page 124 STAT. 152]]

                          ``(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 Commission.
            ``(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 <<NOTE: Deadline.>> later than 
                August 1, 2014, and annually thereafter, the Secretary 
                of the Treasury shall

[[Page 124 STAT. 153]]

                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; and
                          ``(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 <<NOTE: 42 USC 1320d-2 note.>> 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 <<NOTE: Effective 
        date.>> 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)). <<NOTE: Deadline. Effective date.>> 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 effective not later than January 1, 2014.
            (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 <<NOTE: Deadline. Effective date.>> 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 January 1, 2016.

    (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;

[[Page 124 STAT. 154]]

            (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.''.

SEC. 1105. <<NOTE: 42 USC 1320d note.>> EFFECTIVE DATE.

    This subtitle shall take effect on the date of enactment of this 
Act.

     Subtitle C--Quality Health Insurance Coverage for All Americans

                 PART I--HEALTH INSURANCE MARKET REFORMS

SEC. 1201. AMENDMENT TO THE PUBLIC HEALTH SERVICE ACT.

    Part A of title XXVII of the Public Health Service Act (42 U.S.C. 
300gg et seq.), as amended by section 1001, is further amended--
            (1) by striking the heading for subpart 1 and inserting the 
        following:

                     ``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.

    ``(a) In General.--A group health plan and a health insurance issuer 
offering group or individual health insurance coverage may not impose 
any preexisting condition exclusion with respect to such plan or 
coverage.''; and
            (B) by <<NOTE: 42 USC 300gg-3.>> transferring such section 
        (as amended by subparagraph (A)) so as to appear after the 
        section 2703 added by paragraph (4);
            (3)(A) in <<NOTE: 42 USC 300gg-1, 300gg-4.>> 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)--

[[Page 124 STAT. 155]]

                          (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:

``SEC. 2701. FAIR <<NOTE: 42 USC 300gg.>> HEALTH INSURANCE PREMIUMS.

    ``(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 <<NOTE: Definition.>> 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)

[[Page 124 STAT. 156]]

        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.

``SEC. 2702. GUARANTEED <<NOTE: 42 USC 300gg-1.>> AVAILABILITY OF 
            COVERAGE.

    ``(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).

``SEC. 2703. GUARANTEED <<NOTE: 42 USC 300gg-2.>> RENEWABILITY OF 
            COVERAGE.

    ``(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 <<NOTE: 42 USC 300gg-4.>> DISCRIMINATION 
            AGAINST INDIVIDUAL PARTICIPANTS AND BENEFICIARIES BASED ON 
            HEALTH STATUS.

    ``(a) In General.--A group health plan and a health insurance issuer 
offering group or individual health insurance coverage may not 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

[[Page 124 STAT. 157]]

                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 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 the 
                requirements of paragraph (3) are complied with.
            ``(2) Wellness programs not subject to requirements.--If 
        none of the conditions for obtaining a premium discount or 
        rebate or 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

[[Page 124 STAT. 158]]

                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 waiver of the otherwise 
                                applicable standard) for obtaining the 
                                reward for any individual for whom, for 
                                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.

[[Page 124 STAT. 159]]

                    ``(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 
effect.
    ``(l) Wellness Program Demonstration Project.--
            ``(1) In general.--Not <<NOTE: Deadline.>> 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 <<NOTE: Expansion 
        date.>> 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--

[[Page 124 STAT. 160]]

                                    ``(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.--
            ``(1) In general.--Not later than 3 years after the date of 
        enactment of the Patient Protection and Affordable Care Act, the 
        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.

``SEC. 2706. NON-DISCRIMINATION <<NOTE: 42 USC 300gg-5.>> IN HEALTH 
            CARE.

    ``(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 <<NOTE: Applicability.>> 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.

[[Page 124 STAT. 161]]

``SEC. 2707. COMPREHENSIVE <<NOTE: 42 USC 300gg-6.>> 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).

``SEC. 2708. PROHIBITION <<NOTE: 42 USC 300gg-7.>> ON EXCESSIVE WAITING 
            PERIODS.

    ``A group health plan and a health insurance issuer offering group 
or individual health insurance coverage shall not apply any waiting 
period (as defined in section 2704(b)(4)) that exceeds 90 days.''.

                        PART II--OTHER PROVISIONS

SEC. 1251. PRESERVATION <<NOTE: 42 USC 18011.>> OF RIGHT TO MAINTAIN 
            EXISTING COVERAGE.

    (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).

[[Page 124 STAT. 162]]

    (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.

SEC. 1252. RATING REFORMS <<NOTE: 42 USC 18012.>> MUST APPLY UNIFORMLY 
            TO ALL HEALTH INSURANCE ISSUERS AND GROUP HEALTH PLANS.

    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).

SEC. 1253. <<NOTE: 42 USC 300gg note.>> EFFECTIVE DATES.

    This subtitle (and the amendments made by this subtitle) shall 
become effective for plan years beginning on or after January 1, 2014.

        Subtitle D--Available Coverage Choices for All Americans

             PART I--ESTABLISHMENT OF QUALIFIED HEALTH PLANS

SEC. 1301. QUALIFIED <<NOTE: 42 USC 18021.>> HEALTH PLAN DEFINED.

    (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;

[[Page 124 STAT. 163]]

                          (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 1974.
            (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 Service Act.

SEC. 1302. ESSENTIAL <<NOTE: 42 USC 18022.>> HEALTH BENEFITS 
            REQUIREMENTS.

    (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.

[[Page 124 STAT. 164]]

                    (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 management.
                    (J) Pediatric services, including oral and vision 
                care.
            (2) Limitation.--
                    (A) In general.--
                The <<NOTE: Determination.>> 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 <<NOTE: Survey. Reports.>> 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 <<NOTE: Reports.>> 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

[[Page 124 STAT. 165]]

                      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--

[[Page 124 STAT. 166]]

                          (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).
                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.
                    (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.

[[Page 124 STAT. 167]]

                    (B) Exceptions.--Such term does not include 
                premiums, balance billing amounts for non-network 
                providers, or spending for non-covered services.
            (4) Premium <<NOTE: Determination. Deadline.>> 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 a level of coverage that is designed to provide 
                benefits that are actuarially equivalent to 70 percent 
                of the full actuarial value of the benefits provided 
                under the plan.
                    (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 value of the benefits provided 
                under the plan.
                    (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.-- <<NOTE: Guidelines.>> 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.

[[Page 124 STAT. 168]]

            (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 plan.

SEC. 1303. <<NOTE: 42 USC 18023.>> SPECIAL RULES.

    (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

[[Page 124 STAT. 169]]

                          (ii) <<NOTE: Determination.>> 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.--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 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 paragraph (2);
                                    (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

[[Page 124 STAT. 170]]

                      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 
                                (B)(i).
                          (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 under section 1412 of the 
                      Patient Protection and Affordable 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) <<NOTE: Cost estimate.>>  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

[[Page 124 STAT. 171]]

                                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.-- 
        <<NOTE: Abortions.>> 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 abortion.
            (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'').

SEC. 1304. <<NOTE: 42 USC 18024.>> RELATED DEFINITIONS.

    (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

[[Page 124 STAT. 172]]

        (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 year.
            (2) Small employer.--The term ``small 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 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 
                year.
                    (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;
                <<NOTE: Time period.>> 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.

[[Page 124 STAT. 173]]

   PART II--CONSUMER CHOICES AND INSURANCE COMPETITION THROUGH HEALTH 
                            BENEFIT EXCHANGES

SEC. 1311. <<NOTE: 42 USC 18031.>> AFFORDABLE CHOICES OF HEALTH BENEFIT 
            PLANS.

    (a) Assistance to States to Establish American Health Benefit 
Exchanges.--
            (1) Planning and establishment grants.-- 
        <<NOTE: Deadline.>> 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.-- <<NOTE: Determination.>> 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 <<NOTE: Deadline.>> 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 <<NOTE: Establishment. Deadline.>> 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

[[Page 124 STAT. 174]]

        if the Exchange has adequate resources to assist such 
        individuals and employers.

    (c) Responsibilities of the Secretary.--
            (1) In general.--The <<NOTE: Regulations.>> 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 applicable.

[[Page 124 STAT. 175]]

            (2) Rule of construction.-- <<NOTE: Contracts.>> 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 plans.
            (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) <<NOTE: Determination.>> an initial open 
                enrollment, as determined by the Secretary (such 
                determination to be made not later than July 1, 2012);
                    (B) <<NOTE: Determination.>> 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) <<NOTE: Native Americans.>> special monthly 
                enrollment periods for Indians (as defined in section 4 
                of the Indian Health Care Improvement Act).

[[Page 124 STAT. 176]]

    (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 <<NOTE: Payments.>> 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) <<NOTE: Procedures.>> 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) <<NOTE: Hotline.>> provide for the operation of 
                a toll-free telephone hotline to respond to requests for 
                assistance;
                    (C) <<NOTE: Web site.>> 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

[[Page 124 STAT. 177]]

                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) <<NOTE: Certification.>> 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) <<NOTE: Lists.>> 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 coverage; or
                                    (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.--

[[Page 124 STAT. 178]]

                    (A) No federal funds for continued 
                operations. <<NOTE: Effective date.>> --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 operations.
                    (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, including--
                    (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.-- <<NOTE: Web site.>> 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) <<NOTE: Determination.>> 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; or
                          (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. <<NOTE: Web site.>> 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

[[Page 124 STAT. 179]]

        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 as compared to the rate of such growth inside 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 Exchange.
            (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. <<NOTE: Definition.>> --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, medication and care 
                compliance initiatives, including through the use of the 
                medical home model, for treatment or services under the 
                plan or coverage;

[[Page 124 STAT. 180]]

                    (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 information technology under 
                the plan or coverage; and
                    (D) the implementation of wellness and health 
                promotion activities.
            (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.-- <<NOTE: Reports.>> 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.-- <<NOTE: Effective 
        date.>> 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, comprehensive discharge 
                      planning, and post discharge reinforcement by an 
                      appropriate health care professional; or
                    (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) <<NOTE: Grants.>>  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

[[Page 124 STAT. 181]]

                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 paragraph (3);
                          (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.-- 
        <<NOTE: Standards.>> 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.

[[Page 124 STAT. 182]]

SEC. 1312. <<NOTE: 42 USC 18032.>>  CONSUMER CHOICE.

    (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 pool.
            (2) Small group market.--A health insurance issuer shall 
        consider all enrollees in all health plans (other than 
        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 benefits.
            (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

[[Page 124 STAT. 183]]

                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 Washington, DC.
            (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. <<NOTE: Procedures.>> --
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 
exchange.
    (f) Qualified Individuals and Employers; Access Limited to Citizens 
and Lawful Residents.--
            (1) Qualified individuals.--In this title:

[[Page 124 STAT. 184]]

                    (A) In general. <<NOTE: Definition.>> --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. <<NOTE: Definition.>> --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. <<NOTE: Effective date.>> --
                      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.

SEC. 1313. <<NOTE: 42 USC 18033.>> FINANCIAL INTEGRITY.

    (a) Accounting for Expenditures.--
            (1) In general.-- <<NOTE: Deadline. Reports.>> 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 this paragraph.
            (3) Audits.-- <<NOTE: Deadline.>> An Exchange shall be 
        subject to annual audits by the Secretary.

[[Page 124 STAT. 185]]

            (4) Pattern of abuse.-- <<NOTE: Determination.>> 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 Secretary.
            (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 <<NOTE: Penalty.>> .--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 person.

    (b) GAO Oversight. <<NOTE: Deadline. Study.>> --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.

[[Page 124 STAT. 186]]

            PART III--STATE FLEXIBILITY RELATING TO EXCHANGES

SEC. 1321. <<NOTE: 42 USC 18041.>> STATE FLEXIBILITY IN OPERATION AND 
            ENFORCEMENT OF EXCHANGES AND RELATED REQUIREMENTS.

    (a) Establishment of Standards.--
            (1) In general.-- <<NOTE: Regulations.>> 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 <<NOTE: Deadline.>> .--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); or
                    (B) <<NOTE: Determination. Deadline.>> 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.

[[Page 124 STAT. 187]]

            (2) Enforcement authority.-- <<NOTE: Applicability.>> 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.-- <<NOTE: Determination.>> 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.

SEC. 1322. <<NOTE: 42 USC 18042.>> FEDERAL PROGRAM TO ASSIST 
            ESTABLISHMENT AND OPERATION OF NONPROFIT, MEMBER-RUN HEALTH 
            INSURANCE ISSUERS.

    (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

[[Page 124 STAT. 188]]

                      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) <<NOTE: Lobbying.>> 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 <<NOTE: Determination. Payments.>> .--
                      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.
                      <<NOTE: Notification.>> 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. <<NOTE: Deadline.>> --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) <<NOTE: Establishment.>>  Advisory board.--

[[Page 124 STAT. 189]]

                    (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 Security Act.
                    (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. <<NOTE: Deadline.>> --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 Act.
                    (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.-- <<NOTE: Definition.>> 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--

[[Page 124 STAT. 190]]

                    (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 not be treated as a qualified nonprofit health insurance 
        issuer 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 members.
            (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 shall not be treated as a qualified nonprofit 
        health insurance 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

[[Page 124 STAT. 191]]

                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 <<NOTE: 26 USC 501.>>  (relating to list of exempt 
        organizations) is amended by adding at the end the following:
            ``(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 <<NOTE: Applicability.>> .--Subparagraph (A) 
                shall apply to an organization only if--
                          ``(i) <<NOTE: Notice.>> 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) <<NOTE: Lobbying.>> 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.''.

[[Page 124 STAT. 192]]

            (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.-- <<NOTE: Effective date.>> 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.

SEC. 1323. <<NOTE: 42 USC 18043.>> COMMUNITY HEALTH INSURANCE OPTION.

    (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

[[Page 124 STAT. 193]]

        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.-- 
        <<NOTE: Definition.>> 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 plan;
                    (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 section 1324(b).
            (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 addition to the essential health 
                benefits required under 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 <<NOTE: Payments.>> .--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

[[Page 124 STAT. 194]]

                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 health plans.
                    (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) <<NOTE: Standard.>>  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.

[[Page 124 STAT. 195]]

                    (C) Consumer 
                protections <<NOTE: Applicability.>> .--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 <<NOTE: Effective date.>> .--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) <<NOTE: Deadline.>>  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

[[Page 124 STAT. 196]]

                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; and
                          (ii) permanently ineligible to offer a 
                      qualified health plan.

    (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 Act.
                    (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) <<NOTE: Fee.>> shall receive an 
                      administrative fee under paragraph (7).
                    (C) Limitation.--Contracts under this subsection 
                shall not involve the transfer of insurance risk to the 
                contracting administrator.
                    (D) Reference.--An entity with which the Secretary 
                has entered into a contract under this paragraph shall 
                be referred to as a ``contracting administrator''.

[[Page 124 STAT. 197]]

            (2) Qualified entity.--To be qualified to be selected by the 
        Secretary to offer a community health insurance option, an 
        entity shall--
                    (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) <<NOTE: Determination.>>  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.-- <<NOTE: Notification.>> 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.

[[Page 124 STAT. 198]]

                    (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 beneficiaries.
                    (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 period.
            (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 <<NOTE: President. Deadline.>> .--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.

[[Page 124 STAT. 199]]

    (h) Authorization of Appropriations.--There is authorized to be 
appropriated such sums as may be necessary to carry out this section.

SEC. 1324. <<NOTE: 42 USC 18044.>>  LEVEL PLAYING FIELD.

    (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.

      PART IV--STATE FLEXIBILITY TO ESTABLISH ALTERNATIVE PROGRAMS

SEC. 1331. <<NOTE: 42 USC 18051.>> STATE FLEXIBILITY TO ESTABLISH BASIC 
            HEALTH PROGRAMS FOR LOW-INCOME INDIVIDUALS NOT ELIGIBLE FOR 
            MEDICAID.

    (a) Establishment of Program.--
            (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

[[Page 124 STAT. 200]]

                      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 exceed--
                                    (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. <<NOTE: Definition.>> --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 following:
                    (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 conditions;
                          (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.

[[Page 124 STAT. 201]]

                    (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) <<NOTE: Determination.>>  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

[[Page 124 STAT. 202]]

                      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) <<NOTE: Definition.>>  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);

[[Page 124 STAT. 203]]

                    (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 <<NOTE: Review.>> .--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.

SEC. 1332. <<NOTE: 42 USC 18052.>>  WAIVER FOR STATE INNOVATION.

    (a) Application.--
            (1) <<NOTE: Effective date.>>  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 shall--
                    (A) be filed at such time and in such manner as the 
                Secretary may require;
                    (B) contain such information as the Secretary may 
                require, including--
                          (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).

[[Page 124 STAT. 204]]

            (2) Requirements.-- <<NOTE: Effective date.>> 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 <<NOTE: Deadline.>> .--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.

[[Page 124 STAT. 205]]

                    (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; and
                    (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).
                    (B) Termination of opt out.--A State may repeal a 
                law described in subparagraph (A) and terminate the 
                authority provided under the waiver with respect to the 
                State.

    (c) Scope of Waiver.--
            (1) <<NOTE: Determination.>>  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 the Secretary.

    (d) Determinations by Secretary.--
            (1) Time for determination.-- <<NOTE: Deadline.>> The 
        Secretary shall make a determination under subsection (a)(1) not 
        later than 180

[[Page 124 STAT. 206]]

        days after the receipt of an application from a State under such 
        subsection.
            (2) Effect of determination.-- <<NOTE: Notification.>> 
                    (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) <<NOTE: Deadline. Notification.>>  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.

SEC. 1333. <<NOTE: 42 USC 18053.>>  PROVISIONS RELATING TO OFFERING OF 
            PLANS IN MORE THAN ONE STATE.

    (a) Health Care Choice Compacts.--
            (1) In general.-- <<NOTE: Deadline. Regulations.>> 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) <<NOTE: Notification.>> 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)

[[Page 124 STAT. 207]]

        only if the Secretary determines that such health care choice 
        compact--
                    (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;
                    (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; 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) <<NOTE: Applicability.>> 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 
                qualified health plan.
            (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 title;
                    (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 offered;

[[Page 124 STAT. 208]]

                    (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) <<NOTE: Deadline.>>  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.

                 PART V--REINSURANCE AND RISK ADJUSTMENT

SEC. 1341. <<NOTE: 42 USC 18061.>>  TRANSITIONAL REINSURANCE PROGRAM FOR 
            INDIVIDUAL AND SMALL GROUP MARKETS IN EACH STATE.

    (a) In General <<NOTE: Deadline.>> .--Each State shall, not later 
than January 1, 2014--

[[Page 124 STAT. 209]]

            (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) <<NOTE: Contracts.>> 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) <<NOTE: Effective date. Time period.>> 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 conditions.
            (3) Determination of required contributions.--

[[Page 124 STAT. 210]]

                    (A) In general <<NOTE: Effective date. Time 
                period.>> .--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 plan year.
                    (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) <<NOTE: Time period. Effective date.>> 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.

[[Page 124 STAT. 211]]

    (c) Applicable Reinsurance Entity.--For purposes of this section--
            (1) In general.-- <<NOTE: Definition.>> 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.

SEC. 1342. <<NOTE: 42 USC 18062.>> ESTABLISHMENT OF RISK CORRIDORS FOR 
            PLANS IN INDIVIDUAL AND SMALL GROUP MARKETS.

    (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 
Social Security Act.
    (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.

[[Page 124 STAT. 212]]

            (2) Payments in.--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 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
                    (B) a participating plan's allowable costs for any 
                plan 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.

SEC. 1343. <<NOTE: 42 USC 18063.>> RISK ADJUSTMENT.

    (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

[[Page 124 STAT. 213]]

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.

        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.

    (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. <<NOTE: 26 USC 36.>>  REFUNDABLE CREDIT FOR COVERAGE UNDER A 
            QUALIFIED HEALTH PLAN.

    ``(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.-- <<NOTE: Definition.>> 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 year.
            ``(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, or
                    ``(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

[[Page 124 STAT. 214]]

                          ``(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 percent.
                          ``(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

[[Page 124 STAT. 215]]

                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 qualified health plan.

    ``(c) Definition and Rules Relating to Applicable Taxpayers, 
Coverage Months, and Qualified Health Plan.--For purposes of this 
section--
            ``(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--

[[Page 124 STAT. 216]]

                          ``(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 family of the size involved.
                    ``(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

[[Page 124 STAT. 217]]

                                respect to the plan exceeds 9.8 percent 
                                of the applicable taxpayer's household 
                                income.
                      <<NOTE: Applicability.>> 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 
section--
            ``(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 year.
            ``(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--

[[Page 124 STAT. 218]]

                          ``(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 line for 
                                        the taxpayer's family size 
                                        determined 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.-- <<NOTE: Regulations.>> 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

[[Page 124 STAT. 219]]

        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) 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 under section 1412 of the Patient Protection 
                and Affordable 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.
                      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.

    ``(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 <<NOTE: 26 USC 280C.>>  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.''.

[[Page 124 STAT. 220]]

    (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:

``Sec. 36B. Refundable credit for coverage under a qualified health 
           plan.''.

    (e) <<NOTE: 26 USC 36B note.>>  Effective Date.--The amendments made 
by this section shall apply to taxable years ending after December 31, 
2013.

SEC. 1402. <<NOTE: 42 USC 18071.>> REDUCED COST-SHARING FOR INDIVIDUALS 
            ENROLLING IN QUALIFIED HEALTH PLANS.

    (a) In General.--In the case of an eligible insured enrolled in a 
qualified health plan--
            (1) <<NOTE: Notification.>>  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).

[[Page 124 STAT. 221]]

    (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; and
            (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 this 
section.
    (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 than 200 percent but not more than 
                      300 percent of the 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 poverty line for a family of 
                      the size involved, by one-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 <<NOTE: Procedures.>> 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

[[Page 124 STAT. 222]]

                costs of benefits provided under the plan to 90 percent 
                of such costs; and
                    (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) <<NOTE: Notification.>>  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 under the plan.
            (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

[[Page 124 STAT. 223]]

                of any cost-sharing that would be due from the Indian 
                but for subparagraph (A).
            (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 subsection.

    (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 
                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 line for 
                                        the taxpayer's family size 
                                        determined 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 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) <<NOTE: Regulations.>>  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

[[Page 124 STAT. 224]]

        1412 and not the taxable year for which the credit under section 
        36B of such Code is allowed.

                  Subpart B--Eligibility Determinations

SEC. 1411. <<NOTE: 42 USC 18081.>> PROCEDURES FOR DETERMINING 
            ELIGIBILITY FOR EXCHANGE 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.

[[Page 124 STAT. 225]]

            (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 
        information:
                    (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 paragraph (3).
        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.

[[Page 124 STAT. 226]]

                    (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) <<NOTE: Submission.>>  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) <<NOTE: Electronic submission.>>  In general.--
                The Secretary, in consultation with the Secretary of the 
                Treasury, the Secretary of Homeland

[[Page 124 STAT. 227]]

                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. <<NOTE: Reports.>> 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) <<NOTE: Notification.>>  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

[[Page 124 STAT. 228]]

                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) <<NOTE: Notifications.>>  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) <<NOTE: Time period.>>  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

[[Page 124 STAT. 229]]

                      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) <<NOTE: Procedures.>>  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--

[[Page 124 STAT. 230]]

                          (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.

[[Page 124 STAT. 231]]

            (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.

SEC. 1412. <<NOTE: 42 USC 18082.>>  ADVANCE DETERMINATION AND PAYMENT OF 
            PREMIUM TAX CREDITS AND COST-SHARING REDUCTIONS.

    (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) <<NOTE: Notification.>>  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--

[[Page 124 STAT. 232]]

                          (i) the employer did not provide minimum 
                      essential coverage; or
                          (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
            (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) <<NOTE: Notifications.>>  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--

[[Page 124 STAT. 233]]

                          (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. <<NOTE: 42 USC 18083.>>  STREAMLINING OF PROCEDURES FOR 
            ENROLLMENT THROUGH AN EXCHANGE AND STATE MEDICAID, CHIP, AND 
            HEALTH SUBSIDY PROGRAMS.

    (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;

[[Page 124 STAT. 234]]

                          (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 under this section.
                    (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); or
                                    (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.

[[Page 124 STAT. 235]]

            (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 programs.

    (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.

[[Page 124 STAT. 236]]

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 <<NOTE: 26 USC 
        6103.>> 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--

[[Page 124 STAT. 237]]

                          ``(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 <<NOTE: 42 USC 405.>>  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 <<NOTE: 26 USC 6103.>>  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
            (3) by inserting ``or any entity described in subsection 
        (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)''.

SEC. 1415. <<NOTE: 42 USC 18084.>>  PREMIUM TAX CREDIT AND COST-SHARING 
            REDUCTION PAYMENTS DISREGARDED FOR FEDERAL AND FEDERALLY-
            ASSISTED PROGRAMS.

    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 
        individual.

                   PART II--SMALL BUSINESS TAX CREDIT

SEC. 1421. CREDIT FOR EMPLOYEE HEALTH INSURANCE EXPENSES OF SMALL 
            BUSINESSES.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to business-

[[Page 124 STAT. 238]]

related credits) is amended by inserting after section 45Q the 
following:

``SEC. 45R. <<NOTE: 26 USC 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.
            ``(2) Such amount multiplied by a fraction the numerator of 
        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 paragraph (4).
            ``(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.

[[Page 124 STAT. 239]]

                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) <<NOTE: Regulations.>>  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 year.
                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 plan.
            ``(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.

[[Page 124 STAT. 240]]

    ``(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 section.
                    ``(B) <<NOTE: Applicability.>>  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--

[[Page 124 STAT. 241]]

                          ``(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) <<NOTE: Applicability.>>  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) <<NOTE: Determination.>>  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 
as may be necessary to carry out the provisions of this section, 
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 <<NOTE: 26 USC 38.>>  (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:

[[Page 124 STAT. 242]]

            ``(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) <<NOTE: 26 USC 38.>>  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:
            ``(14) the small employer health insurance credit determined 
        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) <<NOTE: Applicability. 26 USC 38 note.>>  Effective Dates.--
            (1) In general.--The amendments made by this section shall 
        apply to amounts paid or incurred in taxable years beginning 
        after December 31, 2010.
            (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.

            Subtitle F--Shared Responsibility for Health Care

                    PART I--INDIVIDUAL RESPONSIBILITY

SEC. 1501. <<NOTE: 42 USC 18091.>>  REQUIREMENT TO MAINTAIN MINIMUM 
            ESSENTIAL COVERAGE.

    (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).

[[Page 124 STAT. 243]]

            (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

[[Page 124 STAT. 244]]

                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.

``SEC. 5000A. <<NOTE: 26 USC 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.-- <<NOTE: Penalty.>> 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

[[Page 124 STAT. 245]]

        regard to paragraph (3)(C)) for the calendar year with or within 
        which the taxable year ends.
            ``(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 substituting `calendar year 
                      2015' for `calendar year 1992' in subparagraph (B) 
                      thereof.
                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.
            ``(4) Terms relating to income and families.--For purposes 
        of this section--
                    ``(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) for the taxable year.
                    ``(B) Household income.--The term `household income' 
                means, with respect to any taxpayer for any taxable 
                year, 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.
                    ``(C) 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.
                    ``(D) Poverty line.--

[[Page 124 STAT. 246]]

                          ``(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 upon request.
            ``(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 charges.

    ``(e) Exemptions.--No penalty shall be imposed under subsection (a) 
with respect to--
            ``(1) Individuals who cannot afford coverage.--

[[Page 124 STAT. 247]]

                    ``(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 arrangement.
                    ``(B) <<NOTE: Definition.>>  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) <<NOTE: Applicability. Determination.>>  
                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

[[Page 124 STAT. 248]]

                was not covered by minimum essential coverage for a 
                continuous period of less than 3 months.
                    ``(B) <<NOTE: Applicability.>>  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) <<NOTE: Definition.>>  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

[[Page 124 STAT. 249]]

        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 68.
            ``(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) <<NOTE: 26 USC 5000A note.>>  Effective Date.--The amendments 
made by this section shall apply to taxable years ending after December 
31, 2013.

[[Page 124 STAT. 250]]

SEC. 1502. REPORTING OF HEALTH INSURANCE COVERAGE.

    (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.

``SEC. 6055. <<NOTE: 26 USC 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

[[Page 124 STAT. 251]]

                (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 <<NOTE: 26 USC 6724.>>  (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.-- <<NOTE: Deadline. 42 USC 
18092.>> 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:

[[Page 124 STAT. 252]]

     ``subpart d--information regarding health insurance coverage''.

    (e) <<NOTE: 26 USC 6055 note.>>  Effective Date.--The amendments 
made by this section shall apply to calendar years beginning after 2013.

                   PART II--EMPLOYER RESPONSIBILITIES

SEC. 1511. AUTOMATIC ENROLLMENT FOR EMPLOYEES OF LARGE EMPLOYERS.

    The Fair Labor Standards Act of 1938 is amended by inserting after 
section 18 (29 U.S.C. 218) the following:

``SEC. 18A. <<NOTE: 29 USC 218A.>>  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 OPTIONS.

    The Fair Labor Standards Act of 1938 is amended by inserting after 
section 18A (as added by section 1513) the following:

``SEC. 18B. <<NOTE: 29 USC 218B.>>  NOTICE TO EMPLOYEES.

    ``(a) In General.-- <<NOTE: Deadline.>> 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.

[[Page 124 STAT. 253]]

    ``(b) Effective Date.--Subsection (a) shall take effect with respect 
to employers in a State beginning on March 1, 2013.''.

SEC. 1513. SHARED RESPONSIBILITY FOR EMPLOYERS.

    (a) In General.--Chapter 43 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following:

``SEC. 4980H. <<NOTE: 26 USC 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 minimum essential coverage 
                under an eligible employer-sponsored plan (as defined in 
                section 5000A(f)(2)) for any month, and
                    ``(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

[[Page 124 STAT. 254]]

                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 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 such month.

    ``(d) Definitions and Special Rules.--For purposes of this section--
            ``(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.

[[Page 124 STAT. 255]]

            ``(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.-- 
                <<NOTE: Regulations. Guidance.>> 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.
            ``(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..-- 
        <<NOTE: Regulations. Guidance.>> 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.''.

[[Page 124 STAT. 256]]

    (b) Clerical Amendment.--The table of sections for chapter 43 of 
such Code is amended by adding at the end the following new item:

``Sec. 4980H. Shared responsibility for employers regarding health 
           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). <<NOTE: Determination.>>  
        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 Senate.

    (d) <<NOTE: 26 USC 4980H note.>>  Effective Date.--The amendments 
made by this section shall apply to months beginning after December 31, 
2013.

SEC. 1514. REPORTING OF EMPLOYER HEALTH INSURANCE COVERAGE.

    (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. <<NOTE: 26 USC 6056.>>  LARGE EMPLOYERS REQUIRED TO REPORT 
            ON HEALTH INSURANCE COVERAGE.

    ``(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) <<NOTE: Certification.>>  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,

[[Page 124 STAT. 257]]

                    ``(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.

    ``(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 full-time employee 
        whose name is required to be set forth in such return under 
        subsection (b)(2)(E) 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) 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.''.
    (b) Assessable Penalties.--
            (1) Subparagraph (B) of section 6724(d)(1) of the Internal 
        Revenue Code of 1986 (relating to definitions), as amended by 
        section 1502, <<NOTE: 26 USC 6724.>>  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

[[Page 124 STAT. 258]]

        (GG) and inserting ``, or'' and by inserting after subparagraph 
        (GG) the following new subparagraph:
                    ``(HH) section 6056(c) (relating to statements 
                relating to large employers required to report on health 
                insurance 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:

``Sec. 6056. Large employers required to report on health insurance 
           coverage.''.

    (d) <<NOTE: 26 USC 6056 note.>>  Effective Date.--The amendments 
made by this section shall apply to periods beginning after December 31, 
2013.

SEC. 1515. OFFERING OF EXCHANGE-PARTICIPATING QUALIFIED HEALTH PLANS 
            THROUGH CAFETERIA PLANS.

    (a) In General.--Subsection (f) of section 125 of the Internal 
Revenue Code of 1986 <<NOTE: 26 USC 125.>>  is amended by adding at the 
end the following new paragraph:
            ``(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) <<NOTE: 26 USC 125 note.>>  Effective Date.--The amendments made 
by this section shall apply to taxable years beginning after December 
31, 2013.

                  Subtitle G--Miscellaneous Provisions

SEC. 1551. <<NOTE: Applicability. 42 USC 18111.>>  DEFINITIONS.

    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.

SEC. 1552. <<NOTE: 42 USC 18112.>>  TRANSPARENCY IN GOVERNMENT.

     <<NOTE: Deadline. Web posting.>> 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).

[[Page 124 STAT. 259]]

SEC. 1553. <<NOTE: 42 USC 18113.>>  PROHIBITION AGAINST DISCRIMINATION 
            ON ASSISTED SUICIDE.

    (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) <<NOTE: Abortion.>>  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.

SEC. 1554. <<NOTE: 42 USC 18114.>>  ACCESS TO THERAPIES.

    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.

[[Page 124 STAT. 260]]

SEC. 1555. <<NOTE: 42 USC 18115.>>  FREEDOM NOT TO PARTICIPATE IN 
            FEDERAL HEALTH INSURANCE PROGRAMS.

    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.

SEC. 1556. EQUITY FOR CERTAIN ELIGIBLE SURVIVORS.

    (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''.
    (c) <<NOTE: Applicability. 30 USC 921 note.>>  Effective Date.--The 
amendments made by this section shall 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.

SEC. 1557. <<NOTE: 42 USC 18116.>>  NONDISCRIMINATION.

    (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). <<NOTE: Applicability.>>  
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 (a).
    (c) Regulations.--The Secretary may promulgate regulations to 
implement this section.

[[Page 124 STAT. 261]]

SEC. 1558. PROTECTIONS FOR EMPLOYEES.

    The Fair Labor Standards Act of 1938 is amended by inserting after 
section 18B (as added by section 1512) the following:

``SEC. 18C. <<NOTE: 29 USC 218C.>>  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.''.

SEC. 1559. <<NOTE: 42 USC 18117.>>  OVERSIGHT.

    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 Department.

SEC. 1560. <<NOTE: 42 USC 18118.>>  RULES OF CONSTRUCTION.

    (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 competition.

[[Page 124 STAT. 262]]

    (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.

SEC. 1561. HEALTH INFORMATION TECHNOLOGY ENROLLMENT STANDARDS AND 
            PROTOCOLS.

    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. <<NOTE: 42 USC 300jj-51.>>  HEALTH INFORMATION TECHNOLOGY 
            ENROLLMENT STANDARDS AND PROTOCOLS.

    ``(a) In General.--
            ``(1) Standards and protocols.-- 
        <<NOTE: Deadline. Determination.>> 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.

[[Page 124 STAT. 263]]

            ``(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 investments.

    ``(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; and
                                    ``(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 paragraph (4); and
                          ``(iii) such other information as the 
                      Secretary may require.
            ``(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.

[[Page 124 STAT. 264]]

                    ``(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.''.

SEC. 1562. CONFORMING AMENDMENTS.

    (a) Applicability.--Section 2735 of the Public Health Service Act 
(42 U.S.C. 300gg-21), as so redesignated by section 1001(4), is 
amended--
            (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'';
                    (B) in paragraph (2)--
                          (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''; and
                    (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 <<NOTE: 42 USC 300gg-3.>> (42 U.S.C. 
        300gg), as so redesignated by section 1201(2)--
                    (A) in subsection (c)--

[[Page 124 STAT. 265]]

                          (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 <<NOTE: 42 USC 300gg-25.>>  (42 U.S.C. 
        300gg-4), as so redesignated by section 1001(2)--
                    (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)--
                          (i) by striking ``health insurance issuer 
                      offering 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 individual 
                      health insurance coverage''; and
                          (ii) in paragraph (3), by striking ``issuer'' 
                      and inserting ``health insurance issuer''; and
                    (D) in subsection (e), by striking ``health 
                insurance issuer offering group health insurance 
                coverage'' and inserting ``health insurance issuer 
                offering group or individual health insurance 
                coverage'';
            (4) in section 2726 <<NOTE: 42 USC 300gg-26.>>  (42 U.S.C. 
        300gg-5), as so redesignated by section 1001(2)--
                    (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 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''; and
                    (C) in subsection (c)--

[[Page 124 STAT. 266]]

                          (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 issuer offering group or 
                      individual health insurance coverage'';
                          (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'';
            (5) in section 2727 <<NOTE: 42 USC 300gg-27.>> (42 U.S.C. 
        300gg-6), as so redesignated by 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'';
            (6) in section 2728 <<NOTE: 42 USC 300gg-28.>> (42 U.S.C. 
        300gg-7), as so redesignated by section 1001(2)--
                    (A) in subsection (a), by striking ``health 
                insurance coverage offered in connection with such 
                plan'' and inserting ``individual health insurance 
                coverage'';
                    (B) in subsection (b)--
                          (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 
                      health insurance coverage'';
                          (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 coverage'';
                    (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''; and
                    (D) in subsection (e)(1), by striking ``health 
                insurance coverage offered in connection with such a 
                plan'' and inserting ``individual health insurance 
                coverage'';
            (7) by striking the heading for subpart 3;
            (8) in section 2731 <<NOTE: 42 USC 300gg-1.>> (42 U.S.C. 
        300gg-11), as so redesignated by section 1001(3)--
                    (A) by striking the section heading and all that 
                follows through subsection (b);
                    (B) in subsection (c)--
                          (i) in paragraph (1)--
                                    (I) in the matter preceding 
                                subparagraph (A), by 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'';

[[Page 124 STAT. 267]]

                                            (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 and 
                                        their employees (and their 
                                        dependents) or any 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));
            (9) in section 2732 <<NOTE: 42 USC 300gg-2.>> (42 U.S.C. 
        300gg-12), as so redesignated by section 1001(3)--
                    (A) by striking the section heading and all that 
                follows through subsection (a);
                    (B) in subsection (b)--
                          (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 following:
            ``(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.'';
                    (C) in subsection (c)--
                          (i) in paragraph (1)--
                                    (I) in the matter preceding 
                                subparagraph (A), by striking ``group 
                                health insurance coverage offered in the 
                                small or large group market'' and 
                                inserting ``group or individual health 
                                insurance coverage'';

[[Page 124 STAT. 268]]

                                    (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 insurance 
                                        coverage''; and
                                    (IV) in subparagraph (C), by 
                                inserting ``or individuals, as 
                                applicable,'' after ``those sponsors''; 
                                and
                          (ii) in paragraph (2)(A)--
                                    (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, as applicable,'' after 
                                ``plan sponsor''; and
                    (D) by transferring such section (as amended by this 
                paragraph) to appear at the end of section 2703 (as 
                added by section 1001(4));
            (10) in section 2733 <<NOTE: 42 USC 300gg-9.>>  (42 U.S.C. 
        300gg-13), as so redesignated by section 1001(4)--
                    (A) in subsection (a)--
                          (i) in the matter preceding paragraph (1), by 
                      striking ``small employer'' and inserting ``small 
                      employer or an individual'';
                          (ii) in paragraph (1), by inserting ``, or 
                      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,'';
                    (B) in subsection (b)--
                          (i) in paragraph (1)--
                                    (I) in the matter preceding 
                                subparagraph (A), by striking ``small 
                                employer'' and inserting ``employer, or 
                                individual, as applicable,'';
                                    (II) in subparagraph (A), by adding 
                                ``and'' at the end;
                                    (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);
                          (ii) in paragraph (2)--
                                    (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;
            (12) in section 2735 (42 U.S.C. 300gg-21), as so 
        redesignated by section 1001(4)--

[[Page 124 STAT. 269]]

                    (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) <<NOTE: 42 USC 300gg-21.>>  as section 
                2722;
            (13) in section 2736 (42 U.S.C. 300gg-22), as so 
        redesignated by section 1001(4)--
                    (A) in subsection (a)--
                          (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
                    (C) by redesignating such section (as amended by 
                this paragraph) <<NOTE: 42 USC 300gg-22.>>  as section 
                2723;
            (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 
                paragraph) <<NOTE: 42 USC 300gg-23.>>  as section 2724;
            (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
                    (B) in paragraph (4)--
                          (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) <<NOTE: 42 USC 18120.>>  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.

[[Page 124 STAT. 270]]

    (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. <<NOTE: Applicability. 29 USC 1185d.>> 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 shall apply.

    ``(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 
amended by adding at the end the following:

``SEC. 9815. <<NOTE: Applicability. 29 USC 9815.>> 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 
        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.

    ``(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 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.''.

SEC. 1563. SENSE OF THE SENATE PROMOTING FISCAL RESPONSIBILITY.

    (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.

[[Page 124 STAT. 271]]

            (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.

                    TITLE II--ROLE OF PUBLIC PROGRAMS

                 Subtitle A--Improved Access to Medicaid

SEC. 2001. MEDICAID COVERAGE FOR THE LOWEST INCOME POPULATIONS.

    (a) Coverage for Individuals With Income at or Below 133 Percent of 
the Poverty Line.--
            (1) Beginning 2014.-- <<NOTE: Effective date.>> 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)

[[Page 124 STAT. 272]]

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), <<NOTE: 42 USC 13966.>>  is amended--
                          (i) in paragraph (24), by striking ``or'' at 
                      the end;
                          (ii) in paragraph (25), by striking the period 
                      and inserting ``; or''; and
                          (iii) by adding at the end the following:
            ``(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) <<NOTE: Time periods.>>  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 the 
                                following:

[[Page 124 STAT. 273]]



 
------------------------------------------------------------------------
                            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
------------------------------------------------------------------------
2018                     31.3                     33.3
------------------------------------------------------------------------

                                    ``(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 State.
                    ``(C) 2019 and succeeding years. <<NOTE: Effective 
                date.>> --Beginning January 1, 2019, notwithstanding 
                subsection (b) but 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 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.

[[Page 124 STAT. 274]]

                    ``(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)), <<NOTE: 42 USC 1396a.>>  is amended by inserting 
                after paragraph (1) the following:

    ``(2) <<NOTE: Effective date. Time period.>>  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) <<NOTE: Guidelines.>>  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''.

[[Page 124 STAT. 275]]

                    (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); and
                          (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 paragraph:
            ``(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 <<NOTE: Time 
        period. Determination.>>  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 Protection and Affordable Care Act.
            ``(2) Continuation of eligibility standards for children 
        until october 1, 2019.-- <<NOTE: Applicability.>> 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.-- <<NOTE: Time 
        period. Deadline. Certification.>> 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

[[Page 124 STAT. 276]]

        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),'';

[[Page 124 STAT. 277]]

                    (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.-- <<NOTE: Effective 
        date.>> 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--
                    (A) by striking ``and'' at the end of paragraph 
                (73);
                    (B) by striking the period at the end of paragraph 
                (74) and inserting ``; and''; and
                    (C) by inserting after paragraph (74) the following 
                new paragraph:
            ``(75) <<NOTE: Effective date.>>  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

[[Page 124 STAT. 278]]

                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.-- <<NOTE: Effective date. 42 USC 
        1396a note.>> 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 end;
                          (ii) in subclause (XIX), by adding ``or'' at 
                      the end; and
                          (iii) by adding at the end the following new 
                      subclause:
                                    ``(XX) <<NOTE: Effective 
                                date.>> 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
                    (B) by adding at the end the following new 
                subsection:

    ``(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 
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,

[[Page 124 STAT. 279]]

the term `parent' includes an individual treated as a caretaker relative 
for purposes of carrying out section 1931.''.
            (2) Conforming amendments.--
                    (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); and
                          (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)''.

SEC. 2002. INCOME ELIGIBILITY FOR NONELDERLY DETERMINED USING MODIFIED 
            GROSS INCOME.

    (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. <<NOTE: Waiver authority.>> 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

[[Page 124 STAT. 280]]

                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 medical assistance under the State plan 
                or under a waiver of 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 eligibility for 
                      medical assistance under the State plan or 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

[[Page 124 STAT. 281]]

                      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 later.
                    ``(E) Transition planning and oversight.-- 
                <<NOTE: Submission.>> 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 assistance.
                    ``(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.

[[Page 124 STAT. 282]]

                    ``(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) <<NOTE: 42 USC 1396a note.>>  Effective Date.--The amendments 
made by subsections (a) and (b) take effect on January 1, 2014.

SEC. 2003. REQUIREMENT TO OFFER PREMIUM ASSISTANCE FOR EMPLOYER-
            SPONSORED INSURANCE.

    (a) In General.--Section 1906A of such Act (42 U.S.C. 1396e-1) is 
amended--
            (1) in subsection (a)--
                    (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
            (3) in subsection (d)--
                    (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 it appears.

[[Page 124 STAT. 283]]

    (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) <<NOTE: 42 USC 1396e-1 note.>>  Effective Date.--The amendments 
made by this section take effect on January 1, 2014.

SEC. 2004. MEDICAID COVERAGE FOR FORMER FOSTER CARE CHILDREN.

    (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) <<NOTE: 42 USC 1396a note.>>  Effective Date.--The amendments 
made by this section take effect on January 1, 2019.

SEC. 2005. PAYMENTS TO TERRITORIES.

    (a) Increase in Limit on Payments.--Section 1108(g) of the Social 
Security Act (42 U.S.C. 1308(g)) is amended--
            (1) in paragraph (2), in the matter preceding subparagraph 
        (A), 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'';

[[Page 124 STAT. 284]]

            (2) by striking the period at the end and inserting ``; 
        and''; 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 
                waiver on the date of enactment of the Patient 
                Protection and 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) <<NOTE: 42 USC 1396d note.>>  Effective date.--The 
        amendment made by paragraph (1) takes effect on January 1, 2011.

SEC. 2006. SPECIAL ADJUSTMENT TO FMAP DETERMINATION FOR CERTAIN STATES 
            RECOVERING FROM A MAJOR DISASTER.

    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
            (2) by adding at the end the following new subsection:

    ``(aa)(1) <<NOTE: Effective date.>> 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 following:
            ``(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

[[Page 124 STAT. 285]]

        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) <<NOTE: Definition.>>  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--
            ``(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 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, by 
        at least 3 percentage points; and
            ``(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 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) <<NOTE: Applicability.>>  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.''.

SEC. 2007. MEDICAID IMPROVEMENT FUND RESCISSION.

    (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''.

[[Page 124 STAT. 286]]

Subtitle B--Enhanced Support for the Children's Health Insurance Program

SEC. 2101. ADDITIONAL FEDERAL FINANCIAL PARTICIPATION FOR CHIP.

    (a) In General.-- <<NOTE: Time period.>> 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:
            ``(3) Continuation of eligibility standards for children 
        until october 1, 2019.--
                    ``(A) In general.-- <<NOTE: Time period.>> 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. <<NOTE: Procedures.>> --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

[[Page 124 STAT. 287]]

                establish procedures to ensure that such children are 
                provided coverage through an Exchange established by the 
                State under section 1311 of the Patient Protection and 
                Affordable Care Act.''.
            (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) <<NOTE: Effective date.>>  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 
following:
                    ``(N) Section 1943(b) (relating to coordination with 
                State Exchanges and the State Medicaid agency).''.

    (f) <<NOTE: 42 USC 1397jj note.>>  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

[[Page 124 STAT. 288]]

implemented under title XIX or XXI, or both, of the Social Security 
Act).

SEC. 2102. TECHNICAL CORRECTIONS.

    (a) <<NOTE: Effective date. 42 USC 1396b note.>>  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, <<NOTE: 42 USC 1397dd.>>  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 <<NOTE: 42 USC 1396 note.>>  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)), <<NOTE: 42 USC 1397ee.>>  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 <<NOTE: 42 USC 1396b.>>  
        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).

[[Page 124 STAT. 289]]

    (b) <<NOTE: 42 USC 13960-1 note.>>  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)''.

         Subtitle C--Medicaid and CHIP Enrollment Simplification

SEC. 2201. ENROLLMENT SIMPLIFICATION AND COORDINATION WITH STATE HEALTH 
            INSURANCE EXCHANGES.

    Title XIX of the Social Security Act (42 U.S.C. 1397aa et seq.) is 
amended by adding at the end the following:

``SEC. 1943. <<NOTE: 42 USC 1396w-3.>>  ENROLLMENT SIMPLIFICATION AND 
            COORDINATION WITH STATE HEALTH INSURANCE EXCHANGES.

    ``(a) Condition for Participation in Medicaid. <<NOTE: Effective 
date.>> --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.-- <<NOTE: Procedures.>> A State shall 
        establish procedures for--
                    ``(A) <<NOTE: Web site.>>  enabling individuals, 
                through an Internet website that meets the requirements 
                of paragraph (4), to apply for medical assistance under 
                the State plan or under a waiver of 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

[[Page 124 STAT. 290]]

                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).

[[Page 124 STAT. 291]]

            ``(4) Enrollment website requirements.-- 
        <<NOTE: Deadline.>> 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 established by the 
        State under section 1311 of the Patient 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).''.

SEC. 2202. PERMITTING HOSPITALS TO MAKE PRESUMPTIVE ELIGIBILITY 
            DETERMINATIONS FOR ALL MEDICAID ELIGIBLE POPULATIONS.

    (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
            (3) by adding at the end the following:
                    ``(B) <<NOTE: Guidelines.>>  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 
                assistance under the State plan or under a waiver of the 
                plan 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

[[Page 124 STAT. 292]]

        of presumptive eligibility made by a hospital that elects under 
        section 1902(a)(47)(B) to be a qualified entity for such 
        purpose''.

    (c) <<NOTE: Applicability. 42 USC 1396a note.>>  Effective Date.--
The amendments made by this section take effect on January 1, 2014, and 
apply to services furnished on or after that date.

              Subtitle D--Improvements to Medicaid Services

SEC. 2301. COVERAGE FOR FREESTANDING BIRTH CENTER SERVICES.

    (a) In General.--Section 1905 of the Social Security Act (42 U.S.C. 
1396d), is amended--
            (1) in subsection (a)--
                    (A) in paragraph (27), by striking ``and'' at the 
                end;
                    (B) by redesignating paragraph (28) as paragraph 
                (29); and
                    (C) by inserting after paragraph (27) the following 
                new paragraph:
            ``(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 paragraph:

    ``(3)(A) <<NOTE: Definitions.>>  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) <<NOTE: Payments.>>  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

[[Page 124 STAT. 293]]

matter preceding clause (i) by striking ``and (21)'' and inserting ``, 
(21), and (28)''.
    (c) <<NOTE: 42 USC 1396a note.>>  Effective Date.--
            (1) In general.-- <<NOTE: Applicability.>> 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.-- 
        <<NOTE: Determination.>> 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.

SEC. 2302. CONCURRENT CARE FOR CHILDREN.

    (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''.

SEC. 2303. STATE ELIGIBILITY OPTION FOR FAMILY PLANNING SERVICES.

    (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:

[[Page 124 STAT. 294]]

    ``(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.
            (4) Conforming amendments.--
                    (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 
        the following:


         ``presumptive eligibility for family planning services


    ``Sec. 1920C.  <<NOTE: 42 USC 1396r-1c.>>  (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

[[Page 124 STAT. 295]]

in conjunction with a family planning service in a family planning 
setting.

    ``(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) <<NOTE: Deadline.>>  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.-- 
        <<NOTE: Deadline.>> 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 following the month during 
        which the determination is made.

[[Page 124 STAT. 296]]

    ``(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).''.
            (2) Conforming amendments.--
                    (A) Section 1902(a)(47) of the Social Security Act 
                (42 U.S.C. 1396a(a)(47)), as amended by section 2202(a), 
                is amended--
                          (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 
the following:
            ``(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.''.

    (d) Effective Date. <<NOTE: Applicability. 42 USC 1396a note.>> --
The amendments made by this section take effect on the date of the 
enactment of this Act and shall apply to items and services furnished on 
or after such date.

SEC. 2304. CLARIFICATION OF DEFINITION OF MEDICAL ASSISTANCE.

    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''.

[[Page 124 STAT. 297]]

  Subtitle E--New Options for States to Provide Long-Term Services and 
                                Supports

SEC. 2401. COMMUNITY FIRST CHOICE OPTION.

    Section 1915 of the Social Security Act (42 U.S.C. 1396n) is amended 
by adding at the end the following:
    ``(k) State Plan Option To Provide Home and Community-based 
Attendant Services and Supports.--
            ``(1) In general.-- <<NOTE: Effective date.>> 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) <<NOTE: Contracts.>>  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,

[[Page 124 STAT. 298]]

                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; and
                          ``(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) <<NOTE: Establishment.>>  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

[[Page 124 STAT. 299]]

                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) <<NOTE: Reports. Determination.>>  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

[[Page 124 STAT. 300]]

        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); and
                          ``(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).
            ``(6) Definitions.--In this subsection:
                    ``(A) Activities of daily living.--The term 
                `activities of daily living' includes tasks such as 
                eating, toileting, grooming, dressing, bathing, and 
                transferring.

[[Page 124 STAT. 301]]

                    ``(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.''.

SEC. 2402. REMOVAL OF BARRIERS TO PROVIDING HOME AND COMMUNITY-BASED 
            SERVICES.

    (a) <<NOTE: 42 USC 1396n note.>>  Oversight and Assessment of the 
Administration of Home and Community-based Services.-- 
<<NOTE: Regulations.>> 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

[[Page 124 STAT. 302]]

            (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 services.

    (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.

[[Page 124 STAT. 303]]

            ``(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 
                      period.
                    ``(C) Renewal. <<NOTE: Time 
                period. Determination. Deadline.>> --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; and
                          ``(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.--
            (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 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;''.
            (2) Conforming amendments.--
                    (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),

[[Page 124 STAT. 304]]

                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) <<NOTE: 42 USC 1396a note.>>  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.

SEC. 2403. MONEY FOLLOWS THE PERSON REBALANCING DEMONSTRATION.

    (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''.

[[Page 124 STAT. 305]]

            (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
                    (B) by adding at the end the following:
        ``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) <<NOTE: 42 USC 1396a note.>>  Effective date.--The 
        amendments made by this subsection take effect 30 days after the 
        date of enactment of this Act.

SEC. 2404. <<NOTE: 42 USC 1396r-5 note.>>  PROTECTION FOR RECIPIENTS OF 
            HOME AND COMMUNITY-BASED SERVICES AGAINST SPOUSAL 
            IMPOVERISHMENT.

     <<NOTE: Time period. Applicability.>> 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)''.

SEC. 2405. FUNDING TO EXPAND STATE AGING AND DISABILITY RESOURCE 
            CENTERS.

    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).

SEC. 2406. SENSE OF THE SENATE REGARDING LONG-TERM CARE.

    (a) Findings.--The Senate makes the following findings:
            (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

[[Page 124 STAT. 306]]

        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 individuals.

    (b) Sense of the Senate.--It is the sense of the Senate that--
            (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.

             Subtitle F--Medicaid Prescription Drug Coverage

SEC. 2501. PRESCRIPTION DRUG REBATES.

    (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 inserting ``; and''; and
                          (iii) by adding at the end the following new 
                      subclause:
                                    ``(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 percent.

[[Page 124 STAT. 307]]

                                    ``(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. <<NOTE: Time period.>> --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.
                      <<NOTE: Determination.>> 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

[[Page 124 STAT. 308]]

                    (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 inserting ``; and''; and
                    (C) by adding at the end the following:
                          
                      ``(xiii) <<NOTE: Contracts. Reports. Determination.
                      >>  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 amended--
                    (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'' before 
                      the period; and
                          (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.''.

[[Page 124 STAT. 309]]

    (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 following new subparagraph:
                    ``(C) Treatment of new formulations.--
                          ``(i) In general.--Except as provided in 
                      clause (ii), 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) <<NOTE: 42 USC 1396r-8 note.>>  Effective date.--The 
        amendment made by paragraph (1) shall apply to drugs that are 
        paid for by a State after December 31, 2009.

    (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 
adding at the end the following new subparagraph:
                    ``(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).

[[Page 124 STAT. 310]]

            (2) <<NOTE: 42 USC 256b note.>>  Effective date.--The 
        amendments made by this subsection take effect on January 1, 
        2010.

SEC. 2502. ELIMINATION OF EXCLUSION OF COVERAGE OF CERTAIN DRUGS.

    (a) In General.--Section 1927(d) of the Social Security Act (42 
U.S.C. 1397r-8(d)) is amended--
            (1) in paragraph (2)--
                    (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) <<NOTE: 42 USC 1396r-8 note.>>  Effective Date.--The amendments 
made by this section shall apply to services furnished on or after 
January 1, 2014.

SEC. 2503. PROVIDING ADEQUATE PHARMACY REIMBURSEMENT.

    (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 
                following:

[[Page 124 STAT. 311]]

                    ``(B) Exclusion of customary prompt pay discounts 
                and other payments.--
                          ``(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 semicolon;
                          (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

[[Page 124 STAT. 312]]

        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) the following:
                          ``(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) <<NOTE: 42 USC 1396r-8 note.>>  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.

   Subtitle G--Medicaid Disproportionate Share Hospital (DSH) Payments

SEC. 2551. DISPROPORTIONATE SHARE HOSPITAL PAYMENTS.

    (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)'';

[[Page 124 STAT. 313]]

            (3) by redesignating paragraph (7) as paragraph (8); and
            (4) by inserting after paragraph (6) the following new 
        paragraph:
            ``(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, reduced by the 
                      applicable percentage determined for the 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 the following:
                          ``(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 <<NOTE: Determination.>> .--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--
                                    ``(I) if the State is a low DSH 
                                State described in paragraph (5)(B), the 
                                applicable percentage is equal to the 
                                product of the percentage reduction in 
                                uncovered individuals for the fiscal 
                                year from the preceding fiscal year and 
                                25 percent; and
                                    ``(II) if the State is any other 
                                State, the applicable percentage is 
                                equal to the product of the percentage 
                                reduction in uncovered individuals for 
                                the fiscal year from the preceding 
                                fiscal year and 50 percent.
                    ``(C) Fiscal year 
                described. <<NOTE: Determination.>> --For purposes of 
                subparagraph (A), the fiscal year described in this 
                subparagraph with respect to a State is the first fiscal 
                year that

[[Page 124 STAT. 314]]

                occurs after fiscal year 2012 for which 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 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 fiscal year.
                    ``(F) Uncovered 
                individuals. <<NOTE: Definition.>> --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) <<NOTE: 42 USC 1396r-4 note.>>  Effective Date.--The amendments 
made by subsection (a) take effect on October 1, 2011.

    Subtitle H--Improved Coordination for Dual Eligible Beneficiaries

SEC. 2601. 5-YEAR PERIOD FOR DEMONSTRATION PROJECTS.

    (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
            (3) by adding at the end the following new paragraph:

    ``(2)(A) <<NOTE: Determination.>>  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.

[[Page 124 STAT. 315]]

    ``(B) <<NOTE: Definition.>>  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 
                inserting ``(other than a waiver described in subsection 
                (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 case of a waiver described in section 
                1915(h)(2))'' after ``3 years''.

SEC. 2602. <<NOTE: 42 USC 1315b.>>  PROVIDING FEDERAL COVERAGE AND 
            PAYMENT COORDINATION FOR DUAL ELIGIBLE BENEFICIARIES.

    (a) Establishment of Federal Coordinated Health Care Office.--
            (1) In general.-- <<NOTE: Deadline.>> 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 Office.
            (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) <<NOTE: Appointment.>>  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.

[[Page 124 STAT. 316]]

            (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 
        programs.
            (5) Eliminating regulatory conflicts between rules under the 
        Medicare and Medicaid programs.
            (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 
        such Act.
            (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 
individuals.
    (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

[[Page 124 STAT. 317]]

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 Providers

SEC. 2701. ADULT HEALTH QUALITY MEASURES.

    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. <<NOTE: 42 USC 1320b-9b.>>  ADULT HEALTH QUALITY MEASURES.

    ``(a) Development of Core Set of Health Care Quality Measures for 
Adults Eligible for Benefits Under Medicaid.--
The <<NOTE: Publication.>> 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.-- <<NOTE: Publication.>> 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 adults.
            ``(2) Dissemination.-- <<NOTE: Publication.>> 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

[[Page 124 STAT. 318]]

                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. <<NOTE: Publication.>> --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.-- <<NOTE: Deadlines. Public 
        information.>> Not later than September 30, 2014, and annually 
        thereafter, the Secretary shall collect, analyze, and make 
        publicly available the information reported by States under 
        paragraph (1).

    ``(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.''.

SEC. 2702. <<NOTE: 42 USC 1396b-1.>>  PAYMENT ADJUSTMENT FOR HEALTH 
            CARE-ACQUIRED CONDITIONS.

    (a) In General. <<NOTE: Determination. Regulations.      Effective 
date.>> --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 beneficiaries.

Effective 
date.

    (b) Health Care-Acquired Condition. <<NOTE: Definition.>> --In this 
section. the term ``health care-acquired condition'' means a medical 
condition for which an individual was diagnosed that could be identified

[[Page 124 STAT. 319]]

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) <<NOTE: Applicability.>> 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.

SEC. 2703. STATE OPTION TO PROVIDE HEALTH HOMES FOR ENROLLEES WITH 
            CHRONIC CONDITIONS.

    (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. <<NOTE: 42 USC 1396w-4.>>  State Option To Provide 
Coordinated Care Through a Health Home for Individuals With Chronic 
Conditions.--

    ``(a) <<NOTE: Determination. Effective date.>> 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 services.

    ``(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 
section.
    ``(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--

[[Page 124 STAT. 320]]

                          ``(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) <<NOTE: Effective date.>> 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 
providers.
    ``(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

[[Page 124 STAT. 321]]

the quality of such services. When appropriate and feasible, a 
designated provider shall use health information technology in providing 
the State with such information.
    ``(h) Definitions.--In this section:
            ``(1) Eligible individual with chronic conditions.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                term `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.
                    ``(B) Rule of construction.--Nothing in this 
                paragraph 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 services.
            ``(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

[[Page 124 STAT. 322]]

        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 
        Protection and Affordable Care Act.''.

    (b) Evaluation.--
            (1) Independent evaluation.--
                    (A) In general.-- <<NOTE: Contracts.>> 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) <<NOTE: 42 USC 1396w-4 note.>> 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 conditions;
                          (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

[[Page 124 STAT. 323]]

                          (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.

SEC. 2704. <<NOTE: 42 USC 1396a note.>> DEMONSTRATION PROJECT TO 
            EVALUATE INTEGRATED CARE AROUND A HOSPITALIZATION.

    (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 hospitalization.
            (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) <<NOTE: Determination.>>  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 Secretary.
            (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

[[Page 124 STAT. 324]]

        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.

SEC. 2705. <<NOTE: 42 USC 1315a note.>>  MEDICAID GLOBAL PAYMENT SYSTEM 
            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 model.
    (b) Duration and Scope.--The demonstration project conducted under 
this section shall operate during a period of fiscal years 2010 through 
2012. <<NOTE: Selection.>>  The Secretary shall select not more than 5 
States to participate in the demonstration project.

    (c) Eligible Safety Net Hospital System or 
Network. <<NOTE: Definition.>> --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

[[Page 124 STAT. 325]]

        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 applicable.
            (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.

SEC. 2706. <<NOTE: 42 USC 1396a note.>> PEDIATRIC ACCOUNTABLE CARE 
            ORGANIZATION DEMONSTRATION PROJECT.

    (a) Authority To Conduct Demonstration.--
            (1) In general.--The Secretary of Health and Human Services 
        (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).
            (2) Duration.--The demonstration project shall begin on 
        January 1, 2012, and shall end on December 31, 2016.

    (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) <<NOTE: Contracts.>> Minimum participation period.--A 
        provider desiring to be recognized as an accountable care 
        organization under

[[Page 124 STAT. 326]]

        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 
appropriated such sums as are necessary to carry out this section.

SEC. 2707. <<NOTE: 42 USC 1396a note.>> MEDICAID EMERGENCY PSYCHIATRIC 
            DEMONSTRATION PROJECT.

    (a) Authority To Conduct Demonstration Project.--The Secretary of 
Health and Human Services (in this section referred to as the 
``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)). <<NOTE: Commencement date.>> 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 health.

    (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 (3).
            (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

[[Page 124 STAT. 327]]

        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, 
        2015.
            (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 
        Secretary.
            (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 following:
                    (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 hospitals.
                    (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

[[Page 124 STAT. 328]]

                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 section.
            (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 this section.

    (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.).

  Subtitle J--Improvements to the Medicaid and CHIP Payment and Access 
                           Commission (MACPAC)

SEC. 2801. MACPAC ASSESSMENT OF POLICIES AFFECTING ALL MEDICAID 
            BENEFICIARIES.

    (a) In General.--Section 1900 of the Social Security Act (42 U.S.C. 
1396) is amended--
            (1) in subsection (b)--

[[Page 124 STAT. 329]]

                    (A) in paragraph (1)--
                          (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'';
                    (B) in paragraph (2)--
                          (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 
                      following:
                    ``(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 processes.
                    ``(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

[[Page 124 STAT. 330]]

                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 following:
                    ``(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 paragraph:
            ``(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''; and
                          (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 `` <<NOTE: Reports.>> , 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

[[Page 124 STAT. 331]]

                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 following:
                    ``(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.''.

[[Page 124 STAT. 332]]

            (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
                    (C) by adding at the end the following:
            ``(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
            (3) by adding at the end the following:
            ``(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').
            ``(10) Coordinate and consult with the federal coordinated 
        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 
        individuals.
            ``(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,

[[Page 124 STAT. 333]]

        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.''.

     Subtitle K--Protections for American Indians and Alaska Natives

SEC. 2901. SPECIAL RULES RELATING TO INDIANS.

    (a) <<NOTE: 25 USC 1623.>> 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) <<NOTE: 25 USC 1623.>> 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
            (2) by adding at the end the following:
                                    ``(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''.
    (b) Effective Date.-- <<NOTE: Applicability. 42 USC 1395qq 
note.>> The amendments made by this section shall apply to items or 
services furnished on or after January 1, 2010.

[[Page 124 STAT. 334]]

             Subtitle L--Maternal and Child Health Services

SEC. 2951. MATERNAL, INFANT, AND EARLY CHILDHOOD HOME VISITING PROGRAMS.

    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. <<NOTE: 42 USC 711.>> MATERNAL, INFANT, AND EARLY CHILDHOOD 
            HOME VISITING PROGRAMS.

    ``(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.-- <<NOTE: Deadline.>> 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 including--
                          ``(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 the State; and
                          ``(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

[[Page 124 STAT. 335]]

        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 section.

    ``(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) <<NOTE: Determination.>> Grant duration.--The 
        Secretary shall determine the period of years for which a grant 
        is made to an eligible entity under paragraph (1).
            ``(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

[[Page 124 STAT. 336]]

                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 Secretary.
                          ``(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 agreements.
                                    ``(II) Advisory 
                                panel. <<NOTE: Establishment.>> --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. <<NOTE: Determination. Termination.>> --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).

[[Page 124 STAT. 337]]

                    ``(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 specified in subparagraph (A).
            ``(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 components:
                    ``(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--

[[Page 124 STAT. 338]]

                                            ``(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 
                      delivered.
                          ``(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 the following:
                    ``(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.

[[Page 124 STAT. 339]]

                    ``(D) Eligible families that have a history of child 
                abuse or neglect or have had interactions with child 
                welfare services.
                    ``(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 includes the 
following:
            ``(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 
        assessment required under subsection (b)(1)(A).
            ``(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

[[Page 124 STAT. 340]]

                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. <<NOTE: Establishment.>> --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) <<NOTE: Grants. Contracts.>> 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 <<NOTE: Assessment.>> --
                          ``(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.

[[Page 124 STAT. 341]]

            ``(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 available.

    ``(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) <<NOTE: Requirements.>> 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); and
                          ``(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

[[Page 124 STAT. 342]]

                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
                          ``(ii) establish quantifiable, measurable 3- 
                      and 5-year benchmarks consistent with subsection 
                      (d)(1)(A).
            ``(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 
        under this section.
            ``(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.

[[Page 124 STAT. 343]]

                    ``(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.''.

[[Page 124 STAT. 344]]

SEC. 2952. <<NOTE: 42 USC 712 note.>> SUPPORT, EDUCATION, AND RESEARCH 
            FOR POSTPARTUM DEPRESSION.

    (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

[[Page 124 STAT. 345]]

                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. <<NOTE: 42 USC 712.>> 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 
Act.
    ``(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

[[Page 124 STAT. 346]]

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 section.
    ``(f) 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 
        under this section.
            ``(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).

    ``(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 2012.
            (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.

[[Page 124 STAT. 347]]

SEC. 2953. PERSONAL RESPONSIBILITY EDUCATION.

    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 
the following:

``SEC. 513. <<NOTE: 42 USC 713.>> 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 under paragraph (2).
                    ``(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

[[Page 124 STAT. 348]]

                                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 2011.
                          ``(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

[[Page 124 STAT. 349]]

        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) <<NOTE: Definition.>> 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 following:

[[Page 124 STAT. 350]]

                          ``(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

[[Page 124 STAT. 351]]

                      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 
                      programs.
                          ``(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 payments to excluded individuals 
                      and entities).
                          ``(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 administrative expenditures).
                          ``(iv) 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.
                          ``(v) Section 507 (relating to penalties for 
                      false statements).
                          ``(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)).

[[Page 124 STAT. 352]]

            ``(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.''.

SEC. 2954. RESTORATION OF FUNDING FOR ABSTINENCE EDUCATION.

    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
            (2) in subsection (d)--
                    (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.

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 
            PROGRAMS.

    (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) <<NOTE: Certification.>> 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
            (2) by adding at the end the following:
                          ``(vii) steps to ensure that the components of 
                      the transition plan development process required 
                      under

[[Page 124 STAT. 353]]

                      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''.

    (d) <<NOTE: 42 USC 622 note.>> Effective Date.--The amendments made 
by this section take effect on October 1, 2010.

     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.

    (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 October 1, 2012.
                    ``(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;

[[Page 124 STAT. 354]]

                                    ``(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 
                                        Services.
                                    ``(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

[[Page 124 STAT. 355]]

                      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 Secretary determines appropriate.
                    ``(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

[[Page 124 STAT. 356]]

                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 measure.
                          ``(iii) Weights.--The methodology developed 
                      under subparagraph (A) shall provide for the 
                      assignment of weights for categories of measures 
                      as the Secretary determines appropriate.
                          ``(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) <<NOTE: Determination.>> 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 fiscal year.
                    ``(C) Value-based incentive payment percentage.--

[[Page 124 STAT. 357]]

                          ``(i) In general.--The Secretary shall specify 
                      a value-based incentive payment percentage for a 
                      hospital for a fiscal year.
                          ``(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); and
                                    ``(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 year.
                          ``(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; and
                          ``(v) with respect to fiscal year 2017 and 
                      succeeding fiscal years, 2 percent.
                    ``(D) Base operating drg payment amount defined.--
                          ``(i) In general.--Except as provided in 
                      clause (ii), 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

[[Page 124 STAT. 358]]

                                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. <<NOTE: Deadline.>> --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 year.
            ``(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 public.

[[Page 124 STAT. 359]]

                          ``(iii) Website.--Such information shall be 
                      posted on the Hospital Compare Internet website in 
                      an easily understandable format.
                    ``(B) Aggregate information.-- <<NOTE: Web 
                posting.>> 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 following:
                          ``(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 (7)(B)(i).
                          ``(iii) The establishment of the performance 
                      standards under paragraph (3) and the performance 
                      period under paragraph (4).
                          ``(iv) The measures specified under subsection 
                      (b)(3)(B)(viii) and the measures selected under 
                      paragraph (2).
                          ``(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--

[[Page 124 STAT. 360]]

                    (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) <<NOTE: Effective date.>> 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) <<NOTE: Validation process.>> 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) <<NOTE: Web posting. Reports.>> 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

[[Page 124 STAT. 361]]

                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 recommendations for such 
                      legislation and administrative action as the 
                      Comptroller General determines appropriate.
            (5) HHS study and report.--
                    (A) Study.--The Secretary of Health and Human 
                Services 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--
                          (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 value-based purchasing program; and
                          (iv) any other area determined appropriate by 
                      the Secretary.

[[Page 124 STAT. 362]]

                    (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 determines appropriate.

    (b) <<NOTE: 42 USC 1395ww note.>> Value-Based Purchasing 
Demonstration Programs.--
            (1) Value-based purchasing demonstration program for 
        inpatient critical access hospitals.--
                    (A) Establishment.--
                          (i) In general.-- <<NOTE: Deadline.>> 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 appropriate.

[[Page 124 STAT. 363]]

            (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.--
                    (A) Establishment.--
                          (i) In general.-- <<NOTE: Deadline.>> Not 
                      later than 2 years after the date 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 hospitals.
                          (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 paragraph shall be conducted for a 3-
                      year period.
                          (iv) Sites.--The Secretary shall conduct the 
                      demonstration program under this paragraph at an 
                      appropriate number (as determined by the 
                      Secretary) of applicable 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 applicable hospitals with 
                      respect to inpatient hospital services; and
                          (ii) recommendations for such other 
                      legislation and administrative action as the 
                      Secretary determines appropriate.

SEC. 3002. IMPROVEMENTS TO THE PHYSICIAN QUALITY REPORTING SYSTEM.

    (a) Extension.--Section 1848(m) of the Social Security Act (42 
U.S.C. 1395w-4(m)) is amended--

[[Page 124 STAT. 364]]

            (1) in paragraph (1)--
                    (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.'';
            (2) in paragraph (3)--
                    (A) in subparagraph (A), in the matter preceding 
                clause (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 percent.

[[Page 124 STAT. 365]]

                    ``(B) Application.--
                          ``(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)''.
            (2) <<NOTE: 42 USC 1395w-4 note.>> Effective date.--The 
        amendment made by paragraph (1) shall 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. <<NOTE: Plan.>> --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 
subparagraph:
                    ``(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''; and

[[Page 124 STAT. 366]]

            (2) by adding at the end the following new subparagraph:
                    ``(I) Informal appeals process.-- 
                <<NOTE: Deadline.>> 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.''.

SEC. 3003. IMPROVEMENTS TO THE PHYSICIAN FEEDBACK PROGRAM.

    (a) In General.--Section 1848(n) of the Social Security Act (42 
U.S.C. 1395w-4(n)) is amended--
            (1) in paragraph (1)--
                    (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
                          (iii) by adding at the end the following new 
                      clauses:
                          ``(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)'';
            (2) in paragraph (4)--
                    (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
            (4) by adding at the end the following new paragraphs:
            ``(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

[[Page 124 STAT. 367]]

                      subparagraph (A) by the entity with a contract 
                      under section 1890(a).
                    ``(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 individual.
                    ``(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

[[Page 124 STAT. 368]]

        episode grouper developed by the Secretary under section 
        1848(n)(9)(A). Such review shall be conducted on an expedited 
        basis.''.

SEC. 3004. QUALITY REPORTING FOR LONG-TERM CARE HOSPITALS, INPATIENT 
            REHABILITATION HOSPITALS, AND HOSPICE PROGRAMS.

    (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 
amended by adding at the end the following new paragraph:
            ``(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 year.
                    ``(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 section 1890(a).
                          ``(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.

[[Page 124 STAT. 369]]

                    ``(E) Public availability of data 
                submitted. <<NOTE: Procedures.>> --The Secretary shall 
                establish procedures for making data submitted under 
                subparagraph (C) available to the public. 
                Such <<NOTE: Review.>>  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. <<NOTE: Web posting.>> 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--
            (1) by redesignating paragraph (7) as paragraph (8); and
            (2) by inserting after paragraph (6) the following new 
        paragraph:
            ``(7) Quality reporting.--
                    ``(A) Reduction in update for failure to report.--
                          ``(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.
                          ``(ii) Special rule.--The application of this 
                      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.
                    ``(B) Noncumulative application.--Any reduction 
                under 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 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 section 1890(a).
                          ``(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

[[Page 124 STAT. 370]]

                      adopted by a consensus organization identified by 
                      the Secretary.
                          ``(iii) Time frame. <<NOTE: Publication.>> --
                      Not later than October 1, 2012, the Secretary 
                      shall publish the measures selected under this 
                      subparagraph that will be applicable with respect 
                      to fiscal year 2014.
                    ``(E) Public availability of data 
                submitted. <<NOTE: Procedures.>> --The Secretary shall 
                establish procedures for making data submitted under 
                subparagraph (C) available to the public. 
                Such <<NOTE: Review.>>  procedures shall ensure that a 
                rehabilitation facility has the opportunity to review 
                the data that is to be made public with respect to the 
                facility prior to such data being made 
                public. <<NOTE: Web posting.>>  The Secretary shall 
                report quality measures that relate to services 
                furnished in inpatient settings in rehabilitation 
                facilities on the Internet website of the Centers for 
                Medicare & Medicaid Services.''.

    (c) Hospice Programs.--Section 1814(i) of the Social Security Act 
(42 U.S.C. 1395f(i)) is amended--
            (1) by redesignating paragraph (5) as paragraph (6); and
            (2) by inserting after paragraph (4) the following new 
        paragraph:
            ``(5) Quality reporting.--
                    ``(A) Reduction in update for failure to report.--
                          ``(i) In general.--For purposes of fiscal year 
                      2014 and 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.
                          ``(ii) Special rule.--The application of this 
                      subparagraph may result in the market basket 
                      percentage increase under paragraph 
                      (1)(C)(ii)(VII) or paragraph (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.
                    ``(B) Noncumulative application.--Any reduction 
                under 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 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.
                    ``(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 section 1890(a).

[[Page 124 STAT. 371]]

                          ``(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. <<NOTE: Publication.>> --
                      Not later than October 1, 2012, the Secretary 
                      shall publish the measures selected under this 
                      subparagraph that will be applicable with respect 
                      to fiscal year 2014.
                    ``(E) Public availability of data submitted.-- 
                <<NOTE: Procedures.>> The Secretary shall establish 
                procedures for making data submitted under subparagraph 
                (C) available to the public. 
                Such <<NOTE: Review.>> procedures shall 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. <<NOTE: Web posting.>>  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.''.

SEC. 3005. QUALITY REPORTING FOR PPS-EXEMPT CANCER HOSPITALS.

    Section 1866 of the Social Security Act (42 U.S.C. 1395cc) is 
amended--
            (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
            (2) by adding at the end the following new subsection:

    ``(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 
        purposes of this subparagraph.
            ``(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

[[Page 124 STAT. 372]]

                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.
                    ``(C) Time frame. <<NOTE: Publication.>> --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 2014.
            ``(4) Public availability of data 
        submitted. <<NOTE: Procedures.>> --The Secretary shall establish 
        procedures for making data submitted under paragraph (4) 
        available to the public. <<NOTE: Review.>> 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. <<NOTE: Web posting.>>  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 Internet website 
        of the Centers for Medicare & Medicaid Services.''.

SEC. 3006. PLANS FOR A VALUE-BASED PURCHASING PROGRAM FOR SKILLED 
            NURSING FACILITIES AND HOME HEALTH AGENCIES.

    (a) Skilled Nursing Facilities.--
            (1) In general.--The Secretary of Health and Human Services 
        (in 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 have been endorsed by 
                      the entity with a contract under section 1890(a).
                          (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.
                    (B) The reporting, collection, and validation of 
                quality data.
                    (C) The structure of value-based payment 
                adjustments, including the determination of thresholds 
                or improvements in quality that would substantiate a 
                payment adjustment,

[[Page 124 STAT. 373]]

                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 
                Secretary.
            (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 
        developed under paragraph (1).

    (b) Home Health Agencies.--
            (1) In general.--The Secretary of Health and Human Services 
        (in 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 home health agencies (as defined in 
        section 1861(o) of such Act (42 U.S.C. 1395x(o))).
            (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 home health 
                agencies.
                    (B) The reporting, collection, and validation of 
                quality data.
                    (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 home health agencies.
                    (E) Any other issues determined appropriate by the 
                Secretary.
            (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 
        developed under paragraph (1).

SEC. 3007. VALUE-BASED PAYMENT MODIFIER UNDER THE PHYSICIAN FEE 
            SCHEDULE.

    Section 1848 of the Social Security Act (42 U.S.C. 1395w-4) is 
amended--
            (1) in subsection (b)(1), by inserting ``subject to 
        subsection (p),'' after ``1998,''; and

[[Page 124 STAT. 374]]

            (2) by adding at the end the following new subsection:

    ``(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 by the Secretary.
                          ``(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 appropriate by the Secretary.
            ``(4) Implementation.--
                    ``(A) Publication of measures, dates of 
                implementation, performance period.-- 
                <<NOTE: Deadline.>> 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

[[Page 124 STAT. 375]]

                                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) <<NOTE: Effective date.>>  
                                beginning on January 1, 2015, with 
                                respect to specific physicians and 
                                groups of physicians the Secretary 
                                determines appropriate; and
                                    ``(II) <<NOTE: Deadline.>>  
                                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 manner.
            ``(5) Systems-based care.-- <<NOTE: Applicability.>> 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.-- <<NOTE: Time period.>> 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). <<NOTE: Effective date. Determination.>> 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.-- <<NOTE: Determination.>> 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.

[[Page 124 STAT. 376]]

            ``(10) Limitations on review.--There shall be no 
        administrative or judicial review under section 1869, section 
        1878, or otherwise of--
                    ``(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).''.

SEC. 3008. PAYMENT ADJUSTMENT FOR CONDITIONS ACQUIRED IN HOSPITALS.

    (a) In General.--Section 1886 of the Social Security Act (42 U.S.C. 
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) <<NOTE: Definition.>> 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) <<NOTE: Determined.>> 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. <<NOTE: Deadline. Reports.>> --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

[[Page 124 STAT. 377]]

                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) <<NOTE: Definition.>>  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. <<NOTE: Public information.>> --
                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 opportunity to review, and 
                submit corrections for, the information to be made 
                public with respect to the hospital under subparagraph 
                (A) prior to such information being made public.
                    ``(C) Website.--Such information shall be posted on 
                the Hospital Compare Internet website in an easily 
                understandable format.
            ``(7) Limitations on review.--There shall be no 
        administrative or judicial review under section 1869, section 
        1878, or otherwise of the following:
                    ``(A) The criteria described in paragraph (2)(A).
                    ``(B) The specification of hospital acquired 
                conditions under paragraph (3).
                    ``(C) The specification of the applicable period 
                under paragraph (4).
                    ``(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

[[Page 124 STAT. 378]]

        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 determines appropriate.

        PART II--NATIONAL STRATEGY TO IMPROVE HEALTH CARE QUALITY

SEC. 3011. NATIONAL STRATEGY.

    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. <<NOTE: 42 USC 280j.>> 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 paragraph (1).
                    ``(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

[[Page 124 STAT. 379]]

                          ``(ix) address other areas as determined 
                      appropriate by the Secretary.
                    ``(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 subsection (a).
            ``(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 priorities.
                    ``(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 subsection (a).
            ``(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--

[[Page 124 STAT. 380]]

                          ``(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 section.
                    ``(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 Social Security 
                Act.

    ``(e) Health Care Quality Internet Website.-- 
<<NOTE: Deadline. Public information.>> 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.''.

SEC. 3012. <<NOTE: 42 USC 280j note.>> INTERAGENCY WORKING GROUP ON 
            HEALTH CARE QUALITY.

    (a) <<NOTE: President. Establishment.>> 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 
following:
            (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 3011).
            (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;

[[Page 124 STAT. 381]]

                    (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 Secretary of Health and Human Services.
                    (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 Group.

    (d) Report to Congress.-- <<NOTE: Public information. Web 
posting.>> 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).

SEC. 3013. QUALITY MEASURE DEVELOPMENT.

    (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) <<NOTE: 42 USC 299c--299c-7.>> 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. <<NOTE: 42 USC 299b-31.>>  QUALITY MEASURE DEVELOPMENT.

    ``(a) Quality Measure.-- <<NOTE: Definition.>> 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.

[[Page 124 STAT. 382]]

    ``(b) Identification of Quality Measures.--
            ``(1) <<NOTE: Consultation.>> 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 under section 1890(a) of the Social Security 
                Act and other 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 Security Act.
            ``(2) Publication.-- <<NOTE: Public information. Web 
        posting. Reports.>> 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

[[Page 124 STAT. 383]]

                    ``(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) <<NOTE: Requirements.>> 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 technologies.
                    ``(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 
Secretary.
    ``(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

[[Page 124 STAT. 384]]

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.

SEC. 3014. QUALITY MEASUREMENT.

    (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 Service Act.
                    ``(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.--

[[Page 124 STAT. 385]]

                          ``(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.-- 
        <<NOTE: Deadline.>> 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 established under section 
                      399HH of the Public Health 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.  <<NOTE: Deadlines. 42 USC 1395aaa-1.>> (a) Multi-
stakeholder Group Input Into Selection of Quality Measures.-- 
<<NOTE: Regulations.>> 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.

[[Page 124 STAT. 386]]

            ``(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.-- 
        <<NOTE: Federal Register, publication.>> 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); and
                    ``(B) <<NOTE: Public information.>> 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 Public Health Service Act.
            ``(2) Existing methods.--To the extent practicable, the 
        Secretary shall utilize and expand existing dissemination 
        methods in disseminating quality measures under the process 
        established under paragraph (1).

    ``(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 to--
                          ``(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

[[Page 124 STAT. 387]]

                    ``(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 
expended.

SEC. 3015. DATA COLLECTION; PUBLIC REPORTING.

    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 
following:

``SEC. 399II. <<NOTE: 42 USC 280j-1.>> 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).
            ``(2) Eligible entities.--To be eligible for a grant or 
        contract under this subsection, an entity shall--
                    ``(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 information;
                          ``(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;

[[Page 124 STAT. 388]]

                    ``(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.-- <<NOTE: Standards.>> 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. <<NOTE: 42 USC 280j-2.>> PUBLIC REPORTING OF PERFORMANCE 
            INFORMATION.

    ``(a) Development of Performance Websites.-- <<NOTE: Web 
posting.>> 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 
conditions.
    ``(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

[[Page 124 STAT. 389]]

        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.
    ``(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.''.

      PART III--ENCOURAGING DEVELOPMENT OF NEW PATIENT CARE MODELS

SEC. 3021. ESTABLISHMENT OF CENTER FOR MEDICARE AND MEDICAID INNOVATION 
            WITHIN CMS.

    (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.  <<NOTE: 42 USC 1315a.>> (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 January 1, 2011.
            ``(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; or
                          ``(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.

[[Page 124 STAT. 390]]

    ``(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) <<NOTE: Determination.>> 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 following:
                                    ``(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.

[[Page 124 STAT. 391]]

                          ``(vii) Utilizing medication therapy 
                      management services, such as those described in 
                      section 935 of the Public Health Service Act.
                          ``(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 individuals.
                          ``(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.

[[Page 124 STAT. 392]]

                          ``(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 professionals.
                    ``(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 individuals.
                          ``(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 settings.
                          ``(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 
                      suppliers.
                          ``(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 title.
                    ``(B) <<NOTE: Determination.>> 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,

[[Page 124 STAT. 393]]

                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 title;
                          ``(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 Secretary; and
                          ``(ii) the changes in spending under the 
                      applicable titles by reason of the model.
                    ``(B) Information.-- <<NOTE: Public 
                information. Determination.>> 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 models.

    ``(c) <<NOTE: Determination.>> 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 to--
                    ``(A) reduce spending under applicable title without 
                reducing the quality of care; or
                    ``(B) improve the quality of care and reduce 
                spending; and
            ``(2) <<NOTE: Certification.>> 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).
            ``(2) Limitations on review.--There shall be no 
        administrative or judicial review under section 1869, section 
        1878, or otherwise of--
                    ``(A) the selection of models for testing or 
                expansion under this section;

[[Page 124 STAT. 394]]

                    ``(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; and
                    ``(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). <<NOTE: Determination.>> 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 
amended--
            (1) in paragraph (81), by striking ``and'' at the end;

[[Page 124 STAT. 395]]

            (2) in paragraph (82), by striking the period at the end and 
        inserting ``; and''; and
            (3) by inserting after paragraph (82) the following new 
        paragraph:
            ``(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.

SEC. 3022. MEDICARE SHARED SAVINGS PROGRAM.

    Title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) is 
amended by adding at the end the following new section:


                        ``shared savings program


    ``Sec. 1899.  <<NOTE: 42 USC 1395jjj.>> (a) Establishment.--
            ``(1) In general.-- <<NOTE: Deadline.>> 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.--
            ``(1) In general.--Subject to the succeeding provisions of 
        this 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 
                professionals.
                    ``(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 
        requirements:
                    ``(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.

[[Page 124 STAT. 396]]

                    ``(B) <<NOTE: Contracts.>> 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 systems.
                    ``(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 technologies.
                    ``(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.-- <<NOTE: Determinations.>> 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 
                determines appropriate.
                    ``(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

[[Page 124 STAT. 397]]

                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.-- <<NOTE: Determination.>> 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)(i).
                    ``(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

[[Page 124 STAT. 398]]

                      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. <<NOTE: Limitations.>> 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 (b)(3);
            ``(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);

[[Page 124 STAT. 399]]

            ``(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).

    ``(h) Definitions.--In this section:
            ``(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.''.

SEC. 3023. NATIONAL PILOT PROGRAM ON PAYMENT BUNDLING.

    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.  <<NOTE: 42 USC 1395cc-4.>> (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.
            ``(2) Definitions.--In this section:
                    ``(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 condition.
                    ``(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

[[Page 124 STAT. 400]]

                                    ``(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 
                      appropriate.
                    ``(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

[[Page 124 STAT. 401]]

        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.-- <<NOTE: Determination.>> 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.--
                    ``(A) In general.--
                          ``(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

[[Page 124 STAT. 402]]

                      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 Secretary.
                    ``(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.-- <<NOTE: Procedures.>> 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.
            ``(4) Quality measures.--
                    ``(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 hospitalization.
                          ``(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.--

[[Page 124 STAT. 403]]

                          ``(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 by 
                      the Secretary.

    ``(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 implementation of the pilot program, the Secretary 
                shall submit to Congress a report on the final results 
                of the independent evaluation conducted under paragraph 
                (1).

    ``(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.--
            ``(1) In general.-- <<NOTE: Deadline.>> Not later than 
        January 1, 2016, the 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.''.

[[Page 124 STAT. 404]]

SEC. 3024. INDEPENDENCE AT HOME DEMONSTRATION PROGRAM.

    Title XVIII of the Social Security Act is amended by inserting after 
section 1866D, as inserted by section 3023, the following new section:


      ``independence at home medical practice demonstration program


    ``Sec. 1866D.  <<NOTE: 42 USC 1395cc-5.>> (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 
                satisfaction.

    ``(b) Independence at Home Medical Practice.--
            ``(1) Independence at home medical practice defined.--In 
        this section:
                    ``(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;

[[Page 124 STAT. 405]]

                          ``(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 demonstration program.
                <<NOTE: Reports. Determination.>> 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 demonstration program.
                    ``(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 demonstration program.
            ``(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

[[Page 124 STAT. 406]]

        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 determined under paragraph 
        (1).

    ``(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 appropriate.
            ``(2) Patient election to participate.-- 
        <<NOTE: Determination.>> 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

[[Page 124 STAT. 407]]

        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 1899.
            ``(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 1899.
            ``(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.
            ``(7) Administration.--Chapter 35 of title 44, United States 
        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

[[Page 124 STAT. 408]]

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 available until expended.
    ``(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.''.

SEC. 3025. HOSPITAL READMISSIONS REDUCTION PROGRAM.

    (a) In General.--Section 1886 of the Social Security Act (42 U.S.C. 
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 of--
                    ``(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.--
                    ``(A) In general.-- <<NOTE: Definition.>> Except as 
                provided in subparagraph (B), 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 (o)) for a discharge if this 
                      subsection did not apply; reduced by
                          ``(ii) any portion of such payment amount that 
                      is 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

[[Page 124 STAT. 409]]

                      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.-- 
                      <<NOTE: Reports. Deadline.>> 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 section.
            ``(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 0.97.
            ``(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.

[[Page 124 STAT. 410]]

                    ``(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.--
                          ``(i) In general.--Subject to clause (ii), the 
                      term `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 
                                hospital for such condition with respect 
                                to such applicable period.
                          ``(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.
            ``(5) Definitions.--For purposes of this subsection:
                    ``(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. <<NOTE: Effective date.>> --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

[[Page 124 STAT. 411]]

                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.
            ``(6) Reporting hospital specific information.--
                    ``(A) In general.-- <<NOTE: Public 
                information.>> The Secretary shall make information 
                available to the public regarding readmission rates of 
                each subsection (d) hospital under the program.
                    ``(B) Opportunity to review and submit 
                corrections.--The Secretary shall ensure that a 
                subsection (d) hospital has the opportunity to review, 
                and submit corrections for, the information to be made 
                public with respect to the hospital under subparagraph 
                (A) prior to such information being made public.
                    ``(C) Website.--Such information shall be posted on 
                the Hospital Compare Internet website in an easily 
                understandable format.
            ``(7) Limitations on review.--There shall be no 
        administrative or judicial review under section 1869, section 
        1878, or otherwise of the following:
                    ``(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

[[Page 124 STAT. 412]]

                respect to this title and posted on the CMS Hospital 
                Compare website.
                    ``(B) Posting of hospital specific all patient 
                readmission rates.-- <<NOTE: Web posting.>> 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 (A).
                          ``(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. <<NOTE: 42 USC 280j-3.>> QUALITY IMPROVEMENT PROGRAM FOR 
            HOSPITALS WITH A HIGH SEVERITY ADJUSTED READMISSION RATE.

    ``(a) Establishment.--
            ``(1) In general.-- <<NOTE: Deadline.>> Not later than 2 
        years after the date of 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.-- <<NOTE: Determination.>> As 
determined appropriate by the Secretary, eligible hospitals and patient 
safety organizations

[[Page 124 STAT. 413]]

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.''.

SEC. 3026. <<NOTE: 42 USC 1395b-1 note.>> COMMUNITY-BASED CARE 
            TRANSITIONS PROGRAM.

    (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 
        following:
                    (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 by the Secretary.
            (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 under this section.
            (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.

    (c) Requirements.--
            (1) Duration.--
                    (A) In general.--The program shall be conducted for 
                a 5-year period, beginning January 1, 2011.
                    (B) Expansion.-- 
                <<NOTE: Determination. Certification.>> 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

[[Page 124 STAT. 414]]

                title, certifies) that such expansion would reduce 
                spending under this title without reducing quality.
            (2) Application; participation.--
                    (A) In general.--
                          (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 entities that--
                    (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.

[[Page 124 STAT. 415]]

    (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 
until expended.

SEC. 3027. EXTENSION OF GAINSHARING DEMONSTRATION.

    (a) In General.--Subsection (d)(3) of section 5007 of the Deficit 
Reduction Act of 2005 (Public Law 109-171) <<NOTE: 42 USC 1395ww 
note.>> 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''.

        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.

    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.''.

[[Page 124 STAT. 416]]

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 ( <<NOTE: 42 USC 
1395w-4.>> 42 U.S.C. 1395w4(e)(1)) is amended--
            (1) in subparagraph (A), by striking ``and (G)'' and 
        inserting ``(G), and (H)''; and
            (2) by adding at the end the following new subparagraph:
                    ``(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 furnished during 2011, the employee wage 
                      and rent portions of the practice expense 
                      geographic index described in subparagraph (A)(i) 
                      shall reflect \1/2\ 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.
                          ``(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 
                      of the following:
                                    ``(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

[[Page 124 STAT. 417]]

                                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) <<NOTE: Deadline.>> 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, including--
                                    ``(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.''.

SEC. 3103. EXTENSION OF EXCEPTIONS PROCESS FOR MEDICARE THERAPY CAPS.

    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''.

SEC. 3104. EXTENSION OF PAYMENT FOR TECHNICAL COMPONENT OF CERTAIN 
            PHYSICIAN PATHOLOGY SERVICES.

    Section 542(c) of the Medicare, Medicaid, and SCHIP Benefits 
Improvement and Protection Act of 2000 (as enacted into law by section 
1(a)(6) of Public Law 106-554), as amended by section 732 of the 
Medicare 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''.

SEC. 3105. EXTENSION OF AMBULANCE ADD-ONS.

    (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 <<NOTE: 42 USC 1395m 
note.>> (Public Law

[[Page 124 STAT. 418]]

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''.

SEC. 3106. EXTENSION OF CERTAIN PAYMENT RULES FOR LONG-TERM CARE 
            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''.

SEC. 3107. EXTENSION OF PHYSICIAN FEE SCHEDULE MENTAL HEALTH ADD-ON.

    Section 138(a)(1) of the Medicare Improvements for Patients and 
Providers Act of 2008 (Public Law 110-275) <<NOTE: 42 USC 1395w-4 
note.>> is amended by striking ``December 31, 2009'' and inserting 
``December 31, 2010''.

SEC. 3108. PERMITTING PHYSICIAN ASSISTANTS TO ORDER POST-HOSPITAL 
            EXTENDED CARE SERVICES.

    (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,''.

    (b) <<NOTE: 42 USC 1395f note.>> Effective Date.--The amendments 
made by this section shall apply to items and services furnished on or 
after January 1, 2011.

SEC. 3109. EXEMPTION OF CERTAIN PHARMACIES FROM ACCREDITATION 
            REQUIREMENTS.

    (a) In General.--Section 1834(a)(20) of the Social Security Act (42 
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

[[Page 124 STAT. 419]]

                such evidence of accreditation prior to January 1, 
                2011'' before the semicolon at the end; and
            (2) by adding at the end the following new subparagraph:
                    ``(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) <<NOTE: Criteria.>> Pharmacies 
                      described.--A pharmacy described in this clause is 
                      a pharmacy that meets each of the following 
                      criteria:
                                    ``(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 
                                specified by the Secretary.
                                    ``(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) <<NOTE: 42 USC 1395m note.>> Administration.--Notwithstanding 
any other provision of law, the Secretary may implement the amendments 
made by subsection (a) by program instruction or otherwise.

[[Page 124 STAT. 420]]

    (c) <<NOTE: 42 USC 1395m note.>> 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).

SEC. 3110. PART B SPECIAL ENROLLMENT PERIOD FOR DISABLED TRICARE 
            BENEFICIARIES.

    (a) In General.--
            (1) In general.--Section 1837 of the Social Security Act (42 
        U.S.C. 1395p) is amended by adding at the end the following new 
        subsection:

    ``(l)(1) In the case of any individual who is a covered beneficiary 
(as defined in section 1072(5) of title 10, United States Code) at the 
time the individual is entitled to 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 
lifetime.
    ``(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.''.
            (2) <<NOTE: 42 USC 1395p note.>> Effective date.--The 
        amendment made by paragraph (1) shall 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''.

[[Page 124 STAT. 421]]

SEC. 3111. PAYMENT FOR BONE DENSITY TESTS.

    (a) Payment.--
            (1) In general.--Section 1848 of the Social Security Act (42 
        U.S.C. 1395w-4) is amended--
                    (A) in subsection (b)--
                          (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; and
                          (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
                          (iii) by adding at the end the following new 
                      subclause:
                                    ``(IV) subsection (b)(6) shall not 
                                be taken into account in applying clause 
                                (ii)(II) for 2010 or 2011.''.
            (2) <<NOTE: 42 USC 1395w-4 note.>> 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.

SEC. 3112. REVISION TO THE MEDICARE IMPROVEMENT FUND.

    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''.

[[Page 124 STAT. 422]]

SEC. 3113. <<NOTE: 42 USC 1395l note.>> TREATMENT OF CERTAIN COMPLEX 
            DIAGNOSTIC LABORATORY TESTS.

    (a) Demonstration Project.--
            (1) In general.--The Secretary of Health and Human Services 
        (in 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

[[Page 124 STAT. 423]]

            (2) such recommendations as the Secretary determines 
        appropriate.

    (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 
transferred under the preceding sentence shall remain available until 
expended.

SEC. 3114. IMPROVED ACCESS FOR CERTIFIED NURSE-MIDWIFE SERVICES.

    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''.

                       PART II--RURAL PROTECTIONS

SEC. 3121. EXTENSION OF OUTPATIENT HOLD HARMLESS PROVISION.

    (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: <<NOTE: Time period. Applicability.>> ``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.''.

SEC. 3122. <<NOTE: 42 USC 1395l note.>> EXTENSION OF MEDICARE REASONABLE 
            COSTS PAYMENTS FOR CERTAIN 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 
period at the end.

SEC. 3123. <<NOTE: 42 USC 1395ww note.>> EXTENSION OF THE RURAL 
            COMMUNITY HOSPITAL DEMONSTRATION PROGRAM.

    (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 
subsection:
    ``(g) One-Year Extension of Demonstration Program.--
            ``(1) In general.--Subject to the succeeding provisions of 
        this subsection, the Secretary shall conduct the demonstration

[[Page 124 STAT. 424]]

        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 under this section.
            ``(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 
        Prescription Drug, Improvement, and Modernization Act of 2003 
        (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)''.

SEC. 3124. EXTENSION OF THE MEDICARE-DEPENDENT HOSPITAL (MDH) PROGRAM.

    (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

[[Page 124 STAT. 425]]

            (2) in clause (ii)(II), by striking ``October 1, 2011'' and 
        inserting ``October 1, 2012''.

    (b) Conforming Amendments.--
            (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 2011'' and inserting ``through fiscal year 2012''.

SEC. 3125. TEMPORARY IMPROVEMENTS TO THE MEDICARE INPATIENT HOSPITAL 
            PAYMENT ADJUSTMENT FOR LOW-VOLUME HOSPITALS.

    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
            (4) by adding at the end the following new subparagraph:
                    ``(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--

[[Page 124 STAT. 426]]

            (1) in subsection (d)(4)(B)(i)(3), by striking subclause 
        (III); and
            (2) in subsection (j)--
                    (A) in paragraph (8), by striking subparagraph (B) 
                and inserting the following:
                    ``(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.

SEC. 3128. TECHNICAL CORRECTION RELATED TO CRITICAL ACCESS HOSPITAL 
            SERVICES.

    (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) <<NOTE: 42 USC 1395m note.>> Effective Date.--The amendments 
made by subsection (a) shall take effect as if included in the enactment 
of section 405(a) of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (Public Law 108-173; 117 Stat. 2266).

SEC. 3129. EXTENSION OF AND REVISIONS TO MEDICARE RURAL HOSPITAL 
            FLEXIBILITY PROGRAM.

    (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''; and
            (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--

[[Page 124 STAT. 427]]

            (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 the 
                end.

    (c) <<NOTE: 42 USC 1395i-4 note.>> Effective Date.--The amendments 
made by this section shall apply to grants made on or after January 1, 
2010.

                  PART III--IMPROVING PAYMENT ACCURACY

SEC. 3131. PAYMENT ADJUSTMENTS FOR HOME HEALTH CARE.

    (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
                    (B) by adding at the end the following new clause:
                          ``(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 year.
                                    ``(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

[[Page 124 STAT. 428]]

                                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 Protection and 
                                Affordable Care Act.''.
            (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.''; and
            (2) in paragraph (5)--
                    (A) by striking ``Outliers.--The Secretary'' and 
                inserting the following: ``Outliers.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                Secretary'';
                    (B) in subparagraph (A), as added by subparagraph 
                (A), by striking ``5 percent'' and inserting ``2.5 
                percent''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(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), <<NOTE: 42 USC 1395fff note.>>  is amended--
            (1) in the section heading, by striking ``one-year'' and 
        inserting ``temporary''; and
            (2) in subsection (a)--

[[Page 124 STAT. 429]]

                    (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) <<NOTE: 42 USC 1395fff note.>> Study and Report on the 
Development of Home Health Payment Reforms in Order To Ensure Access to 
Care and Quality Services.--
            (1) In general.--The Secretary of Health and Human Services 
        (in this section referred to as the ``Secretary'') shall conduct 
        a 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; and
                          (vi) other areas determined appropriate by the 
                      Secretary.
                    (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

[[Page 124 STAT. 430]]

        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 Security Act;
                    (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 administrative action as the Secretary 
        determines appropriate.
            (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.

SEC. 3132. HOSPICE REFORM.

    (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--
                    (A) by redesignating paragraph (6) as paragraph (7); 
                and
                    (B) by inserting after paragraph (5) the following 
                new paragraph:
            ``(6)(A) <<NOTE: Data and information collection.>> 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. <<NOTE: Deadline.>> The Secretary shall begin to 
        collect such data by not later than January 1, 2011.
            ``(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--

[[Page 124 STAT. 431]]

                          ``(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) <<NOTE: Deadline. Regulation.>> 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
                    (B) by adding at the end the following new clause:
                          ``(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

[[Page 124 STAT. 432]]

                      (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
            (2) by adding at the end the following new subparagraph:
                    ``(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
            (2) by adding at the end the following new subsection:

    ``(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.--

[[Page 124 STAT. 433]]

                          ``(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); and
                                    ``(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
                                    ``(II) who are uninsured in the most 
                                recent period 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).
            ``(3) Limitations on review.--There shall be no 
        administrative or judicial review under section 1869, section 
        1878, or otherwise of the following:
                    ``(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.''.

[[Page 124 STAT. 434]]

SEC. 3134. MISVALUED CODES UNDER THE PHYSICIAN FEE SCHEDULE.

    (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

[[Page 124 STAT. 435]]

                                for consideration of coding changes) 
                                which may include consolidation of 
                                individual services into bundled codes 
                                for payment under the fee schedule under 
                                subsection (b).
                                    ``(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) <<NOTE: 42 USC 1395w-4 note.>> 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 this section.
                    (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 program instruction or otherwise.
                    (C) Section 4505(d) of the Balanced Budget Act of 
                1997 <<NOTE: Repeal.>>  is repealed.
                    (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. <<NOTE: Repeal.>> --Section 1868(a) of the Social 
        Security Act (42 U.S.C. 1395ee(a)) is repealed.

[[Page 124 STAT. 436]]

SEC. 3135. MODIFICATION OF EQUIPMENT UTILIZATION FACTOR FOR ADVANCED 
            IMAGING SERVICES.

    (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) <<NOTE: Time periods.>> 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 
                diagnostic imaging services (as defined in section 
                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 January 1, 2013, and before January 1, 2014, 
                      a 70 percent (rather than 50 percent) presumed 
                      rate of utilization of 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 certain advanced diagnostic 
                                imaging services for 2014 and subsequent 
                                years.--Effective for fee schedules 
                                established beginning with 2014, reduced 
                                expenditures attributable to the 
                                presumed

[[Page 124 STAT. 437]]

                                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 amended--
            (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
            (2) in subsection (c)(2)(B)(v), by adding at the end the 
        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. <<NOTE: Deadline. Public information. Time 
period.>> --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.

SEC. 3136. REVISION OF PAYMENT FOR POWER-DRIVEN WHEELCHAIRS.

    (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''.

[[Page 124 STAT. 438]]

    (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''.
    (c) <<NOTE: 42 USC 1395m note.>> Effective Date.--
            (1) <<NOTE: Applicability.>> 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.

SEC. 3137. HOSPITAL WAGE INDEX IMPROVEMENT.

    (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), <<NOTE: 42 USC 1395ww note.>>  is 
        amended by striking ``September 30, 2009'' and inserting 
        ``September 30, 2010''.
            (2) <<NOTE: 42 USC 1395ww note.>> 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) <<NOTE: 42 USC 1395ww note.>> Plan for Reforming the Medicare 
Hospital Wage Index System.--
            (1) In general. <<NOTE: Deadline. Reports.>> --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.
            (2) Details.--In developing the plan under paragraph (1), 
        the 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;

[[Page 124 STAT. 439]]

                    (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.
            (3) Consultation.--In developing the plan under paragraph 
        (1), the Secretary shall consult with relevant affected parties.

    (c) Use of Particular Criteria for Determining 
Reclassifications. <<NOTE: Effective date.>> --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.

SEC. 3138. TREATMENT OF CERTAIN CANCER HOSPITALS.

    Section 1833(t) of the Social Security Act (42 U.S.C. 1395l(t)) is 
amended by adding at the end the following new paragraph:
            ``(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, 
                2011.''.

SEC. 3139. PAYMENT FOR BIOSIMILAR BIOLOGICAL PRODUCTS.

    (a) In General.--Section 1847A of the Social Security Act (42 U.S.C. 
1395w-3a) is amended--
            (1) in subsection (b)--
                    (A) in paragraph (1)--
                          (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 
                      subparagraph:

[[Page 124 STAT. 440]]

                    ``(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 
        new subparagraph:
                    ``(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.''.

    (b) <<NOTE: Applicability. 42 USC 1395w-3a note.>> Effective Date.--
The amendments made by subsection (a) shall 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).

SEC. 3140. <<NOTE: 42 USC 1395d note.>> MEDICARE HOSPICE CONCURRENT CARE 
            DEMONSTRATION PROGRAM.

    (a) Establishment.--
            (1) In general.--The Secretary of Health and Human Services 
        (in this section referred to as the ``Secretary'') shall 
        establish a 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

[[Page 124 STAT. 441]]

        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 appropriate.

    (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.

SEC. 3141. <<NOTE: 42 USC 1395ww note.>> APPLICATION OF BUDGET 
            NEUTRALITY ON A NATIONAL BASIS IN THE CALCULATION OF THE 
            MEDICARE HOSPITAL WAGE INDEX FLOOR.

    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).

SEC. 3142. HHS STUDY ON URBAN MEDICARE-DEPENDENT HOSPITALS.

    (a) Study.--
            (1) In general.--The Secretary of Health and Human Services 
        (in this section referred to as the ``Secretary'') shall conduct 
        a 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

[[Page 124 STAT. 442]]

                    (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 
recommendations for such legislation and administrative action as the 
Secretary determines appropriate.

SEC. 3143. <<NOTE: 42 USC 1395d note.>> PROTECTING HOME HEALTH BENEFITS.

    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.

                Subtitle C--Provisions Relating to Part C

SEC. 3201. MEDICARE ADVANTAGE PAYMENT.

    (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 year; and
                                                ``(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--
                                            ``(aa) \1/3\ of the quotient 
                                        of--

[[Page 124 STAT. 443]]

                                                ``(AA) the applicable 
                                            amount determined under 
                                            subsection (k)(1) for the 
                                            area for the year; and
                                                ``(BB) 12; and
                                            ``(bb) \2/3\ of the MA 
                                        competitive benchmark 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 area 
                                for the month; or'';
                          (iii) in clause (ii), as redesignated by 
                      clause (i), by striking ``subparagraph (A)'' and 
                      inserting ``clause (i)'';
                    (D) by adding at the end the following new 
                paragraphs:
            ``(2) Computation of ma competitive benchmark amount.--
                    ``(A) In general.--Subject to subparagraph (B) and 
                paragraph (3), for months in each year (beginning with 
                2012) for each MA payment area the Secretary shall 
                compute an MA competitive benchmark amount equal to the 
                weighted average of the unadjusted MA statutory non-drug 
                monthly bid amount (as defined in section 1854(b)(2)(E)) 
                for each MA plan in the area, with the weight for each 
                plan being equal to the average number of beneficiaries 
                enrolled under such plan in the reference month (as 
                defined in section 1858(f)(4), except that, in applying 
                such definition for purposes of this paragraph, `to 
                compute the MA competitive benchmark amount under 
                section 1853(j)(2)' shall be substituted for `to compute 
                the percentage specified in subparagraph (A) and other 
                relevant percentages under this part').
                    ``(B) Weighting rules.--
                          ``(i) Single plan rule.--In the case of an MA 
                      payment area in which only a single MA plan is 
                      being offered, the weight under subparagraph (A) 
                      shall be equal to 1.
                          ``(ii) Use of simple average among multiple 
                      plans if no plans offered in previous year.--In 
                      the case of an MA payment area in which no MA plan 
                      was offered in the previous year and more than 1 
                      MA plan is offered in the current year, the 
                      Secretary shall use a simple average of the 
                      unadjusted MA statutory non-drug monthly bid 
                      amount (as so defined) for purposes of computing 
                      the MA competitive benchmark amount under 
                      subparagraph (A).
            ``(3) Cap on ma competitive benchmark amount.--In no case 
        shall the MA competitive benchmark amount for an area for a 
        month in a year be greater than the applicable amount

[[Page 124 STAT. 444]]

        that would (but for the application of this subsection) be 
        determined under subsection (k)(1) for the area for the month in 
        the year.''; and
                    (E) in subsection (k)(2)(B)(ii)(III), by striking 
                ``(j)(1)(A)'' and inserting ``(j)(1)(A)(i)''.
            (2) Conforming amendments.--
                    (A) Section 1853(k)(2) of the Social Security Act 
                (42 U.S.C. 1395w-23(k)(2)) is amended--
                          (i) in subparagraph (A), by striking ``through 
                      2010'' and inserting ``and subsequent years''; and
                          (ii) in subparagraph (C)--
                                    (I) in clause (iii), by striking 
                                ``and'' at the end;
                                    (II) in clause (iv), by striking the 
                                period at the end and inserting ``; 
                                and''; and
                                    (III) by adding at the end the 
                                following new clause:
                          ``(v) for 2011 and subsequent years, 0.00.''.
                    (B) Section 1854(b) of the Social Security Act (42 
                U.S.C. 1395w-24(b)) is amended--
                          (i) in paragraph (3)(B)(i), by striking 
                      ``1853(j)(1)'' and inserting ``1853(j)(1)(A)''; 
                      and
                          (ii) in paragraph (4)(B)(i), by striking 
                      ``1853(j)(2)'' and inserting ``1853(j)(1)(B)''.
                    (C) Section 1858(f) of the Social Security 
                Act <<NOTE: 42 USC 1395w-27a.>> (42 U.S.C. 1395w-27(f)) 
                is amended--
                          (i) in paragraph (1), by striking 
                      ``1853(j)(2)'' and inserting ``1853(j)(1)(B)''; 
                      and
                          (ii) in paragraph (3)(A), by striking 
                      ``1853(j)(1)(A)'' and inserting 
                      ``1853(j)(1)(A)(i)''.
                    (D) Section 1860C-1(d)(1)(A) of the Social Security 
                Act (42 U.S.C. 1395w-29(d)(1)(A)) is amended by striking 
                ``1853(j)(1)(A)'' and inserting ``1853(j)(1)(A)(i)''.

    (b) Reduction of National Per Capita Growth Percentage for 2011.--
Section 1853(c)(6) of the Social Security Act (42 U.S.C. 1395w-23(c)(6)) 
is amended--
            (1) in clause (v), by striking ``and'' at the end;
            (2) in clause (vi)--
                    (A) by striking ``for a year after 2002'' and 
                inserting ``for 2003 through 2010''; and
                    (B) by striking the period at the end and inserting 
                a comma; and
                    (C) by adding at the end the following new clauses:
                          ``(vii) for 2011, 3 percentage points; and
                          ``(viii) for a year after 2011, 0 percentage 
                      points.''.

    (c) Enhancement of Beneficiary Rebates.--Section 1854(b)(1)(C)(i) of 
the Social Security Act (42 U.S.C. 1395w-24(b)(1)(C)(i)) is amended by 
inserting ``(or 100 percent in the case of plan years beginning on or 
after January 1, 2014)'' after ``75 percent''.
    (d) Bidding Rules.--
            (1) Requirements for information 
        submitted. <<NOTE: Certification.>> --Section 1854(a)(6)(A) of 
        the Social Security Act (42 U.S.C. 1395w-24(a)(6)(A)) is 
        amended, in the flush matter following clause (v), by adding at 
        the end the following sentence: ``Information to be submitted 
        under this paragraph shall be certified by a qualified member of 
        the American Academy of Actuaries

[[Page 124 STAT. 445]]

        and shall meet actuarial guidelines and rules established by the 
        Secretary under subparagraph (B)(v).''.
            (2) Establishment of actuarial guidelines.--Section 
        1854(a)(6)(B) of the Social Security Act (42 U.S.C. 1395w-
        24(a)(6)(B)) is amended--
                    (A) in clause (i), by striking ``(iii) and (iv)'' 
                and inserting ``(iii), (iv), and (v)''; and
                    (B) by adding at the end the following new clause:
                          ``(v) Establishment of actuarial guidelines.--
                                    ``(I) In general.--In order to 
                                establish fair MA competitive benchmarks 
                                under section 1853(j)(1)(A)(i), the 
                                Secretary, acting through the Chief 
                                Actuary of the Centers for Medicare & 
                                Medicaid Services (in this clause 
                                referred to as the `Chief Actuary'), 
                                shall establish--
                                            ``(aa) actuarial guidelines 
                                        for the submission of bid 
                                        information under this 
                                        paragraph; and
                                            ``(bb) bidding rules that 
                                        are appropriate to ensure 
                                        accurate bids and fair 
                                        competition among MA plans.
                                    ``(II) Denial of bid amounts.--The 
                                Secretary shall deny monthly bid amounts 
                                submitted under subparagraph (A) that do 
                                not meet the actuarial guidelines and 
                                rules established under subclause (I).
                                    ``(III) Refusal to accept certain 
                                bids due to misrepresentations and 
                                failures to adequately meet 
                                requirements. <<NOTE: Determinations. Rep
                                orts.>> --In the case where the 
                                Secretary determines that information 
                                submitted by an MA organization under 
                                subparagraph (A) contains consistent 
                                misrepresentations and failures to 
                                adequately meet requirements of the 
                                organization, the Secretary may refuse 
                                to accept any additional such bid 
                                amounts from the organization for the 
                                plan year and the Chief Actuary shall, 
                                if the Chief Actuary determines that the 
                                actuaries of the organization were 
                                complicit in those misrepresentations 
                                and failures, report those actuaries to 
                                the Actuarial Board for Counseling and 
                                Discipline.''.
            (3) <<NOTE: 42 USC 1395w-24 note.>> Effective date.--The 
        amendments made by this subsection shall apply to bid amounts 
        submitted on or after January 1, 2012.

    (e) MA Local Plan Service Areas.--
            (1) In general.--Section 1853(d) of the Social Security Act 
        (42 U.S.C. 1395w-23(d)) is amended--
                    (A) in the subsection heading, by striking ``MA 
                Region'' and inserting ``MA Region; MA Local Plan 
                Service Area'';
                    (B) in paragraph (1), by striking subparagraph (A) 
                and inserting the following:
                    ``(A) with respect to an MA local plan--
                          ``(i) for years before 2012, an MA local area 
                      (as defined in paragraph (2)); and

[[Page 124 STAT. 446]]

                          ``(ii) for 2012 and succeeding years, a 
                      service area that is an entire urban or rural 
                      area, as applicable (as described in paragraph 
                      (5)); and''; and
                    (C) by adding at the end the following new 
                paragraph:
            ``(5) MA local plan service area.--For 2012 and succeeding 
        years, the service area for an MA local plan shall be an entire 
        urban or rural area in each State as follows:
                    ``(A) Urban areas.--
                          ``(i) In general.--Subject to clause (ii) and 
                      subparagraphs (C) and (D), the service area for an 
                      MA local plan in an urban area shall be the Core 
                      Based Statistical Area (in this paragraph referred 
                      to as a `CBSA') or, if applicable, a conceptually 
                      similar alternative classification, as defined by 
                      the Director of the Office of Management and 
                      Budget.
                          ``(ii) CBSA covering more than one state.--In 
                      the case of a CBSA (or alternative classification) 
                      that covers more than one State, the Secretary 
                      shall divide the CBSA (or alternative 
                      classification) into separate service areas with 
                      respect to each State covered by the CBSA (or 
                      alternative classification).
                    ``(B) Rural areas.--Subject to subparagraphs (C) and 
                (D), the service area for an MA local plan in a rural 
                area shall be a county that does not qualify for 
                inclusion in a CBSA (or alternative classification), as 
                defined by the Director of the Office of Management and 
                Budget.
                    ``(C) Refinements to service areas.--For 2015 and 
                succeeding years, in order to reflect actual patterns of 
                health care service utilization, the Secretary may 
                adjust the boundaries of service areas for MA local 
                plans in urban areas and rural areas under subparagraphs 
                (A) and (B), respectively, but may only do so based on 
                recent analyses of actual patterns of care.
                    ``(D) Additional authority to make limited 
                exceptions to service area requirements for ma local 
                plans.--The Secretary may, in addition to any 
                adjustments under subparagraph (C), make limited 
                exceptions to service area requirements otherwise 
                applicable under this part for MA local plans that have 
                in effect (as of the date of enactment of the Patient 
                Protection and Affordable Care Act)--
                          ``(i) agreements with another MA organization 
                      or MA plan that preclude the offering of benefits 
                      throughout an entire service area; or
                          ``(ii) limitations in their structural 
                      capacity to support adequate networks throughout 
                      an entire service area as a result of the delivery 
                      system model of the MA local plan.''.
            (2) Conforming amendments.--
                    (A) In general.--
                          (i) Section 1851(b)(1) of the Social Security 
                      Act (42 U.S.C. 1395w-21(b)(1)) is amended by 
                      striking subparagraph (C).
                          (ii) Section 1853(b)(1)(B)(i) of such Act (42 
                      U.S.C. 1395w-23(b)(1)(B)(i))--

[[Page 124 STAT. 447]]

                                    (I) in the matter preceding 
                                subclause (I), by striking ``MA payment 
                                area'' and inserting ``MA local area (as 
                                defined in subsection (d)(2))''; and
                                    (II) in subclause (I), by striking 
                                ``MA payment area'' and inserting ``MA 
                                local area (as so defined)''.
                          (iii) Section 1853(b)(4) of such Act (42 
                      U.S.C. 1395w-23(b)(4)) is amended by striking 
                      ``Medicare Advantage payment area'' and inserting 
                      ``MA local area (as so defined)''.
                          (iv) Section 1853(c)(1) of such Act (42 U.S.C. 
                      1395w-23(c)(1)) is amended--
                                    (I) in the matter preceding 
                                subparagraph (A), by striking ``a 
                                Medicare Advantage payment area that 
                                is''; and
                                    (II) in subparagraph (D)(i), by 
                                striking ``MA payment area'' and 
                                inserting ``MA local area (as defined in 
                                subsection (d)(2))''.
                          (v) Section 1854 of such Act (42 U.S.C. 1395w-
                      24) is amended by striking subsection (h).
                    (B) <<NOTE: 42 USC 1395w-21 note.>> Effective 
                date.--The amendments made by this paragraph shall take 
                effect on January 1, 2012.

    (f) Performance Bonuses.--
            (1) MA plans.--
                    (A) In general.--Section 1853 of the Social Security 
                Act (42 U.S.C. 1395w-23) is amended by adding at the end 
                the following new subsection:

    ``(n) Performance Bonuses.--
            ``(1) Care coordination and management performance bonus.--
                    ``(A) In general. <<NOTE: Effective 
                date. Payments.>> --For years beginning with 2014, 
                subject to subparagraph (B), in the case of an MA plan 
                that conducts 1 or more programs described in 
                subparagraph (C) with respect to the year, the Secretary 
                shall, in addition to any other payment provided under 
                this part, make monthly payments, with respect to 
                coverage of an individual under this part, to the MA 
                plan in an amount equal to the product of--
                          ``(i) 0.5 percent of the national monthly per 
                      capita cost for expenditures for individuals 
                      enrolled under the original medicare fee-for-
                      service program for the year; and
                          ``(ii) the total number of programs described 
                      in clauses (i) through (ix) of subparagraph (C) 
                      that the Secretary determines the plan is 
                      conducting for the year under such subparagraph.
                    ``(B) Limitation.--In no case may the total amount 
                of payment with respect to a year under subparagraph (A) 
                be greater than 2 percent of the national monthly per 
                capita cost for expenditures for individuals enrolled 
                under the original medicare fee-for-service program for 
                the year, as determined prior to the application of risk 
                adjustment under paragraph (4).
                    ``(C) Programs described.--The following programs 
                are described in this paragraph:
                          ``(i) Care management programs that--
                                    ``(I) target individuals with 1 or 
                                more chronic conditions;

[[Page 124 STAT. 448]]

                                    ``(II) identify gaps in care; and
                                    ``(III) facilitate improved care by 
                                using additional resources like nurses, 
                                nurse practitioners, and physician 
                                assistants.
                          ``(ii) Programs that focus on patient 
                      education and self-management of health 
                      conditions, including interventions that--
                                    ``(I) help manage chronic 
                                conditions;
                                    ``(II) reduce declines in health 
                                status; and
                                    ``(III) foster patient and provider 
                                collaboration.
                          ``(iii) Transitional care interventions that 
                      focus on care provided around a hospital inpatient 
                      episode, including programs that target post-
                      discharge patient care in order to reduce 
                      unnecessary health complications and readmissions.
                          ``(iv) Patient safety programs, including 
                      provisions for hospital-based patient safety 
                      programs in contracts that the Medicare Advantage 
                      organization offering the MA plan has with 
                      hospitals.
                          ``(v) Financial policies that promote 
                      systematic coordination of care by primary care 
                      physicians across the full spectrum of specialties 
                      and sites of care, such as medical homes, 
                      capitation arrangements, or pay-for-performance 
                      programs.
                          ``(vi) Programs that address, identify, and 
                      ameliorate health care disparities among principal 
                      at-risk subpopulations.
                          ``(vii) Medication therapy management programs 
                      that are more extensive than is required under 
                      section 1860D-4(c) (as determined by the 
                      Secretary).
                          ``(viii) Health information technology 
                      programs, including clinical decision support and 
                      other tools to facilitate data collection and 
                      ensure patient-centered, appropriate care.
                          ``(ix) Such other care management and 
                      coordination programs as the Secretary determines 
                      appropriate.
                    ``(D) Conduct of program in urban and rural areas.--
                An MA plan may conduct a program described in 
                subparagraph (C) in a manner appropriate for an urban or 
                rural area, as applicable.
                    ``(E) Reporting of data.--Each Medicare Advantage 
                organization shall provide to the Secretary the 
                information needed to determine whether they are 
                eligible for a care coordination and management 
                performance bonus at a time and in a manner specified by 
                the Secretary.
                    ``(F) Periodic auditing. <<NOTE: Deadline.>> --The 
                Secretary shall provide for the annual auditing of 
                programs described in subparagraph (C) for which an MA 
                plan receives a care coordination and management 
                performance bonus under this paragraph. The Comptroller 
                General shall monitor auditing activities conducted 
                under this subparagraph.
            ``(2) Quality performance bonuses.--
                    ``(A) Quality bonus. <<NOTE: Effective 
                date. Payments.>> --For years beginning with 2014, the 
                Secretary shall, in addition to any other payment 
                provided under this part, make monthly payments, with 
                respect to coverage of an individual under this part, to 
                an MA plan that achieves at least a 3 star rating (or

[[Page 124 STAT. 449]]

                comparable rating) on a rating system described in 
                subparagraph (C) in an amount equal to--
                          ``(i) in the case of a plan that achieves a 3 
                      star rating (or comparable rating) on such system 
                      2 percent of the national monthly per capita cost 
                      for expenditures for individuals enrolled under 
                      the original medicare fee-for-service program for 
                      the year; and
                          ``(ii) in the case of a plan that achieves a 4 
                      or 5 star rating (or comparable rating on such 
                      system, 4 percent of such national monthly per 
                      capita cost for the year.
                    ``(B) Improved quality bonus. <<NOTE: Effective 
                date. Payments.>> --For years beginning with 2014, in 
                the case of an MA plan that does not receive a quality 
                bonus under subparagraph (A) and is an improved quality 
                MA plan with respect to the year (as identified by the 
                Secretary), the Secretary shall, in addition to any 
                other payment provided under this part, make monthly 
                payments, with respect to coverage of an individual 
                under this part, to the MA plan in an amount equal to 1 
                percent of such national monthly per capita cost for the 
                year.
                    ``(C) Use of rating system.--For purposes of 
                subparagraph (A), a rating system described in this 
                paragraph is--
                          ``(i) a rating system that uses up to 5 stars 
                      to rate clinical quality and enrollee satisfaction 
                      and performance at the Medicare Advantage contract 
                      or MA plan level; or
                          ``(ii) such other system established by the 
                      Secretary that provides for the determination of a 
                      comparable quality performance rating to the 
                      rating system described in clause (i).
                    ``(D) Data used in determining score.--
                          ``(i) In general.--The rating of an MA plan 
                      under the rating system described in subparagraph 
                      (C) with respect to a year shall be based on based 
                      on the most recent data available.
                          ``(ii) Plans that fail to report data.--An MA 
                      plan which does not report data that enables the 
                      Secretary to rate the plan for purposes of 
                      subparagraph (A) or identify the plan for purposes 
                      of subparagraph (B) shall be counted, for purposes 
                      of such rating or identification, as having the 
                      lowest plan performance rating and the lowest 
                      percentage improvement, respectively.
            ``(3) Quality bonus for new and low enrollment ma plans.--
                    ``(A) New ma plans. <<NOTE: Effective 
                date. Payments.>> --For years beginning with 2014, in 
                the case of an MA plan that first submits a bid under 
                section 1854(a)(1)(A) for 2012 or a subsequent year, 
                only receives enrollments made during the coverage 
                election periods described in section 1851(e), and is 
                not able to receive a bonus under subparagraph (A) or 
                (B) of paragraph (2) for the year, the Secretary shall, 
                in addition to any other payment provided under this 
                part, make monthly payments, with respect to coverage of 
                an individual under this part, to the MA plan in an 
                amount equal to 2 percent of national monthly per capita 
                cost for expenditures for

[[Page 124 STAT. 450]]

                individuals enrolled under the original medicare fee-
                for-service program for the year. In its fourth year of 
                operation, the MA plan shall be paid in the same manner 
                as other MA plans with comparable enrollment.
                    ``(B) Low enrollment plans. <<NOTE: Effective 
                date. Determination.>> --For years beginning with 2014, 
                in the case of an MA plan that has low enrollment (as 
                defined by the Secretary) and would not otherwise be 
                able to receive a bonus under subparagraph (A) or (B) of 
                paragraph (2) or subparagraph (A) of this paragraph for 
                the year (referred to in this subparagraph as a `low 
                enrollment plan'), the Secretary shall use a regional or 
                local mean of the rating of all MA plans in the region 
                or local area, as determined appropriate by the 
                Secretary, on measures used to determine whether MA 
                plans are eligible for a quality or an improved quality 
                bonus, as applicable, to determine whether the low 
                enrollment plan is eligible for a bonus under such a 
                subparagraph.
            ``(4) Risk adjustment.--The Secretary shall risk adjust a 
        performance bonus under this subsection in the same manner as 
        the Secretary risk adjusts beneficiary rebates described in 
        section 1854(b)(1)(C).
            ``(5) Notification.--The Secretary, in the annual 
        announcement required under subsection (b)(1)(B) for 2014 and 
        each succeeding year, shall notify the Medicare Advantage 
        organization of any performance bonus (including a care 
        coordination and management performance bonus under paragraph 
        (1), a quality performance bonus under paragraph (2), and a 
        quality bonus for new and low enrollment plans under paragraph 
        (3)) that the organization will receive under this subsection 
        with respect to the year. <<NOTE: Web posting.>> The Secretary 
        shall provide for the publication of the information described 
        in the previous sentence on the Internet website of the Centers 
        for Medicare & Medicaid Services.''
                    (B) Conforming amendment.--Section 1853(a)(1)(B) of 
                the Social Security Act (42 U.S.C. 1395w-23(a)(1)(B)) is 
                amended--
                          (i) in clause (i), by inserting ``and any 
                      performance bonus under subsection (n)'' before 
                      the period at the end; and
                          (ii) in clause (ii), by striking ``(G)'' and 
                      inserting ``(G), plus the amount (if any) of any 
                      performance bonus under subsection (n)''.
            (2) Application of performance bonuses to ma regional 
        plans.--Section 1858 of the Social Security Act (42 U.S.C. 
        1395w-27a) is amended--
                    (A) in subsection (f)(1), by striking ``subsection 
                (e)'' and inserting ``subsections (e) and (i)''; and
                    (B) by adding at the end the following new 
                subsection:

    ``(i) Application of Performance Bonuses to MA Regional 
Plans. <<NOTE: Effective date.>> --For years beginning with 2014, the 
Secretary shall apply the performance bonuses under section 1853(n) 
(relating to bonuses for care coordination and management, quality 
performance, and new and low enrollment MA plans) to MA regional plans 
in a similar manner as such performance bonuses apply to MA plans under 
such subsection.''.

    (g) Grandfathering Supplemental Benefits for Current Enrollees After 
Implementation of Competitive Bidding.--

[[Page 124 STAT. 451]]

Section 1853 of the Social Security Act (42 U.S.C. 1395w-23), as amended 
by subsection (f), is amended by adding at the end the following new 
subsection:
    ``(o) Grandfathering Supplemental Benefits for Current Enrolles 
After Implementation of Competitive Bidding.--
            ``(1) Identification of areas.--The Secretary shall identify 
        MA local areas in which, with respect to 2009, average bids 
        submitted by an MA organization under section 1854(a) for MA 
        local plans in the area are not greater than 75 percent of the 
        adjusted average per capita cost for the year involved, 
        determined under section 1876(a)(4), for the area for 
        individuals who are not enrolled in an MA plan under this part 
        for the year, but adjusted to exclude costs attributable to 
        payments under section 1848(o), 1886(n), and 1886(h).
            ``(2) Election to provide rebates to grandfathered 
        enrollees.--
                    ``(A) In general. <<NOTE: Effective date.>> --For 
                years beginning with 2012, each Medicare Advantage 
                organization offering an MA local plan in an area 
                identified by the Secretary under paragraph (1) may 
                elect to provide rebates to grandfathered enrollees 
                under section 1854(b)(1)(C). In the case where an MA 
                organization makes such an election, the monthly per 
                capita dollar amount of such rebates shall not exceed 
                the applicable amount for the year (as defined in 
                subparagraph (B)).
                    ``(B) Applicable amount. <<NOTE: Definition.>> --For 
                purposes of this subsection, the term `applicable 
                amount' means--
                          ``(i) for 2012, the monthly per capita dollar 
                      amount of such rebates provided to enrollees under 
                      the MA local plan with respect to 2011; and
                          ``(ii) for a subsequent year, 95 percent of 
                      the amount determined under this subparagraph for 
                      the preceding year.
            ``(3) Special rules for plans in identified 
        areas. <<NOTE: Applicability.>> --Notwithstanding any other 
        provision of this part, the following shall apply with respect 
        to each Medicare Advantage organization offering an MA local 
        plan in an area identified by the Secretary under paragraph (1) 
        that makes an election described in paragraph (2):
                    ``(A) Payments.--The amount of the monthly payment 
                under this section to the Medicare Advantage 
                organization, with respect to coverage of a 
                grandfathered enrollee under this part in the area for a 
                month, shall be equal to--
                          ``(i) for 2012 and 2013, the sum of--
                                    ``(I) the bid amount under section 
                                1854(a) for the MA local plan; and
                                    ``(II) the applicable amount (as 
                                defined in paragraph (2)(B)) for the MA 
                                local plan for the year.
                          ``(ii) for 2014 and subsequent years, the sum 
                      of--
                                    ``(I) the MA competitive benchmark 
                                amount under subsection (j)(1)(A)(i) for 
                                the area for the month, adjusted, only 
                                to the extent the Secretary determines 
                                necessary, to account for induced 
                                utilization as a result of rebates 
                                provided to grandfathered enrollees 
                                (except that such adjustment shall not 
                                exceed 0.5 percent of such MA 
                                competitive benchmark amount); and

[[Page 124 STAT. 452]]

                                    ``(II) the applicable amount (as so 
                                defined) for the MA local plan for the 
                                year.
                    ``(B) Requirement to submit bids under competitive 
                bidding.--The Medicare Advantage organization shall 
                submit a single bid amount under section 1854(a) for the 
                MA local plan. The Medicare Advantage organization shall 
                remove from such bid amount any effects of induced 
                demand for care that may result from the higher rebates 
                available to grandfathered enrollees under this 
                subsection.
                    ``(C) Nonapplication of bonus payments and any other 
                rebates.--The Medicare Advantage organization offering 
                the MA local plan shall not be eligible for any bonus 
                payment under subsection (n) or any rebate under this 
                part (other than as provided under this subsection) with 
                respect to grandfathered enrollees.
                    ``(D) Nonapplication of uniform bid and premium 
                amounts to grandfathered enrollees.--Section 1854(c) 
                shall not apply with respect to the MA local plan.
                    ``(E) Nonapplication of limitation on application of 
                plan rebates toward payment of part b premium.--
                Notwithstanding clause (iii) of section 1854(b)(1)(C), 
                in the case of a grandfathered enrollee, a rebate under 
                such section may be used for the purpose described in 
                clause (ii)(III) of such section.
                    ``(F) Risk adjustment.--The Secretary shall risk 
                adjust rebates to grandfathered enrollees under this 
                subsection in the same manner as the Secretary risk 
                adjusts beneficiary rebates described in section 
                1854(b)(1)(C).
            ``(4) Definition of grandfathered enrollee.--In this 
        subsection, the term `grandfathered enrollee' means an 
        individual who is enrolled (effective as of the date of 
        enactment of this subsection) in an MA local plan in an area 
        that is identified by the Secretary under paragraph (1).''.

    (h) Transitional Extra Benefits.--Section 1853 of the Social 
Security Act (42 U.S.C. 1395w-23), as amended by subsections (f) and 
(g), is amended by adding at the end the following new subsection:
    ``(p) Transitional Extra Benefits.--
            ``(1) In general. <<NOTE: Effective date.>> --For years 
        beginning with 2012, the Secretary shall provide transitional 
        rebates under section 1854(b)(1)(C) for the provision of extra 
        benefits (as specified by the Secretary) to enrollees described 
        in paragraph (2).
            ``(2) Enrollees described.--An enrollee described in this 
        paragraph is an individual who--
                    ``(A) enrolls in an MA local plan in an applicable 
                area; and
                    ``(B) experiences a significant reduction in extra 
                benefits described in clause (ii) of section 
                1854(b)(1)(C) as a result of competitive bidding under 
                this part (as determined by the Secretary).
            ``(3) Applicable areas. <<NOTE: Definition.>> --In this 
        subsection, the term `applicable area' means the following:
                    ``(A) The 2 largest metropolitan statistical areas, 
                if the Secretary determines that the total amount of 
                such extra benefits for each enrollee for the month in 
                those areas is greater than $100.
                    ``(B) A county where--

[[Page 124 STAT. 453]]

                          ``(i) the MA area-specific non-drug monthly 
                      benchmark amount for a month in 2011 is equal to 
                      the legacy urban floor amount (as described in 
                      subsection (c)(1)(B)(iii)), as determined by the 
                      Secretary for the area for 2011;
                          ``(ii) the percentage of Medicare Advantage 
                      eligible beneficiaries in the county who are 
                      enrolled in an MA plan for 2009 is greater than 30 
                      percent (as determined by the Secretary); and
                          ``(iii) average bids submitted by an MA 
                      organization under section 1854(a) for MA local 
                      plans in the county for 2011 are not greater than 
                      the adjusted average per capita cost for the year 
                      involved, determined under section 1876(a)(4), for 
                      the county for individuals who are not enrolled in 
                      an MA plan under this part for the year, but 
                      adjusted to exclude costs attributable to payments 
                      under section 1848(o), 1886(n), and 1886(h).
                    ``(C) If the Secretary determines appropriate, a 
                county contiguous to an area or county described in 
                subparagraph (A) or (B), respectively.
            ``(4) Review of plan bids.--In the case of a bid submitted 
        by an MA organization under section 1854(a) for an MA local plan 
        in an applicable area, the Secretary shall review such bid in 
        order to ensure that extra benefits (as specified by the 
        Secretary) are provided to enrollees described in paragraph (2).
            ``(5) Funding. <<NOTE: Determination.>> --The Secretary 
        shall provide for the transfer from the Federal Hospital 
        Insurance Trust Fund under section 1817 and the Federal 
        Supplementary Medical Insurance Trust Fund established under 
        section 1841, in such proportion as the Secretary determines 
        appropriate, of an amount not to exceed $5,000,000,000 for the 
        period of fiscal years 2012 through 2019 for the purpose of 
        providing transitional rebates under section 1854(b)(1)(C) for 
        the provision of extra benefits under this subsection.''.

    (i) Nonapplication of Competitive Bidding and Related Provisions and 
Clarification of MA Payment Area for PACE Programs.--
            (1) Nonapplication of competitive bidding and related 
        provisions for pace programs.--Section 1894 of the Social 
        Security Act (42 U.S.C. 1395eee) is amended--
                    (A) by redesignating subsections (h) and (i) as 
                subsections (i) and (j), respectively;
                    (B) by inserting after subsection (g) the following 
                new subsection:

    ``(h) Nonapplication of Competitive Bidding and Related Provisions 
Under Part C.--With respect to a PACE program under this section, the 
following provisions (and regulations relating to such provisions) shall 
not apply:
            ``(1) Section 1853(j)(1)(A)(i), relating to MA area-specific 
        non-drug monthly benchmark amount being based on competitive 
        bids.
            ``(2) Section 1853(d)(5), relating to the establishment of 
        MA local plan service areas.
            ``(3) Section 1853(n), relating to the payment of 
        performance bonuses.

[[Page 124 STAT. 454]]

            ``(4) Section 1853(o), relating to grandfathering 
        supplemental benefits for current enrollees after implementation 
        of competitive bidding.
            ``(5) Section 1853(p), relating to transitional extra 
        benefits.''.
            (2) Special rule for ma payment area for pace programs.--
        Section 1853(d) of the Social Security Act (42 U.S.C. 1395w-
        23(d)), as amended by subsection (e), is amended by adding at 
        the end the following new paragraph:
            ``(6) Special rule for ma payment area for pace 
        programs. <<NOTE: Effective date.>> --For years beginning with 
        2012, in the case of a PACE program under section 1894, the MA 
        payment area shall be the MA local area (as defined in paragraph 
        (2)).''.

SEC. 3202. BENEFIT PROTECTION AND SIMPLIFICATION.

    (a) Limitation on Variation of Cost Sharing for Certain Benefits.--
            (1) In general.--Section 1852(a)(1)(B) of the Social 
        Security Act (42 U.S.C. 1395w-22(a)(1)(B)) is amended--
                    (A) in clause (i), by inserting ``, subject to 
                clause (iii),'' after ``and B or''; and
                    (B) by adding at the end the following new clauses:
                          ``(iii) Limitation on variation of cost 
                      sharing for certain benefits.--Subject to clause 
                      (v), cost-sharing for services described in clause 
                      (iv) shall not exceed the cost-sharing required 
                      for those services under parts A and B.
                          ``(iv) Services described.--The following 
                      services are described in this clause:
                                    ``(I) Chemotherapy administration 
                                services.
                                    ``(II) Renal dialysis services (as 
                                defined in section 1881(b)(14)(B)).
                                    ``(III) Skilled nursing care.
                                    ``(IV) Such other services that the 
                                Secretary determines appropriate 
                                (including services that the Secretary 
                                determines require a high level of 
                                predictability and transparency for 
                                beneficiaries).
                          ``(v) Exception.--In the case of services 
                      described in clause (iv) for which there is no 
                      cost-sharing required under parts A and B, cost-
                      sharing may be required for those services in 
                      accordance with clause (i).''.
            (2) <<NOTE: 42 USC 1395w-22 note.>> Effective date.--The 
        amendments made by this subsection shall apply to plan years 
        beginning on or after January 1, 2011.

    (b) Application of Rebates, Performance Bonuses, and Premiums.--
            (1) Application of rebates.--Section 1854(b)(1)(C) of the 
        Social Security Act (42 U.S.C. 1395w-24(b)(1)(C)) is amended--
                    (A) in clause (ii), by striking ``rebate.--A 
                rebate'' and inserting ``rebate for plan years before 
                2012.--For plan years before 2012, a rebate'';
                    (B) by redesignating clauses (iii) and (iv) as 
                clauses (iv) and (v); and
                    (C) by inserting after clause (ii) the following new 
                clause:
                          ``(iii) Form of rebate for plan year 2012 and 
                      subsequent plan years. <<NOTE: Effective 
                      date.>> --For plan years beginning on or after 
                      January 1, 2012, a rebate required under

[[Page 124 STAT. 455]]

                      this subparagraph may not be used for the purpose 
                      described in clause (ii)(III) and shall be 
                      provided through the application of the amount of 
                      the rebate in the following priority order:
                                    ``(I) First, to use the most 
                                significant share to meaningfully reduce 
                                cost-sharing otherwise applicable for 
                                benefits under the original medicare 
                                fee-for-service program under parts A 
                                and B and for qualified prescription 
                                drug coverage under part D, including 
                                the reduction of any deductibles, 
                                copayments, and maximum limitations on 
                                out-of-pocket expenses otherwise 
                                applicable. <<NOTE: Applicability.>> Any 
                                reduction of maximum limitations on out-
                                of-pocket expenses under the preceding 
                                sentence shall apply to all benefits 
                                under the original medicare fee-for-
                                service program option. The Secretary 
                                may provide guidance on meaningfully 
                                reducing cost-sharing under this 
                                subclause, except that such guidance may 
                                not require a particular amount of cost-
                                sharing or reduction in cost-sharing.
                                    ``(II) Second, to use the next most 
                                significant share to meaningfully 
                                provide coverage of preventive and 
                                wellness health care benefits (as 
                                defined by the Secretary) which are not 
                                benefits under the original medicare 
                                fee-for-service program, such as smoking 
                                cessation, a free flu shot, and an 
                                annual physical examination.
                                    ``(III) Third, to use the remaining 
                                share to meaningfully provide coverage 
                                of other health care benefits which are 
                                not benefits under the original medicare 
                                fee-for-service program, such as eye 
                                examinations and dental coverage, and 
                                are not benefits described in subclause 
                                (II).''.
            (2) Application of performance bonuses.--Section 1853(n) of 
        the Social Security Act, as added by section 3201(f), is amended 
        by adding at the end the following new paragraph:
            ``(6) <<NOTE: Effective date.>> Application of performance 
        bonuses.--For plan years beginning on or after January 1, 2014, 
        any performance bonus paid to an MA plan under this subsection 
        shall be used for the purposes, and in the priority order, 
        described in subclauses (I) through (III) of section 
        1854(b)(1)(C)(iii).''.
            (3) Application of ma monthly supplementary beneficiary 
        premium.--Section 1854(b)(2)(C) of the Social Security Act (42 
        U.S.C. 1395w-24(b)(2)(C)) is amended--
                    (A) by striking ``Premium.--The term'' and inserting 
                ``premium.--
                          ``(i) In general.--The term''; and
                    (B) by adding at the end the following new clause:
                          ``(ii) Application of ma monthly supplementary 
                      beneficiary premium. <<NOTE: Effective date.>> --
                      For plan years beginning on or after January 1, 
                      2012, any MA monthly supplementary beneficiary 
                      premium charged to an individual enrolled in an MA 
                      plan shall be used for the purposes, and in the 
                      priority order, described in subclauses (I) 
                      through (III) of paragraph (1)(C)(iii).''.

[[Page 124 STAT. 456]]

SEC. 3203. APPLICATION OF CODING INTENSITY ADJUSTMENT DURING MA PAYMENT 
            TRANSITION.

    Section 1853(a)(1)(C) of the Social Security Act (42 U.S.C. 1395w-
23(a)(1)(C)) is amended by adding at the end the following new clause:
                          ``(iii) Application of coding intensity 
                      adjustment for 2011 and subsequent years.--
                                    ``(I) Requirement to apply in 2011 
                                through 2013.--In order to ensure 
                                payment accuracy, the Secretary shall 
                                conduct an analysis of the differences 
                                described in clause (ii)(I). The 
                                Secretary shall ensure that the results 
                                of such analysis are incorporated into 
                                the risk scores for 2011, 2012, and 
                                2013.
                                    ``(II) Authority to apply in 2014 
                                and subsequent years.--The Secretary 
                                may, as appropriate, incorporate the 
                                results of such analysis into the risk 
                                scores for 2014 and subsequent years.''.

SEC. 3204. SIMPLIFICATION OF ANNUAL BENEFICIARY ELECTION PERIODS.

    (a) Annual 45-day Period for Disenrollment From MA Plans To Elect To 
Receive Benefits Under the Original Medicare Fee-for-service Program.--
            (1) In general.--Section 1851(e)(2)(C) of the Social 
        Security Act <<NOTE: 42 USC 1395w-21.>> (42 U.S.C. 1395w-
        1(e)(2)(C)) is amended to read as follows:
                    ``(C) Annual 45-day period for disenrollment from ma 
                plans to elect to receive benefits under the original 
                medicare fee-for-service program. <<NOTE: Effective 
                date.>> --Subject to subparagraph (D), at any time 
                during the first 45 days of a year (beginning with 
                2011), an individual who is enrolled in a Medicare 
                Advantage plan may change the election under subsection 
                (a)(1), but only with respect to coverage under the 
                original medicare fee-for-service program under parts A 
                and B, and may elect qualified prescription drug 
                coverage in accordance with section 1860D-1.''.
            (2) <<NOTE: 42 USC 1395w-21 note.>> Effective date.--The 
        amendment made by paragraph (1) shall apply with respect to 2011 
        and succeeding years.

    (b) Timing of the Annual, Coordinated Election Period Under Parts C 
and D.--Section 1851(e)(3)(B) of the Social Security Act <<NOTE: 42 
USC 1395w-21.>> (42 U.S.C. 1395w-1(e)(3)(B)) is amended--
            (1) in clause (iii), by striking ``and'' at the end;
            (2) in clause (iv)--
                    (A) by striking ``and succeeding years'' and 
                inserting ``, 2008, 2009, and 2010''; and
                    (B) by striking the period at the end and inserting 
                ``; and''; and
            (3) by adding at the end the following new clause:
                          ``(v) with respect to 2012 and succeeding 
                      years, the period beginning on October 15 and 
                      ending on December 7 of the year before such 
                      year.''.

[[Page 124 STAT. 457]]

SEC. 3205. EXTENSION FOR SPECIALIZED MA PLANS FOR SPECIAL NEEDS 
            INDIVIDUALS.

    (a) Extension of SNP Authority.--Section 1859(f)(1) of the Social 
Security Act (42 U.S.C. 1395w-28(f)(1)), as amended by section 164(a) of 
the Medicare Improvements for Patients and Providers Act of 2008 (Public 
Law 110-275), is amended by striking ``2011'' and inserting ``2014''.
    (b) Authority To Apply Frailty Adjustment Under PACE Payment 
Rules.--Section 1853(a)(1)(B) of the Social Security Act (42 U.S.C. 
1395w-23(a)(1)(B)) is amended by adding at the end the following new 
clause:
                          ``(iv) Authority to apply frailty adjustment 
                      under pace payment rules for certain specialized 
                      ma plans for special needs individuals.--
                                    ``(I) In general.--Notwithstanding 
                                the preceding provisions of this 
                                paragraph, for plan year 2011 and 
                                subsequent plan years, in the case of a 
                                plan described in subclause (II), the 
                                Secretary may apply the payment rules 
                                under section 1894(d) (other than 
                                paragraph (3) of such section) rather 
                                than the payment rules that would 
                                otherwise apply under this part, but 
                                only to the extent necessary to reflect 
                                the costs of treating high 
                                concentrations of frail individuals.
                                    ``(II) Plan described.--A plan 
                                described in this subclause is a 
                                specialized MA plan for special needs 
                                individuals described in section 
                                1859(b)(6)(B)(ii) that is fully 
                                integrated with capitated contracts with 
                                States for Medicaid benefits, including 
                                long-term care, and that have similar 
                                average levels of frailty (as determined 
                                by the Secretary) as the PACE 
                                program.''.

    (c) Transition and Exception Regarding Restriction on Enrollment.--
Section 1859(f) of the Social Security Act (42 U.S.C. 1395w-28(f)) is 
amended by adding at the end the following new paragraph:
            ``(6) Transition and exception regarding restriction on 
        enrollment.--
                    ``(A) In general. <<NOTE: Procedures.>> --Subject to 
                subparagraph (C), the Secretary shall establish 
                procedures for the transition of applicable individuals 
                to--
                          ``(i) a Medicare Advantage plan that is not a 
                      specialized MA plan for special needs individuals 
                      (as defined in subsection (b)(6)); or
                          ``(ii) the original medicare fee-for-service 
                      program under parts A and B.
                    ``(B) Applicable 
                individuals. <<NOTE: Definition.>> --For purposes of 
                clause (i), the term `applicable individual' means an 
                individual who--
                          ``(i) is enrolled under a specialized MA plan 
                      for special needs individuals (as defined in 
                      subsection (b)(6)); and
                          ``(ii) is not within the 1 or more of the 
                      classes of special needs individuals to which 
                      enrollment under the plan is restricted to.
                    ``(C) Exception.--The Secretary shall provide for an 
                exception to the transition described in subparagraph 
                (A)

[[Page 124 STAT. 458]]

                for a limited period of time for individuals enrolled 
                under a specialized MA plan for special needs 
                individuals described in subsection (b)(6)(B)(ii) who 
                are no longer eligible for medical assistance under 
                title XIX.
                    ``(D) Timeline for initial 
                transition. <<NOTE: Deadline.>> --The Secretary shall 
                ensure that applicable individuals enrolled in a 
                specialized MA plan for special needs individuals (as 
                defined in subsection (b)(6)) prior to January 1, 2010, 
                are transitioned to a plan or the program described in 
                subparagraph (A) by not later than January 1, 2013.''.

    (d) Temporary Extension of Authority To Operate but No Service Area 
Expansion for Dual Special Needs Plans That Do Not Meet Certain 
Requirements.--Section 164(c)(2) of the Medicare Improvements for 
Patients and Providers Act of 2008 (Public Law 110-275) <<NOTE: 42 
USC 1395w-28 note.>>  is amended by striking ``December 31, 2010'' and 
inserting ``December 31, 2012''.

    (e) Authority To Require Special Needs Plans Be NCQA Approved.--
Section 1859(f) of the Social Security Act (42 U.S.C. 1395w-28(f)), as 
amended by subsections (a) and (c), is amended--
            (1) in paragraph (2), by adding at the end the following new 
        subparagraph:
                    ``(C) If applicable, the plan meets the requirement 
                described in paragraph (7).'';
            (2) in paragraph (3), by adding at the end the following new 
        subparagraph:
                    ``(E) If applicable, the plan meets the requirement 
                described in paragraph (7).'';
            (3) in paragraph (4), by adding at the end the following new 
        subparagraph:
                    ``(C) If applicable, the plan meets the requirement 
                described in paragraph (7).''; and
            (4) by adding at the end the following new paragraph:
            ``(7) Authority to require special needs plans be ncqa 
        approved. <<NOTE: Standards.>> --For 2012 and subsequent years, 
        the Secretary shall require that a Medicare Advantage 
        organization offering a specialized MA plan for special needs 
        individuals be approved by the National Committee for Quality 
        Assurance (based on standards established by the Secretary).''.

    (f) Risk Adjustment.--Section 1853(a)(1)(C) of the Social Security 
Act <<NOTE: 42 USC 1395w-23.>> (42 U.S.C. 1395i-23(a)(1)(C)) is amended 
by adding at the end the following new clause:
                          ``(iii) Improvements to risk adjustment for 
                      special needs individuals with chronic health 
                      conditions.--
                                    ``(I) In general.--For 2011 and 
                                subsequent years, for purposes of the 
                                adjustment under clause (i) with respect 
                                to individuals described in subclause 
                                (II), the Secretary shall use a risk 
                                score that reflects the known underlying 
                                risk profile and chronic health status 
                                of similar individuals. Such risk score 
                                shall be used instead of the default 
                                risk score for new enrollees in Medicare 
                                Advantage plans that are not specialized 
                                MA plans for special needs individuals 
                                (as defined in section 1859(b)(6)).
                                    ``(II) Individuals described.--An 
                                individual described in this subclause 
                                is a special needs individual described 
                                in subsection (b)(6)(B)(iii) who

[[Page 124 STAT. 459]]

                                enrolls in a specialized MA plan for 
                                special needs individuals on or after 
                                January 1, 2011.
                                    ``(III) Evaluation.--For 2011 and 
                                periodically thereafter, the Secretary 
                                shall evaluate and revise the risk 
                                adjustment system under this 
                                subparagraph in order to, as accurately 
                                as possible, account for higher medical 
                                and care coordination costs associated 
                                with frailty, individuals with multiple, 
                                comorbid chronic conditions, and 
                                individuals with a diagnosis of mental 
                                illness, and also to account for costs 
                                that may be associated with higher 
                                concentrations of beneficiaries with 
                                those conditions.
                                    ``(IV) Publication of evaluation and 
                                revisions.--The Secretary shall publish, 
                                as part of an announcement under 
                                subsection (b), a description of any 
                                evaluation conducted under subclause 
                                (III) during the preceding year and any 
                                revisions made under such subclause as a 
                                result of such evaluation.''.

    (g) Technical Correction.--Section 1859(f)(5) of the Social Security 
Act (42 U.S.C. 1395w-28(f)(5)) is amended, in the matter preceding 
subparagraph (A), by striking ``described in subsection (b)(6)(B)(i)''.

SEC. 3206. EXTENSION OF REASONABLE COST CONTRACTS.

    Section 1876(h)(5)(C)(ii) of the Social Security Act (42 U.S.C. 
1395mm(h)(5)(C)(ii)) is amended, in the matter preceding subclause (I), 
by striking ``January 1, 2010'' and inserting ``January 1, 2013''.

SEC. 3207. <<NOTE: 42 USC 1395w-27 note.>> TECHNICAL CORRECTION TO MA 
            PRIVATE FEE-FOR-SERVICE PLANS.

     <<NOTE: Applicability.>> For plan year 2011 and subsequent plan 
years, to the extent that the Secretary of Health and Human Services is 
applying the 2008 service area extension waiver policy (as modified in 
the April 11, 2008, Centers for Medicare & Medicaid Services' memorandum 
with the subject ``2009 Employer Group Waiver-Modification of the 2008 
Service Area Extension Waiver Granted to Certain MA Local Coordinated 
Care Plans'') to Medicare Advantage coordinated care plans, the 
Secretary shall extend the application of such waiver policy to 
employers who contract directly with the Secretary as a Medicare 
Advantage private fee-for-service plan under section 1857(i)(2) of the 
Social Security Act (42 U.S.C. 1395w-27(i)(2)) and that had enrollment 
as of October 1, 2009.

SEC. 3208. MAKING SENIOR HOUSING FACILITY DEMONSTRATION PERMANENT.

    (a) In General.--Section 1859 of the Social Security Act (42 U.S.C. 
1395w-28) is amended by adding at the end the following new subsection:
    ``(g) Special Rules for Senior Housing Facility Plans.--
            ``(1) In general.--In the case of a Medicare Advantage 
        senior housing facility plan described in paragraph (2), 
        notwithstanding any other provision of this part to the contrary 
        and in accordance with regulations of the Secretary, the service 
        area of such plan may be limited to a senior housing facility in 
        a geographic area.

[[Page 124 STAT. 460]]

            ``(2) Medicare advantage senior housing facility plan 
        described.--For purposes of this subsection, a Medicare 
        Advantage senior housing facility plan is a Medicare Advantage 
        plan that--
                    ``(A) restricts enrollment of individuals under this 
                part to individuals who reside in a continuing care 
                retirement community (as defined in section 
                1852(l)(4)(B));
                    ``(B) provides primary care services onsite and has 
                a ratio of accessible physicians to beneficiaries that 
                the Secretary determines is adequate;
                    ``(C) provides transportation services for 
                beneficiaries to specialty providers outside of the 
                facility; and
                    ``(D) has participated (as of December 31, 2009) in 
                a demonstration project established by the Secretary 
                under which such a plan was offered for not less than 1 
                year.''.

    (b) Effective Date. <<NOTE: 42 USC 1395w-28 note.>> --The amendment 
made by this section shall take effect on January 1, 2010, and shall 
apply to plan years beginning on or after such date.

SEC. 3209. AUTHORITY TO DENY PLAN BIDS.

    (a) In General.--Section 1854(a)(5) of the Social Security Act (42 
U.S.C. 1395w-24(a)(5)) is amended by adding at the end the following new 
subparagraph:
                    ``(C) Rejection of bids.--
                          ``(i) In general.--Nothing in this section 
                      shall be construed as requiring the Secretary to 
                      accept any or every bid submitted by an MA 
                      organization under this subsection.
                          ``(ii) Authority to deny bids that propose 
                      significant increases in cost sharing or decreases 
                      in benefits.--The Secretary may deny a bid 
                      submitted by an MA organization for an MA plan if 
                      it proposes significant increases in cost sharing 
                      or decreases in benefits offered under the 
                      plan.''.

    (b) Application Under Part D.--Section 1860D-11(d) of such Act (42 
U.S.C. 1395w-111(d)) is amended by adding at the end the following new 
paragraph:
            ``(3) Rejection of bids. <<NOTE: Applicability.>> --
        Paragraph (5)(C) of section 1854(a) shall apply with respect to 
        bids submitted by a PDP sponsor under subsection (b) in the same 
        manner as such paragraph applies to bids submitted by an MA 
        organization under such section 1854(a).''.

    (c) <<NOTE: 42 USC 1395w-24 note.>> Effective Date.--The amendments 
made by this section shall apply to bids submitted for contract years 
beginning on or after January 1, 2011.

SEC. 3210. DEVELOPMENT OF NEW STANDARDS FOR CERTAIN MEDIGAP PLANS.

    (a) In General.--Section 1882 of the Social Security Act (42 U.S.C. 
1395ss) is amended by adding at the end the following new subsection:
    ``(y) Development of New Standards for Certain Medicare Supplemental 
Policies.--
            ``(1) In general.--The Secretary shall request the National 
        Association of Insurance Commissioners to review and revise the 
        standards for benefit packages described in paragraph (2) under 
        subsection (p)(1), to otherwise update standards to include 
        requirements for nominal cost sharing to encourage

[[Page 124 STAT. 461]]

        the use of appropriate physicians' services under part B. Such 
        revisions shall be based on evidence published in peer-reviewed 
        journals or current examples used by integrated delivery systems 
        and made consistent with the rules applicable under subsection 
        (p)(1)(E) with the reference to the `1991 NAIC Model Regulation' 
        deemed a reference to the NAIC Model Regulation as published in 
        the Federal Register on December 4, 1998, and as subsequently 
        updated by the National Association of Insurance Commissioners 
        to reflect previous changes in law and the reference to `date of 
        enactment of this subsection' deemed a reference to the date of 
        enactment of the Patient Protection and Affordable Care 
        Act. <<NOTE: Effective date.>> To the extent practicable, such 
        revision shall provide for the implementation of revised 
        standards for benefit packages as of January 1, 2015.
            ``(2) Benefit packages described.--The benefit packages 
        described in this paragraph are benefit packages classified as 
        `C' and `F'.''.

    (b) Conforming Amendment.--Section 1882(o)(1) of the Social Security 
Act (42 U.S.C. 1395ss(o)(1)) is amended by striking ``, and (w)'' and 
inserting ``(w), and (y)''.

Subtitle D--Medicare Part D Improvements for Prescription Drug Plans and 
                               MA-PD Plans

SEC. 3301. MEDICARE COVERAGE GAP DISCOUNT PROGRAM.

    (a) Condition for Coverage of Drugs Under Part D.--Part D of Title 
XVIII of the Social Security Act (42 U.S.C. 1395w-101 et seq.), is 
amended by adding at the end the following new section:


            ``condition for coverage of drugs under this part


    ``Sec. 1860D-43. <<NOTE: Contracts. 42 USC 1395w-153.>>  (a) In 
General.--In order for coverage to be available under this part for 
covered part D drugs (as defined in section 1860D-2(e)) of a 
manufacturer, the manufacturer must--
            ``(1) participate in the Medicare coverage gap discount 
        program under section 1860D-14A;
            ``(2) have entered into and have in effect an agreement 
        described in subsection (b) of such section with the Secretary; 
        and
            ``(3) have entered into and have in effect, under terms and 
        conditions specified by the Secretary, a contract with a third 
        party that the Secretary has entered into a contract with under 
        subsection (d)(3) of such section.

    ``(b) Effective Date.--Subsection (a) shall apply to covered part D 
drugs dispensed under this part on or after July 1, 2010.
    ``(c) Authorizing Coverage for Drugs Not Covered Under Agreements.--
Subsection (a) shall not apply to the dispensing of a covered part D 
drug if--
            ``(1) <<NOTE: Determination.>> the Secretary has made a 
        determination that the availability of the drug is essential to 
        the health of beneficiaries under this part; or

[[Page 124 STAT. 462]]

            ``(2) <<NOTE: Determination. Time period.>> the Secretary 
        determines that in the period beginning on July 1, 2010, and 
        ending on December 31, 2010, there were extenuating 
        circumstances.

    ``(d) Definition of Manufacturer.--In this section, the term 
`manufacturer' has the meaning given such term in section 1860D-
14A(g)(5).''.
    (b) Medicare Coverage Gap Discount Program.--Part D of title XVIII 
of the Social Security Act (42 U.S.C. 1395w-101) is amended by inserting 
after section 1860D-14 the following new section:


                ``medicare coverage gap discount program


    ``Sec. 1860D-14A.  <<NOTE: Deadlines. 42 USC 1395w-114a.>> (a) 
Establishment.--The Secretary shall establish a Medicare coverage gap 
discount program (in this section referred to as the `program') by not 
later than July 1, 2010. <<NOTE: Contracts.>> Under the program, the 
Secretary shall enter into agreements described in subsection (b) with 
manufacturers and provide for the performance of the duties described in 
subsection (c)(1). The Secretary shall establish a model agreement for 
use under the program by not later than April 1, 2010, in consultation 
with manufacturers, and allow for comment on such model agreement.

    ``(b) Terms of Agreement.--
            ``(1) In general.--
                    ``(A) Agreement.--An agreement under this section 
                shall require the manufacturer to provide applicable 
                beneficiaries access to discounted prices for applicable 
                drugs of the manufacturer.
                    ``(B) Provision of discounted prices at the point-
                of-sale.--Except as provided in subsection 
                (c)(1)(A)(iii), such discounted prices shall be provided 
                to the applicable beneficiary at the pharmacy or by the 
                mail order service at the point-of-sale of an applicable 
                drug.
                    ``(C) <<NOTE: Deadlines.>>  Timing of agreement.--
                          ``(i) Special rule for 2010 and 2011.--In 
                      order for an agreement with a manufacturer to be 
                      in effect under this section with respect to the 
                      period beginning on July 1, 2010, and ending on 
                      December 31, 2011, the manufacturer shall enter 
                      into such agreement not later than May 1, 2010.
                          ``(ii) 2012 and subsequent years.--In order 
                      for an agreement with a manufacturer to be in 
                      effect under this section with respect to plan 
                      year 2012 or a subsequent plan year, the 
                      manufacturer shall enter into such agreement (or 
                      such agreement shall be renewed under paragraph 
                      (4)(A)) not later than January 30 of the preceding 
                      year.
            ``(2) Provision of appropriate 
        data. <<NOTE: Determination.>> --Each manufacturer with an 
        agreement in effect under this section shall collect and have 
        available appropriate data, as determined by the Secretary, to 
        ensure that it can demonstrate to the Secretary compliance with 
        the requirements under the program.
            ``(3) Compliance with requirements for administration of 
        program.--Each manufacturer with an agreement in effect under 
        this section shall comply with requirements imposed by the 
        Secretary or a third party with a contract under subsection 
        (d)(3), as applicable, for purposes of administering the

[[Page 124 STAT. 463]]

        program, including any determination under clause (i) of 
        subsection (c)(1)(A) or procedures established under such 
        subsection (c)(1)(A).
            ``(4) Length of agreement.--
                    ``(A) In general. <<NOTE: Time period.>> --An 
                agreement under this section shall be effective for an 
                initial period of not less than 18 months and shall be 
                automatically renewed for a period of not less than 1 
                year unless terminated under subparagraph (B).
                    ``(B) Termination.--
                          ``(i) By the secretary.--The Secretary may 
                      provide for termination of an agreement under this 
                      section for a knowing and willful violation of the 
                      requirements of the agreement or other good cause 
                      shown. <<NOTE: Notice.>> Such termination shall 
                      not be effective earlier than 30 days after the 
                      date of notice to the manufacturer of such 
                      termination. The Secretary shall provide, upon 
                      request, a manufacturer with a hearing concerning 
                      such a termination, and such hearing shall take 
                      place prior to the effective date of the 
                      termination with sufficient time for such 
                      effective date to be repealed if the Secretary 
                      determines appropriate.
                          ``(ii) By a manufacturer.--A manufacturer may 
                      terminate an agreement under this section for any 
                      reason. Any such termination shall be effective, 
                      with respect to a plan year--
                                    ``(I) if the termination occurs 
                                before January 30 of a plan year, as of 
                                the day after the end of the plan year; 
                                and
                                    ``(II) if the termination occurs on 
                                or after January 30 of a plan year, as 
                                of the day after the end of the 
                                succeeding plan year.
                          ``(iii) Effectiveness of termination.--Any 
                      termination under this subparagraph shall not 
                      affect discounts for applicable drugs of the 
                      manufacturer that are due under the agreement 
                      before the effective date of its termination.
                          ``(iv) Notice to third 
                      party. <<NOTE: Deadline.>> --The Secretary shall 
                      provide notice of such termination to a third 
                      party with a contract under subsection (d)(3) 
                      within not less than 30 days before the effective 
                      date of such termination.

    ``(c) Duties Described and Special Rule for Supplemental Benefits.--
            ``(1) Duties described.--The duties described in this 
        subsection are the following:
                    ``(A) Administration of 
                program. <<NOTE: Procedures.>> --Administering the 
                program, including--
                          ``(i) <<NOTE: Determination.>> the 
                      determination of the amount of the discounted 
                      price of an applicable drug of a manufacturer;
                          ``(ii) except as provided in clause (iii), the 
                      establishment of procedures under which discounted 
                      prices are provided to applicable beneficiaries at 
                      pharmacies or by mail order service at the point-
                      of-sale of an applicable drug;
                          ``(iii) in the case where, during the period 
                      beginning on July 1, 2010, and ending on December 
                      31, 2011,

[[Page 124 STAT. 464]]

                      it is not practicable to provide such discounted 
                      prices at the point-of-sale (as described in 
                      clause (ii)), the establishment of procedures to 
                      provide such discounted prices as soon as 
                      practicable after the point-of-sale;
                          ``(iv) the establishment of procedures to 
                      ensure that, not later than the applicable number 
                      of calendar days after the dispensing of an 
                      applicable drug by a pharmacy or mail order 
                      service, the pharmacy or mail order service is 
                      reimbursed for an amount equal to the difference 
                      between--
                                    ``(I) the negotiated price of the 
                                applicable drug; and
                                    ``(II) the discounted price of the 
                                applicable drug;
                          ``(v) the establishment of procedures to 
                      ensure that the discounted price for an applicable 
                      drug under this section is applied before any 
                      coverage or financial assistance under other 
                      health benefit plans or programs that provide 
                      coverage or financial assistance for the purchase 
                      or provision of prescription drug coverage on 
                      behalf of applicable beneficiaries as the 
                      Secretary may specify;
                          ``(vi) the establishment of procedures to 
                      implement the special rule for supplemental 
                      benefits under paragraph (2); and
                          ``(vii) providing a reasonable dispute 
                      resolution mechanism to resolve disagreements 
                      between manufacturers, applicable beneficiaries, 
                      and the third party with a contract under 
                      subsection (d)(3).
                    ``(B) Monitoring compliance.--
                          ``(i) In general.--The Secretary shall monitor 
                      compliance by a manufacturer with the terms of an 
                      agreement under this section.
                          ``(ii) Notification.--If a third party with a 
                      contract under subsection (d)(3) determines that 
                      the manufacturer is not in compliance with such 
                      agreement, the third party shall notify the 
                      Secretary of such noncompliance for appropriate 
                      enforcement under subsection (e).
                    ``(C) Collection of data from prescription drug 
                plans and ma-pd plans.--The Secretary may collect 
                appropriate data from prescription drug plans and MA-PD 
                plans in a timeframe that allows for discounted prices 
                to be provided for applicable drugs under this section.
            ``(2) Special rule for supplemental benefits.--For plan year 
        2010 and each subsequent plan year, in the case where an 
        applicable beneficiary has supplemental benefits with respect to 
        applicable drugs under the prescription drug plan or MA-PD plan 
        that the applicable beneficiary is enrolled in, the applicable 
        beneficiary shall not be provided a discounted price for an 
        applicable drug under this section until after such supplemental 
        benefits have been applied with respect to the applicable drug.

    ``(d) Administration.--
            ``(1) In general.--Subject to paragraph (2), the Secretary 
        shall provide for the implementation of this section, including 
        the performance of the duties described in subsection (c)(1).

[[Page 124 STAT. 465]]

            ``(2) Limitation.--
                    ``(A) In general.--Subject to subparagraph (B), in 
                providing for such implementation, the Secretary shall 
                not receive or distribute any funds of a manufacturer 
                under the program.
                    ``(B) Exception. <<NOTE: Time 
                period. Determination.>> --The limitation under 
                subparagraph (A) shall not apply to the Secretary with 
                respect to drugs dispensed during the period beginning 
                on July 1, 2010, and ending on December 31, 2010, but 
                only if the Secretary determines that the exception to 
                such limitation under this subparagraph is necessary in 
                order for the Secretary to begin implementation of this 
                section and provide applicable beneficiaries timely 
                access to discounted prices during such period.
            ``(3) Contract with third parties.--The Secretary shall 
        enter into a contract with 1 or more third parties to administer 
        the requirements established by the Secretary in order to carry 
        out this section. At a minimum, the contract with a third party 
        under the preceding sentence shall require that the third 
        party--
                    ``(A) receive and transmit information between the 
                Secretary, manufacturers, and other individuals or 
                entities the Secretary determines appropriate;
                    ``(B) receive, distribute, or facilitate the 
                distribution of funds of manufacturers to appropriate 
                individuals or entities in order to meet the obligations 
                of manufacturers under agreements under this section;
                    ``(C) provide adequate and timely information to 
                manufacturers, consistent with the agreement with the 
                manufacturer under this section, as necessary for the 
                manufacturer to fulfill its obligations under this 
                section; and
                    ``(D) permit manufacturers to conduct periodic 
                audits, directly or through contracts, of the data and 
                information used by the third party to determine 
                discounts for applicable drugs of the manufacturer under 
                the program.
            ``(4) Performance requirements.--The Secretary shall 
        establish performance requirements for a third party with a 
        contract under paragraph (3) and safeguards to protect the 
        independence and integrity of the activities carried out by the 
        third party under the program under this section.
            ``(5) Implementation.--The Secretary may implement the 
        program under this section by program instruction or otherwise.
            ``(6) Administration.--Chapter 35 of title 44, United States 
        Code, shall not apply to the program under this section.

    ``(e) Enforcement.--
            ``(1) Audits.--Each manufacturer with an agreement in effect 
        under this section shall be subject to periodic audit by the 
        Secretary.
            ``(2) Civil money penalty.--
                    ``(A) In general. <<NOTE: Determination.>> --The 
                Secretary shall impose a civil money penalty on a 
                manufacturer that fails to provide applicable 
                beneficiaries discounts for applicable drugs of the 
                manufacturer in accordance with such agreement for each 
                such failure in an amount the Secretary determines is 
                commensurate with the sum of--

[[Page 124 STAT. 466]]

                          ``(i) the amount that the manufacturer would 
                      have paid with respect to such discounts under the 
                      agreement, which will then be used to pay the 
                      discounts which the manufacturer had failed to 
                      provide; and
                          ``(ii) 25 percent of such amount.
                    ``(B) Application.--The provisions of section 1128A 
                (other than subsections (a) and (b)) shall apply to a 
                civil money penalty under this paragraph in the same 
                manner as such provisions apply to a penalty or 
                proceeding under section 1128A(a).

    ``(f) Clarification Regarding Availability of Other Covered Part D 
Drugs.--Nothing in this section shall prevent an applicable beneficiary 
from purchasing a covered part D drug that is not an applicable drug 
(including a generic drug or a drug that is not on the formulary of the 
prescription drug plan or MA-PD plan that the applicable beneficiary is 
enrolled in).
    ``(g) Definitions.--In this section:
            ``(1) Applicable beneficiary.--The term `applicable 
        beneficiary' means an individual who, on the date of dispensing 
        an applicable drug--
                    ``(A) is enrolled in a prescription drug plan or an 
                MA-PD plan;
                    ``(B) is not enrolled in a qualified retiree 
                prescription drug plan;
                    ``(C) is not entitled to an income-related subsidy 
                under section 1860D-14(a);
                    ``(D) is not subject to a reduction in premium 
                subsidy under section 1839(i); and
                    ``(E) who--
                          ``(i) has reached or exceeded the initial 
                      coverage limit under section 1860D-2(b)(3) during 
                      the year; and
                          ``(ii) has not incurred costs for covered part 
                      D drugs in the year equal to the annual out-of-
                      pocket threshold specified in section 1860D-
                      2(b)(4)(B).
            ``(2) Applicable drug.--The term `applicable drug' means, 
        with respect to an applicable beneficiary, a covered part D 
        drug--
                    ``(A) approved under a new drug application under 
                section 505(b) of the Federal Food, Drug, and Cosmetic 
                Act or, in the case of a biologic product, licensed 
                under section 351 of the Public Health Service Act 
                (other than a product licensed under subsection (k) of 
                such section 351); and
                    ``(B)(i) if the PDP sponsor of the prescription drug 
                plan or the MA organization offering the MA-PD plan uses 
                a formulary, which is on the formulary of the 
                prescription drug plan or MA-PD plan that the applicable 
                beneficiary is enrolled in;
                    ``(ii) if the PDP sponsor of the prescription drug 
                plan or the MA organization offering the MA-PD plan does 
                not use a formulary, for which benefits are available 
                under the prescription drug plan or MA-PD plan that the 
                applicable beneficiary is enrolled in; or
                    ``(iii) is provided through an exception or appeal.
            ``(3) Applicable number of calendar days.--The term 
        `applicable number of calendar days' means--

[[Page 124 STAT. 467]]

                    ``(A) with respect to claims for reimbursement 
                submitted electronically, 14 days; and
                    ``(B) with respect to claims for reimbursement 
                submitted otherwise, 30 days.
            ``(4) Discounted price.--
                    ``(A) In general.--The term `discounted price' means 
                50 percent of the negotiated price of the applicable 
                drug of a manufacturer.
                    ``(B) Clarification.--Nothing in this section shall 
                be construed as affecting the responsibility of an 
                applicable beneficiary for payment of a dispensing fee 
                for an applicable drug.
                    ``(C) Special case for certain claims.--In the case 
                where the entire amount of the negotiated price of an 
                individual claim for an applicable drug with respect to 
                an applicable beneficiary does not fall at or above the 
                initial coverage limit under section 1860D-2(b)(3) and 
                below the annual out-of-pocket threshold specified in 
                section 1860D-2(b)(4)(B) for the year, the manufacturer 
                of the applicable drug shall provide the discounted 
                price under this section on only the portion of the 
                negotiated price of the applicable drug that falls at or 
                above such initial coverage limit and below such annual 
                out-of-pocket threshold.
            ``(5) Manufacturer.--The term `manufacturer' means any 
        entity which is engaged in the production, preparation, 
        propagation, compounding, conversion, or processing of 
        prescription drug products, either directly or indirectly by 
        extraction from substances of natural origin, or independently 
        by means of chemical synthesis, or by a combination of 
        extraction and chemical synthesis. Such term does not include a 
        wholesale distributor of drugs or a retail pharmacy licensed 
        under State law.
            ``(6) Negotiated price.--The term `negotiated price' has the 
        meaning given such term in section 423.100 of title 42, Code of 
        Federal Regulations (as in effect on the date of enactment of 
        this section), except that such negotiated price shall not 
        include any dispensing fee for the applicable drug.
            ``(7) Qualified retiree prescription drug plan.--The term 
        `qualified retiree prescription drug plan' has the meaning given 
        such term in section 1860D-22(a)(2).''.

    (c) Inclusion in Incurred Costs.--
            (1) In general.--Section 1860D-2(b)(4) of the Social 
        Security Act (42 U.S.C. 1395w-102(b)(4)) is amended--
                    (A) in subparagraph (C), in the matter preceding 
                clause (i), by striking ``In applying'' and inserting 
                ``Except as provided in subparagraph (E), in applying''; 
                and
                    (B) by adding at the end the following new 
                subparagraph:
                    ``(E) Inclusion of costs of applicable drugs under 
                medicare coverage gap discount program.--In applying 
                subparagraph (A), incurred costs shall include the 
                negotiated price (as defined in paragraph (6) of section 
                1860D-14A(g)) of an applicable drug (as defined in 
                paragraph (2) of such section) of a manufacturer that is 
                furnished to an applicable beneficiary (as defined in 
                paragraph (1) of such section) under the Medicare 
                coverage gap discount

[[Page 124 STAT. 468]]

                program under section 1860D-14A, regardless of whether 
                part of such costs were paid by a manufacturer under 
                such program.''.
            (2) Effective date. <<NOTE: 42 USC 1395w-102 note.>> --The 
        amendments made by this subsection shall apply to costs incurred 
        on or after July 1, 2010.

    (d) Conforming Amendment Permitting Prescription Drug Discounts.--
            (1) In general.--Section 1128B(b)(3) of the Social Security 
        Act (42 U.S.C. 1320a-7b(b)(3)) is amended--
                    (A) by striking ``and'' at the end of subparagraph 
                (G);
                    (B) in the subparagraph (H) added by section 237(d) 
                of the Medicare Prescription Drug, Improvement, and 
                Modernization Act of 2003 (Public Law 108-173; 117 Stat. 
                2213)--
                          (i) by moving such subparagraph 2 ems to the 
                      left; and
                          (ii) by striking the period at the end and 
                      inserting a semicolon;
                    (C) in the subparagraph (H) added by section 431(a) 
                of such Act (117 Stat. 2287)--
                          (i) by redesignating such subparagraph as 
                      subparagraph (I);
                          (ii) by moving such subparagraph 2 ems to the 
                      left; and
                          (iii) by striking the period at the end and 
                      inserting ``; and''; and
                    (D) by adding at the end the following new 
                subparagraph:
                    ``(J) a discount in the price of an applicable drug 
                (as defined in paragraph (2) of section 1860D-14A(g)) of 
                a manufacturer that is furnished to an applicable 
                beneficiary (as defined in paragraph (1) of such 
                section) under the Medicare coverage gap discount 
                program under section 1860D-14A.''.
            (2) Conforming amendment to definition of best price under 
        medicaid.--Section 1927(c)(1)(C)(i)(VI) of the Social Security 
        Act (42 U.S.C. 1396r-8(c)(1)(C)(i)(VI)) is amended by inserting 
        ``, or any discounts provided by manufacturers under the 
        Medicare coverage gap discount program under section 1860D-14A'' 
        before the period at the end.
            (3) <<NOTE: 42 USC 1320a-76 note.>> Effective date.--The 
        amendments made by this subsection shall apply to drugs 
        dispensed on or after July 1, 2010.

SEC. 3302. IMPROVEMENT IN DETERMINATION OF MEDICARE PART D LOW-INCOME 
            BENCHMARK PREMIUM.

    (a) In General.--Section 1860D-14(b)(2)(B)(iii) of the Social 
Security Act (42 U.S.C. 1395w-114(b)(2)(B)(iii)) is amended by inserting 
``, determined without regard to any reduction in such premium as a 
result of any beneficiary rebate under section 1854(b)(1)(C) or bonus 
payment under section 1853(n)'' before the period at the end.
    (b) <<NOTE: 42 USC 1395w-114 note.>> Effective Date.--The amendment 
made by subsection (a) shall apply to premiums for months beginning on 
or after January 1, 2011.

[[Page 124 STAT. 469]]

SEC. 3303. VOLUNTARY DE MINIMIS POLICY FOR SUBSIDY ELIGIBLE INDIVIDUALS 
            UNDER PRESCRIPTION DRUG PLANS AND MA-PD PLANS.

    (a) In General.--Section 1860D-14(a) of the Social Security Act (42 
U.S.C. 1395w-114(a)) is amended by adding at the end the following new 
paragraph:
            ``(5) Waiver of de minimis 
        premiums. <<NOTE: Procedures.>> --The Secretary shall, under 
        procedures established by the Secretary, permit a prescription 
        drug plan or an MA-PD plan to waive the monthly beneficiary 
        premium for a subsidy eligible individual if the amount of such 
        premium is de minimis. If such premium is waived under the plan, 
        the Secretary shall not reassign subsidy eligible individuals 
        enrolled in the plan to other plans based on the fact that the 
        monthly beneficiary premium under the plan was greater than the 
        low-income benchmark premium amount.''.

    (b) Authorizing the Secretary To Auto-enroll Subsidy Eligible 
Individuals in Plans That Waive De Minimis Premiums.--Section 1860D-
1(b)(1) of the Social Security Act (42 U.S.C. 1395w-101(b)(1)) is 
amended--
            (1) in subparagraph (C), by inserting ``except as provided 
        in subparagraph (D),'' after ``shall include,''
            (2) by adding at the end the following new subparagraph:
                    ``(D) Special rule for plans that waive de minimis 
                premiums.--The process established under subparagraph 
                (A) may include, in the case of a part D eligible 
                individual who is a subsidy eligible individual (as 
                defined in section 1860D-14(a)(3)) who has failed to 
                enroll in a prescription drug plan or an MA-PD plan, for 
                the enrollment in a prescription drug plan or MA-PD plan 
                that has waived the monthly beneficiary premium for such 
                subsidy eligible individual under section 1860D-
                14(a)(5). If there is more than one such plan available, 
                the Secretary shall enroll such an individual under the 
                preceding sentence on a random basis among all such 
                plans in the PDP region. Nothing in the previous 
                sentence shall prevent such an individual from declining 
                or changing such enrollment.''.

    (c) <<NOTE: 42 USC 1395w-101 note.>> Effective Date.--The amendments 
made by this subsection shall apply to premiums for months, and 
enrollments for plan years, beginning on or after January 1, 2011.

SEC. 3304. SPECIAL RULE FOR WIDOWS AND WIDOWERS REGARDING ELIGIBILITY 
            FOR LOW-INCOME ASSISTANCE.

    (a) In General.--Section 1860D-14(a)(3)(B) of the Social Security 
Act (42 U.S.C. 1395w-114(a)(3)(B)) is amended by adding at the end the 
following new clause:
                          ``(vi) Special rule for widows and widowers.--
                      Notwithstanding the preceding provisions of this 
                      subparagraph, in the case of an individual whose 
                      spouse dies during the effective period for a 
                      determination or redetermination that has been 
                      made under this subparagraph, such effective 
                      period shall be extended through the date that is 
                      1 year after the date on which the determination 
                      or redetermination would (but for the application 
                      of this clause) otherwise cease to be 
                      effective.''.

[[Page 124 STAT. 470]]

    (b) <<NOTE: 42 USC 1395w-114 note.>> Effective Date.--The amendment 
made by subsection (a) shall take effect on January 1, 2011.

SEC. 3305. IMPROVED INFORMATION FOR SUBSIDY ELIGIBLE INDIVIDUALS 
            REASSIGNED TO PRESCRIPTION DRUG PLANS AND MA-PD PLANS.

    Section 1860D-14 of the Social Security Act (42 U.S.C. 1395w-114) is 
amended--
            (1) by redesignating subsection (d) as subsection (e); and
            (2) by inserting after subsection (c) the following new 
        subsection:

    ``(d) Facilitation of Reassignments. <<NOTE: Deadlines.>> --
Beginning not later than January 1, 2011, the Secretary shall, in the 
case of a subsidy eligible individual who is enrolled in one 
prescription drug plan and is subsequently reassigned by the Secretary 
to a new prescription drug plan, provide the individual, within 30 days 
of such reassignment, with--
            ``(1) information on formulary differences between the 
        individual's former plan and the plan to which the individual is 
        reassigned with respect to the individual's drug regimens; and
            ``(2) a description of the individual's right to request a 
        coverage determination, exception, or reconsideration under 
        section 1860D-4(g), bring an appeal under section 1860D-4(h), or 
        resolve a grievance under section 1860D-4(f).''.

SEC. 3306. FUNDING OUTREACH AND ASSISTANCE FOR LOW-INCOME PROGRAMS.

    (a) Additional Funding for State Health Insurance Programs.--
Subsection (a)(1)(B) of section 119 of the Medicare Improvements for 
Patients and Providers Act of 2008 (42 U.S.C. 1395b-3 note) is amended 
by striking ``(42 U.S.C. 1395w-23(f))'' and all that follows through the 
period at the end and inserting ``(42 U.S.C. 1395w-23(f)), to the 
Centers for Medicare & Medicaid Services Program Management Account--
                          ``(i) for fiscal year 2009, of $7,500,000; and
                          ``(ii) for the period of fiscal years 2010 
                      through 2012, of $15,000,000.
                Amounts appropriated under this subparagraph shall 
                remain available until expended.''.

    (b) Additional Funding for Area Agencies on Aging.--Subsection 
(b)(1)(B) of such section 119 is amended by striking ``(42 U.S.C. 1395w-
23(f))'' and all that follows through the period at the end and 
inserting ``(42 U.S.C. 1395w-23(f)), to the Administration on Aging--
                          ``(i) for fiscal year 2009, of $7,500,000; and
                          ``(ii) for the period of fiscal years 2010 
                      through 2012, of $15,000,000.
                Amounts appropriated under this subparagraph shall 
                remain available until expended.''.

    (c) Additional Funding for Aging and Disability Resource Centers.--
Subsection (c)(1)(B) of such section 119 is amended by striking ``(42 
U.S.C. 1395w-23(f))'' and all that follows through the period at the end 
and inserting ``(42 U.S.C. 1395w-23(f)), to the Administration on 
Aging--
                          ``(i) for fiscal year 2009, of $5,000,000; and
                          ``(ii) for the period of fiscal years 2010 
                      through 2012, of $10,000,000.

[[Page 124 STAT. 471]]

                Amounts appropriated under this subparagraph shall 
                remain available until expended.''.

    (d) Additional Funding for Contract With the National Center for 
Benefits and Outreach Enrollment.--Subsection (d)(2) of such section 119 
is amended by striking ``(42 U.S.C. 1395w-23(f))'' and all that follows 
through the period at the end and inserting ``(42 U.S.C. 1395w-23(f)), 
to the Administration on Aging--
                          ``(i) for fiscal year 2009, of $5,000,000; and
                          ``(ii) for the period of fiscal years 2010 
                      through 2012, of $5,000,000.
                Amounts appropriated under this subparagraph shall 
                remain available until expended.''.

    (e) Secretarial Authority To Enlist Support in Conducting Certain 
Outreach Activities.--Such section 119 is amended by adding at the end 
the following new subsection:
    ``(g) Secretarial Authority To Enlist Support in Conducting Certain 
Outreach Activities.--The Secretary may request that an entity awarded a 
grant under this section support the conduct of outreach activities 
aimed at preventing disease and promoting wellness. Notwithstanding any 
other provision of this section, an entity may use a grant awarded under 
this subsection to support the conduct of activities described in the 
preceding sentence.''.

SEC. 3307. IMPROVING FORMULARY REQUIREMENTS FOR PRESCRIPTION DRUG PLANS 
            AND MA-PD PLANS WITH RESPECT TO CERTAIN CATEGORIES OR 
            CLASSES OF DRUGS.

    (a) Improving Formulary Requirements.--Section 1860D-
4(b)(3)(G) <<NOTE: 42 USC 1395w-104.>> of the Social Security Act is 
amended to read as follows:
                    ``(G) Required inclusion of drugs in certain 
                categories and classes.--
                          ``(i) Formulary requirements.--
                                    ``(I) In general.--Subject to 
                                subclause (II), a PDP sponsor offering a 
                                prescription drug plan shall be required 
                                to include all covered part D drugs in 
                                the categories and classes identified by 
                                the Secretary under clause (ii)(I).
                                    ``(II) Exceptions.--The Secretary 
                                may establish exceptions that permit a 
                                PDP sponsor offering a prescription drug 
                                plan to exclude from its formulary a 
                                particular covered part D drug in a 
                                category or class that is otherwise 
                                required to be included in the formulary 
                                under subclause (I) (or to otherwise 
                                limit access to such a drug, including 
                                through prior authorization or 
                                utilization management).
                          ``(ii) Identification of drugs in certain 
                      categories and classes.--
                                    ``(I) In general.--Subject to clause 
                                (iv), the Secretary shall identify, as 
                                appropriate, categories and classes of 
                                drugs for which the Secretary determines 
                                are of clinical concern.
                                    ``(II) Criteria.--The Secretary 
                                shall use criteria established by the 
                                Secretary in making any determination 
                                under subclause (I).

[[Page 124 STAT. 472]]

                          ``(iii) <<NOTE: Regulations. Public 
                      information.>>  Implementation.--The Secretary 
                      shall establish the criteria under clause (ii)(II) 
                      and any exceptions under clause (i)(II) through 
                      the promulgation of a regulation which includes a 
                      public notice and comment period.
                          ``(iv) Requirement for certain categories and 
                      classes until criteria established.--Until such 
                      time as the Secretary establishes the criteria 
                      under clause (ii)(II) the following categories and 
                      classes of drugs shall be identified under clause 
                      (ii)(I):
                                    ``(I) Anticonvulsants.
                                    ``(II) Antidepressants.
                                    ``(III) Antineoplastics.
                                    ``(IV) Antipsychotics.
                                    ``(V) Antiretrovirals.
                                    ``(VI) Immunosuppressants for the 
                                treatment of transplant rejection.''.

    (b) <<NOTE: 42 USC 1395w-104 note.>> Effective Date.--The amendments 
made by this section shall apply to plan year 2011 and subsequent plan 
years.

SEC. 3308. REDUCING PART D PREMIUM SUBSIDY FOR HIGH-INCOME 
            BENEFICIARIES.

    (a) Income-Related Increase in Part D Premium.--
            (1) In general.--Section 1860D-13(a) of the Social Security 
        Act (42 U.S.C. 1395w-113(a)) is amended by adding at the end the 
        following new paragraph:
            ``(7) Increase in base beneficiary premium based on 
        income.--
                    ``(A) In general.--In the case of an individual 
                whose modified adjusted gross income exceeds the 
                threshold amount applicable under paragraph (2) of 
                section 1839(i) (including application of paragraph (5) 
                of such section) for the calendar year, the monthly 
                amount of the beneficiary premium applicable under this 
                section for a month after December 2010 shall be 
                increased by the monthly adjustment amount specified in 
                subparagraph (B).
                    ``(B) Monthly adjustment amount.--The monthly 
                adjustment amount specified in this subparagraph for an 
                individual for a month in a year is equal to the product 
                of--
                          ``(i) the quotient obtained by dividing--
                                    ``(I) the applicable percentage 
                                determined under paragraph (3)(C) of 
                                section 1839(i) (including application 
                                of paragraph (5) of such section) for 
                                the individual for the calendar year 
                                reduced by 25.5 percent; by
                                    ``(II) 25.5 percent; and
                          ``(ii) the base beneficiary premium (as 
                      computed under paragraph (2)).
                    ``(C) Modified adjusted gross income.--For purposes 
                of this paragraph, the term `modified adjusted gross 
                income' has the meaning given such term in subparagraph 
                (A) of section 1839(i)(4), determined for the taxable 
                year applicable under subparagraphs (B) and (C) of such 
                section.
                    ``(D) Determination by commissioner of social 
                security.--The Commissioner of Social Security shall 
                make any determination necessary to carry out the 
                income-

[[Page 124 STAT. 473]]

                related increase in the base beneficiary premium under 
                this paragraph.
                    ``(E) <<NOTE: Deadlines.>> Procedures to assure 
                correct income-related increase in base beneficiary 
                premium.--
                          ``(i) Disclosure of base beneficiary 
                      premium.--Not later than September 15 of each year 
                      beginning with 2010, the Secretary shall disclose 
                      to the Commissioner of Social Security the amount 
                      of the base beneficiary premium (as computed under 
                      paragraph (2)) for the purpose of carrying out the 
                      income-related increase in the base beneficiary 
                      premium under this paragraph with respect to the 
                      following year.
                          ``(ii) Additional disclosure.--Not later than 
                      October 15 of each year beginning with 2010, the 
                      Secretary shall disclose to the Commissioner of 
                      Social Security the following information for the 
                      purpose of carrying out the income-related 
                      increase in the base beneficiary premium under 
                      this paragraph with respect to the following year:
                                    ``(I) The modified adjusted gross 
                                income threshold applicable under 
                                paragraph (2) of section 1839(i) 
                                (including application of paragraph (5) 
                                of such section).
                                    ``(II) The applicable percentage 
                                determined under paragraph (3)(C) of 
                                section 1839(i) (including application 
                                of paragraph (5) of such section).
                                    ``(III) The monthly adjustment 
                                amount specified in subparagraph (B).
                                    ``(IV) Any other information the 
                                Commissioner of Social Security 
                                determines necessary to carry out the 
                                income-related increase in the base 
                                beneficiary premium under this 
                                paragraph.
                    ``(F) Rule of construction.--The formula used to 
                determine the monthly adjustment amount specified under 
                subparagraph (B) shall only be used for the purpose of 
                determining such monthly adjustment amount under such 
                subparagraph.''.
            (2) Collection of monthly adjustment amount.--Section 1860D-
        13(c) of the Social Security Act (42 U.S.C. 1395w-113(c)) is 
        amended--
                    (A) in paragraph (1), by striking ``(2) and (3)'' 
                and inserting ``(2), (3), and (4)''; and
                    (B) by adding at the end the following new 
                paragraph:
            ``(4) Collection of monthly adjustment amount.--
                    ``(A) In general.--Notwithstanding any provision of 
                this subsection or section 1854(d)(2), subject to 
                subparagraph (B), the amount of the income-related 
                increase in the base beneficiary premium for an 
                individual for a month (as determined under subsection 
                (a)(7)) shall be paid through withholding from benefit 
                payments in the manner provided under section 1840.
                    ``(B) Agreements.--In the case where the monthly 
                benefit payments of an individual that are withheld 
                under subparagraph (A) are insufficient to pay the 
                amount described in such subparagraph, the Commissioner 
                of Social Security shall enter into agreements with the 
                Secretary, the Director of the Office of Personnel 
                Management,

[[Page 124 STAT. 474]]

                and the Railroad Retirement Board as necessary in order 
                to allow other agencies to collect the amount described 
                in subparagraph (A) that was not withheld under such 
                subparagraph.''.

    (b) Conforming Amendments.--
            (1) Medicare.--Section 1860D-13(a)(1) of the Social Security 
        Act (42 U.S.C. 1395w-113(a)(1)) is amended--
                    (A) by redesignating subparagraph (F) as 
                subparagraph (G);
                    (B) in subparagraph (G), as redesignated by 
                subparagraph (A), by striking ``(D) and (E)'' and 
                inserting ``(D), (E), and (F)''; and
                    (C) by inserting after subparagraph (E) the 
                following new subparagraph:
                    ``(F) Increase based on income.--The monthly 
                beneficiary premium shall be increased pursuant to 
                paragraph (7).''.
            (2) <<NOTE: 26 USC 6103.>> Internal revenue code.--Section 
        6103(l)(20) of the Internal Revenue Code of 1986 (relating to 
        disclosure of return information to carry out Medicare part B 
        premium subsidy adjustment) is amended--
                    (A) in the heading, by inserting ``and part d base 
                beneficiary premium increase'' after ``part b premium 
                subsidy adjustment'';
                    (B) in subparagraph (A)--
                          (i) in the matter preceding clause (i), by 
                      inserting ``or increase under section 1860D-
                      13(a)(7)'' after ``1839(i)''; and
                          (ii) in clause (vii), by inserting after 
                      ``subsection (i) of such section'' the following: 
                      ``or increase under section 1860D-13(a)(7) of such 
                      Act''; and
                    (C) in subparagraph (B)--
                          (i) by striking ``Return information'' and 
                      inserting the following:
                          ``(i) In general.--Return information'';
                          (ii) by inserting ``or increase under such 
                      section 1860D-13(a)(7)'' before the period at the 
                      end;
                          (iii) as amended by clause (i), by inserting 
                      ``or for the purpose of resolving taxpayer appeals 
                      with respect to any such premium adjustment or 
                      increase'' before the period at the end; and
                          (iv) by adding at the end the following new 
                      clause:
                          ``(ii) Disclosure to other agencies.--
                      Officers, employees, and contractors of the Social 
                      Security Administration may disclose--
                                    ``(I) the taxpayer identity 
                                information and the amount of the 
                                premium subsidy adjustment or premium 
                                increase with respect to a taxpayer 
                                described in subparagraph (A) to 
                                officers, employees, and contractors of 
                                the Centers for Medicare and Medicaid 
                                Services, to the extent that such 
                                disclosure is necessary for the 
                                collection of the premium subsidy amount 
                                or the increased premium amount,
                                    ``(II) the taxpayer identity 
                                information and the amount of the 
                                premium subsidy adjustment or the 
                                increased premium amount with respect to

[[Page 124 STAT. 475]]

                                a taxpayer described in subparagraph (A) 
                                to officers and employees of the Office 
                                of Personnel Management and the Railroad 
                                Retirement Board, to the extent that 
                                such disclosure is necessary for the 
                                collection of the premium subsidy amount 
                                or the increased premium amount,
                                    ``(III) return information with 
                                respect to a taxpayer described in 
                                subparagraph (A) to officers and 
                                employees of the Department of Health 
                                and Human Services to the extent 
                                necessary to resolve administrative 
                                appeals of such premium subsidy 
                                adjustment or increased premium, and
                                    ``(IV) return information with 
                                respect to a taxpayer described in 
                                subparagraph (A) to officers and 
                                employees of the Department of Justice 
                                for use in judicial proceedings to the 
                                extent necessary to carry out the 
                                purposes described in clause (i).''.

SEC. 3309. ELIMINATION OF COST SHARING FOR CERTAIN DUAL ELIGIBLE 
            INDIVIDUALS.

    Section 1860D-14(a)(1)(D)(i) of the Social Security Act (42 U.S.C. 
1395w-114(a)(1)(D)(i)) is amended by inserting ``or, effective on a date 
specified by the Secretary (but in no case earlier than January 1, 
2012), who would be such an institutionalized individual or couple, if 
the full-benefit dual eligible individual were not receiving services 
under a home and community-based waiver authorized for a State under 
section 1115 or subsection (c) or (d) of section 1915 or under a State 
plan amendment under subsection (i) of such section or services provided 
through enrollment in a medicaid managed care organization with a 
contract under section 1903(m) or under section 1932'' after 
``1902(q)(1)(B))''.

SEC. 3310. REDUCING WASTEFUL DISPENSING OF OUTPATIENT PRESCRIPTION DRUGS 
            IN LONG-TERM CARE FACILITIES UNDER PRESCRIPTION DRUG PLANS 
            AND MA-PD PLANS.

    (a) In General.--Section 1860D-4(c) of the Social Security Act (42 
U.S.C. 1395w-104(c)) is amended by adding at the end the following new 
paragraph:
            ``(3) Reducing wasteful dispensing of outpatient 
        prescription drugs in long-term care facilities.--The Secretary 
        shall require PDP sponsors of prescription drug plans to utilize 
        specific, uniform dispensing techniques, as determined by the 
        Secretary, in consultation with relevant stakeholders (including 
        representatives of nursing facilities, residents of nursing 
        facilities, pharmacists, the pharmacy industry (including retail 
        and long-term care pharmacy), prescription drug plans, MA-PD 
        plans, and any other stakeholders the Secretary determines 
        appropriate), such as weekly, daily, or automated dose 
        dispensing, when dispensing covered part D drugs to enrollees 
        who reside in a long-term care facility in order to reduce waste 
        associated with 30-day fills.''.

    (b) <<NOTE: 42 USC 1395w-104 note.>>  Effective Date.--The amendment 
made by subsection (a) shall apply to plan years beginning on or after 
January 1, 2012.

SEC. 3311. <<NOTE: 42 USC 1395w-154.>> IMPROVED MEDICARE PRESCRIPTION 
            DRUG PLAN AND MA-PD PLAN COMPLAINT SYSTEM.

    (a) In General.--The Secretary shall develop and maintain a 
complaint system, that is widely known and easy to use, to

[[Page 124 STAT. 476]]

collect and maintain information on MA-PD plan and prescription drug 
plan complaints that are received (including by telephone, letter, e-
mail, or any other means) by the Secretary (including by a regional 
office of the Department of Health and Human Services, the Medicare 
Beneficiary Ombudsman, a subcontractor, a carrier, a fiscal 
intermediary, and a Medicare administrative contractor under section 
1874A of the Social Security Act (42 U.S.C. 1395kk)) through the date on 
which the complaint is resolved. The system shall be able to report and 
initiate appropriate interventions and monitoring based on substantial 
complaints and to guide quality improvement.
    (b) Model Electronic Complaint Form.--The Secretary shall develop a 
model electronic complaint form to be used for reporting plan complaints 
under the system. Such form shall be prominently displayed on the front 
page of the Medicare.gov Internet website and on the Internet website of 
the Medicare Beneficiary Ombudsman.
    (c) Annual Reports by the Secretary.--The Secretary shall submit to 
Congress annual reports on the system. Such reports shall include an 
analysis of the number and types of complaints reported in the system, 
geographic variations in such complaints, the timeliness of agency or 
plan responses to such complaints, and the resolution of such 
complaints.
    (d) Definitions.--In this section:
            (1) MA-PD plan.--The term ``MA-PD plan'' has the meaning 
        given such term in section 1860D-41(a)(9) of such Act (42 U.S.C. 
        1395w-151(a)(9)).
            (2) Prescription drug plan.--The term ``prescription drug 
        plan'' has the meaning given such term in section 1860D-
        41(a)(14) of such Act (42 U.S.C. 1395w-151(a)(14)).
            (3) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (4) System.--The term ``system'' means the plan complaint 
        system developed and maintained under subsection (a).

SEC. 3312. UNIFORM EXCEPTIONS AND APPEALS PROCESS FOR PRESCRIPTION DRUG 
            PLANS AND MA-PD PLANS.

    (a) In General.--Section 1860D-4(b)(3) of the Social Security Act 
(42 U.S.C. 1395w-104(b)(3)) is amended by adding at the end the 
following new subparagraph:
                    ``(H) Use of single, uniform exceptions and appeals 
                process.--Notwithstanding any other provision of this 
                part, each PDP sponsor of a prescription drug plan 
                shall--
                          ``(i) use a single, uniform exceptions and 
                      appeals process (including, to the extent the 
                      Secretary determines feasible, a single, uniform 
                      model form for use under such process) with 
                      respect to the determination of prescription drug 
                      coverage for an enrollee under the plan; and
                          ``(ii) provide instant access to such process 
                      by enrollees through a toll-free telephone number 
                      and an Internet website.''.

    (b) <<NOTE: 42 USC 1395w-104 note.>> Effective Date.--The amendment 
made by subsection (a) shall apply to exceptions and appeals on or after 
January 1, 2012.

[[Page 124 STAT. 477]]

SEC. 3313. <<NOTE: 42 USC 1395w-101 note.>> OFFICE OF THE INSPECTOR 
            GENERAL STUDIES AND REPORTS.

    (a) Study and Annual Report on Part D Formularies' Inclusion of 
Drugs Commonly Used by Dual Eligibles.--
            (1) Study.--The Inspector General of the Department of 
        Health and Human Services shall conduct a study of the extent to 
        which formularies used by prescription drug plans and MA-PD 
        plans under part D include drugs commonly used by 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))).
            (2) Annual reports.--Not later than July 1 of each year 
        (beginning with 2011), the Inspector General shall submit to 
        Congress a report on the study conducted under paragraph (1), 
        together with such recommendations as the Inspector General 
        determines appropriate.

    (b) Study and Report on Prescription Drug Prices Under Medicare Part 
D and Medicaid.--
            (1) Study.--
                    (A) In general.--The Inspector General of the 
                Department of Health and Human Services shall conduct a 
                study on prices for covered part D drugs under the 
                Medicare prescription drug program under part D of title 
                XVIII of the Social Security Act and for covered 
                outpatient drugs under title XIX. Such study shall 
                include the following:
                          (i) A comparison, with respect to the 200 most 
                      frequently dispensed covered part D drugs under 
                      such program and covered outpatient drugs under 
                      such title (as determined by the Inspector General 
                      based on volume and expenditures), of--
                                    (I) the prices paid for covered part 
                                D drugs by PDP sponsors of prescription 
                                drug plans and Medicare Advantage 
                                organizations offering MA-PD plans; and
                                    (II) the prices paid for covered 
                                outpatient drugs by a State plan under 
                                title XIX.
                          (ii) An assessment of--
                                    (I) the financial impact of any 
                                discrepancies in such prices on the 
                                Federal Government; and
                                    (II) the financial impact of any 
                                such discrepancies on enrollees under 
                                part D or individuals eligible for 
                                medical assistance under a State plan 
                                under title XIX.
                    (B) Price.--For purposes of subparagraph (A), the 
                price of a covered part D drug or a covered outpatient 
                drug shall include any rebate or discount under such 
                program or such title, respectively, including any 
                negotiated price concession described in section 1860D-
                2(d)(1)(B) of the Social Security Act (42 U.S.C. 1395w-
                102(d)(1)(B)) or rebate under an agreement under section 
                1927 of the Social Security Act (42 U.S.C. 1396r-8).
                    (C) Authority to collect any necessary 
                information.--Notwithstanding any other provision of 
                law, the Inspector General of the Department of Health 
                and Human Services shall be able to collect any 
                information related to the prices of covered part D 
                drugs under such program

[[Page 124 STAT. 478]]

                and covered outpatient drugs under such title XIX 
                necessary to carry out the comparison under subparagraph 
                (A).
            (2) Report.--
                    (A) In general.--Not later than October 1, 2011, 
                subject to subparagraph (B), the Inspector General 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 Inspector General determines appropriate.
                    (B) Limitation on information contained in report.--
                The report submitted under subparagraph (A) shall not 
                include any information that the Inspector General 
                determines is proprietary or is likely to negatively 
                impact the ability of a PDP sponsor or a State plan 
                under title XIX to negotiate prices for covered part D 
                drugs or covered outpatient drugs, respectively.
            (3) Definitions.--In this section:
                    (A) Covered part d drug.--The term ``covered part D 
                drug'' has the meaning given such term in section 1860D-
                2(e) of the Social Security Act (42 U.S.C. 1395w-
                102(e)).
                    (B) Covered outpatient drug.--The term ``covered 
                outpatient drug'' has the meaning given such term in 
                section 1927(k) of such Act (42 U.S.C. 1396r(k)).
                    (C) MA-PD plan.--The term ``MA-PD plan'' has the 
                meaning given such term in section 1860D-41(a)(9) of 
                such Act (42 U.S.C. 1395w-151(a)(9)).
                    (D) Medicare advantage organization.--The term 
                ``Medicare Advantage organization'' has the meaning 
                given such term in section 1859(a)(1) of such Act (42 
                U.S.C. 1395w-28)(a)(1)).
                    (E) PDP sponsor.--The term ``PDP sponsor'' has the 
                meaning given such term in section 1860D-41(a)(13) of 
                such Act (42 U.S.C. 1395w-151(a)(13)).
                    (F) Prescription drug plan.--The term ``prescription 
                drug plan'' has the meaning given such term in section 
                1860D-41(a)(14) of such Act (42 U.S.C. 1395w-
                151(a)(14)).

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.

    (a) In General.--Section 1860D-2(b)(4)(C) of the Social Security Act 
(42 U.S.C. 1395w-102(b)(4)(C)) is amended--
            (1) in clause (i), by striking ``and'' at the end;
            (2) in clause (ii)--
                    (A) by striking ``such costs shall be treated as 
                incurred only if'' and inserting ``subject to clause 
                (iii), such costs shall be treated as incurred only 
                if'';
                    (B) by striking ``, under section 1860D-14, or under 
                a State Pharmaceutical Assistance Program''; and
                    (C) by striking the period at the end and inserting 
                ``; and''; and
            (3) by inserting after clause (ii) the following new clause:
                          ``(iii) such costs shall be treated as 
                      incurred and shall not be considered to be 
                      reimbursed under clause (ii) if such costs are 
                      borne or paid--

[[Page 124 STAT. 479]]

                                    ``(I) under section 1860D-14;
                                    ``(II) under a State Pharmaceutical 
                                Assistance Program;
                                    ``(III) by the Indian Health 
                                Service, an Indian tribe or tribal 
                                organization, or an urban Indian 
                                organization (as defined in section 4 of 
                                the Indian Health Care Improvement Act); 
                                or
                                    ``(IV) under an AIDS Drug Assistance 
                                Program under part B of title XXVI of 
                                the Public Health Service Act.''.

    (b) <<NOTE: 42 USC 1395w-102 note.>> Effective Date.--The amendments 
made by subsection (a) shall apply to costs incurred on or after January 
1, 2011.

SEC. 3315. IMMEDIATE REDUCTION IN COVERAGE GAP IN 2010.

    Section 1860D-2(b) of the Social Security Act (42 U.S.C. 1395w-
102(b)) is amended--
            (1) in paragraph (3)(A), by striking ``paragraph (4)'' and 
        inserting ``paragraphs (4) and (7)''; and
            (2) by adding at the end the following new paragraph:
            ``(7) Increase in initial coverage limit in 2010.--
                    ``(A) <<NOTE: Effective date.>>  In general.--For 
                the plan year beginning on January 1, 2010, the initial 
                coverage limit described in paragraph (3)(B) otherwise 
                applicable shall be increased by $500.
                    ``(B) Application.--In applying subparagraph (A)--
                          ``(i) except as otherwise provided in this 
                      subparagraph, there shall be no change in the 
                      premiums, bids, or any other parameters under this 
                      part or part C;
                          ``(ii) costs that would be treated as incurred 
                      costs for purposes of applying paragraph (4) but 
                      for the application of subparagraph (A) shall 
                      continue to be treated as incurred costs;
                          ``(iii) <<NOTE: Procedures.>> the Secretary 
                      shall establish procedures, which may include a 
                      reconciliation process, to fully reimburse PDP 
                      sponsors with respect to prescription drug plans 
                      and MA organizations with respect to MA-PD plans 
                      for the reduction in beneficiary cost sharing 
                      associated with the application of subparagraph 
                      (A);
                          ``(iv) the Secretary shall develop an estimate 
                      of the additional increased costs attributable to 
                      the application of this paragraph for increased 
                      drug utilization and financing and administrative 
                      costs and shall use such estimate to adjust 
                      payments to PDP sponsors with respect to 
                      prescription drug plans under this part and MA 
                      organizations with respect to MA-PD plans under 
                      part C; and
                          ``(v) <<NOTE: Procedures.>>  the Secretary 
                      shall establish procedures for retroactive 
                      reimbursement of part D eligible individuals who 
                      are covered under such a plan for costs which are 
                      incurred before the date of initial implementation 
                      of subparagraph (A) and which would be reimbursed 
                      under such a plan if such implementation occurred 
                      as of January 1, 2010.
                    ``(C) <<NOTE: Applicability. Time periods.>> No 
                effect on subsequent years.--The increase under 
                subparagraph (A) shall only apply with respect to the 
                plan year beginning on January 1, 2010, and the initial 
                coverage limit for plan years beginning on or after 
                January

[[Page 124 STAT. 480]]

                1, 2011, shall be determined as if subparagraph (A) had 
                never applied.''.

              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.

    (a) Inpatient Acute Hospitals.--Section 1886(b)(3)(B) of the Social 
Security Act (42 U.S.C. 1395ww(b)(3)(B)), as amended by section 
3001(a)(3), is further amended--
            (1) in clause (i)(XX), by striking ``clause (viii)'' and 
        inserting ``clauses (viii), (ix), (xi), and (xii)'';
            (2) in the first sentence of clause (viii), by inserting 
        ``of such applicable percentage increase (determined without 
        regard to clause (ix), (xi), or (xii))'' after ``one-quarter'';
            (3) in the first sentence of clause (ix)(I), by inserting 
        ``(determined without regard to clause (viii), (xi), or (xii))'' 
        after ``clause (i)'' the second time it appears; and
            (4) by adding at the end the following new clauses:

    ``(xi)(I) For 2012 and each subsequent fiscal year, after 
determining the applicable percentage increase described in clause (i) 
and after application of clauses (viii) and (ix), such percentage 
increase shall be reduced by the productivity adjustment described in 
subclause (II).
    ``(II) The productivity adjustment described in this subclause, with 
respect to a percentage, factor, or update for a fiscal year, year, cost 
reporting period, or other annual period, is a productivity adjustment 
equal to the 10-year moving average of changes in annual economy-wide 
private nonfarm business multi-factor productivity (as projected by the 
Secretary for the 10-year period ending with the applicable fiscal year, 
year, cost reporting period, or other annual period).
    ``(III) The application of subclause (I) may result in the 
applicable percentage increase described in clause (i) being less than 
0.0 for a fiscal year, and may result in payment rates under this 
section for a fiscal year being less than such payment rates for the 
preceding fiscal year.
    ``(xii) After determining the applicable percentage increase 
described in clause (i), and after application of clauses (viii), (ix), 
and (xi), the Secretary shall reduce such applicable percentage 
increase--
            ``(I) for each of fiscal years 2010 and 2011, by 0.25 
        percentage point; and
            ``(II) subject to clause (xiii), for each of fiscal years 
        2012 through 2019, by 0.2 percentage point.

The application of this clause may result in the applicable percentage 
increase described in clause (i) being less than 0.0 for a fiscal year, 
and may result in payment rates under this section for a fiscal year 
being less than such payment rates for the preceding fiscal year.
    ``(xiii) <<NOTE: Applicability.>> Clause (xii) shall be applied with 
respect to any of fiscal years 2014 through 2019 by substituting `0.0 
percentage points' for `0.2 percentage point', if for such fiscal year--

[[Page 124 STAT. 481]]

            ``(I) the excess (if any) of--
                    ``(aa) the total percentage of the non-elderly 
                insured population for the preceding fiscal year (based 
                on the most recent estimates available from the Director 
                of the Congressional Budget Office before a vote in 
                either House on the Patient Protection and Affordable 
                Care Act that, if determined in the affirmative, would 
                clear such Act for enrollment); over
                    ``(bb) the total percentage of the non-elderly 
                insured population for such preceding fiscal year (as 
                estimated by the Secretary); exceeds
            ``(II) 5 percentage points.''.

    (b) Skilled Nursing Facilities.--Section 1888(e)(5)(B) of the Social 
Security Act (42 U.S.C. 1395yy(e)(5)(B)) is amended--
            (1) by striking ``percentage.--The term'' and inserting 
        ``percentage.--
                          ``(i) In general.--Subject to clause (ii), the 
                      term''; and
            (2) by adding at the end the following new clause:
                          ``(ii) Adjustment.--For fiscal year 2012 and 
                      each subsequent fiscal year, after determining the 
                      percentage described in clause (i), the Secretary 
                      shall reduce such percentage by the productivity 
                      adjustment described in section 
                      1886(b)(3)(B)(xi)(II). The application of the 
                      preceding sentence may result in such percentage 
                      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.''.

    (c) Long-term Care Hospitals.--Section 1886(m) of the Social 
Security Act (42 U.S.C. 1395ww(m)) is amended by adding at the end the 
following new paragraphs:
            ``(3) Implementation for rate year 2010 and subsequent 
        years.--
                    ``(A) In general.--In implementing the system 
                described in paragraph (1) for rate year 2010 and each 
                subsequent rate year, any annual update to a standard 
                Federal rate for discharges for the hospital during the 
                rate year, shall be reduced--
                          ``(i) for rate year 2012 and each subsequent 
                      rate year, by the productivity adjustment 
                      described in section 1886(b)(3)(B)(xi)(II); and
                          ``(ii) for each of rate years 2010 through 
                      2019, by the other adjustment described in 
                      paragraph (4).
                    ``(B) Special rule.--The application of this 
                paragraph 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 year.
            ``(4) Other adjustment.--
                    ``(A) In general.--For purposes of paragraph 
                (3)(A)(ii), the other adjustment described in this 
                paragraph is--
                          ``(i) for each of rate years 2010 and 2011, 
                      0.25 percentage point; and
                          ``(ii) subject to subparagraph (B), for each 
                      of rate years 2012 through 2019, 0.2 percentage 
                      point.

[[Page 124 STAT. 482]]

                    ``(B) Reduction of other adjustment.--Subparagraph 
                (A)(ii) shall be applied with respect to any of rate 
                years 2014 through 2019 by substituting `0.0 percentage 
                points' for `0.2 percentage point', if for such rate 
                year--
                          ``(i) the excess (if any) of--
                                    ``(I) the total percentage of the 
                                non-elderly insured population for the 
                                preceding rate year (based on the most 
                                recent estimates available from the 
                                Director of the Congressional Budget 
                                Office before a vote in either House on 
                                the Patient Protection and Affordable 
                                Care Act that, if determined in the 
                                affirmative, would clear such Act for 
                                enrollment); over
                                    ``(II) the total percentage of the 
                                non-elderly insured population for such 
                                preceding rate year (as estimated by the 
                                Secretary); exceeds
                          ``(ii) 5 percentage points.''.

    (d) Inpatient Rehabilitation Facilities.--Section 1886(j)(3) of the 
Social Security Act (42 U.S.C. 1395ww(j)(3)) is amended--
            (1) in subparagraph (C)--
                    (A) by striking ``factor.--For purposes'' and 
                inserting ``factor.--
                          ``(i) In general.--For purposes'';
                    (B) by inserting ``subject to clause (ii)'' before 
                the period at the end of the first sentence of clause 
                (i), as added by paragraph (1); and
                    (C) by adding at the end the following new clause:
                          ``(ii) Productivity and other adjustment.--
                      After establishing the increase factor described 
                      in clause (i) for a fiscal year, the Secretary 
                      shall reduce such increase factor--
                                    ``(I) for fiscal year 2012 and each 
                                subsequent fiscal year, by the 
                                productivity adjustment described in 
                                section 1886(b)(3)(B)(xi)(II); and
                                    ``(II) for each of fiscal years 2010 
                                through 2019, by the other adjustment 
                                described in subparagraph (D).
                      The application of this clause may result in the 
                      increase factor under this subparagraph 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.''; and
            (2) by adding at the end the following new subparagraph:
                    ``(D) Other adjustment.--
                          ``(i) In general.--For purposes of 
                      subparagraph (C)(ii)(II), the other adjustment 
                      described in this subparagraph is--
                                    ``(I) for each of fiscal years 2010 
                                and 2011, 0.25 percentage point; and
                                    ``(II) subject to clause (ii), for 
                                each of fiscal years 2012 through 2019, 
                                0.2 percentage point.
                          ``(ii) <<NOTE: Applicability.>>  Reduction of 
                      other adjustment.--Clause (i)(II) shall be applied 
                      with respect to any of fiscal years 2014 through 
                      2019 by substituting `0.0 percentage points' for 
                      `0.2 percentage point', if for such fiscal year--

[[Page 124 STAT. 483]]

                                    ``(I) the excess (if any) of--
                                            ``(aa) the total percentage 
                                        of the non-elderly insured 
                                        population for the preceding 
                                        fiscal year (based on the most 
                                        recent estimates available from 
                                        the Director of the 
                                        Congressional Budget Office 
                                        before a vote in either House on 
                                        the Patient Protection and 
                                        Affordable Care Act that, if 
                                        determined in the affirmative, 
                                        would clear such Act for 
                                        enrollment); over
                                            ``(bb) the total percentage 
                                        of the non-elderly insured 
                                        population for such preceding 
                                        fiscal year (as estimated by the 
                                        Secretary); exceeds
                                    ``(II) 5 percentage points.''.

    (e) Home Health Agencies.--Section 1895(b)(3)(B) of the Social 
Security Act (42 U.S.C. 1395fff(b)(3)(B)) is amended--
            (1) in clause (ii)(V), by striking ``clause (v)'' and 
        inserting ``clauses (v) and (vi)''; and
            (2) by adding at the end the following new clause:
                          ``(vi) Adjustments.--After determining the 
                      home health market basket percentage increase 
                      under clause (iii), and after application of 
                      clause (v), the Secretary shall reduce such 
                      percentage--
                                    ``(I) for 2015 and each subsequent 
                                year, by the productivity adjustment 
                                described in section 
                                1886(b)(3)(B)(xi)(II); and
                                    ``(II) for each of 2011 and 2012, by 
                                1 percentage point.
                      The application of this clause may result in the 
                      home health market basket percentage increase 
                      under clause (iii) being less than 0.0 for a year, 
                      and may result in payment rates under the system 
                      under this subsection for a year being less than 
                      such payment rates for the preceding year.''.

    (f) Psychiatric Hospitals.--Section 1886 of the Social Security 
Act, <<NOTE: 42 USC 1395ww.>>  as amended by sections 3001, 3008, 3025, 
and 3133, is amended by adding at the end the following new subsection:

    ``(s) Prospective Payment for Psychiatric Hospitals.--
            ``(1) Reference to establishment and implementation of 
        system.--For provisions related to the establishment and 
        implementation of a prospective payment system for payments 
        under this title for inpatient hospital services furnished by 
        psychiatric hospitals (as described in clause (i) of subsection 
        (d)(1)(B)) and psychiatric units (as described in the matter 
        following clause (v) of such subsection), see section 124 of the 
        Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 
        1999.
            ``(2) Implementation for rate year beginning in 2010 and 
        subsequent rate years.--
                    ``(A) In general.--In implementing the system 
                described in paragraph (1) for the rate year beginning 
                in 2010 and any subsequent rate year, any update to a 
                base rate for days during the rate year for a 
                psychiatric hospital or unit, respectively, shall be 
                reduced--

[[Page 124 STAT. 484]]

                          ``(i) for the rate year beginning in 2012 and 
                      each subsequent rate year, by the productivity 
                      adjustment described in section 
                      1886(b)(3)(B)(xi)(II); and
                          ``(ii) for each of the rate years beginning in 
                      2010 through 2019, by the other adjustment 
                      described in paragraph (3).
                    ``(B) Special rule.--The application of this 
                paragraph may result in such 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 year.
            ``(3) Other adjustment.--
                    ``(A) In general.--For purposes of paragraph 
                (2)(A)(ii), the other adjustment described in this 
                paragraph is--
                          ``(i) for each of the rate years beginning in 
                      2010 and 2011, 0.25 percentage point; and
                          ``(ii) subject to subparagraph (B), for each 
                      of the rate years beginning in 2012 through 2019, 
                      0.2 percentage point.
                    ``(B) Reduction of other adjustment.--Subparagraph 
                (A)(ii) shall be applied with respect to any of rate 
                years 2014 through 2019 by substituting `0.0 percentage 
                points' for `0.2 percentage point', if for such rate 
                year--
                          ``(i) the excess (if any) of--
                                    ``(I) the total percentage of the 
                                non-elderly insured population for the 
                                preceding rate year (based on the most 
                                recent estimates available from the 
                                Director of the Congressional Budget 
                                Office before a vote in either House on 
                                the Patient Protection and Affordable 
                                Care Act that, if determined in the 
                                affirmative, would clear such Act for 
                                enrollment); over
                                    ``(II) the total percentage of the 
                                non-elderly insured population for such 
                                preceding rate year (as estimated by the 
                                Secretary); exceeds
                          ``(ii) 5 percentage points.''.

    (g) Hospice Care.--Section 1814(i)(1)(C) of the Social Security Act 
(42 U.S.C. 1395f(i)(1)(C)), as amended by section 3132, is amended by 
adding at the end the following new clauses:
    ``(iv) After determining the market basket percentage increase under 
clause (ii)(VII) or (iii), as applicable, with respect to fiscal year 
2013 and each subsequent fiscal year, the Secretary shall reduce such 
percentage--
            ``(I) for 2013 and each subsequent fiscal year, by the 
        productivity adjustment described in section 
        1886(b)(3)(B)(xi)(II); and
            ``(II) subject to clause (v), for each of fiscal years 2013 
        through 2019, by 0.5 percentage point.

The application of this clause may result in the market basket 
percentage increase under clause (ii)(VII) or (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.
    ``(v) <<NOTE: Applicability.>> Clause (iv)(II) shall be applied with 
respect to any of fiscal years 2014 through 2019 by substituting `0.0 
percentage points' for `0.5 percentage point', if for such fiscal year--
            ``(I) the excess (if any) of--

[[Page 124 STAT. 485]]

                    ``(aa) the total percentage of the non-elderly 
                insured population for the preceding fiscal year (based 
                on the most recent estimates available from the Director 
                of the Congressional Budget Office before a vote in 
                either House on the Patient Protection and Affordable 
                Care Act that, if determined in the affirmative, would 
                clear such Act for enrollment); over
                    ``(bb) the total percentage of the non-elderly 
                insured population for such preceding fiscal year (as 
                estimated by the Secretary); exceeds
            ``(II) 5 percentage points.''.

    (h) Dialysis.--Section 1881(b)(14)(F) of the Social Security Act (42 
U.S.C. 1395rr(b)(14)(F)) is amended--
            (1) in clause (i)--
                    (A) by inserting ``(I)'' after ``(F)(i)''
                    (B) in subclause (I), as inserted by subparagraph 
                (A)--
                          (i) by striking ``clause (ii)'' and inserting 
                      ``subclause (II) and clause (ii)''; and
                          (ii) by striking ``minus 1.0 percentage 
                      point''; and
                    (C) by adding at the end the following new 
                subclause:

    ``(II) For 2012 and each subsequent year, after determining the 
increase factor described in subclause (I), the Secretary shall reduce 
such increase factor by the productivity adjustment described in section 
1886(b)(3)(B)(xi)(II). The application of the preceding sentence may 
result in such increase factor being less than 0.0 for a year, and may 
result in payment rates under the payment system under this paragraph 
for a year being less than such payment rates for the preceding year.''; 
and
            (2) in clause (ii)(II)--
                    (A) by striking ``The'' and inserting ``Subject to 
                clause (i)(II), the''; and
                    (B) by striking ``clause (i) minus 1.0 percentage 
                point'' and inserting ``clause (i)(I)''.

    (i) Outpatient Hospitals.--Section 1833(t)(3) of the Social Security 
Act (42 U.S.C. 1395l(t)(3)) is amended--
            (1) in subparagraph (C)(iv), by inserting ``and subparagraph 
        (F) of this paragraph'' after ``(17)''; and
            (2) by adding at the end the following new subparagraphs:
                    ``(F) Productivity and other adjustment.--After 
                determining the OPD fee schedule increase factor under 
                subparagraph (C)(iv), the Secretary shall reduce such 
                increase factor--
                          ``(i) for 2012 and subsequent years, by the 
                      productivity adjustment described in section 
                      1886(b)(3)(B)(xi)(II); and
                          ``(ii) for each of 2010 through 2019, by the 
                      adjustment described in subparagraph (G).
                The application of this subparagraph may result in the 
                increase factor under subparagraph (C)(iv) being less 
                than 0.0 for a year, and may result in payment rates 
                under the payment system under this subsection for a 
                year being less than such payment rates for the 
                preceding year.
                    ``(G) Other adjustment.--
                          ``(i) Adjustment.--For purposes of 
                      subparagraph (F)(ii), the adjustment described in 
                      this subparagraph is--

[[Page 124 STAT. 486]]

                                    ``(I) for each of 2010 and 2011, 
                                0.25 percentage point; and
                                    ``(II) subject to clause (ii), for 
                                each of 2012 through 2019, 0.2 
                                percentage point.
                          ``(ii) Reduction of other adjustment.--Clause 
                      (i)(II) shall be applied with respect to any of 
                      2014 through 2019 by substituting `0.0 percentage 
                      points' for `0.2 percentage point', if for such 
                      year--
                                    ``(I) the excess (if any) of--
                                            ``(aa) the total percentage 
                                        of the non-elderly insured 
                                        population for the preceding 
                                        year (based on the most recent 
                                        estimates available from the 
                                        Director of the Congressional 
                                        Budget Office before a vote in 
                                        either House on the Patient 
                                        Protection and Affordable Care 
                                        Act that, if determined in the 
                                        affirmative, would clear such 
                                        Act for enrollment); over
                                            ``(bb) the total percentage 
                                        of the non-elderly insured 
                                        population for such preceding 
                                        year (as estimated by the 
                                        Secretary); exceeds
                                    ``(II) 5 percentage points.''.

    (j) Ambulance Services.--Section 1834(l)(3) of the Social Security 
Act (42 U.S.C. 1395m(l)(3)) is amended--
            (1) in subparagraph (A), by striking ``and'' at the end;
            (2) in subparagraph (B)--
                    (A) by inserting ``, subject to subparagraph (C) and 
                the succeeding sentence of this paragraph,'' after 
                ``increased''; and
                    (B) by striking the period at the end and inserting 
                ``; and'';
            (3) by adding at the end the following new subparagraph:
                    ``(C) for 2011 and each subsequent year, after 
                determining the percentage increase under subparagraph 
                (B) for the year, reduce such percentage increase by the 
                productivity adjustment described in section 
                1886(b)(3)(B)(xi)(II).''; and
            (4) by adding at the end the following flush sentence:
        ``The application of subparagraph (C) may result in the 
        percentage increase under subparagraph (B) being less than 0.0 
        for a year, and may result in payment rates under the fee 
        schedule under this subsection for a year being less than such 
        payment rates for the preceding year.''.

    (k) Ambulatory Surgical Center Services.--Section 1833(i)(2)(D) of 
the Social Security Act (42 U.S.C. 1395l(i)(2)(D)) is amended--
            (1) by redesignating clause (v) as clause (vi); and
            (2) by inserting after clause (iv) the following new clause:
                          ``(v) In implementing the system described in 
                      clause (i) for 2011 and each subsequent year, any 
                      annual update under such system for the year, 
                      after application of clause (iv), shall be reduced 
                      by the productivity adjustment described in 
                      section 1886(b)(3)(B)(xi)(II). The application of 
                      the preceding sentence may result in such update 
                      being less than 0.0 for a year, and may result in 
                      payment rates under the system described in clause 
                      (i) for a year being less than such payment rates 
                      for the preceding year.''.

[[Page 124 STAT. 487]]

    (l) Laboratory Services.--Section 1833(h)(2)(A) of the Social 
Security Act (42 U.S.C. 1395l(h)(2)(A)) is amended--
            (1) in clause (i)--
                    (A) by inserting ``, subject to clause (iv),'' after 
                ``year) by''; and
                    (B) by striking ``through 2013'' and inserting ``and 
                2010''; and
            (2) by adding at the end the following new clause:
                          ``(iv) After determining the adjustment to the 
                      fee schedules under clause (i), the Secretary 
                      shall reduce such adjustment--
                                    ``(I) for 2011 and each subsequent 
                                year, by the productivity adjustment 
                                described in section 
                                1886(b)(3)(B)(xi)(II); and
                                    ``(II) for each of 2011 through 
                                2015, by 1.75 percentage points.
                      Subclause (I) shall not apply in a year where the 
                      adjustment to the fee schedules determined under 
                      clause (i) is 0.0 or a percentage decrease for a 
                      year. The application of the productivity 
                      adjustment under subclause (I) shall not result in 
                      an adjustment to the fee schedules under clause 
                      (i) being less than 0.0 for a year. The 
                      application of subclause (II) may result in an 
                      adjustment to the fee schedules under clause (i) 
                      being less than 0.0 for a year, and may result in 
                      payment rates for a year being less than such 
                      payment rates for the preceding year.''.

    (m) Certain Durable Medical Equipment.--Section 1834(a)(14) of the 
Social Security Act (42 U.S.C. 1395m(a)(14)) is amended--
            (1) in subparagraph (K)--
                    (A) by striking ``2011, 2012, and 2013,''; and
                    (B) by inserting ``and'' after the semicolon at the 
                end;
            (2) by striking subparagraphs (L) and (M) and inserting the 
        following new subparagraph:
                    ``(L) for 2011 and each subsequent year--
                          ``(i) the percentage increase in the consumer 
                      price index for all urban consumers (United States 
                      city average) for the 12-month period ending with 
                      June of the previous year, reduced by--
                          ``(ii) the productivity adjustment described 
                      in section 1886(b)(3)(B)(xi)(II).''; and
            (3) by adding at the end the following flush sentence:
        ``The application of subparagraph (L)(ii) may result in the 
        covered item update under this paragraph being less than 0.0 for 
        a year, and may result in payment rates under this subsection 
        for a year being less than such payment rates for the preceding 
        year.''.

    (n) Prosthetic Devices, Orthotics, and Prosthetics.--Section 
1834(h)(4) of the Social Security Act (42 U.S.C. 1395m(h)(4)) is 
amended--
            (1) in subparagraph (A)--
                    (A) in clause (ix), by striking ``and'' at the end;
                    (B) in clause (x)--
                          (i) by striking ``a subsequent year'' and 
                      inserting ``for each of 2007 through 2010''; and

[[Page 124 STAT. 488]]

                          (ii) by inserting ``and'' after the semicolon 
                      at the end;
                    (C) by adding at the end the following new clause:
                          ``(xi) for 2011 and each subsequent year--
                                    ``(I) the percentage increase in the 
                                consumer price index for all urban 
                                consumers (United States city average) 
                                for the 12-month period ending with June 
                                of the previous year, reduced by--
                                    ``(II) the productivity adjustment 
                                described in section 
                                1886(b)(3)(B)(xi)(II).''; and
                    (D) by adding at the end the following flush 
                sentence:
        ``The application of subparagraph (A)(xi)(II) may result in the 
        applicable percentage increase under subparagraph (A) being less 
        than 0.0 for a year, and may result in payment rates under this 
        subsection for a year being less than such payment rates for the 
        preceding year.''.

    (o) Other Items.--Section 1842(s)(1) of the Social Security Act (42 
U.S.C. 1395u(s)(1)) is amended--
            (1) in the first sentence, by striking ``Subject to'' and 
        inserting ``(A) Subject to'';
            (2) by striking the second sentence and inserting the 
        following new subparagraph:
                    ``(B) Any fee schedule established under this 
                paragraph for such item or service shall be updated--
                          ``(i) for years before 2011--
                                    ``(I) subject to subclause (II), by 
                                the percentage increase in the consumer 
                                price index for all urban consumers 
                                (United States city average) for the 12-
                                month period ending with June of the 
                                preceding year; and
                                    ``(II) for items and services 
                                described in paragraph (2)(D) for 2009, 
                                section 1834(a)(14)(J) shall apply under 
                                this paragraph instead of the percentage 
                                increase otherwise applicable; and
                          ``(ii) for 2011 and subsequent years--
                                    ``(I) the percentage increase in the 
                                consumer price index for all urban 
                                consumers (United States city average) 
                                for the 12-month period ending with June 
                                of the previous year, reduced by--
                                    ``(II) the productivity adjustment 
                                described in section 
                                1886(b)(3)(B)(xi)(II).''; and
            (3) by adding at the end the following flush sentence:
        ``The application of subparagraph (B)(ii)(II) may result in the 
        update under this paragraph being less than 0.0 for a year, and 
        may result in payment rates under any fee schedule established 
        under this paragraph for a year being less than such payment 
        rates for the preceding year.''.

    (p) <<NOTE: 42 USC 1395ww note.>> No Application Prior to April 1, 
2010.--Notwithstanding the preceding provisions of this section, the 
amendments made by subsections (a), (c), and (d) shall not apply to 
discharges occurring before April 1, 2010.

SEC. 3402. TEMPORARY ADJUSTMENT TO THE CALCULATION OF PART B PREMIUMS.

    Section 1839(i) of the Social Security Act (42 U.S.C. 1395r(i)) is 
amended--

[[Page 124 STAT. 489]]

            (1) in paragraph (2), in the matter preceding subparagraph 
        (A), by inserting ``subject to paragraph (6),'' after 
        ``subsection,'';
            (2) in paragraph (3)(A)(i), by striking ``The applicable'' 
        and inserting ``Subject to paragraph (6), the applicable'';
            (3) by redesignating paragraph (6) as paragraph (7); and
            (4) by inserting after paragraph (5) the following new 
        paragraph:
            ``(6) <<NOTE: Time period.>> Temporary adjustment to income 
        thresholds.--Notwithstanding any other provision of this 
        subsection, during the period beginning on January 1, 2011, and 
        ending on December 31, 2019--
                    ``(A) the threshold amount otherwise applicable 
                under paragraph (2) shall be equal to such amount for 
                2010; and
                    ``(B) the dollar amounts otherwise applicable under 
                paragraph (3)(C)(i) shall be equal to such dollar 
                amounts for 2010.''.

SEC. 3403. INDEPENDENT MEDICARE ADVISORY BOARD.

    (a) Board.--
            (1) In general.--Title XVIII of the Social Security Act (42 
        U.S.C. 1395 et seq.), as amended by section 3022, is amended by 
        adding at the end the following new section:


                  ``independent medicare advisory board


    ``Sec. 1899A.  <<NOTE: 42 USC 1395kkk.>> (a) Establishment.--There 
is established an independent board to be known as the `Independent 
Medicare Advisory Board'.

    ``(b) Purpose.--It is the purpose of this section to, in accordance 
with the following provisions of this section, reduce the per capita 
rate of growth in Medicare spending--
            ``(1) by requiring the Chief Actuary of the Centers for 
        Medicare & Medicaid Services to determine in each year to which 
        this section applies (in this section referred to as `a 
        determination year') the projected per capita growth rate under 
        Medicare for the second year following the determination year 
        (in this section referred to as `an implementation year');
            ``(2) if the projection for the implementation year exceeds 
        the target growth rate for that year, by requiring the Board to 
        develop and submit during the first year following the 
        determination year (in this section referred to as `a proposal 
        year') a proposal containing recommendations to reduce the 
        Medicare per capita growth rate to the extent required by this 
        section; and
            ``(3) by requiring the Secretary to implement such proposals 
        unless Congress enacts legislation pursuant to this section.

    ``(c) Board Proposals.--
            ``(1) Development.--
                    ``(A) In general.--The Board shall develop detailed 
                and specific proposals related to the Medicare program 
                in accordance with the succeeding provisions of this 
                section.
                    ``(B) Advisory reports.--Beginning January 15, 2014, 
                the Board may develop and submit to Congress advisory 
                reports on matters related to the Medicare program, 
                regardless of whether or not the Board submitted a 
                proposal for such year. Such a report may, for years 
                prior to 2020,

[[Page 124 STAT. 490]]

                include recommendations regarding improvements to 
                payment systems for providers of services and suppliers 
                who are not otherwise subject to the scope of the 
                Board's recommendations in a proposal under this 
                section. Any advisory report submitted under this 
                subparagraph shall not be subject to the rules for 
                congressional consideration under subsection (d).
            ``(2) Proposals.--
                    ``(A) Requirements.--Each proposal submitted under 
                this section in a proposal year shall meet each of the 
                following requirements:
                          ``(i) If the Chief Actuary of the Centers for 
                      Medicare & Medicaid Services has made a 
                      determination under paragraph (7)(A) in the 
                      determination year, the proposal shall include 
                      recommendations so that the proposal as a whole 
                      (after taking into account recommendations under 
                      clause (v)) will result in a net reduction in 
                      total Medicare program spending in the 
                      implementation year that is at least equal to the 
                      applicable savings target established under 
                      paragraph (7)(B) for such implementation year. In 
                      determining whether a proposal meets the 
                      requirement of the preceding sentence, reductions 
                      in Medicare program spending during the 3-month 
                      period immediately preceding the implementation 
                      year shall be counted to the extent that such 
                      reductions are a result of the implementation of 
                      recommendations contained in the proposal for a 
                      change in the payment rate for an item or service 
                      that was effective during such period pursuant to 
                      subsection (e)(2)(A).
                          ``(ii) The proposal shall not include any 
                      recommendation to ration health care, raise 
                      revenues or Medicare beneficiary premiums under 
                      section 1818, 1818A, or 1839, increase Medicare 
                      beneficiary cost-sharing (including deductibles, 
                      coinsurance, and copayments), or otherwise 
                      restrict benefits or modify eligibility criteria.
                          ``(iii) In the case of proposals submitted 
                      prior to December 31, 2018, the proposal shall not 
                      include any recommendation that would reduce 
                      payment rates for items and services furnished, 
                      prior to December 31, 2019, by providers of 
                      services (as defined in section 1861(u)) and 
                      suppliers (as defined in section 1861(d)) 
                      scheduled, pursuant to the amendments made by 
                      section 3401 of the Patient Protection and 
                      Affordable Care Act, to receive a reduction to the 
                      inflationary payment updates of such providers of 
                      services and suppliers in excess of a reduction 
                      due to productivity in a year in which such 
                      recommendations would take effect.
                          ``(iv) As appropriate, the proposal shall 
                      include recommendations to reduce Medicare 
                      payments under parts C and D, such as reductions 
                      in direct subsidy payments to Medicare Advantage 
                      and prescription drug plans specified under 
                      paragraph (1) and (2) of section 1860D-15(a) that 
                      are related to administrative expenses (including 
                      profits) for basic coverage, denying high bids or 
                      removing high bids for prescription drug

[[Page 124 STAT. 491]]

                      coverage from the calculation of the national 
                      average monthly bid amount under section 1860D-
                      13(a)(4), and reductions in payments to Medicare 
                      Advantage plans under clauses (i) and (ii) of 
                      section 1853(a)(1)(B) that are related to 
                      administrative expenses (including profits) and 
                      performance bonuses for Medicare Advantage plans 
                      under section 1853(n). Any such recommendation 
                      shall not affect the base beneficiary premium 
                      percentage specified under 1860D-13(a).
                          ``(v) The proposal shall include 
                      recommendations with respect to administrative 
                      funding for the Secretary to carry out the 
                      recommendations contained in the proposal.
                          ``(vi) The proposal shall only include 
                      recommendations related to the Medicare program.
                    ``(B) Additional considerations.--In developing and 
                submitting each proposal under this section in a 
                proposal year, the Board shall, to the extent feasible--
                          ``(i) give priority to recommendations that 
                      extend Medicare solvency;
                          ``(ii) include recommendations that--
                                    ``(I) improve the health care 
                                delivery system and health outcomes, 
                                including by promoting integrated care, 
                                care coordination, prevention and 
                                wellness, and quality and efficiency 
                                improvement; and
                                    ``(II) protect and improve Medicare 
                                beneficiaries' access to necessary and 
                                evidence-based items and services, 
                                including in rural and frontier areas;
                          ``(iii) include recommendations that target 
                      reductions in Medicare program spending to sources 
                      of excess cost growth;
                          ``(iv) consider the effects on Medicare 
                      beneficiaries of changes in payments to providers 
                      of services (as defined in section 1861(u)) and 
                      suppliers (as defined in section 1861(d));
                          ``(v) consider the effects of the 
                      recommendations on providers of services and 
                      suppliers with actual or projected negative cost 
                      margins or payment updates; and
                          ``(vi) consider the unique needs of Medicare 
                      beneficiaries who are dually eligible for Medicare 
                      and the Medicaid program under title XIX.
                    ``(C) No increase in total medicare program 
                spending.--Each proposal submitted under this section 
                shall be designed in such a manner that implementation 
                of the recommendations contained in the proposal would 
                not be expected to result, over the 10-year period 
                starting with the implementation year, in any increase 
                in the total amount of net Medicare program spending 
                relative to the total amount of net Medicare program 
                spending that would have occurred absent such 
                implementation.
                    ``(D) Consultation with 
                medpac. <<NOTE: Submission.>> --The Board shall submit a 
                draft copy of each proposal to be submitted under this 
                section to the Medicare Payment Advisory Commission 
                established under section 1805 for its 
                review. <<NOTE: Deadline.>> The Board

[[Page 124 STAT. 492]]

                shall submit such draft copy by not later than September 
                1 of the determination year.
                    ``(E) Review and comment by the 
                secretary. <<NOTE: Submission. Deadlines.>> --The Board 
                shall submit a draft copy of each proposal to be 
                submitted to Congress under this section to the 
                Secretary for the Secretary's review and comment. The 
                Board shall submit such draft copy by not later than 
                September 1 of the determination 
                year. <<NOTE: Reports.>>  Not later than March 1 of the 
                submission year, the Secretary shall submit a report to 
                Congress on the results of such review, unless the 
                Secretary submits a proposal under paragraph (5)(A) in 
                that year.
                    ``(F) Consultations.--In carrying out its duties 
                under this section, the Board shall engage in regular 
                consultations with the Medicaid and CHIP Payment and 
                Access Commission under section 1900.
            ``(3) Transmission of board proposal to president.--
                    ``(A) In general.--
                          ``(i) In general. <<NOTE: Deadline.>> --Except 
                      as provided in clause (ii) and subsection 
                      (f)(3)(B), the Board shall transmit a proposal 
                      under this section to the President on January 15 
                      of each year (beginning with 2014).
                          ``(ii) Exception.--The Board shall not submit 
                      a proposal under clause (i) in a proposal year if 
                      the year is--
                                    ``(I) a year for which the Chief 
                                Actuary of the Centers for Medicare & 
                                Medicaid Services makes a determination 
                                in the determination year under 
                                paragraph (6)(A) that the growth rate 
                                described in clause (i) of such 
                                paragraph does not exceed the growth 
                                rate described in clause (ii) of such 
                                paragraph;
                                    ``(II) a year in which the Chief 
                                Actuary of the Centers for Medicare & 
                                Medicaid Services makes a determination 
                                in the determination year that the 
                                projected percentage increase (if any) 
                                for the medical care expenditure 
                                category of the Consumer Price Index for 
                                All Urban Consumers (United States city 
                                average) for the implementation year is 
                                less than the projected percentage 
                                increase (if any) in the Consumer Price 
                                Index for All Urban Consumers (all 
                                items; United States city average) for 
                                such implementation year; or
                                    ``(III) for proposal year 2019 and 
                                subsequent proposal years, a year in 
                                which the Chief Actuary of the Centers 
                                for Medicare & Medicaid Services makes a 
                                determination in the determination year 
                                that the growth rate described in 
                                paragraph (8) exceeds the growth rate 
                                described in paragraph (6)(A)(i).
                          ``(iii) Start-up period.--The Board may not 
                      submit a proposal under clause (i) prior to 
                      January 15, 2014.
                    ``(B) Required information.--Each proposal submitted 
                by the Board under subparagraph (A)(i) shall include--
                          ``(i) the recommendations described in 
                      paragraph (2)(A)(i);

[[Page 124 STAT. 493]]

                          ``(ii) an explanation of each recommendation 
                      contained in the proposal and the reasons for 
                      including such recommendation;
                          ``(iii) an actuarial opinion by the Chief 
                      Actuary of the Centers for Medicare & Medicaid 
                      Services certifying that the proposal meets the 
                      requirements of subparagraphs (A)(i) and (C) of 
                      paragraph (2);
                          ``(iv) a legislative proposal that implements 
                      the recommendations; and
                          ``(v) other information determined appropriate 
                      by the Board.
            ``(4) Presidential submission to congress.--Upon receiving a 
        proposal from the Board under paragraph (3)(A)(i) or the 
        Secretary under paragraph (5), the President shall immediately 
        submit such proposal to Congress.
            ``(5) Contingent secretarial development of proposal.--If, 
        with respect to a proposal year, the Board is required, to but 
        fails, to submit a proposal to the President by the deadline 
        applicable under paragraph (3)(A)(i), the Secretary shall 
        develop a detailed and specific proposal that satisfies the 
        requirements of subparagraphs (A) and (C) (and, to the extent 
        feasible, subparagraph (B)) of paragraph (2) and contains the 
        information required paragraph 
        (3)(B)). <<NOTE: Deadline. Transmission.>>  By not later than 
        January 25 of the year, the Secretary shall transmit--
                    ``(A) such proposal to the President; and
                    ``(B) a copy of such proposal to the Medicare 
                Payment Advisory Commission for its review.
            ``(6) Per capita growth rate projections by chief actuary.--
                    ``(A) In 
                general. <<NOTE: Deadlines. Determination.>> --Subject 
                to subsection (f)(3)(A), not later than April 30, 2013, 
                and annually thereafter, the Chief Actuary of the 
                Centers for Medicare & Medicaid Services shall determine 
                in each such year whether--
                          ``(i) the projected Medicare per capita growth 
                      rate for the implementation year (as determined 
                      under subparagraph (B)); exceeds
                          ``(ii) the projected Medicare per capita 
                      target growth rate for the implementation year (as 
                      determined under subparagraph (C)).
                    ``(B) Medicare per capita growth rate.--
                          ``(i) In general.--For purposes of this 
                      section, the Medicare per capita growth rate for 
                      an implementation year shall be calculated as the 
                      projected 5-year average (ending with such year) 
                      of the growth in Medicare program spending per 
                      unduplicated enrollee.
                          ``(ii) Requirement.--The projection under 
                      clause (i) shall--
                                    ``(I) to the extent that there is 
                                projected to be a negative update to the 
                                single conversion factor applicable to 
                                payments for physicians' services under 
                                section 1848(d) furnished in the 
                                proposal year or the implementation 
                                year, assume that such update for such 
                                services is 0 percent rather than the 
                                negative percent that would otherwise 
                                apply; and

[[Page 124 STAT. 494]]

                                    ``(II) take into account any 
                                delivery system reforms or other payment 
                                changes that have been enacted or 
                                published in final rules but not yet 
                                implemented as of the making of such 
                                calculation.
                    ``(C) Medicare per capita target growth rate.--For 
                purposes of this section, the Medicare per capita target 
                growth rate for an implementation year shall be 
                calculated as the projected 5-year average (ending with 
                such year) percentage increase in--
                          ``(i) with respect to a determination year 
                      that is prior to 2018, the average of the 
                      projected percentage increase (if any) in--
                                    ``(I) the Consumer Price Index for 
                                All Urban Consumers (all items; United 
                                States city average); and
                                    ``(II) the medical care expenditure 
                                category of the Consumer Price Index for 
                                All Urban Consumers (United States city 
                                average); and
                          ``(ii) with respect to a determination year 
                      that is after 2017, the nominal gross domestic 
                      product per capita plus 1.0 percentage point.
            ``(7) Savings requirement.--
                    ``(A) In general.--If, with respect to a 
                determination year, the Chief Actuary of the Centers for 
                Medicare & Medicaid Services makes a determination under 
                paragraph (6)(A) that the growth rate described in 
                clause (i) of such paragraph exceeds the growth rate 
                described in clause (ii) of such paragraph, the Chief 
                Actuary shall establish an applicable savings target for 
                the implementation year.
                    ``(B) Applicable savings target.--For purposes of 
                this section, the applicable savings target for an 
                implementation year shall be an amount equal to the 
                product of--
                          ``(i) the total amount of projected Medicare 
                      program spending for the proposal year; and
                          ``(ii) the applicable percent for the 
                      implementation year.
                    ``(C) Applicable percent.--For purposes of 
                subparagraph (B), the applicable percent for an 
                implementation year is the lesser of--
                          ``(i) in the case of--
                                    ``(I) implementation year 2015, 0.5 
                                percent;
                                    ``(II) implementation year 2016, 1.0 
                                percent;
                                    ``(III) implementation year 2017, 
                                1.25 percent; and
                                    ``(IV) implementation year 2018 or 
                                any subsequent implementation year, 1.5 
                                percent; and
                          ``(ii) the projected excess for the 
                      implementation year (expressed as a percent) 
                      determined under subparagraph (A).
            ``(8) Per capita rate of growth in national health 
        expenditures. <<NOTE: Effective date.>> --In each determination 
        year (beginning in 2018), the Chief Actuary of the Centers for 
        Medicare & Medicaid Services shall project the per capita rate 
        of growth in national health expenditures for the implementation 
        year. Such rate of growth for an implementation year shall be 
        calculated as the projected 5-year average (ending with such 
        year) percentage increase in national health care expenditures.

[[Page 124 STAT. 495]]

    ``(d) Congressional Consideration.--
            ``(1) <<NOTE: Proposal.>> Introduction.--
                    ``(A) In general.--On the day on which a proposal is 
                submitted by the President to the House of 
                Representatives and the Senate under subsection (c)(4), 
                the legislative proposal (described in subsection 
                (c)(3)(B)(iv)) contained in the proposal shall be 
                introduced (by request) in the Senate by the majority 
                leader of the Senate or by Members of the Senate 
                designated by the majority leader of the Senate and 
                shall be introduced (by request) in the House by the 
                majority leader of the House or by Members of the House 
                designated by the majority leader of the House.
                    ``(B) Not in session.--If either House is not in 
                session on the day on which such legislative proposal is 
                submitted, the legislative proposal shall be introduced 
                in that House, as provided in subparagraph (A), on the 
                first day thereafter on which that House is in session.
                    ``(C) <<NOTE: Deadline.>>  Any member.--If the 
                legislative proposal is not introduced in either House 
                within 5 days on which that House is in session after 
                the day on which the legislative proposal is submitted, 
                then any Member of that House may introduce the 
                legislative proposal.
                    ``(D) Referral.--The legislation introduced under 
                this paragraph shall be referred by the Presiding 
                Officers of the respective Houses to the Committee on 
                Finance in the Senate and to the Committee on Energy and 
                Commerce and the Committee on Ways and Means in the 
                House of Representatives.
            ``(2) Committee consideration of proposal.--
                    ``(A) Reporting bill.--Not later than April 1 of any 
                proposal year in which a proposal is submitted by the 
                President to Congress under this section, the Committee 
                on Ways and Means and the Committee on Energy and 
                Commerce of the House of Representatives and the 
                Committee on Finance of the Senate may report the bill 
                referred to the Committee under paragraph (1)(D) with 
                committee amendments related to the Medicare program.
                    ``(B) Calculations.--In determining whether a 
                committee amendment meets the requirement of 
                subparagraph (A), the reductions in Medicare program 
                spending during the 3-month period immediately preceding 
                the implementation year shall be counted to the extent 
                that such reductions are a result of the implementation 
                provisions in the committee amendment for a change in 
                the payment rate for an item or service that was 
                effective during such period pursuant to such amendment.
                    ``(C) Committee jurisdiction.--Notwithstanding rule 
                XV of the Standing Rules of the Senate, a committee 
                amendment described in subparagraph (A) may include 
                matter not within the jurisdiction of the Committee on 
                Finance if that matter is relevant to a proposal 
                contained in the bill submitted under subsection (c)(3).
                    ``(D) Discharge.--If, with respect to the House 
                involved, the committee has not reported the bill by the 
                date required by subparagraph (A), the committee shall 
                be discharged from further consideration of the 
                proposal.

[[Page 124 STAT. 496]]

            ``(3) Limitation on changes to the board recommendations.--
                    ``(A) In general.--It shall not be in order in the 
                Senate or the House of Representatives to consider any 
                bill, resolution, or amendment, pursuant to this 
                subsection or conference report thereon, that fails to 
                satisfy the requirements of subparagraphs (A)(i) and (C) 
                of subsection (c)(2).
                    ``(B) Limitation on changes to the board 
                recommendations in other legislation.--It shall not be 
                in order in the Senate or the House of Representatives 
                to consider any bill, resolution, amendment, or 
                conference report (other than pursuant to this section) 
                that would repeal or otherwise change the 
                recommendations of the Board if that change would fail 
                to satisfy the requirements of subparagraphs (A)(i) and 
                (C) of subsection (c)(2).
                    ``(C) Limitation on changes to this subsection.--It 
                shall not be in order in the Senate or the House of 
                Representatives to consider any bill, resolution, 
                amendment, or conference report that would repeal or 
                otherwise change this subsection.
                    ``(D) Waiver.--This paragraph may be waived or 
                suspended in the Senate only by the affirmative vote of 
                three-fifths of the Members, duly chosen and sworn.
                    ``(E) Appeals.--An affirmative vote of three-fifths 
                of the Members of the Senate, duly chosen and sworn, 
                shall be required in the Senate to sustain an appeal of 
                the ruling of the Chair on a point of order raised under 
                this paragraph.
            ``(4) Expedited procedure.--
                    ``(A) Consideration.--A motion to proceed to the 
                consideration of the bill in the Senate is not 
                debatable.
                    ``(B) Amendment.--
                          ``(i) Time limitation.--Debate in the Senate 
                      on any amendment to a bill under this section 
                      shall be limited to 1 hour, to be equally divided 
                      between, and controlled by, the mover and the 
                      manager of the bill, and debate on any amendment 
                      to an amendment, debatable motion, or appeal shall 
                      be limited to 30 minutes, to be equally divided 
                      between, and controlled by, the mover and the 
                      manager of the bill, except that in the event the 
                      manager of the bill is in favor of any such 
                      amendment, motion, or appeal, the time in 
                      opposition thereto shall be controlled by the 
                      minority leader or such leader's designee.
                          ``(ii) Germane.--No amendment that is not 
                      germane to the provisions of such bill shall be 
                      received.
                          ``(iii) Additional time.--The leaders, or 
                      either of them, may, from the time under their 
                      control on the passage of the bill, allot 
                      additional time to any Senator during the 
                      consideration of any amendment, debatable motion, 
                      or appeal.
                          ``(iv) Amendment not in order.--It shall not 
                      be in order to consider an amendment that would 
                      cause the bill to result in a net reduction in 
                      total Medicare program spending in the 
                      implementation year that is less than the 
                      applicable savings target established

[[Page 124 STAT. 497]]

                      under subsection (c)(7)(B) for such implementation 
                      year.
                          ``(v) Waiver and appeals.--This paragraph may 
                      be waived or suspended in the Senate only by the 
                      affirmative vote of three-fifths of the Members, 
                      duly chosen and sworn. An affirmative vote of 
                      three-fifths of the Members of the Senate, duly 
                      chosen and sworn, shall be required in the Senate 
                      to sustain an appeal of the ruling of the Chair on 
                      a point of order raised under this section.
                    ``(C) Consideration by the other house.--
                          ``(i) In general.--The expedited procedures 
                      provided in this subsection for the consideration 
                      of a bill introduced pursuant to paragraph (1) 
                      shall not apply to such a bill that is received by 
                      one House from the other House if such a bill was 
                      not introduced in the receiving House.
                          ``(ii) Before 
                      passage. <<NOTE: Applicability.>> --If a bill that 
                      is introduced pursuant to paragraph (1) is 
                      received by one House from the other House, after 
                      introduction but before disposition of such a bill 
                      in the receiving House, then the following shall 
                      apply:
                                    ``(I) The receiving House shall 
                                consider the bill introduced in that 
                                House through all stages of 
                                consideration up to, but not including, 
                                passage.
                                    ``(II) The question on passage shall 
                                be put on the bill of the other House as 
                                amended by the language of the receiving 
                                House.
                          ``(iii) After passage.--If a bill introduced 
                      pursuant to paragraph (1) is received by one House 
                      from the other House, after such a bill is passed 
                      by the receiving House, then the vote on passage 
                      of the bill that originates in the receiving House 
                      shall be considered to be the vote on passage of 
                      the bill received from the other House as amended 
                      by the language of the receiving House.
                          ``(iv) Disposition.--Upon disposition of a 
                      bill introduced pursuant to paragraph (1) that is 
                      received by one House from the other House, it 
                      shall no longer be in order to consider the bill 
                      that originates in the receiving House.
                          ``(v) Limitation. <<NOTE: Applicability.>> --
                      Clauses (ii), (iii), and (iv) shall apply only to 
                      a bill received by one House from the other House 
                      if the bill--
                                    ``(I) is related only to the program 
                                under this title; and
                                    ``(II) satisfies the requirements of 
                                subparagraphs (A)(i) and (C) of 
                                subsection (c)(2).
                    ``(D) Senate limits on debate.--
                          ``(i) In general.--In the Senate, 
                      consideration of the bill and on all debatable 
                      motions and appeals in connection therewith shall 
                      not exceed a total of 30 hours, which shall be 
                      divided equally between the majority and minority 
                      leaders or their designees.
                          ``(ii) Motion to further limit debate.--A 
                      motion to further limit debate on the bill is in 
                      order and is not debatable.

[[Page 124 STAT. 498]]

                          ``(iii) Motion or appeal.--Any debatable 
                      motion or appeal is debatable for not to exceed 1 
                      hour, to be divided equally between those favoring 
                      and those opposing the motion or appeal.
                          ``(iv) Final disposition.--After 30 hours of 
                      consideration, the Senate shall proceed, without 
                      any further debate on any question, to vote on the 
                      final disposition thereof to the exclusion of all 
                      amendments not then pending before the Senate at 
                      that time and to the exclusion of all motions, 
                      except a motion to table, or to reconsider and one 
                      quorum call on demand to establish the presence of 
                      a quorum (and motions required to establish a 
                      quorum) immediately before the final vote begins.
                    ``(E) Consideration in conference.--
                          ``(i) In general.--Consideration in the Senate 
                      and the House of Representatives on the conference 
                      report or any messages between Houses shall be 
                      limited to 10 hours, equally divided and 
                      controlled by the majority and minority leaders of 
                      the Senate or their designees and the Speaker of 
                      the House of Representatives and the minority 
                      leader of the House of Representatives or their 
                      designees.
                          ``(ii) Time limitation.--Debate in the Senate 
                      on any amendment under this subparagraph shall be 
                      limited to 1 hour, to be equally divided between, 
                      and controlled by, the mover and the manager of 
                      the bill, and debate on any amendment to an 
                      amendment, debatable motion, or appeal shall be 
                      limited to 30 minutes, to be equally divided 
                      between, and controlled by, the mover and the 
                      manager of the bill, except that in the event the 
                      manager of the bill is in favor of any such 
                      amendment, motion, or appeal, the time in 
                      opposition thereto shall be controlled by the 
                      minority leader or such leader's designee.
                          ``(iii) Final disposition.--After 10 hours of 
                      consideration, the Senate shall proceed, without 
                      any further debate on any question, to vote on the 
                      final disposition thereof to the exclusion of all 
                      motions not then pending before the Senate at that 
                      time or necessary to resolve the differences 
                      between the Houses and to the exclusion of all 
                      other motions, except a motion to table, or to 
                      reconsider and one quorum call on demand to 
                      establish the presence of a quorum (and motions 
                      required to establish a quorum) immediately before 
                      the final vote begins.
                          ``(iv) Limitation. <<NOTE: Applicability.>> --
                      Clauses (i) through (iii) shall only apply to a 
                      conference report, message or the amendments 
                      thereto if the conference report, message, or an 
                      amendment thereto--
                                    ``(I) is related only to the program 
                                under this title; and
                                    ``(II) satisfies the requirements of 
                                subparagraphs (A)(i) and (C) of 
                                subsection (c)(2).
                    ``(F) Veto.--If the President vetoes the bill debate 
                on a veto message in the Senate under this subsection 
                shall

[[Page 124 STAT. 499]]

                be 1 hour equally divided between the majority and 
                minority leaders or their designees.
            ``(5) Rules of the senate and house of representatives.--
        This subsection and subsection (f)(2) are enacted by Congress--
                    ``(A) as an exercise of the rulemaking power of the 
                Senate and the House of Representatives, respectively, 
                and is deemed to be part of the rules of each House, 
                respectively, but applicable only with respect to the 
                procedure to be followed in that House in the case of 
                bill under this section, and it supersedes other rules 
                only to the extent that it is inconsistent with such 
                rules; and
                    ``(B) with full recognition of the constitutional 
                right of either House to change the rules (so far as 
                they relate to the procedure of that House) at any time, 
                in the same manner, and to the same extent as in the 
                case of any other rule of that House.

    ``(e) Implementation of Proposal.--
            ``(1) In general.--Notwithstanding any other provision of 
        law, the Secretary shall, except as provided in paragraph (3), 
        implement the recommendations contained in a proposal submitted 
        by the President to Congress pursuant to this section on August 
        15 of the year in which the proposal is so submitted.
            ``(2) Application.--
                    ``(A) In general.--A recommendation described in 
                paragraph (1) shall apply as follows:
                          ``(i) In the case of a recommendation that is 
                      a change in the payment rate for an item or 
                      service under Medicare in which payment rates 
                      change on a fiscal year basis (or a cost reporting 
                      period basis that relates to a fiscal year), on a 
                      calendar year basis (or a cost reporting period 
                      basis that relates to a calendar year), or on a 
                      rate year basis (or a cost reporting period basis 
                      that relates to a rate year), such recommendation 
                      shall apply to items and services furnished on the 
                      first day of the first fiscal year, calendar year, 
                      or rate year (as the case may be) that begins 
                      after such August 15.
                          ``(ii) In the case of a recommendation 
                      relating to payments to plans under parts C and D, 
                      such recommendation shall apply to plan years 
                      beginning on the first day of the first calendar 
                      year that begins after such August 15.
                          ``(iii) In the case of any other 
                      recommendation, such recommendation shall be 
                      addressed in the regular regulatory process 
                      timeframe and shall apply as soon as practicable.
                    ``(B) Interim final rulemaking.--The Secretary may 
                use interim final rulemaking to implement any 
                recommendation described in paragraph (1).
            ``(3) Exception.--The Secretary shall not be required to 
        implement the recommendations contained in a proposal submitted 
        in a proposal year by the President to Congress pursuant to this 
        section if--
                    ``(A) prior to August 15 of the proposal year, 
                Federal legislation is enacted that includes the 
                following provision: `This Act supercedes the 
                recommendations of the Board

[[Page 124 STAT. 500]]

                contained in the proposal submitted, in the year which 
                includes the date of enactment of this Act, to Congress 
                under section 1899A of the Social Security Act.'; and
                    ``(B) <<NOTE: Deadline.>> in the case of 
                implementation year 2020 and subsequent implementation 
                years, a joint resolution described in subsection (f)(1) 
                is enacted not later than August 15, 2017.
            ``(4) No affect on authority to implement certain 
        provisions.--Nothing in paragraph (3) shall be construed to 
        affect the authority of the Secretary to implement any 
        recommendation contained in a proposal or advisory report under 
        this section to the extent that the Secretary otherwise has the 
        authority to implement such recommendation administratively.
            ``(5) Limitation on review.--There shall be no 
        administrative or judicial review under section 1869, section 
        1878, or otherwise of the implementation by the Secretary under 
        this subsection of the recommendations contained in a proposal.

    ``(f) Joint Resolution Required To Discontinue the Board.--
            ``(1) In general. <<NOTE: Definition.>> --For purposes of 
        subsection (e)(3)(B), a joint resolution described in this 
        paragraph means only a joint resolution--
                    ``(A) that is introduced in 2017 by not later than 
                February 1 of such year;
                    ``(B) which does not have a preamble;
                    ``(C) the title of which is as follows: `Joint 
                resolution approving the discontinuation of the process 
                for consideration and automatic implementation of the 
                annual proposal of the Independent Medicare Advisory 
                Board under section 1899A of the Social Security Act'; 
                and
                    ``(D) the matter after the resolving clause of which 
                is as follows: `That Congress approves the 
                discontinuation of the process for consideration and 
                automatic implementation of the annual proposal of the 
                Independent Medicare Advisory Board under section 1899A 
                of the Social Security Act.'.
            ``(2) Procedure.--
                    ``(A) Referral.--A joint resolution described in 
                paragraph (1) shall be referred to the Committee on Ways 
                and Means and the Committee on Energy and Commerce of 
                the House of Representatives and the Committee on 
                Finance of the Senate.
                    ``(B) Discharge. <<NOTE: Deadline. Petition.>> --In 
                the Senate, if the committee to which is referred a 
                joint resolution described in paragraph (1) has not 
                reported such joint resolution (or an identical joint 
                resolution) at the end of 20 days after the joint 
                resolution described in paragraph (1) is introduced, 
                such committee may be discharged from further 
                consideration of such joint resolution upon a petition 
                supported in writing by 30 Members of the Senate, and 
                such joint resolution shall be placed on the calendar.
                    ``(C) Consideration.--
                          ``(i) In general.--In the Senate, when the 
                      committee to which a joint resolution is referred 
                      has reported, or when a committee is discharged 
                      (under subparagraph (C)) from further 
                      consideration of a joint

[[Page 124 STAT. 501]]

                      resolution described in paragraph (1), it is at 
                      any time thereafter in order (even though a 
                      previous motion to the same effect has been 
                      disagreed to) for a motion to proceed to the 
                      consideration of the joint resolution to be made, 
                      and all points of order against the joint 
                      resolution (and against consideration of the joint 
                      resolution) are waived, except for points of order 
                      under the Congressional Budget act of 1974 or 
                      under budget resolutions pursuant to that Act. The 
                      motion is not debatable. A motion to reconsider 
                      the vote by which the motion is agreed to or 
                      disagreed to shall not be in order. If a motion to 
                      proceed to the consideration of the joint 
                      resolution is agreed to, the joint resolution 
                      shall remain the unfinished business of the Senate 
                      until disposed of.
                          ``(ii) Debate limitation.--In the Senate, 
                      consideration of the joint resolution, and on all 
                      debatable motions and appeals in connection 
                      therewith, shall be limited to not more than 10 
                      hours, which shall be divided equally between the 
                      majority leader and the minority leader, or their 
                      designees. A motion further to limit debate is in 
                      order and not debatable. An amendment to, or a 
                      motion to postpone, or a motion to proceed to the 
                      consideration of other business, or a motion to 
                      recommit the joint resolution is not in order.
                          ``(iii) Passage.--In the Senate, immediately 
                      following the conclusion of the debate on a joint 
                      resolution described in paragraph (1), and a 
                      single quorum call at the conclusion of the debate 
                      if requested in accordance with the rules of the 
                      Senate, the vote on passage of the joint 
                      resolution shall occur.
                          ``(iv) Appeals.--Appeals from the decisions of 
                      the Chair relating to the application of the rules 
                      of the Senate to the procedure relating to a joint 
                      resolution described in paragraph (1) shall be 
                      decided without debate.
                    ``(D) Other house acts 
                first. <<NOTE: Applicability.>> --If, before the passage 
                by 1 House of a joint resolution of that House described 
                in paragraph (1), that House receives from the other 
                House a joint resolution described in paragraph (1), 
                then the following procedures shall apply:
                          ``(i) The joint resolution of the other House 
                      shall not be referred to a committee.
                          ``(ii) With respect to a joint resolution 
                      described in paragraph (1) of the House receiving 
                      the joint resolution--
                                    ``(I) the procedure in that House 
                                shall be the same as if no joint 
                                resolution had been received from the 
                                other House; but
                                    ``(II) the vote on final passage 
                                shall be on the joint resolution of the 
                                other House.
                    ``(E) Excluded days.--For purposes of determining 
                the period specified in subparagraph (B), there shall be 
                excluded any days either House of Congress is adjourned 
                for more than 3 days during a session of Congress.

[[Page 124 STAT. 502]]

                    ``(F) Majority required for adoption.--A joint 
                resolution considered under this subsection shall 
                require an affirmative vote of three-fifths of the 
                Members, duly chosen and sworn, for adoption.
            ``(3) <<NOTE: Deadlines.>>  Termination.--If a joint 
        resolution described in paragraph (1) is enacted not later than 
        August 15, 2017--
                    ``(A) the Chief Actuary of the Medicare & Medicaid 
                Services shall not--
                          ``(i) make any determinations under subsection 
                      (c)(6) after May 1, 2017; or
                          ``(ii) provide any opinion pursuant to 
                      subsection (c)(3)(B)(iii) after January 16, 2018;
                    ``(B) the Board shall not submit any proposals or 
                advisory reports to Congress under this section after 
                January 16, 2018; and
                    ``(C) the Board and the consumer advisory council 
                under subsection (k) shall terminate on August 16, 2018.

    ``(g) Board Membership; Terms of Office; Chairperson; Removal.--
            ``(1) Membership.--
                    ``(A) <<NOTE: President. Appointments.>> In 
                general.--The Board shall be composed of--
                          ``(i) 15 members appointed by the President, 
                      by and with the advice and consent of the Senate; 
                      and
                          ``(ii) the Secretary, the Administrator of the 
                      Center for Medicare & Medicaid Services, and the 
                      Administrator of the Health Resources and Services 
                      Administration, all of whom shall serve ex officio 
                      as nonvoting members of the Board.
                    ``(B) Qualifications.--
                          ``(i) In general.--The appointed membership of 
                      the Board shall include individuals with national 
                      recognition for their expertise in health finance 
                      and economics, actuarial science, health facility 
                      management, health plans and integrated delivery 
                      systems, reimbursement of health facilities, 
                      allopathic and osteopathic physicians, and other 
                      providers of health services, and other related 
                      fields, who provide a mix of different 
                      professionals, broad geographic representation, 
                      and a balance between urban and rural 
                      representatives.
                          ``(ii) Inclusion.--The appointed membership of 
                      the Board shall include (but not be limited to) 
                      physicians and other health professionals, experts 
                      in the area of pharmaco-economics or prescription 
                      drug benefit programs, employers, third-party 
                      payers, individuals skilled in the conduct and 
                      interpretation of biomedical, health services, and 
                      health economics research and expertise in 
                      outcomes and effectiveness research and technology 
                      assessment. Such membership shall also include 
                      representatives of consumers and the elderly.
                          ``(iii) Majority nonproviders.--Individuals 
                      who are directly involved in the provision or 
                      management of the delivery of items and services 
                      covered under this title shall not constitute a 
                      majority of the appointed membership of the Board.
                    ``(C) Ethical disclosure. <<NOTE: President. Public 
                information.>> --The President shall establish a system 
                for public disclosure by appointed members

[[Page 124 STAT. 503]]

                of the Board of financial and other potential conflicts 
                of interest relating to such members. Appointed members 
                of the Board shall be treated as officers in the 
                executive branch for purposes of applying title I of the 
                Ethics in Government Act of 1978 (Public Law 95-521).
                    ``(D) Conflicts of interest.--No individual may 
                serve as an appointed member if that individual engages 
                in any other business, vocation, or employment.
                    ``(E) Consultation with 
                congress. <<NOTE: President.>> --In selecting 
                individuals for nominations for appointments to the 
                Board, the President shall consult with--
                          ``(i) the majority leader of the Senate 
                      concerning the appointment of 3 members;
                          ``(ii) the Speaker of the House of 
                      Representatives concerning the appointment of 3 
                      members;
                          ``(iii) the minority leader of the Senate 
                      concerning the appointment of 3 members; and
                          ``(iv) the minority leader of the House of 
                      Representatives concerning the appointment of 3 
                      members.
            ``(2) Term of office.--Each appointed member shall hold 
        office for a term of 6 years except that--
                    ``(A) a member may not serve more than 2 full 
                consecutive terms (but may be reappointed to 2 full 
                consecutive terms after being appointed to fill a 
                vacancy on the Board);
                    ``(B) a member appointed to fill a vacancy occurring 
                prior to the expiration of the term for which that 
                member's predecessor was appointed shall be appointed 
                for the remainder of such term;
                    ``(C) a member may continue to serve after the 
                expiration of the member's term until a successor has 
                taken office; and
                    ``(D) of the members first appointed under this 
                section, 5 shall be appointed for a term of 1 year, 5 
                shall be appointed for a term of 3 years, and 5 shall be 
                appointed for a term of 6 years, the term of each to be 
                designated by the President at the time of nomination.
            ``(3) Chairperson.--
                    ``(A) In 
                general. <<NOTE: Appointment. President.>> --The 
                Chairperson shall be appointed by the President, by and 
                with the advice and consent of the Senate, from among 
                the members of the Board.
                    ``(B) Duties.--The Chairperson shall be the 
                principal executive officer of the Board, and shall 
                exercise all of the executive and administrative 
                functions of the Board, including functions of the Board 
                with respect to--
                          ``(i) the appointment and supervision of 
                      personnel employed by the Board;
                          ``(ii) the distribution of business among 
                      personnel appointed and supervised by the 
                      Chairperson and among administrative units of the 
                      Board; and
                          ``(iii) the use and expenditure of funds.
                    ``(C) Governance.--In carrying out any of the 
                functions under subparagraph (B), the Chairperson shall 
                be governed by the general policies established by the 
                Board and by the decisions, findings, and determinations 
                the Board shall by law be authorized to make.

[[Page 124 STAT. 504]]

                    ``(D) Requests for appropriations.--Requests or 
                estimates for regular, supplemental, or deficiency 
                appropriations on behalf of the Board may not be 
                submitted by the Chairperson without the prior approval 
                of a majority vote of the Board.
            ``(4) Removal.--Any appointed member may be removed by the 
        President for neglect of duty or malfeasance in office, but for 
        no other cause.

    ``(h) Vacancies; Quorum; Seal; Vice Chairperson; Voting on 
Reports.--
            ``(1) Vacancies.--No vacancy on the Board shall impair the 
        right of the remaining members to exercise all the powers of the 
        Board.
            ``(2) Quorum.--A majority of the appointed members of the 
        Board shall constitute a quorum for the transaction of business, 
        but a lesser number of members may hold hearings.
            ``(3) Seal.--The Board shall have an official seal, of which 
        judicial notice shall be taken.
            ``(4) Vice chairperson. <<NOTE: Deadline.>> --The Board 
        shall annually elect a Vice Chairperson to act in the absence or 
        disability of the Chairperson or in case of a vacancy in the 
        office of the Chairperson.
            ``(5) Voting on proposals.--Any proposal of the Board must 
        be approved by the majority of appointed members present.

    ``(i) Powers of the Board.--
            ``(1) Hearings.--The Board may hold such hearings, sit and 
        act at such times and places, take such testimony, and receive 
        such evidence as the Board considers advisable to carry out this 
        section.
            ``(2) Authority to inform research priorities for data 
        collection.--The Board may advise the Secretary on priorities 
        for health services research, particularly as such priorities 
        pertain to necessary changes and issues regarding payment 
        reforms under Medicare.
            ``(3) Obtaining official data.--The Board may secure 
        directly from any department or agency of the United States 
        information necessary to enable it to carry out this section. 
        Upon request of the Chairperson, the head of that department or 
        agency shall furnish that information to the Board on an agreed 
        upon schedule.
            ``(4) Postal services.--The Board may use the United States 
        mails in the same manner and under the same conditions as other 
        departments and agencies of the Federal Government.
            ``(5) Gifts.--The Board may accept, use, and dispose of 
        gifts or donations of services or property.
            ``(6) Offices.--The Board shall maintain a principal office 
        and such field offices as it determines necessary, and may meet 
        and exercise any of its powers at any other place.

    ``(j) Personnel Matters.--
            ``(1) Compensation of members and chairperson.--Each 
        appointed member, other than the Chairperson, shall be 
        compensated at a rate equal to the annual rate of basic pay 
        prescribed for level III of the Executive Schedule under section 
        5315 of title 5, United States Code. The Chairperson shall be 
        compensated at a rate equal to the daily equivalent of the 
        annual rate of basic pay prescribed for level II of the

[[Page 124 STAT. 505]]

        Executive Schedule under section 5315 of title 5, United States 
        Code.
            ``(2) Travel expenses.--The appointed members shall be 
        allowed travel expenses, including per diem in lieu of 
        subsistence, at rates authorized for employees of agencies under 
        subchapter I of chapter 57 of title 5, United States Code, while 
        away from their homes or regular places of business in the 
        performance of services for the Board.
            ``(3) Staff.--
                    ``(A) In general.--The Chairperson may, without 
                regard to the civil service laws and regulations, 
                appoint and terminate an executive director and such 
                other additional personnel as may be necessary to enable 
                the Board to perform its duties. The employment of an 
                executive director shall be subject to confirmation by 
                the Board.
                    ``(B) Compensation.--The Chairperson may fix the 
                compensation of the executive director and other 
                personnel without regard to chapter 51 and subchapter 
                III of chapter 53 of title 5, United States Code, 
                relating to classification of positions and General 
                Schedule pay rates, except that the rate of pay for the 
                executive director and other personnel may not exceed 
                the rate payable for level V of the Executive Schedule 
                under section 5316 of such title.
            ``(4) Detail of government employees.--Any Federal 
        Government employee may be detailed to the Board without 
        reimbursement, and such detail shall be without interruption or 
        loss of civil service status or privilege.
            ``(5) Procurement of temporary and intermittent services.--
        The Chairperson may procure temporary and intermittent services 
        under section 3109(b) of title 5, United States Code, at rates 
        for individuals which do not exceed the daily equivalent of the 
        annual rate of basic pay prescribed for level V of the Executive 
        Schedule under section 5316 of such title.

    ``(k) Consumer Advisory Council.--
            ``(1) In general. <<NOTE: Establishment.>> --There is 
        established a consumer advisory council to advise the Board on 
        the impact of payment policies under this title on consumers.
            ``(2) Membership.--
                    ``(A) Number and appointment.--The consumer advisory 
                council shall be composed of 10 consumer representatives 
                appointed by the Comptroller General of the United 
                States, 1 from among each of the 10 regions established 
                by the Secretary as of the date of enactment of this 
                section.
                    ``(B) Qualifications.--The membership of the council 
                shall represent the interests of consumers and 
                particular communities.
            ``(3) Duties. <<NOTE: Deadlines.>> --The consumer advisory 
        council shall, subject to the call of the Board, meet not less 
        frequently than 2 times each year in the District of Columbia.
            ``(4) Open meetings.--Meetings of the consumer advisory 
        council shall be open to the public.
            ``(5) Election of officers.--Members of the consumer 
        advisory council shall elect their own officers.
            ``(6) Application of faca.--The Federal Advisory Committee 
        Act (5 U.S.C. App.) shall apply to the consumer advisory council 
        except that section 14 of such Act shall not apply.

[[Page 124 STAT. 506]]

    ``(l) Definitions.--In this section:
            ``(1) Board; chairperson; member.--The terms `Board', 
        `Chairperson', and `Member' mean the Independent Medicare 
        Advisory Board established under subsection (a) and the 
        Chairperson and any Member thereof, respectively.
            ``(2) Medicare.--The term `Medicare' means the program 
        established under this title, including parts A, B, C, and D.
            ``(3) Medicare beneficiary.--The term `Medicare beneficiary' 
        means an individual who is entitled to, or enrolled for, 
        benefits under part A or enrolled for benefits under part B.
            ``(4) Medicare program spending.--The term `Medicare program 
        spending' means program spending under parts A, B, and D net of 
        premiums.

    ``(m) Funding.--
            ``(1) In general.--There are appropriated to the Board to 
        carry out its duties and functions--
                    ``(A) for fiscal year 2012, $15,000,000; and
                    ``(B) for each subsequent fiscal year, the amount 
                appropriated under this paragraph for the previous 
                fiscal year increased by the annual percentage increase 
                in the Consumer Price Index for All Urban Consumers (all 
                items; United States city average) as of June of the 
                previous fiscal year.
            ``(2) From trust funds.--Sixty percent of amounts 
        appropriated under paragraph (1) shall be derived by transfer 
        from the Federal Hospital Insurance Trust Fund under section 
        1817 and 40 percent of amounts appropriated under such paragraph 
        shall be derived by transfer from the Federal Supplementary 
        Medical Insurance Trust Fund under section 1841.''.
            (2) Lobbying cooling-off period for members of the 
        independent medicare advisory board.--Section 207(c) of title 
        18, United States Code, is amended by inserting at the end the 
        following:
            ``(3) Members of the independent medicare advisory board.--
                    ``(A) In general. <<NOTE: Applicability.>> --
                Paragraph (1) shall apply to a member of the Independent 
                Medicare Advisory Board under section 1899A.
                    ``(B) Agencies and congress.--For purposes of 
                paragraph (1), the agency in which the individual 
                described in subparagraph (A) served shall be considered 
                to be the Independent Medicare Advisory Board, the 
                Department of Health and Human Services, and the 
                relevant committees of jurisdiction of Congress, 
                including the Committee on Ways and Means and the 
                Committee on Energy and Commerce of the House of 
                Representatives and the Committee on Finance of the 
                Senate.''.

    (b) <<NOTE: 42 USC 1395kkk-1.>> GAO Study and Report on 
Determination and Implementation of Payment and Coverage Policies Under 
the Medicare Program.--
            (1) Initial study and report.--
                    (A) Study.--The Comptroller General of the United 
                States (in this section referred to as the ``Comptroller 
                General'') shall conduct a study on changes to payment 
                policies, methodologies, and rates and coverage policies 
                and methodologies under the Medicare program under title 
                XVIII

[[Page 124 STAT. 507]]

                of the Social Security Act as a result of the 
                recommendations contained in the proposals made by the 
                Independent Medicare Advisory Board under section 1899A 
                of such Act (as added by subsection (a)), including an 
                analysis of the effect of such recommendations on--
                          (i) Medicare beneficiary access to providers 
                      and items and services;
                          (ii) the affordability of Medicare premiums 
                      and cost-sharing (including deductibles, 
                      coinsurance, and copayments);
                          (iii) the potential impact of changes on other 
                      government or private-sector purchasers and payers 
                      of care; and
                          (iv) quality of patient care, including 
                      patient experience, outcomes, and other measures 
                      of care.
                    (B) Report.--Not later than July 1, 2015, the 
                Comptroller General 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 Comptroller 
                General determines appropriate.
            (2) Subsequent studies and reports.--The Comptroller General 
        shall periodically conduct such additional studies and submit 
        reports to Congress on changes to Medicare payments policies, 
        methodologies, and rates and coverage policies and methodologies 
        as the Comptroller General determines appropriate, in 
        consultation with the Committee on Ways and Means and the 
        Committee on Energy and Commerce of the House of Representatives 
        and the Committee on Finance of the Senate.

    (c) Conforming Amendments.--Section 1805(b) of the Social Security 
Act (42 U.S.C. 1395b-6(b)) is amended--
            (1) by redesignating paragraphs (4) through (8) as 
        paragraphs (5) through (9), respectively; and
            (2) by inserting after paragraph (3) the following:
            ``(4) Review and comment on the independent medicare 
        advisory board or secretarial proposal. <<NOTE: Deadline.>> --If 
        the Independent Medicare Advisory Board (as established under 
        subsection (a) of section 1899A) or the Secretary submits a 
        proposal to the Commission under such section in a year, the 
        Commission shall review the proposal and, not later than March 1 
        of that year, submit to the Committee on Ways and Means and the 
        Committee on Energy and Commerce of the House of Representatives 
        and the Committee on Finance of the Senate written comments on 
        such proposal. Such comments may include such recommendations as 
        the Commission deems appropriate.''.

              Subtitle F--Health Care Quality Improvements

SEC. 3501. HEALTH CARE DELIVERY SYSTEM RESEARCH; QUALITY IMPROVEMENT 
            TECHNICAL ASSISTANCE.

    Part D of title IX of the Public Health Service Act, as amended by 
section 3013, is further amended by adding at the end the following:

[[Page 124 STAT. 508]]

         ``Subpart II--Health Care Quality Improvement Programs

``SEC. 933. <<NOTE: 42 USC 299b-33.>> HEALTH CARE DELIVERY SYSTEM 
            RESEARCH.

    ``(a) Purpose.--The purposes of this section are to--
            ``(1) enable the Director to identify, develop, evaluate, 
        disseminate, and provide training in innovative methodologies 
        and strategies for quality improvement practices in the delivery 
        of health care services that represent best practices (referred 
        to as `best practices') in health care quality, safety, and 
        value; and
            ``(2) ensure that the Director is accountable for 
        implementing a model to pursue such research in a collaborative 
        manner with other related Federal agencies.

    ``(b) General Functions of the Center.--The Center for Quality 
Improvement and Patient Safety of the Agency for Healthcare Research and 
Quality (referred to in this section as the `Center'), or any other 
relevant agency or department designated by the Director, shall--
            ``(1) carry out its functions using research from a variety 
        of disciplines, which may include epidemiology, health services, 
        sociology, psychology, human factors engineering, biostatistics, 
        health economics, clinical research, and health informatics;
            ``(2) conduct or support activities consistent with the 
        purposes described in subsection (a), and for--
                    ``(A) best practices for quality improvement 
                practices in the delivery of health care services; and
                    ``(B) that include changes in processes of care and 
                the redesign of systems used by providers that will 
                reliably result in intended health outcomes, improve 
                patient safety, and reduce medical errors (such as skill 
                development for health care providers in team-based 
                health care delivery and rapid cycle process 
                improvement) and facilitate adoption of improved 
                workflow;
            ``(3) identify health care providers, including health care 
        systems, single institutions, and individual providers, that--
                    ``(A) deliver consistently high-quality, efficient 
                health care services (as determined by the Secretary); 
                and
                    ``(B) employ best practices that are adaptable and 
                scalable to diverse health care settings or effective in 
                improving care across diverse settings;
            ``(4) assess research, evidence, and knowledge about what 
        strategies and methodologies are most effective in improving 
        health care delivery;
            ``(5) find ways to translate such information rapidly and 
        effectively into practice, and document the sustainability of 
        those improvements;
            ``(6) create strategies for quality improvement through the 
        development of tools, methodologies, and interventions that can 
        successfully reduce variations in the delivery of health care;
            ``(7) identify, measure, and improve organizational, human, 
        or other causative factors, including those related to the 
        culture and system design of a health care organization, that 
        contribute to the success and sustainability of specific quality 
        improvement and patient safety strategies;

[[Page 124 STAT. 509]]

            ``(8) provide for the development of best practices in the 
        delivery of health care services that--
                    ``(A) have a high likelihood of success, based on 
                structured review of empirical evidence;
                    ``(B) are specified with sufficient detail of the 
                individual processes, steps, training, skills, and 
                knowledge required for implementation and incorporation 
                into workflow of health care practitioners in a variety 
                of settings;
                    ``(C) are designed to be readily adapted by health 
                care providers in a variety of settings; and
                    ``(D) where applicable, assist health care providers 
                in working with other health care providers across the 
                continuum of care and in engaging patients and their 
                families in improving the care and patient health 
                outcomes;
            ``(9) provide for the funding of the activities of 
        organizations with recognized expertise and excellence in 
        improving the delivery of health care services, including 
        children's health care, by involving multiple disciplines, 
        managers of health care entities, broad development and 
        training, patients, caregivers and families, and frontline 
        health care workers, including activities for the examination of 
        strategies to share best quality improvement practices and to 
        promote excellence in the delivery of health care services; and
            ``(10) build capacity at the State and community level to 
        lead quality and safety efforts through education, training, and 
        mentoring programs to carry out the activities under paragraphs 
        (1) through (9).

    ``(c) Research Functions of Center.--
            ``(1) In general.--The Center shall support, such as through 
        a contract or other mechanism, research on health care delivery 
        system improvement and the development of tools to facilitate 
        adoption of best practices that improve the quality, safety, and 
        efficiency of health care delivery services. Such support may 
        include establishing a Quality Improvement Network Research 
        Program for the purpose of testing, scaling, and disseminating 
        of interventions to improve quality and efficiency in health 
        care. Recipients of funding under the Program may include 
        national, State, multi-State, or multi-site quality improvement 
        networks.
            ``(2) Research requirements.--The research conducted 
        pursuant to paragraph (1) shall--
                    ``(A) address the priorities identified by the 
                Secretary in the national strategic plan established 
                under section 399HH;
                    ``(B) identify areas in which evidence is 
                insufficient to identify strategies and methodologies, 
                taking into consideration areas of insufficient evidence 
                identified by the entity with a contract under section 
                1890(a) of the Social Security Act in the report 
                required under section 399JJ;
                    ``(C) address concerns identified by health care 
                institutions and providers and communicated through the 
                Center pursuant to subsection (d);
                    ``(D) reduce preventable morbidity, mortality, and 
                associated costs of morbidity and mortality by building 
                capacity for patient safety research;
                    ``(E) support the discovery of processes for the 
                reliable, safe, efficient, and responsive delivery of 
                health care, taking

[[Page 124 STAT. 510]]

                into account discoveries from clinical research and 
                comparative effectiveness research;
                    ``(F) allow communication of research findings and 
                translate evidence into practice recommendations that 
                are adaptable to a variety of settings, and which, as 
                soon as practicable after the establishment of the 
                Center, shall include--
                          ``(i) the implementation of a national 
                      application of Intensive Care Unit improvement 
                      projects relating to the adult (including 
                      geriatric), pediatric, and neonatal patient 
                      populations;
                          ``(ii) practical methods for addressing health 
                      care associated infections, including Methicillin-
                      Resistant Staphylococcus Aureus and Vancomycin-
                      Resistant Entercoccus infections and other 
                      emerging infections; and
                          ``(iii) practical methods for reducing 
                      preventable hospital admissions and readmissions;
                    ``(G) expand demonstration projects for improving 
                the quality of children's health care and the use of 
                health information technology, such as through Pediatric 
                Quality Improvement Collaboratives and Learning 
                Networks, consistent with provisions of section 1139A of 
                the Social Security Act for assessing and improving 
                quality, where applicable;
                    ``(H) identify and mitigate hazards by--
                          ``(i) analyzing events reported to patient 
                      safety reporting systems and patient safety 
                      organizations; and
                          ``(ii) using the results of such analyses to 
                      develop scientific methods of response to such 
                      events;
                    ``(I) include the conduct of systematic reviews of 
                existing practices that improve the quality, safety, and 
                efficiency of health care delivery, as well as new 
                research on improving such practices; and
                    ``(J) include the examination of how to measure and 
                evaluate the progress of quality and patient safety 
                activities.

    ``(d) Dissemination of Research Findings.--
            ``(1) Public availability.--The Director shall make the 
        research findings of the Center available to the public through 
        multiple media and appropriate formats to reflect the varying 
        needs of health care providers and consumers and diverse levels 
        of health literacy.
            ``(2) Linkage to health information technology.--The 
        Secretary shall ensure that research findings and results 
        generated by the Center are shared with the Office of the 
        National Coordinator of Health Information Technology and used 
        to inform the activities of the health information technology 
        extension program under section 3012, as well as any relevant 
        standards, certification criteria, or implementation 
        specifications.

    ``(e) Prioritization. <<NOTE: List.>> --The Director shall identify 
and regularly update a list of processes or systems on which to focus 
research and dissemination activities of the Center, taking into 
account--
            ``(1) the cost to Federal health programs;
            ``(2) consumer assessment of health care experience;

[[Page 124 STAT. 511]]

            ``(3) provider assessment of such processes or systems and 
        opportunities to minimize distress and injury to the health care 
        workforce;
            ``(4) the potential impact of such processes or systems on 
        health status and function of patients, including vulnerable 
        populations including children;
            ``(5) the areas of insufficient evidence identified under 
        subsection (c)(2)(B); and
            ``(6) the evolution of meaningful use of health information 
        technology, as defined in section 3000.

    ``(f) Coordination.--The Center shall coordinate its activities with 
activities conducted by the Center for Medicare and Medicaid Innovation 
established under section 1115A of the Social Security Act.
    ``(g) Funding.--There is authorized to be appropriated to carry out 
this section $20,000,000 for fiscal years 2010 through 2014.

``SEC. 934. <<NOTE: Grants. Contracts. 42 USC 299b-34.>>  QUALITY 
            IMPROVEMENT TECHNICAL ASSISTANCE AND IMPLEMENTATION.

    ``(a) In General.--The Director, through the Center for Quality 
Improvement and Patient Safety of the Agency for Healthcare Research and 
Quality (referred to in this section as the `Center'), shall award--
            ``(1) technical assistance grants or contracts to eligible 
        entities to provide technical support to institutions that 
        deliver health care and health care providers (including rural 
        and urban providers of services and suppliers with limited 
        infrastructure and financial resources to implement and support 
        quality improvement activities, providers of services and 
        suppliers with poor performance scores, and providers of 
        services and suppliers for which there are disparities in care 
        among subgroups of patients) so that such institutions and 
        providers understand, adapt, and implement the models and 
        practices identified in the research conducted by the Center, 
        including the Quality Improvement Networks Research Program; and
            ``(2) implementation grants or contracts to eligible 
        entities to implement the models and practices described under 
        paragraph (1).

    ``(b) Eligible Entities.--
            ``(1) Technical assistance award.--To be eligible to receive 
        a technical assistance grant or contract under subsection 
        (a)(1), an entity--
                    ``(A) may be a health care provider, health care 
                provider association, professional society, health care 
                worker organization, Indian health organization, quality 
                improvement organization, patient safety organization, 
                local quality improvement collaborative, the Joint 
                Commission, academic health center, university, 
                physician-based research network, primary care extension 
                program established under section 399W, 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), or any other entity 
                identified by the Secretary; and
                    ``(B) shall have demonstrated expertise in providing 
                information and technical support and assistance to 
                health care providers regarding quality improvement.

[[Page 124 STAT. 512]]

            ``(2) Implementation award.--To be eligible to receive an 
        implementation grant or contract under subsection (a)(2), an 
        entity--
                    ``(A) may be a hospital or other health care 
                provider or consortium or providers, as determined by 
                the Secretary; and
                    ``(B) shall have demonstrated expertise in providing 
                information and technical support and assistance to 
                health care providers regarding quality improvement.

    ``(c) Application.--
            ``(1) Technical assistance award.--To receive a technical 
        assistance grant or contract under subsection (a)(1), an 
        eligible entity shall submit an application to the Secretary at 
        such time, in such manner, and containing--
                    ``(A) a plan for a sustainable business model that 
                may include a system of--
                          ``(i) charging fees to institutions and 
                      providers that receive technical support from the 
                      entity; and
                          ``(ii) reducing or eliminating such fees for 
                      such institutions and providers that serve low-
                      income populations; and
                    ``(B) such other information as the Director may 
                require.
            ``(2) Implementation award.--To receive a grant or contract 
        under subsection (a)(2), an eligible entity shall submit an 
        application to the Secretary at such time, in such manner, and 
        containing--
                    ``(A) a plan for implementation of a model or 
                practice identified in the research conducted by the 
                Center including--
                          ``(i) financial cost, staffing requirements, 
                      and timeline for implementation; and
                          ``(ii) pre- and projected post-implementation 
                      quality measure performance data in targeted 
                      improvement areas identified by the Secretary; and
                    ``(B) such other information as the Director may 
                require.

    ``(d) Matching Funds.--The Director 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) Evaluation.--
            ``(1) In general.--The Director shall evaluate the 
        performance of each entity that receives a grant or contract 
        under this section. The evaluation of an entity shall include a 
        study of--
                    ``(A) the success of such entity in achieving the 
                implementation, by the health care institutions and 
                providers assisted by such entity, of the models and 
                practices identified in the research conducted by the 
                Center under section 933;

[[Page 124 STAT. 513]]

                    ``(B) the perception of the health care institutions 
                and providers assisted by such entity regarding the 
                value of the entity; and
                    ``(C) where practicable, better patient health 
                outcomes and lower cost resulting from the assistance 
                provided by such entity.
            ``(2) Effect of evaluation. <<NOTE: Determination.>> --Based 
        on the outcome of the evaluation of the entity under paragraph 
        (1), the Director shall determine whether to renew a grant or 
        contract with such entity under this section.

    ``(f) Coordination.--The entities that receive a grant or contract 
under this section shall coordinate with health information technology 
regional extension centers under section 3012(c) and the primary care 
extension program established under section 399W regarding the 
dissemination of quality improvement, system delivery reform, and best 
practices information.''.

SEC. 3502. <<NOTE: Grants. Contracts. 42 USC 256a-1.>> ESTABLISHING 
            COMMUNITY HEALTH TEAMS TO SUPPORT THE PATIENT-CENTERED 
            MEDICAL HOME.

    (a) In General.--The Secretary of Health and Human Services 
(referred to in this section as the ``Secretary'') shall establish a 
program to provide grants to or enter into contracts with eligible 
entities to establish community-based interdisciplinary, 
interprofessional teams (referred to in this section as ``health 
teams'') to support primary care practices, including obstetrics and 
gynecology practices, within the hospital service areas served by the 
eligible entities. Grants or contracts shall be used to--
            (1) establish health teams to provide support services to 
        primary care providers; and
            (2) provide capitated payments to primary care providers as 
        determined by the Secretary.

    (b) Eligible Entities.--To be eligible to receive a grant or 
contract under subsection (a), an entity shall--
            (1)(A) be a State or State-designated entity; or
            (B) be an Indian tribe or tribal organization, as defined in 
        section 4 of the Indian Health Care Improvement Act;
            (2) <<NOTE: Plans. Deadline.>> submit a plan for achieving 
        long-term financial sustainability within 3 years;
            (3) <<NOTE: Plans.>> submit a plan for incorporating 
        prevention initiatives and patient education and care management 
        resources into the delivery of health care that is integrated 
        with community-based prevention and treatment resources, where 
        available;
            (4) ensure that the health team established by the entity 
        includes an interdisciplinary, interprofessional team of health 
        care providers, as determined by the Secretary; such team may 
        include medical specialists, nurses, pharmacists, nutritionists, 
        dieticians, social workers, behavioral and mental health 
        providers (including substance use disorder prevention and 
        treatment providers), doctors of chiropractic, licensed 
        complementary and alternative medicine practitioners, and 
        physicians' assistants;
            (5) agree to provide services to eligible individuals with 
        chronic conditions, as described in section 1945 of the Social 
        Security Act (as added by section 2703), in accordance with the 
        payment methodology established under subsection (c) of such 
        section; and

[[Page 124 STAT. 514]]

            (6) submit to the Secretary an application at such time, in 
        such manner, and containing such information as the Secretary 
        may require.

    (c) Requirements for Health Teams.--A health team established 
pursuant to a grant or contract under subsection (a) shall--
            (1) establish contractual agreements with primary care 
        providers to provide support services;
            (2) support patient-centered medical homes, defined as a 
        mode of care that includes--
                    (A) personal physicians;
                    (B) whole person orientation;
                    (C) coordinated and integrated care;
                    (D) safe and high-quality care through evidence-
                informed medicine, appropriate use of health information 
                technology, and continuous quality improvements;
                    (E) expanded access to care; and
                    (F) payment that recognizes added value from 
                additional components of patient-centered care;
            (3) collaborate with local primary care providers and 
        existing State and community based resources to coordinate 
        disease prevention, chronic disease management, transitioning 
        between health care providers and settings and case management 
        for patients, including children, with priority given to those 
        amenable to prevention and with chronic diseases or conditions 
        identified by the Secretary;
            (4) <<NOTE: Plans.>> in collaboration with local health care 
        providers, develop and implement interdisciplinary, 
        interprofessional care plans that integrate clinical and 
        community preventive and health promotion services for patients, 
        including children, with a priority given to those amenable to 
        prevention and with chronic diseases or conditions identified by 
        the Secretary;
            (5) incorporate health care providers, patients, caregivers, 
        and authorized representatives in program design and oversight;
            (6) provide support necessary for local primary care 
        providers to--
                    (A) coordinate and provide access to high-quality 
                health care services;
                    (B) coordinate and provide access to preventive and 
                health promotion services;
                    (C) provide access to appropriate specialty care and 
                inpatient services;
                    (D) provide quality-driven, cost-effective, 
                culturally appropriate, and patient- and family-centered 
                health care;
                    (E) provide access to pharmacist-delivered 
                medication management services, including medication 
                reconciliation;
                    (F) provide coordination of the appropriate use of 
                complementary and alternative (CAM) services to those 
                who request such services;
                    (G) promote effective strategies for treatment 
                planning, monitoring health outcomes and resource use, 
                sharing information, treatment decision support, and 
                organizing care to avoid duplication of service and 
                other medical management approaches intended to improve 
                quality and value of health care services;
                    (H) provide local access to the continuum of health 
                care services in the most appropriate setting, including

[[Page 124 STAT. 515]]

                access to individuals that implement the care plans of 
                patients and coordinate care, such as integrative health 
                care practitioners;
                    (I) collect and report data that permits evaluation 
                of the success of the collaborative effort on patient 
                outcomes, including collection of data on patient 
                experience of care, and identification of areas for 
                improvement; and
                    (J) establish a coordinated system of early 
                identification and referral for children at risk for 
                developmental or behavioral problems such as through the 
                use of infolines, health information technology, or 
                other means as determined by the Secretary;
            (7) provide 24-hour care management and support during 
        transitions in care settings including--
                    (A) a transitional care program that provides onsite 
                visits from the care coordinator, assists with the 
                development of discharge plans and medication 
                reconciliation upon admission to and discharge from the 
                hospitals, nursing home, or other institution setting;
                    (B) discharge planning and counseling support to 
                providers, patients, caregivers, and authorized 
                representatives;
                    (C) assuring that post-discharge care plans include 
                medication management, as appropriate;
                    (D) referrals for mental and behavioral health 
                services, which may include the use of infolines; and
                    (E) transitional health care needs from adolescence 
                to adulthood;
            (8) serve as a liaison to community prevention and treatment 
        programs;
            (9) demonstrate a capacity to implement and maintain health 
        information technology that meets the requirements of certified 
        EHR technology (as defined in section 3000 of the Public Health 
        Service Act (42 U.S.C. 300jj)) to facilitate coordination among 
        members of the applicable care team and affiliated primary care 
        practices; and
            (10) <<NOTE: Reports.>>  where applicable, report to the 
        Secretary information on quality measures used under section 
        399JJ of the Public Health Service Act.

    (d) Requirement for Primary Care Providers.--A provider who 
contracts with a care team shall--
            (1) <<NOTE: Plans.>> provide a care plan to the care team 
        for each patient participant;
            (2) <<NOTE: Records.>> provide access to participant health 
        records; and
            (3) meet regularly with the care team to ensure integration 
        of care.

    (e) Reporting to Secretary.--An entity that receives a grant or 
contract under subsection (a) shall submit to the Secretary a report 
that describes and evaluates, as requested by the Secretary, the 
activities carried out by the entity under subsection (c).
    (f) Definition of Primary Care.--In this section, the term ``primary 
care'' means the provision of integrated, accessible health care 
services by clinicians who are accountable for addressing a large 
majority of personal health care needs, developing a sustained 
partnership with patients, and practicing in the context of family and 
community.

[[Page 124 STAT. 516]]

SEC. 3503. MEDICATION MANAGEMENT SERVICES IN TREATMENT OF CHRONIC 
            DISEASE.

    Title IX of the Public Health Service Act (42 U.S.C. 299 et seq.), 
as amended by section 3501, is further amended by inserting after 
section 934 the following:

``SEC. 935. <<NOTE: 42 USC 299b-35.>> GRANTS OR CONTRACTS TO IMPLEMENT 
            MEDICATION MANAGEMENT SERVICES IN TREATMENT OF CHRONIC 
            DISEASES.

    ``(a) In General.--The Secretary, acting through the Patient Safety 
Research Center established in section 933 (referred to in this section 
as the `Center'), shall establish a program to provide grants or 
contracts to eligible entities to implement medication management 
(referred to in this section as `MTM') services provided by licensed 
pharmacists, as a collaborative, multidisciplinary, inter-professional 
approach to the treatment of chronic diseases for targeted individuals, 
to improve the quality of care and reduce overall cost in the treatment 
of such diseases. <<NOTE: Deadline.>> The Secretary shall commence the 
program under this section not later than May 1, 2010.

    ``(b) <<NOTE: Plans.>> Eligible Entities.--To be eligible to receive 
a grant or contract under subsection (a), an entity shall--
            ``(1) provide a setting appropriate for MTM services, as 
        recommended by the experts described in subsection (e);
            ``(2) submit to the Secretary a plan for achieving long-term 
        financial sustainability;
            ``(3) where applicable, submit a plan for coordinating MTM 
        services through local community health teams established in 
        section 3502 of the Patient Protection and Affordable Care Act 
        or in collaboration with primary care extension programs 
        established in section 399W;
            ``(4) submit a plan for meeting the requirements under 
        subsection (c); and
            ``(5) submit to the Secretary such other information as the 
        Secretary may require.

    ``(c) MTM Services to Targeted Individuals.--The MTM services 
provided with the assistance of a grant or contract awarded under 
subsection (a) shall, as allowed by State law including applicable 
collaborative pharmacy practice agreements, include--
            ``(1) performing or obtaining necessary assessments of the 
        health and functional status of each patient receiving such MTM 
        services;
            ``(2) formulating a medication treatment plan according to 
        therapeutic goals agreed upon by the prescriber and the patient 
        or caregiver or authorized representative of the patient;
            ``(3) selecting, initiating, modifying, recommending changes 
        to, or administering medication therapy;
            ``(4) monitoring, which may include access to, ordering, or 
        performing laboratory assessments, and evaluating the response 
        of the patient to therapy, including safety and effectiveness;
            ``(5) performing an initial comprehensive medication review 
        to identify, resolve, and prevent medication-related problems, 
        including adverse drug events, quarterly targeted medication 
        reviews for ongoing monitoring, and additional followup 
        interventions on a schedule developed collaboratively with the 
        prescriber;

[[Page 124 STAT. 517]]

            ``(6) documenting the care delivered and communicating 
        essential information about such care, including a summary of 
        the medication review, and the recommendations of the pharmacist 
        to other appropriate health care providers of the patient in a 
        timely fashion;
            ``(7) providing education and training designed to enhance 
        the understanding and appropriate use of the medications by the 
        patient, caregiver, and other authorized representative;
            ``(8) providing information, support services, and resources 
        and strategies designed to enhance patient adherence with 
        therapeutic regimens;
            ``(9) coordinating and integrating MTM services within the 
        broader health care management services provided to the patient; 
        and
            ``(10) such other patient care services allowed under 
        pharmacist scopes of practice in use in other Federal programs 
        that have implemented MTM services.

    ``(d) Targeted Individuals.--MTM services provided by licensed 
pharmacists under a grant or contract awarded under subsection (a) shall 
be offered to targeted individuals who--
            ``(1) take 4 or more prescribed medications (including over-
        the-counter medications and dietary supplements);
            ``(2) take any `high risk' medications;
            ``(3) have 2 or more chronic diseases, as identified by the 
        Secretary; or
            ``(4) have undergone a transition of care, or other factors, 
        as determined by the Secretary, that are likely to create a high 
        risk of medication-related problems.

    ``(e) Consultation With Experts.--In designing and implementing MTM 
services provided under grants or contracts awarded under subsection 
(a), the Secretary shall consult with Federal, State, private, public-
private, and academic entities, pharmacy and pharmacist organizations, 
health care organizations, consumer advocates, chronic disease groups, 
and other stakeholders involved with the research, dissemination, and 
implementation of pharmacist-delivered MTM services, as the Secretary 
determines appropriate. <<NOTE: Determination.>> The Secretary, in 
collaboration with this group, shall determine whether it is possible to 
incorporate rapid cycle process improvement concepts in use in other 
Federal programs that have implemented MTM services.

    ``(f) Reporting to the Secretary.--An entity that receives a grant 
or contract under subsection (a) shall submit to the Secretary a report 
that describes and evaluates, as requested by the Secretary, the 
activities carried out under subsection (c), including quality measures 
endorsed by the entity with a contract under section 1890 of the Social 
Security Act, as determined by the Secretary.
    ``(g) Evaluation and Report.--The Secretary shall submit to the 
relevant committees of Congress a report which shall--
            ``(1) assess the clinical effectiveness of pharmacist-
        provided services under the MTM services program, as compared to 
        usual care, including an evaluation of whether enrollees 
        maintained better health with fewer hospitalizations and 
        emergency room visits than similar patients not enrolled in the 
        program;
            ``(2) assess changes in overall health care resource use by 
        targeted individuals;

[[Page 124 STAT. 518]]

            ``(3) assess patient and prescriber satisfaction with MTM 
        services;
            ``(4) assess the impact of patient-cost sharing requirements 
        on medication adherence and recommendations for modifications;
            ``(5) identify and evaluate other factors that may impact 
        clinical and economic outcomes, including demographic 
        characteristics, clinical characteristics, and health services 
        use of the patient, as well as characteristics of the regimen, 
        pharmacy benefit, and MTM services provided; and
            ``(6) evaluate the extent to which participating pharmacists 
        who maintain a dispensing role have a conflict of interest in 
        the provision of MTM services, and if such conflict is found, 
        provide recommendations on how such a conflict might be 
        appropriately addressed.

    ``(h) Grants or Contracts To Fund Development of Performance 
Measures.--The Secretary may, through the quality measure development 
program under section 931 of the Public Health Service Act, award grants 
or contracts to eligible entities for the purpose of funding the 
development of performance measures that assess the use and 
effectiveness of medication therapy management services.''.

SEC. 3504. DESIGN AND IMPLEMENTATION OF REGIONALIZED SYSTEMS FOR 
            EMERGENCY CARE.

    (a) In General.--Title XII of the Public Health Service Act (42 
U.S.C. 300d et seq.) is amended--
            (1) <<NOTE: 42 USC 300d-5.>>  in section 1203--
                    (A) in the section heading, by inserting ``for 
                trauma systems'' after ``grants''; and
                    (B) in subsection (a), by striking ``Administrator 
                of the Health Resources and Services Administration'' 
                and inserting ``Assistant Secretary for Preparedness and 
                Response'';
            (2) by inserting after section 1203 the following:

``SEC. 1204. <<NOTE: Contracts. 42 USC 300d-6.>> COMPETITIVE GRANTS FOR 
            REGIONALIZED SYSTEMS FOR EMERGENCY CARE RESPONSE.

    ``(a) In General.--The Secretary, acting through the Assistant 
Secretary for Preparedness and Response, shall award not fewer than 4 
multiyear contracts or competitive grants to eligible entities to 
support pilot projects that design, implement, and evaluate innovative 
models of regionalized, comprehensive, and accountable emergency care 
and trauma systems.
    ``(b) <<NOTE: Definitions.>>  Eligible Entity; Region.--In this 
section:
            ``(1) Eligible entity.--The term `eligible entity' means--
                    ``(A) a State or a partnership of 1 or more States 
                and 1 or more local governments; or
                    ``(B) an Indian tribe (as defined in section 4 of 
                the Indian Health Care Improvement Act) or a partnership 
                of 1 or more Indian tribes.
            ``(2) Region.--The term `region' means an area within a 
        State, an area that lies within multiple States, or a similar 
        area (such as a multicounty area), as determined by the 
        Secretary.
            ``(3) Emergency services.--The term `emergency services' 
        includes acute, prehospital, and trauma care.

[[Page 124 STAT. 519]]

    ``(c) Pilot Projects.--The Secretary shall award a contract or grant 
under subsection (a) to an eligible entity that proposes a pilot project 
to design, implement, and evaluate an emergency medical and trauma 
system that--
            ``(1) coordinates with public health and safety services, 
        emergency medical services, medical facilities, trauma centers, 
        and other entities in a region to develop an approach to 
        emergency medical and trauma system access throughout the 
        region, including 9-1-1 Public Safety Answering Points and 
        emergency medical dispatch;
            ``(2) includes a mechanism, such as a regional medical 
        direction or transport communications system, that operates 
        throughout the region to ensure that the patient is taken to the 
        medically appropriate facility (whether an initial facility or a 
        higher-level facility) in a timely fashion;
            ``(3) allows for the tracking of prehospital and hospital 
        resources, including inpatient bed capacity, emergency 
        department capacity, trauma center capacity, on-call specialist 
        coverage, ambulance diversion status, and the coordination of 
        such tracking with regional communications and hospital 
        destination decisions; and
            ``(4) includes a consistent region-wide prehospital, 
        hospital, and interfacility data management system that--
                    ``(A) submits data to the National EMS Information 
                System, the National Trauma Data Bank, and others;
                    ``(B) reports data to appropriate Federal and State 
                databanks and registries; and
                    ``(C) contains information sufficient to evaluate 
                key elements of prehospital care, hospital destination 
                decisions, including initial hospital and interfacility 
                decisions, and relevant health outcomes of hospital 
                care.

    ``(d) Application.--
            ``(1) In general.--An eligible entity that seeks a contract 
        or grant described in subsection (a) shall submit to the 
        Secretary an application at such time and in such manner as the 
        Secretary may require.
            ``(2) Application information.--Each application shall 
        include--
                    ``(A) an assurance from the eligible entity that the 
                proposed system--
                          ``(i) has been coordinated with the applicable 
                      State Office of Emergency Medical Services (or 
                      equivalent State office);
                          ``(ii) includes consistent indirect and direct 
                      medical oversight of prehospital, hospital, and 
                      interfacility transport throughout the region;
                          ``(iii) coordinates prehospital treatment and 
                      triage, hospital destination, and interfacility 
                      transport throughout the region;
                          ``(iv) includes a categorization or 
                      designation system for special medical facilities 
                      throughout the region that is integrated with 
                      transport and destination protocols;
                          ``(v) includes a regional medical direction, 
                      patient tracking, and resource allocation system 
                      that supports day-to-day emergency care and surge 
                      capacity and is

[[Page 124 STAT. 520]]

                      integrated with other components of the national 
                      and State emergency preparedness system; and
                          ``(vi) addresses pediatric concerns related to 
                      integration, planning, preparedness, and 
                      coordination of emergency medical services for 
                      infants, children and adolescents; and
                    ``(B) such other information as the Secretary may 
                require.

    ``(e) Requirement of Matching Funds.--
            ``(1) In general.--The Secretary may not make a grant under 
        this section unless the State (or consortia of States) involved 
        agrees, with respect to the costs to be incurred by the State 
        (or consortia) in carrying out the purpose for which such grant 
        was made, to make available non-Federal contributions (in cash 
        or in kind under paragraph (2)) toward such costs in an amount 
        equal to not less than $1 for each $3 of Federal funds provided 
        in the grant. Such contributions may be made directly or through 
        donations from public or private entities.
            ``(2) Non-federal contributions.--Non-Federal contributions 
        required in paragraph (1) may be in cash or in kind, fairly 
        evaluated, including equipment or services (and excluding 
        indirect or overhead costs). Amounts provided by the Federal 
        Government, or services assisted or subsidized to any 
        significant extent by the Federal Government, may not be 
        included in determining the amount of such non-Federal 
        contributions.

    ``(f) Priority.--The Secretary shall give priority for the award of 
the contracts or grants described in subsection (a) to any eligible 
entity that serves a population in a medically underserved area (as 
defined in section 330(b)(3)).
    ``(g) Report.--Not later than 90 days after the completion of a 
pilot project under subsection (a), the recipient of such contract or 
grant described in shall submit to the Secretary a report containing the 
results of an evaluation of the program, including an identification 
of--
            ``(1) the impact of the regional, accountable emergency care 
        and trauma system on patient health outcomes for various 
        critical care categories, such as trauma, stroke, cardiac 
        emergencies, neurological emergencies, and pediatric 
        emergencies;
            ``(2) the system characteristics that contribute to the 
        effectiveness and efficiency of the program (or lack thereof);
            ``(3) methods of assuring the long-term financial 
        sustainability of the emergency care and trauma system;
            ``(4) the State and local legislation necessary to implement 
        and to maintain the system;
            ``(5) the barriers to developing regionalized, accountable 
        emergency care and trauma systems, as well as the methods to 
        overcome such barriers; and
            ``(6) recommendations on the utilization of available 
        funding for future regionalization efforts.

    ``(h) Dissemination of Findings.--The <<NOTE: Public 
information.>> Secretary shall, as appropriate, disseminate to the 
public and to the appropriate Committees of the Congress, the 
information contained in a report made under subsection (g).''; and
            (3) in <<NOTE: 42 USC 300d-32.>> section 1232--
                    (A) in subsection (a), by striking ``appropriated'' 
                and all that follows through the period at the end and 
                inserting

[[Page 124 STAT. 521]]

                ``appropriated $24,000,000 for each of fiscal years 2010 
                through 2014.''; and
                    (B) by inserting after subsection (c) the following:

    ``(d) Authority.--For <<NOTE: Effective date.>> the purpose of 
carrying out parts A through C, beginning on the date of enactment of 
the Patient Protection and Affordable Care Act, the Secretary shall 
transfer authority in administering grants and related authorities under 
such parts from the Administrator of the Health Resources and Services 
Administration to the Assistant Secretary for Preparedness and 
Response.''.

    (b) Support for Emergency Medicine Research.--Part H of title IV of 
the Public Health Service Act (42 U.S.C. 289 et seq.) is amended by 
inserting after the section 498C the following:

``SEC. 498D. <<NOTE: 42 USC 289g-4.>> SUPPORT FOR EMERGENCY MEDICINE 
            RESEARCH.

    ``(a) Emergency Medical Research.--The Secretary shall support 
Federal programs administered by the National Institutes of Health, the 
Agency for Healthcare Research and Quality, the Health Resources and 
Services Administration, the Centers for Disease Control and Prevention, 
and other agencies involved in improving the emergency care system to 
expand and accelerate research in emergency medical care systems and 
emergency medicine, including--
            ``(1) the basic science of emergency medicine;
            ``(2) the model of service delivery and the components of 
        such models that contribute to enhanced patient health outcomes;
            ``(3) the translation of basic scientific research into 
        improved practice; and
            ``(4) the development of timely and efficient delivery of 
        health services.

    ``(b) Pediatric Emergency Medical Research.--The Secretary shall 
support Federal programs administered by the National Institutes of 
Health, the Agency for Healthcare Research and Quality, the Health 
Resources and Services Administration, the Centers for Disease Control 
and Prevention, and other agencies to coordinate and expand research in 
pediatric emergency medical care systems and pediatric emergency 
medicine, including--
            ``(1) an examination of the gaps and opportunities in 
        pediatric emergency care research and a strategy for the optimal 
        organization and funding of such research;
            ``(2) the role of pediatric emergency services as an 
        integrated component of the overall health system;
            ``(3) system-wide pediatric emergency care planning, 
        preparedness, coordination, and funding;
            ``(4) pediatric training in professional education; and
            ``(5) research in pediatric emergency care, specifically on 
        the efficacy, safety, and health outcomes of medications used 
        for infants, children, and adolescents in emergency care 
        settings in order to improve patient safety.

    ``(c) Impact Research.--The Secretary shall support research to 
determine the estimated economic impact of, and savings that result 
from, the implementation of coordinated emergency care systems.
    ``(d) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be necessary for 
each of fiscal years 2010 through 2014.''.

[[Page 124 STAT. 522]]

SEC. 3505. TRAUMA CARE CENTERS AND SERVICE AVAILABILITY.

    (a) Trauma Care Centers.--
            (1) Grants for trauma care centers.--Section 1241 of the 
        Public Health Service Act (42 U.S.C. 300d-41) is amended by 
        striking subsections (a) and (b) and inserting the following:

    ``(a) In General.--The Secretary shall establish 3 programs to award 
grants to qualified public, nonprofit Indian Health Service, Indian 
tribal, and urban Indian trauma centers--
            ``(1) to assist in defraying substantial uncompensated care 
        costs;
            ``(2) to further the core missions of such trauma centers, 
        including by addressing costs associated with patient 
        stabilization and transfer, trauma education and outreach, 
        coordination with local and regional trauma systems, essential 
        personnel and other fixed costs, and expenses associated with 
        employee and non-employee physician services; and
            ``(3) to provide emergency relief to ensure the continued 
        and future availability of trauma services.

    ``(b) Minimum Qualifications of Trauma Centers.--
            ``(1) Participation in trauma care system operating under 
        certain professional guidelines.--Except as provided in 
        paragraph (2), the Secretary may not award a grant to a trauma 
        center under subsection (a) unless the trauma center is a 
        participant in a trauma system that substantially complies with 
        section 1213.
            ``(2) Exemption.--Paragraph (1) shall not apply to trauma 
        centers that are located in States with no existing trauma care 
        system.
            ``(3) Qualification for substantial uncompensated care 
        costs.--The Secretary shall award substantial uncompensated care 
        grants under subsection (a)(1) only to trauma centers meeting at 
        least 1 of the criteria in 1 of the following 3 categories:
                    ``(A) Category a.--The criteria for category A are 
                as follows:
                          ``(i) At least 40 percent of the visits in the 
                      emergency department of the hospital in which the 
                      trauma center is located were charity or self-pay 
                      patients.
                          ``(ii) At least 50 percent of the visits in 
                      such emergency department were Medicaid (under 
                      title XIX of the Social Security Act (42 U.S.C. 
                      1396 et seq.)) and charity and self-pay patients 
                      combined.
                    ``(B) Category b.--The criteria for category B are 
                as follows:
                          ``(i) At least 35 percent of the visits in the 
                      emergency department were charity or self-pay 
                      patients.
                          ``(ii) At least 50 percent of the visits in 
                      the emergency department were Medicaid and charity 
                      and self-pay patients combined.
                    ``(C) Category c.--The criteria for category C are 
                as follows:
                          ``(i) At least 20 percent of the visits in the 
                      emergency department were charity or self-pay 
                      patients.
                          ``(ii) At least 30 percent of the visits in 
                      the emergency department were Medicaid and charity 
                      and self-pay patients combined.

[[Page 124 STAT. 523]]

            ``(4) Trauma centers in 1115 waiver states.--Notwithstanding 
        paragraph (3), the Secretary may award a substantial 
        uncompensated care grant to a trauma center under subsection 
        (a)(1) if the trauma center qualifies for funds under a Low 
        Income Pool or Safety Net Care Pool established through a waiver 
        approved under section 1115 of the Social Security Act (42 
        U.S.C. 1315).
            ``(5) Designation.--The Secretary may not award a grant to a 
        trauma center unless such trauma center is verified by the 
        American College of Surgeons or designated by an equivalent 
        State or local agency.

    ``(c) Additional Requirements.--The Secretary may not award a grant 
to a trauma center under subsection (a)(1) unless such trauma center--
            ``(1) submits <<NOTE: Plans.>> to the Secretary a plan 
        satisfactory to the Secretary that demonstrates a continued 
        commitment to serving trauma patients regardless of their 
        ability to pay; and
            ``(2) has policies in place to assist patients who cannot 
        pay for part or all of the care they receive, including a 
        sliding fee scale, and to ensure fair billing and collection 
        practices.''.
            (2) Considerations in making grants.--Section 1242 of the 
        Public Health Service Act (42 U.S.C. 300d-42) is amended by 
        striking subsections (a) and (b) and inserting the following:

    ``(a) Substantial Uncompensated Care Awards.--
            ``(1) In general.--The Secretary shall establish an award 
        basis for each eligible trauma center for grants under section 
        1241(a)(1) according to the percentage described in paragraph 
        (2), subject to the requirements of section 1241(b)(3).
            ``(2) Percentages.--The applicable percentages are as 
        follows:
                    ``(A) With respect to a category A trauma center, 
                100 percent of the uncompensated care costs.
                    ``(B) With respect to a category B trauma center, 
                not more than 75 percent of the uncompensated care 
                costs.
                    ``(C) With respect to a category C trauma center, 
                not more than 50 percent of the uncompensated care 
                costs.

    ``(b) Core Mission Awards.--
            ``(1) In general.--In awarding grants under section 
        1241(a)(2), the Secretary shall--
                    ``(A) reserve 25 percent of the amount allocated for 
                core mission awards for Level III and Level IV trauma 
                centers; and
                    ``(B) reserve 25 percent of the amount allocated for 
                core mission awards for large urban Level I and II 
                trauma centers--
                          ``(i) that have at least 1 graduate medical 
                      education fellowship in trauma or trauma related 
                      specialties for which demand is exceeding supply;
                          ``(ii) for which--
                                    ``(I) annual uncompensated care 
                                costs exceed $10,000,000; or
                                    ``(II) at least 20 percent of 
                                emergency department visits are charity 
                                or self-pay or Medicaid patients; and
                          ``(iii) that are not eligible for substantial 
                      uncompensated care awards under section 
                      1241(a)(1).

[[Page 124 STAT. 524]]

    ``(c) Emergency Awards.--In awarding grants under section 
1241(a)(3), the Secretary shall--
            ``(1) give preference to any application submitted by a 
        trauma center that provides trauma care in a geographic area in 
        which the availability of trauma care has significantly 
        decreased or will significantly decrease if the center is forced 
        to close or downgrade service or growth in demand for trauma 
        services exceeds capacity; and
            ``(2) reallocate any emergency awards funds not obligated 
        due to insufficient, or a lack of qualified, applications to the 
        significant uncompensated care award program.''.
            (3) Certain agreements.--Section 1243 of the Public Health 
        Service Act (42 U.S.C. 300d-43) is amended by striking 
        subsections (a), (b), and (c) and inserting the following:

    ``(a) Maintenance of Financial Support.--The Secretary may require a 
trauma center receiving a grant under section 1241(a) to maintain access 
to trauma services at comparable levels to the prior year during the 
grant period.
    ``(b) Trauma Care Registry.--The Secretary may require the trauma 
center receiving a grant under section 1241(a) to provide data to a 
national and centralized registry of trauma cases, in accordance with 
guidelines developed by the American College of Surgeons, and as the 
Secretary may otherwise require.''.
            (4) General provisions.--Section 1244 of the Public Health 
        Service Act (42 U.S.C. 300d-44) is amended by striking 
        subsections (a), (b), and (c) and inserting the following:

    ``(a) Application.--The Secretary may not award a grant to a trauma 
center under section 1241(a) unless such center submits an application 
for the grant to the Secretary and the application is in such form, is 
made in such manner, and contains such agreements, assurances, and 
information as the Secretary determines to be necessary to carry out 
this part.
    ``(b) Limitation on Duration of Support.--The period <<NOTE: Waiver 
authority.>> during which a trauma center receives payments under a 
grant under section 1241(a)(3) shall be for 3 fiscal years, except that 
the Secretary may waive such requirement for a center and authorize such 
center to receive such payments for 1 additional fiscal year.

    ``(c) Limitation on Amount of Grant.--Notwithstanding section 
1242(a), a grant under section 1241 may not be made in an amount 
exceeding $2,000,000 for each fiscal year.
    ``(d) Eligibility.--Except as provided in section 
1242(b)(1)(B)(iii), acquisition of, or eligibility for, a grant under 
section 1241(a) shall not preclude a trauma center from being eligible 
for other grants described in such section.
    ``(e) Funding Distribution.--Of the total amount appropriated for a 
fiscal year under section 1245, 70 percent shall be used for substantial 
uncompensated care awards under section 1241(a)(1), 20 percent shall be 
used for core mission awards under section 1241(a)(2), and 10 percent 
shall be used for emergency awards under section 1241(a)(3).
    ``(f) Minimum Allowance.--Notwithstanding subsection (e), if the 
amount appropriated for a fiscal year under section 1245 is less than 
$25,000,000, all available funding for such fiscal year shall be used 
for substantial uncompensated care awards under section 1241(a)(1).
    ``(g) Substantial Uncompensated Care Award Distribution and 
Proportional Share.--Notwithstanding section 1242(a), of

[[Page 124 STAT. 525]]

the amount appropriated for substantial uncompensated care grants for a 
fiscal year, the Secretary shall--
            ``(1) make available--
                    ``(A) 50 percent of such funds for category A trauma 
                center grantees;
                    ``(B) 35 percent of such funds for category B trauma 
                center grantees; and
                    ``(C) 15 percent of such funds for category C trauma 
                center grantees; and
            ``(2) provide available funds within each category in a 
        manner proportional to the award basis specified in section 
        1242(a)(2) to each eligible trauma center.

    ``(h) Report.--Beginning 2 years after the date of enactment of the 
Patient Protection and Affordable Care Act, and every 2 years 
thereafter, the Secretary shall biennially report to Congress regarding 
the status of the grants made under section 1241 and on the overall 
financial stability of trauma centers.''.
            (5) Authorization of appropriations.--Section 1245 of the 
        Public Health Service Act (42 U.S.C. 300d-45) is amended to read 
        as follows:

``SEC. 1245. <<NOTE: 42 USC 300d-45.>> AUTHORIZATION OF APPROPRIATIONS.

    ``For the purpose of carrying out this part, there are authorized to 
be appropriated $100,000,000 for fiscal year 2009, and such sums as may 
be necessary for each of fiscal years 2010 through 2015. Such 
authorization of appropriations is in addition to any other 
authorization of appropriations or amounts that are available for such 
purpose.''.
            (6) Definition.--Part D of title XII of the Public Health 
        Service Act (42 U.S.C. 300d-41 et seq.) is amended by adding at 
        the end the following:

``SEC. 1246. <<NOTE: 42 USC 300d-46.>> DEFINITION.

    ``In this part, the term `uncompensated care costs' means 
unreimbursed costs from serving self-pay, charity, or Medicaid patients, 
without regard to payment under section 1923 of the Social Security Act, 
all of which are attributable to emergency care and trauma care, 
including costs related to subsequent inpatient admissions to the 
hospital.''.
    (b) Trauma Service Availability.--Title XII of the Public Health 
Service Act (42 U.S.C. 300d et seq.) is amended by adding at the end the 
following:

                  ``PART H--TRAUMA SERVICE AVAILABILITY

``SEC. 1281. <<NOTE: 42 USC 300d-81.>> GRANTS TO STATES.

    ``(a) Establishment.--To promote universal access to trauma care 
services provided by trauma centers and trauma-related physician 
specialties, the Secretary shall provide funding to States to enable 
such States to award grants to eligible entities for the purposes 
described in this section.
    ``(b) Awarding of Grants by States.--Each State may award grants to 
eligible entities within the State for the purposes described in 
subparagraph (d).
    ``(c) Eligibility.--
            ``(1) In general.--To be eligible to receive a grant under 
        subsection (b) an entity shall--
                    ``(A) be--

[[Page 124 STAT. 526]]

                          ``(i) a public or nonprofit trauma center or 
                      consortium thereof that meets that requirements of 
                      paragraphs (1), (2), and (5) of section 1241(b);
                          ``(ii) a safety net public or nonprofit trauma 
                      center that meets the requirements of paragraphs 
                      (1) through (5) of section 1241(b); or
                          ``(iii) a hospital in an underserved area (as 
                      defined by the State) that seeks to establish new 
                      trauma services; and
                    ``(B) submit to the State an application at such 
                time, in such manner, and containing such information as 
                the State may require.
            ``(2) Limitation.--A State shall use at least 40 percent of 
        the amount available to the State under this part for a fiscal 
        year to award grants to safety net trauma centers described in 
        paragraph (1)(A)(ii).

    ``(d) Use of Funds.--The recipient of a grant under subsection (b) 
shall carry out 1 or more of the following activities consistent with 
subsection (b):
            ``(1) Providing trauma centers with funding to support 
        physician compensation in trauma-related physician specialties 
        where shortages exist in the region involved, with priority 
        provided to safety net trauma centers described in subsection 
        (c)(1)(A)(ii).
            ``(2) Providing for individual safety net trauma center 
        fiscal stability and costs related to having service that is 
        available 24 hours a day, 7 days a week, with priority provided 
        to safety net trauma centers described in subsection 
        (c)(1)(A)(ii) located in urban, border, and rural areas.
            ``(3) Reducing trauma center overcrowding at specific trauma 
        centers related to throughput of trauma patients.
            ``(4) Establishing new trauma services in underserved areas 
        as defined by the State.
            ``(5) Enhancing collaboration between trauma centers and 
        other hospitals and emergency medical services personnel related 
        to trauma service availability.
            ``(6) Making capital improvements to enhance access and 
        expedite trauma care, including providing helipads and 
        associated safety infrastructure.
            ``(7) Enhancing trauma surge capacity at specific trauma 
        centers.
            ``(8) Ensuring expedient receipt of trauma patients 
        transported by ground or air to the appropriate trauma center.
            ``(9) Enhancing interstate trauma center collaboration.

    ``(e) Limitation.--
            ``(1) In general.--A State may use not more than 20 percent 
        of the amount available to the State under this part for a 
        fiscal year for administrative costs associated with awarding 
        grants and related costs.
            ``(2) Maintenance of effort.--The Secretary may not provide 
        funding to a State under this part unless the State agrees that 
        such funds will be used to supplement and not supplant State 
        funding otherwise available for the activities and costs 
        described in this part.

    ``(f) Distribution of Funds.--The <<NOTE: Applicability.>> following 
shall apply with respect to grants provided in this part:

[[Page 124 STAT. 527]]

            ``(1) Less than $10,000,000.--If the amount of 
        appropriations for this part in a fiscal year is less than 
        $10,000,000, the Secretary shall divide such funding evenly 
        among only those States that have 1 or more trauma centers 
        eligible for funding under section 1241(b)(3)(A).
            ``(2) Less than $20,000,000.--If the amount of 
        appropriations in a fiscal year is less than $20,000,000, the 
        Secretary shall divide such funding evenly among only those 
        States that have 1 or more trauma centers eligible for funding 
        under subparagraphs (A) and (B) of section 1241(b)(3).
            ``(3) Less than $30,000,000.--If the amount of 
        appropriations for this part in a fiscal year is less than 
        $30,000,000, the Secretary shall divide such funding evenly 
        among only those States that have 1 or more trauma centers 
        eligible for funding under section 1241(b)(3).
            ``(4) $30,000,000 or more.--If the amount of appropriations 
        for this part in a fiscal year is $30,000,000 or more, the 
        Secretary shall divide such funding evenly among all States.

``SEC. 1282. <<NOTE: 42 USC 300d-82.>> AUTHORIZATION OF APPROPRIATIONS.

    ``For the purpose of carrying out this part, there is authorized to 
be appropriated $100,000,000 for each of fiscal years 2010 through 
2015.''.

SEC. 3506. PROGRAM TO FACILITATE SHARED DECISIONMAKING.

    Part D of title IX of the Public Health Service Act, as amended by 
section 3503, is further amended by adding at the end the following:

``SEC. 936. <<NOTE: 42 USC 299b-36.>> PROGRAM TO FACILITATE SHARED 
            DECISIONMAKING.

    ``(a) Purpose.--The purpose of this section is to facilitate 
collaborative processes between patients, caregivers or authorized 
representatives, and clinicians that engages the patient, caregiver or 
authorized representative in decisionmaking, provides patients, 
caregivers or authorized representatives with information about trade-
offs among treatment options, and facilitates the incorporation of 
patient preferences and values into the medical plan.
    ``(b) Definitions.--In this section:
            ``(1) Patient decision aid.--The term `patient decision aid' 
        means an educational tool that helps patients, caregivers or 
        authorized representatives understand and communicate their 
        beliefs and preferences related to their treatment options, and 
        to decide with their health care provider what treatments are 
        best for them based on their treatment options, scientific 
        evidence, circumstances, beliefs, and preferences.
            ``(2) Preference sensitive care.--The term `preference 
        sensitive care' means medical care for which the clinical 
        evidence does not clearly support one treatment option such that 
        the appropriate course of treatment depends on the values of the 
        patient or the preferences of the patient, caregivers or 
        authorized representatives regarding the benefits, harms and 
        scientific evidence for each treatment option, the use of such 
        care should depend on the informed patient choice among 
        clinically appropriate treatment options.

    ``(c) Establishment of Independent Standards for Patient Decision 
Aids for Preference Sensitive Care.--
            ``(1) Contract with entity to establish standards and 
        certify patient decision aids.--

[[Page 124 STAT. 528]]

                    ``(A) In general.--For purposes of supporting 
                consensus-based standards for patient decision aids for 
                preference sensitive care and a certification process 
                for patient decision aids for use in the Federal health 
                programs and by other interested parties, the Secretary 
                shall have in effect a contract with the entity with a 
                contract under section 1890 of the Social Security Act. 
                Such contract shall provide that the entity perform the 
                duties described in paragraph (2).
                    ``(B) Timing for first contract.--As soon as 
                practicable after the date of the enactment of this 
                section, the Secretary shall enter into the first 
                contract under subparagraph (A).
                    ``(C) Period of contract.--A contract under 
                subparagraph (A) shall be for a period of 18 months 
                (except such contract may be renewed after a subsequent 
                bidding process).
            ``(2) Duties.--The following duties are described in this 
        paragraph:
                    ``(A) Develop and identify standards for patient 
                decision aids.--The entity shall synthesize evidence and 
                convene a broad range of experts and key stakeholders to 
                develop and identify consensus-based standards to 
                evaluate patient decision aids for preference sensitive 
                care.
                    ``(B) Endorse patient decision aids.--The entity 
                shall review patient decision aids and develop a 
                certification process whether patient decision aids meet 
                the standards developed and identified under 
                subparagraph (A). The entity shall give priority to the 
                review and certification of patient decision aids for 
                preference sensitive care.

    ``(d) Program <<NOTE: Grants. Contracts.>> To Develop, Update and 
Patient Decision Aids To Assist Health Care Providers and Patients.--
            ``(1) In general.--The Secretary, acting through the 
        Director, and in coordination with heads of other relevant 
        agencies, such as the Director of the Centers for Disease 
        Control and Prevention and the Director of the National 
        Institutes of Health, shall establish a program to award grants 
        or contracts--
                    ``(A) to develop, update, and produce patient 
                decision aids for preference sensitive care to assist 
                health care providers in educating patients, caregivers, 
                and authorized representatives concerning the relative 
                safety, relative effectiveness (including possible 
                health outcomes and impact on functional status), and 
                relative cost of treatment or, where appropriate, 
                palliative care options;
                    ``(B) to test such materials to ensure such 
                materials are balanced and evidence based in aiding 
                health care providers and patients, caregivers, and 
                authorized representatives to make informed decisions 
                about patient care and can be easily incorporated into a 
                broad array of practice settings; and
                    ``(C) to educate providers on the use of such 
                materials, including through academic curricula.
            ``(2) Requirements for patient decision aids.--Patient 
        decision aids developed and produced pursuant to a grant or 
        contract under paragraph (1)--

[[Page 124 STAT. 529]]

                    ``(A) shall be designed to engage patients, 
                caregivers, and authorized representatives in informed 
                decisionmaking with health care providers;
                    ``(B) shall present up-to-date clinical evidence 
                about the risks and benefits of treatment options in a 
                form and manner that is age-appropriate and can be 
                adapted for patients, caregivers, and authorized 
                representatives from a variety of cultural and 
                educational backgrounds to reflect the varying needs of 
                consumers and diverse levels of health literacy;
                    ``(C) shall, where appropriate, explain why there is 
                a lack of evidence to support one treatment option over 
                another; and
                    ``(D) shall address health care decisions across the 
                age span, including those affecting vulnerable 
                populations including children.
            ``(3) Distribution.--The Director shall ensure that patient 
        decision aids produced with grants or contracts under this 
        section are available to the public.
            ``(4) Nonduplication of efforts.--The Director shall ensure 
        that the activities under this section of the Agency and other 
        agencies, including the Centers for Disease Control and 
        Prevention and the National Institutes of Health, are free of 
        unnecessary duplication of effort.

    ``(e) Grants To Support Shared Decisionmaking Implementation.--
            ``(1) In general.--The Secretary shall establish a program 
        to provide for the phased-in development, implementation, and 
        evaluation of shared decisionmaking using patient decision aids 
        to meet the objective of improving the understanding of patients 
        of their medical treatment options.
            ``(2) Shared decisionmaking resource centers.--
                    ``(A) In general.--The Secretary shall provide 
                grants for the establishment and support of Shared 
                Decisionmaking Resource Centers (referred to in this 
                subsection as `Centers') to provide technical assistance 
                to providers and to develop and disseminate best 
                practices and other information to support and 
                accelerate adoption, implementation, and effective use 
                of patient decision aids and shared decisionmaking by 
                providers.
                    ``(B) Objectives.--The objective of a Center is to 
                enhance and promote the adoption of patient decision 
                aids and shared decisionmaking through--
                          ``(i) providing assistance to eligible 
                      providers with the implementation and effective 
                      use of, and training on, patient decision aids; 
                      and
                          ``(ii) the dissemination of best practices and 
                      research on the implementation and effective use 
                      of patient decision aids.
            ``(3) Shared decisionmaking participation grants.--
                    ``(A) In general.--The Secretary shall provide 
                grants to health care providers for the development and 
                implementation of shared decisionmaking techniques and 
                to assess the use of such techniques.
                    ``(B) Preference.--In order to facilitate the use of 
                best practices, the Secretary shall provide a preference 
                in making grants under this subsection to health care

[[Page 124 STAT. 530]]

                providers who participate in training by Shared 
                Decisionmaking Resource Centers or comparable training.
                    ``(C) Limitation.--Funds under this paragraph shall 
                not be used to purchase or implement use of patient 
                decision aids other than those certified under the 
                process identified in subsection (c).
            ``(4) Guidance.--The Secretary may issue guidance to 
        eligible grantees under this subsection on the use of patient 
        decision aids.

    ``(f) Funding.--For purposes of carrying out this section there are 
authorized to be appropriated such sums as may be necessary for fiscal 
year 2010 and each subsequent fiscal year.''.

SEC. 3507. PRESENTATION <<NOTE: 21 USC 352 note.>> OF PRESCRIPTION DRUG 
            BENEFIT AND RISK INFORMATION.

    (a) In General.--The <<NOTE: Determination.>> Secretary of Health 
and Human Services (referred to in this section as the ``Secretary''), 
acting through the Commissioner of Food and Drugs, shall determine 
whether the addition of quantitative summaries of the benefits and risks 
of prescription drugs in a standardized format (such as a table or drug 
facts box) to the promotional labeling or print advertising of such 
drugs would improve health care decisionmaking by clinicians and 
patients and consumers.

    (b) Review and Consultation.--In making the determination under 
subsection (a), the Secretary shall review all available scientific 
evidence and research on decisionmaking and social and cognitive 
psychology and consult with drug manufacturers, clinicians, patients and 
consumers, experts in health literacy, representatives of racial and 
ethnic minorities, and experts in women's and pediatric health.
    (c) Report.--Not later than 1 year after the date of enactment of 
this Act, the Secretary shall submit to Congress a report that 
provides--
            (1) the determination by the Secretary under subsection (a); 
        and
            (2) the reasoning and analysis underlying that 
        determination.

    (d) Authority.--If the <<NOTE: Deadline. Regulations.>> Secretary 
determines under subsection (a) that the addition of quantitative 
summaries of the benefits and risks of prescription drugs in a 
standardized format (such as a table or drug facts box) to the 
promotional labeling or print advertising of such drugs would improve 
health care decisionmaking by clinicians and patients and consumers, 
then the Secretary, not later than 3 years after the date of submission 
of the report under subsection (c), shall promulgate proposed 
regulations as necessary to implement such format.

    (e) Clarification.--Nothing in this section shall be construed to 
restrict the existing authorities of the Secretary with respect to 
benefit and risk information.

SEC. 3508. DEMONSTRATION <<NOTE: 42 USC 294j.>> PROGRAM TO INTEGRATE 
            QUALITY IMPROVEMENT AND PATIENT SAFETY TRAINING INTO 
            CLINICAL EDUCATION OF HEALTH PROFESSIONALS.

    (a) In General.--The Secretary may award grants to eligible entities 
or consortia under this section to carry out demonstration projects to 
develop and implement academic curricula that integrates quality 
improvement and patient safety in the clinical

[[Page 124 STAT. 531]]

education of health professionals. Such awards shall be made on a 
competitive basis and pursuant to peer review.
    (b) Eligibility.--To be eligible to receive a grant under subsection 
(a), an entity or consortium shall--
            (1) submit to the Secretary an application at such time, in 
        such manner, and containing such information as the Secretary 
        may require;
            (2) be or include--
                    (A) a health professions school;
                    (B) a school of public health;
                    (C) a school of social work;
                    (D) a school of nursing;
                    (E) a school of pharmacy;
                    (F) an institution with a graduate medical education 
                program; or
                    (G) a school of health care administration;
            (3) collaborate in the development of curricula described in 
        subsection (a) with an organization that accredits such school 
        or institution;
            (4) provide for the collection of data regarding the 
        effectiveness of the demonstration project; and
            (5) provide matching funds in accordance with subsection 
        (c).

    (c) Matching Funds.--
            (1) In general.--The Secretary may award a grant to an 
        entity or consortium under this section only if the entity or 
        consortium agrees to make available non-Federal contributions 
        toward the costs of the program to be funded under the grant in 
        an amount that is not less than $1 for each $5 of Federal funds 
        provided under the grant.
            (2) Determination of amount contributed.--Non-Federal 
        contributions under paragraph (1) may be in cash or in-kind, 
        fairly evaluated, including equipment or services. Amounts 
        provided by the Federal Government, or services assisted or 
        subsidized to any significant extent by the Federal Government, 
        may not be included in determining the amount of such 
        contributions.

    (d) Evaluation.--The <<NOTE: Publication. Public 
information.>> Secretary shall take such action as may be necessary to 
evaluate the projects funded under this section and publish, make 
publicly available, and disseminate the results of such evaluations on 
as wide a basis as is practicable.

    (e) Reports.--Not later than 2 years after the date of enactment of 
this section, and annually thereafter, the Secretary shall submit to the 
Committee on Health, Education, Labor, and Pensions and the Committee on 
Finance of the Senate and the Committee on Energy and Commerce and the 
Committee on Ways and Means of the House of Representatives a report 
that--
            (1) describes the specific projects supported under this 
        section; and
            (2) contains recommendations for Congress based on the 
        evaluation conducted under subsection (d).

SEC. 3509. IMPROVING WOMEN'S HEALTH.

    (a) Health and Human Services Office on Women's Health.--

[[Page 124 STAT. 532]]

            (1) Establishment.--Part A of title II of the Public Health 
        Service Act (42 U.S.C. 202 et seq.) is amended by adding at the 
        end the following:

``SEC. 229. HEALTH <<NOTE: 42 USC 237a.>> AND HUMAN SERVICES OFFICE ON 
            WOMEN'S HEALTH.

    ``(a) Establishment of Office.--There is established within the 
Office of the Secretary, an Office on Women's Health (referred to in 
this section as the `Office'). The Office shall be headed by a Deputy 
Assistant Secretary for Women's Health who may report to the Secretary.
    ``(b) Duties.--The Secretary, acting through the Office, with 
respect to the health concerns of women, shall--
            ``(1) establish short-range and long-range goals and 
        objectives within the Department of Health and Human Services 
        and, as relevant and appropriate, coordinate with other 
        appropriate offices on activities within the Department that 
        relate to disease prevention, health promotion, service 
        delivery, research, and public and health care professional 
        education, for issues of particular concern to women throughout 
        their lifespan;
            ``(2) provide expert advice and consultation to the 
        Secretary concerning scientific, legal, ethical, and policy 
        issues relating to women's health;
            ``(3) monitor the Department of Health and Human Services' 
        offices, agencies, and regional activities regarding women's 
        health and identify needs regarding the coordination of 
        activities, including intramural and extramural 
        multidisciplinary activities;
            ``(4) establish a Department of Health and Human Services 
        Coordinating Committee on Women's Health, which shall be chaired 
        by the Deputy Assistant Secretary for Women's Health and 
        composed of senior level representatives from each of the 
        agencies and offices of the Department of Health and Human 
        Services;
            ``(5) establish <<NOTE: Establishment.>> a National Women's 
        Health Information Center to--
                    ``(A) facilitate the exchange of information 
                regarding matters relating to health information, health 
                promotion, preventive health services, research 
                advances, and education in the appropriate use of health 
                care;
                    ``(B) facilitate access to such information;
                    ``(C) assist in the analysis of issues and problems 
                relating to the matters described in this paragraph; and
                    ``(D) provide technical assistance with respect to 
                the exchange of information (including facilitating the 
                development of materials for such technical assistance);
            ``(6) coordinate efforts to promote women's health programs 
        and policies with the private sector; and
            ``(7) through publications and any other means appropriate, 
        provide for the exchange of information between the Office and 
        recipients of grants, contracts, and agreements under subsection 
        (c), and between the Office and health professionals and the 
        general public.

    ``(c) Grants and Contracts Regarding Duties.--

[[Page 124 STAT. 533]]

            ``(1) Authority.--In carrying out subsection (b), the 
        Secretary may make grants to, and enter into cooperative 
        agreements, contracts, and interagency agreements with, public 
        and private entities, agencies, and organizations.
            ``(2) Evaluation and dissemination.--The Secretary shall 
        directly or through contracts with public and private entities, 
        agencies, and organizations, provide for evaluations of projects 
        carried out with financial assistance provided under paragraph 
        (1) and for the dissemination of information developed as a 
        result of such projects.

    ``(d) Reports.--Not later than 1 year after the date of enactment of 
this section, and every second year thereafter, the Secretary shall 
prepare and submit to the appropriate committees of Congress a report 
describing the activities carried out under this section during the 
period for which the report is being prepared.
    ``(e) Authorization of Appropriations.--For the purpose of carrying 
out this section, there are authorized to be appropriated such sums as 
may be necessary for each of the fiscal years 2010 through 2014.''.
            (2) Transfer of functions.--There <<NOTE: 42 USC 237a 
        note.>> are transferred to the Office on Women's Health 
        (established under section 229 of the Public Health Service Act, 
        as added by this section), all functions exercised by the Office 
        on Women's Health of the Public Health Service prior to the date 
        of enactment of this section, including all personnel and 
        compensation authority, all delegation and assignment authority, 
        and all remaining appropriations. All orders, determinations, 
        rules, regulations, permits, agreements, grants, contracts, 
        certificates, licenses, registrations, privileges, and other 
        administrative actions that--
                    (A) have been issued, made, granted, or allowed to 
                become effective by the President, any Federal agency or 
                official thereof, or by a court of competent 
                jurisdiction, in the performance of functions 
                transferred under this paragraph; and
                    (B) are in effect at the time this section takes 
                effect, or were final before the date of enactment of 
                this section and are to become effective on or after 
                such date,
        shall continue in effect according to their terms until 
        modified, terminated, superseded, set aside, or revoked in 
        accordance with law by the President, the Secretary, or other 
        authorized official, a court of competent jurisdiction, or by 
        operation of law.

    (b) Centers for Disease Control and Prevention Office of Women's 
Health.--Part A of title III of the Public Health Service Act (42 U.S.C. 
241 et seq.) is amended by adding at the end the following:

``SEC. 310A. CENTERS <<NOTE: 42 USC 242s.>> FOR DISEASE CONTROL AND 
            PREVENTION OFFICE OF WOMEN'S HEALTH.

    ``(a) Establishment.--There is established within the Office of the 
Director of the Centers for Disease Control and Prevention, an office to 
be known as the Office of Women's Health (referred to in this section as 
the `Office'). The Office shall be headed by a director who shall be 
appointed by the Director of such Centers.
    ``(b) Purpose.--The Director of the Office shall--

[[Page 124 STAT. 534]]

            ``(1) report to the Director of the Centers for Disease 
        Control and Prevention on the current level of the Centers' 
        activity regarding women's health conditions across, where 
        appropriate, age, biological, and sociocultural contexts, in all 
        aspects of the Centers' work, including prevention programs, 
        public and professional education, services, and treatment;
            ``(2) establish short-range and long-range goals and 
        objectives within the Centers for women's health and, as 
        relevant and appropriate, coordinate with other appropriate 
        offices on activities within the Centers that relate to 
        prevention, research, education and training, service delivery, 
        and policy development, for issues of particular concern to 
        women;
            ``(3) identify projects in women's health that should be 
        conducted or supported by the Centers;
            ``(4) consult with health professionals, nongovernmental 
        organizations, consumer organizations, women's health 
        professionals, and other individuals and groups, as appropriate, 
        on the policy of the Centers with regard to women; and
            ``(5) serve as a member of the Department of Health and 
        Human Services Coordinating Committee on Women's Health 
        (established under section 229(b)(4)).

    ``(c) Definition.--As used in this section, the term `women's health 
conditions', with respect to women of all age, ethnic, and racial 
groups, means diseases, disorders, and conditions--
            ``(1) unique to, significantly more serious for, or 
        significantly more prevalent in women; and
            ``(2) for which the factors of medical risk or type of 
        medical intervention are different for women, or for which there 
        is reasonable evidence that indicates that such factors or types 
        may be different for women.

    ``(d) Authorization of Appropriations.--For the purpose of carrying 
out this section, there are authorized to be appropriated such sums as 
may be necessary for each of the fiscal years 2010 through 2014.''.
    (c) Office of Women's Health Research.--Section 486(a) of the Public 
Health Service Act (42 U.S.C. 287d(a)) is amended by inserting ``and who 
shall report directly to the Director'' before the period at the end 
thereof.
    (d) Substance Abuse and Mental Health Services Administration.--
Section 501(f) of the Public Health Service Act (42 U.S.C. 290aa(f)) is 
amended--
            (1) in paragraph (1), by inserting ``who shall report 
        directly to the Administrator'' before the period;
            (2) by redesignating paragraph (4) as paragraph (5); and
            (3) by inserting after paragraph (3), the following:
            ``(4) Office.--Nothing in this subsection shall be construed 
        to preclude the Secretary from establishing within the Substance 
        Abuse and Mental Health Administration an Office of Women's 
        Health.''.

    (e) Agency for Healthcare Research and Quality Activities Regarding 
Women's Health.--Part <<NOTE: 42 USC 299b-25, 299b-26.>> C of title IX 
of the Public Health Service Act (42 U.S.C. 299c et seq.) is amended--
            (1) by redesignating sections 925 and 926 as sections 926 
        and 927, respectively; and
            (2) by inserting after section 924 the following:

[[Page 124 STAT. 535]]

``SEC. 925. <<NOTE: 42 USC 299b-24a.>> ACTIVITIES REGARDING WOMEN'S 
            HEALTH.

    ``(a) Establishment.--There is established within the Office of the 
Director, an Office of Women's Health and Gender-Based Research 
(referred to in this section as the `Office'). The Office shall be 
headed by a director who shall be appointed by the Director of 
Healthcare and Research Quality.
    ``(b) Purpose.--The official designated under subsection (a) shall--
            ``(1) report to the Director on the current Agency level of 
        activity regarding women's health, across, where appropriate, 
        age, biological, and sociocultural contexts, in all aspects of 
        Agency work, including the development of evidence reports and 
        clinical practice protocols and the conduct of research into 
        patient outcomes, delivery of health care services, quality of 
        care, and access to health care;
            ``(2) establish short-range and long-range goals and 
        objectives within the Agency for research important to women's 
        health and, as relevant and appropriate, coordinate with other 
        appropriate offices on activities within the Agency that relate 
        to health services and medical effectiveness research, for 
        issues of particular concern to women;
            ``(3) identify projects in women's health that should be 
        conducted or supported by the Agency;
            ``(4) consult with health professionals, nongovernmental 
        organizations, consumer organizations, women's health 
        professionals, and other individuals and groups, as appropriate, 
        on Agency policy with regard to women; and
            ``(5) serve as a member of the Department of Health and 
        Human Services Coordinating Committee on Women's Health 
        (established under section 229(b)(4)).''.

    ``(c) Authorization of Appropriations.--For the purpose of carrying 
out this section, there are authorized to be appropriated such sums as 
may be necessary for each of the fiscal years 2010 through 2014.''.
    (f) Health Resources and Services Administration Office of Women's 
Health.--Title VII of the Social Security Act (42 U.S.C. 901 et seq.) is 
amended by adding at the end the following:

``SEC. 713. OFFICE <<NOTE: 42 USC 914.>> OF WOMEN'S HEALTH.

    ``(a) Establishment.--The Secretary shall establish within the 
Office of the Administrator of the Health Resources and Services 
Administration, an office to be known as the Office of Women's Health. 
The Office shall be headed by a director who shall be appointed by the 
Administrator.
    ``(b) Purpose.--The Director of the Office shall--
            ``(1) report to the Administrator on the current 
        Administration level of activity regarding women's health 
        across, where appropriate, age, biological, and sociocultural 
        contexts;
            ``(2) establish short-range and long-range goals and 
        objectives within the Health Resources and Services 
        Administration for women's health and, as relevant and 
        appropriate, coordinate with other appropriate offices on 
        activities within the Administration that relate to health care 
        provider training, health service delivery, research, and 
        demonstration projects, for issues of particular concern to 
        women;
            ``(3) identify projects in women's health that should be 
        conducted or supported by the bureaus of the Administration;

[[Page 124 STAT. 536]]

            ``(4) consult with health professionals, nongovernmental 
        organizations, consumer organizations, women's health 
        professionals, and other individuals and groups, as appropriate, 
        on Administration policy with regard to women; and
            ``(5) serve as a member of the Department of Health and 
        Human Services Coordinating Committee on Women's Health 
        (established under section 229(b)(4) of the Public Health 
        Service Act).

    ``(c) Continued Administration of Existing Programs.--The Director 
of the Office shall assume the authority for the development, 
implementation, administration, and evaluation of any projects carried 
out through the Health Resources and Services Administration relating to 
women's health on the date of enactment of this section.
    ``(d) Definitions.--For purposes of this section:
            ``(1) Administration.--The term `Administration' means the 
        Health Resources and Services Administration.
            ``(2) Administrator.--The term `Administrator' means the 
        Administrator of the Health Resources and Services 
        Administration.
            ``(3) Office.--The term `Office' means the Office of Women's 
        Health established under this section in the Administration.

    ``(e) Authorization of Appropriations.--For the purpose of carrying 
out this section, there are authorized to be appropriated such sums as 
may be necessary for each of the fiscal years 2010 through 2014.''.
    (g) Food and Drug Administration Office of Women's Health.--Chapter 
X of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 391 et seq.) is 
amended by adding at the end the following:

``SEC. 1011. OFFICE <<NOTE: 21 USC 399b.>> OF WOMEN'S HEALTH.

    ``(a) Establishment.--There is established within the Office of the 
Commissioner, an office to be known as the Office of Women's Health 
(referred to in this section as the `Office'). The Office shall be 
headed by a director who shall be appointed by the Commissioner of Food 
and Drugs.
    ``(b) Purpose.--The Director of the Office shall--
            ``(1) report to the Commissioner of Food and Drugs on 
        current Food and Drug Administration (referred to in this 
        section as the `Administration') levels of activity regarding 
        women's participation in clinical trials and the analysis of 
        data by sex in the testing of drugs, medical devices, and 
        biological products across, where appropriate, age, biological, 
        and sociocultural contexts;
            ``(2) establish short-range and long-range goals and 
        objectives within the Administration for issues of particular 
        concern to women's health within the jurisdiction of the 
        Administration, including, where relevant and appropriate, 
        adequate inclusion of women and analysis of data by sex in 
        Administration protocols and policies;
            ``(3) provide information to women and health care providers 
        on those areas in which differences between men and women exist;
            ``(4) consult with pharmaceutical, biologics, and device 
        manufacturers, health professionals with expertise in women's

[[Page 124 STAT. 537]]

        issues, consumer organizations, and women's health professionals 
        on Administration policy with regard to women;
            ``(5) make annual estimates of funds needed to monitor 
        clinical trials and analysis of data by sex in accordance with 
        needs that are identified; and
            ``(6) serve as a member of the Department of Health and 
        Human Services Coordinating Committee on Women's Health 
        (established under section 229(b)(4) of the Public Health 
        Service Act).

    ``(c) Authorization of Appropriations.--For the purpose of carrying 
out this section, there are authorized to be appropriated such sums as 
may be necessary for each of the fiscal years 2010 through 2014.''.
    (h) No New Regulatory <<NOTE: 42 USC 237a note.>> Authority.--
Nothing in this section and the amendments made by this section may be 
construed as establishing regulatory authority or modifying any existing 
regulatory authority.

    (i) Limitation on <<NOTE: 42 USC 237a note.>> Termination.--
Notwithstanding any other provision of law, a Federal office of women's 
health (including the Office of Research on Women's Health of the 
National Institutes of Health) or Federal appointive position with 
primary responsibility over women's health issues (including the 
Associate Administrator for Women's Services under the Substance Abuse 
and Mental Health Services Administration) that is in existence on the 
date of enactment of this section shall not be terminated, reorganized, 
or have any of it's powers or duties transferred unless such 
termination, reorganization, or transfer is approved by Congress through 
the adoption of a concurrent resolution of approval.

    (j) Rule of <<NOTE: 42 USC 237a note.>> Construction.--Nothing in 
this section (or the amendments made by this section) shall be construed 
to limit the authority of the Secretary of Health and Human Services 
with respect to women's health, or with respect to activities carried 
out through the Department of Health and Human Services on the date of 
enactment of this section.

SEC. 3510. PATIENT NAVIGATOR PROGRAM.

    Section 340A of the Public Health Service Act (42 U.S.C. 256a) is 
amended--
            (1) by striking subsection (d)(3) and inserting the 
        following:
            ``(3) Limitations on grant period.--In carrying out this 
        section, the Secretary shall ensure that the total period of a 
        grant does not exceed 4 years.'';
            (2) in subsection (e), by adding at the end the following:
            ``(3) Minimum core proficiencies.--The Secretary shall not 
        award a grant to an entity under this section unless such entity 
        provides assurances that patient navigators recruited, assigned, 
        trained, or employed using grant funds meet minimum core 
        proficiencies, as defined by the entity that submits the 
        application, that are tailored for the main focus or 
        intervention of the navigator involved.''; and
            (3) in subsection (m)--
                    (A) in paragraph (1), by striking ``and $3,500,000 
                for fiscal year 2010.'' and inserting ``$3,500,000 for 
                fiscal year 2010, and such sums as may be necessary for 
                each of fiscal years 2011 through 2015.''; and
                    (B) in paragraph (2), by striking ``2010'' and 
                inserting ``2015''.

[[Page 124 STAT. 538]]

SEC. 3511. AUTHORIZATION OF APPROPRIATIONS.

    Except where otherwise provided in this subtitle (or an amendment 
made by this subtitle), there is authorized to be appropriated such sums 
as may be necessary to carry out this subtitle (and such amendments made 
by this subtitle).

    Subtitle G--Protecting and Improving Guaranteed Medicare Benefits

SEC. 3601. PROTECTING <<NOTE: 42 USC 1395 note.>> AND IMPROVING 
            GUARANTEED MEDICARE BENEFITS.

    (a) Protecting Guaranteed Medicare Benefits.--Nothing in the 
provisions of, or amendments made by, this Act shall result in a 
reduction of guaranteed benefits under title XVIII of the Social 
Security Act.
    (b) Ensuring That Medicare Savings Benefit the Medicare Program and 
Medicare Beneficiaries.--Savings generated for the Medicare program 
under title XVIII of the Social Security Act under the provisions of, 
and amendments made by, this Act shall extend the solvency of the 
Medicare trust funds, reduce Medicare premiums and other cost-sharing 
for beneficiaries, and improve or expand guaranteed Medicare benefits 
and protect access to Medicare providers.

SEC. 3602. NO <<NOTE: 42 USC 1395w-21 note.>> CUTS IN GUARANTEED 
            BENEFITS.

    Nothing in this Act shall result in the reduction or elimination of 
any benefits guaranteed by law to participants in Medicare Advantage 
plans.

   TITLE IV--PREVENTION OF CHRONIC DISEASE AND IMPROVING PUBLIC HEALTH

  Subtitle A--Modernizing Disease Prevention and Public Health Systems

SEC. 4001. NATIONAL <<NOTE: 42 USC 300u-10.>> PREVENTION, HEALTH 
            PROMOTION AND PUBLIC HEALTH COUNCIL.

    (a) Establishment.--The President <<NOTE: President.>> shall 
establish, within the Department of Health and Human Services, a council 
to be known as the ``National Prevention, Health Promotion and Public 
Health Council'' (referred to in this section as the ``Council'').

    (b) Chairperson.--The 
President <<NOTE: President. Appointment.>> shall appoint the Surgeon 
General to serve as the chairperson of the Council.

    (c) Composition.--The Council shall be composed of--
            (1) the Secretary of Health and Human Services;
            (2) the Secretary of Agriculture;
            (3) the Secretary of Education;
            (4) the Chairman of the Federal Trade Commission;
            (5) the Secretary of Transportation;
            (6) the Secretary of Labor;
            (7) the Secretary of Homeland Security;

[[Page 124 STAT. 539]]

            (8) the Administrator of the Environmental Protection 
        Agency;
            (9) the Director of the Office of National Drug Control 
        Policy;
            (10) the Director of the Domestic Policy Council;
            (11) the Assistant Secretary for Indian Affairs;
            (12) the Chairman of the Corporation for National and 
        Community Service; and
            (13) the head of any other Federal agency that the 
        chairperson determines is appropriate.

    (d) Purposes and Duties.--The Council shall--
            (1) provide coordination and leadership at the Federal 
        level, and among all Federal departments and agencies, with 
        respect to prevention, wellness and health promotion practices, 
        the public health system, and integrative health care in the 
        United States;
            (2) after obtaining input from relevant stakeholders, 
        develop a national prevention, health promotion, public health, 
        and integrative health care strategy that incorporates the most 
        effective and achievable means of improving the health status of 
        Americans and reducing the incidence of preventable illness and 
        disability in the United States;
            (3) provide recommendations to the President and Congress 
        concerning the most pressing health issues confronting the 
        United States and changes in Federal policy to achieve national 
        wellness, health promotion, and public health goals, including 
        the reduction of tobacco use, sedentary behavior, and poor 
        nutrition;
            (4) consider and propose evidence-based models, policies, 
        and innovative approaches for the promotion of transformative 
        models of prevention, integrative health, and public health on 
        individual and community levels across the United States;
            (5) establish processes for continual public input, 
        including input from State, regional, and local leadership 
        communities and other relevant stakeholders, including Indian 
        tribes and tribal organizations;
            (6) submit the reports required under subsection (g); and
            (7) carry out other activities determined appropriate by the 
        President.

    (e) Meetings.--The Council shall meet at the call of the 
Chairperson.
    (f) Advisory <<NOTE: President.>> Group.--
            (1) In general.--The <<NOTE: Establishment.>> President 
        shall establish an Advisory Group to the Council to be known as 
        the ``Advisory Group on Prevention, Health Promotion, and 
        Integrative and Public Health'' (hereafter referred to in this 
        section as the ``Advisory Group''). The Advisory Group shall be 
        within the Department of Health and Human Services and report to 
        the Surgeon General.
            (2) Composition.--
                    (A) In general.--The Advisory Group shall be 
                composed of not more than 25 non-Federal members to be 
                appointed by the President.
                    (B) Representation.--In appointing members under 
                subparagraph (A), the President shall ensure that the 
                Advisory Group includes a diverse group of licensed 
                health

[[Page 124 STAT. 540]]

                professionals, including integrative health 
                practitioners who have expertise in--
                          (i) worksite health promotion;
                          (ii) community services, including community 
                      health centers;
                          (iii) preventive medicine;
                          (iv) health coaching;
                          (v) public health education;
                          (vi) geriatrics; and
                          (vii) rehabilitation medicine.
            (3) Purposes and duties.--The Advisory Group shall develop 
        policy and program recommendations and advise the Council on 
        lifestyle-based chronic disease prevention and management, 
        integrative health care practices, and health promotion.

    (g) National Prevention and Health Promotion Strategy.--
Not <<NOTE: Deadline. Public information.>> later than 1 year after the 
date of enactment of this Act, the Chairperson, in consultation with the 
Council, shall develop and make public a national prevention, health 
promotion and public health strategy, and shall review and revise such 
strategy periodically. Such strategy shall--
            (1) set specific goals and objectives for improving the 
        health of the United States through federally-supported 
        prevention, health promotion, and public health programs, 
        consistent with ongoing goal setting efforts conducted by 
        specific agencies;
            (2) establish specific and measurable actions and timelines 
        to carry out the strategy, and determine accountability for 
        meeting those timelines, within and across Federal departments 
        and agencies; and
            (3) make recommendations to improve Federal efforts relating 
        to prevention, health promotion, public health, and integrative 
        health care practices to ensure Federal efforts are consistent 
        with available standards and evidence.

    (h) Report.--Not later than July 1, 2010, and annually thereafter 
through January 1, 2015, the Council shall submit to the President and 
the relevant committees of Congress, a report that--
            (1) describes the activities and efforts on prevention, 
        health promotion, and public health and activities to develop a 
        national strategy conducted by the Council during the period for 
        which the report is prepared;
            (2) describes the national progress in meeting specific 
        prevention, health promotion, and public health goals defined in 
        the strategy and further describes corrective actions 
        recommended by the Council and taken by relevant agencies and 
        organizations to meet these goals;
            (3) contains a list of national priorities on health 
        promotion and disease prevention to address lifestyle behavior 
        modification (smoking cessation, proper nutrition, appropriate 
        exercise, mental health, behavioral health, substance use 
        disorder, and domestic violence screenings) and the prevention 
        measures for the 5 leading disease killers in the United States;
            (4) contains specific science-based initiatives to achieve 
        the measurable goals of Healthy People 2010 regarding nutrition, 
        exercise, and smoking cessation, and targeting the 5 leading 
        disease killers in the United States;
            (5) contains specific plans for consolidating Federal health 
        programs and Centers that exist to promote healthy behavior

[[Page 124 STAT. 541]]

        and reduce disease risk (including eliminating programs and 
        offices determined to be ineffective in meeting the priority 
        goals of Healthy People 2010);
            (6) contains specific plans to ensure that all Federal 
        health care programs are fully coordinated with science-based 
        prevention recommendations by the Director of the Centers for 
        Disease Control and Prevention; and
            (7) contains specific plans to ensure that all non-
        Department of Health and Human Services prevention programs are 
        based on the science-based guidelines developed by the Centers 
        for Disease Control and Prevention under paragraph (4).

    (i) Periodic Reviews.--The 
Secretary <<NOTE: Deadlines. Evaluations.>> and the Comptroller General 
of the United States shall jointly conduct periodic reviews, not less 
than every 5 years, and evaluations of every Federal disease prevention 
and health promotion initiative, program, and agency. Such <<NOTE: Web 
posting.>> reviews shall be evaluated based on effectiveness in meeting 
metrics-based goals with an analysis posted on such agencies' public 
Internet websites.

SEC. 4002. PREVENTION <<NOTE: 42 USC 300u-11.>> AND PUBLIC HEALTH FUND.

    (a) Purpose.--It is the purpose of this section to establish a 
Prevention and Public Health Fund (referred to in this section as the 
``Fund''), to be administered through the Department of Health and Human 
Services, Office of the Secretary, to provide for expanded and sustained 
national investment in prevention and public health programs to improve 
health and help restrain the rate of growth in private and public sector 
health care costs.
    (b) Funding.--There are hereby authorized to be appropriated, and 
appropriated, to the Fund, out of any monies in the Treasury not 
otherwise appropriated--
            (1) for fiscal year 2010, $500,000,000;
            (2) for fiscal year 2011, $750,000,000;
            (3) for fiscal year 2012, $1,000,000,000;
            (4) for fiscal year 2013, $1,250,000,000;
            (5) for fiscal year 2014, $1,500,000,000; and
            (6) for fiscal year 2015, and each fiscal year thereafter, 
        $2,000,000,000.

    (c) Use of Fund.--The Secretary shall transfer amounts in the Fund 
to accounts within the Department of Health and Human Services to 
increase funding, over the fiscal year 2008 level, for programs 
authorized by the Public Health Service Act, for prevention, wellness, 
and public health activities including prevention research and health 
screenings, such as the Community Transformation grant program, the 
Education and Outreach Campaign for Preventive Benefits, and 
immunization programs.
    (d) Transfer Authority.--The Committee on Appropriations of the 
Senate and the Committee on Appropriations of the House of 
Representatives may provide for the transfer of funds in the Fund to 
eligible activities under this section, subject to subsection (c).

SEC. 4003. CLINICAL AND COMMUNITY PREVENTIVE SERVICES.

    (a) Preventive Services Task Force.--Section 915 of the Public 
Health Service Act (42 U.S.C. 299b-4) is amended by striking subsection 
(a) and inserting the following:
    ``(a) Preventive Services Task Force.--
            ``(1) Establishment and purpose.--The Director shall convene 
        an independent Preventive Services Task Force (referred

[[Page 124 STAT. 542]]

        to in this subsection as the `Task Force') to be composed of 
        individuals with appropriate expertise. Such Task Force shall 
        review the scientific evidence related to the effectiveness, 
        appropriateness, and cost-effectiveness of clinical preventive 
        services for the purpose of developing recommendations for the 
        health care community, and updating previous clinical preventive 
        recommendations, to be published in the Guide to Clinical 
        Preventive Services (referred to in this section as the 
        `Guide'), for individuals and organizations delivering clinical 
        services, including primary care professionals, health care 
        systems, professional societies, employers, community 
        organizations, non-profit organizations, Congress and other 
        policy-makers, governmental public health agencies, health care 
        quality organizations, and organizations developing national 
        health objectives. Such recommendations shall consider clinical 
        preventive best practice recommendations from the Agency for 
        Healthcare Research and Quality, the National Institutes of 
        Health, the Centers for Disease Control and Prevention, the 
        Institute of Medicine, specialty medical associations, patient 
        groups, and scientific societies.
            ``(2) Duties.--The duties of the Task Force shall include--
                    ``(A) the development of additional topic areas for 
                new recommendations and interventions related to those 
                topic areas, including those related to specific sub-
                populations and age groups;
                    ``(B) at least once during every 5-year period, 
                review interventions and update recommendations related 
                to existing topic areas, including new or improved 
                techniques to assess the health effects of 
                interventions;
                    ``(C) improved integration with Federal Government 
                health objectives and related target setting for health 
                improvement;
                    ``(D) the enhanced dissemination of recommendations;
                    ``(E) the provision of technical assistance to those 
                health care professionals, agencies and organizations 
                that request help in implementing the Guide 
                recommendations; and
                    ``(F) the submission of yearly reports to Congress 
                and related agencies identifying gaps in research, such 
                as preventive services that receive an insufficient 
                evidence statement, and recommending priority areas that 
                deserve further examination, including areas related to 
                populations and age groups not adequately addressed by 
                current recommendations.
            ``(3) Role of agency.--The Agency shall provide ongoing 
        administrative, research, and technical support for the 
        operations of the Task Force, including coordinating and 
        supporting the dissemination of the recommendations of the Task 
        Force, ensuring adequate staff resources, and assistance to 
        those organizations requesting it for implementation of the 
        Guide's recommendations.
            ``(4) Coordination with community preventive services task 
        force.--The Task Force shall take appropriate steps to 
        coordinate its work with the Community Preventive Services Task 
        Force and the Advisory Committee on Immunization Practices, 
        including the examination of how each task force's 
        recommendations interact at the nexus of clinic and community.

[[Page 124 STAT. 543]]

            ``(5) Operation.--Operation. In carrying out the duties 
        under paragraph (2), the Task Force is not subject to the 
        provisions of Appendix 2 of title 5, United States Code.
            ``(6) Independence.--All members of the Task Force convened 
        under this subsection, and any recommendations made by such 
        members, shall be independent and, to the extent practicable, 
        not subject to political pressure.
            ``(7) Authorization of appropriations.--There are authorized 
        to be appropriated such sums as may be necessary for each fiscal 
        year to carry out the activities of the Task Force.''.

    (b) Community Preventive Services Task Force.--
            (1) In general.--Part P of title III of the Public Health 
        Service Act, as amended by paragraph (2), is amended by adding 
        at the end the following:

``SEC. 399U. COMMUNITY <<NOTE: 42 USC 280g-10.>> PREVENTIVE SERVICES 
            TASK FORCE.

    ``(a) Establishment and Purpose.--The Director of the Centers for 
Disease Control and Prevention shall convene an independent Community 
Preventive Services Task Force (referred to in this subsection as the 
`Task Force') to be composed of individuals with appropriate expertise. 
Such <<NOTE: Review. Recommenda- tions. Publication.>> Task Force shall 
review the scientific evidence related to the effectiveness, 
appropriateness, and cost-effectiveness of community preventive 
interventions for the purpose of developing recommendations, to be 
published in the Guide to Community Preventive Services (referred to in 
this section as the `Guide'), for individuals and organizations 
delivering population-based services, including primary care 
professionals, health care systems, professional societies, employers, 
community organizations, non-profit organizations, schools, governmental 
public health agencies, Indian tribes, tribal organizations and urban 
Indian organizations, medical groups, Congress and other policy-makers. 
Community preventive services include any policies, programs, processes 
or activities designed to affect or otherwise affecting health at the 
population level.

    ``(b) Duties.--The duties of the Task Force shall include--
            ``(1) the development of additional topic areas for new 
        recommendations and interventions related to those topic areas, 
        including those related to specific populations and age groups, 
        as well as the social, economic and physical environments that 
        can have broad effects on the health and disease of populations 
        and health disparities among sub-populations and age groups;
            ``(2) at least once during every 5-year period, review 
        interventions and update recommendations related to existing 
        topic areas, including new or improved techniques to assess the 
        health effects of interventions, including health impact 
        assessment and population health modeling;
            ``(3) improved integration with Federal Government health 
        objectives and related target setting for health improvement;
            ``(4) the enhanced dissemination of recommendations;
            ``(5) the provision of technical assistance to those health 
        care professionals, agencies, and organizations that request 
        help in implementing the Guide recommendations; and
            ``(6) providing yearly reports to Congress and related 
        agencies identifying gaps in research and recommending priority 
        areas that deserve further examination, including areas related

[[Page 124 STAT. 544]]

        to populations and age groups not adequately addressed by 
        current recommendations.

    ``(c) Role of Agency.--The Director shall provide ongoing 
administrative, research, and technical support for the operations of 
the Task Force, including coordinating and supporting the dissemination 
of the recommendations of the Task Force, ensuring adequate staff 
resources, and assistance to those organizations requesting it for 
implementation of Guide recommendations.
    ``(d) Coordination With Preventive Services Task Force.--The Task 
Force shall take appropriate steps to coordinate its work with the U.S. 
Preventive Services Task Force and the Advisory Committee on 
Immunization Practices, including the examination of how each task 
force's recommendations interact at the nexus of clinic and community.
    ``(e) Operation.--In carrying out the duties under subsection (b), 
the Task Force shall not be subject to the provisions of Appendix 2 of 
title 5, United States Code.
    ``(f) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary for each fiscal year to carry 
out the activities of the Task Force.''.
            (2) Technical amendments.--
                    (A) Section 399R of the Public Health Service Act 
                (as added by section 2 of the ALS Registry Act (Public 
                Law 110-373; 122 Stat. 4047)) <<NOTE: 42 USC 280g-
                7.>> is redesignated as section 399S.
                    (B) Section 399R of such Act (as added by section 3 
                of the Prenatally and Postnatally Diagnosed Conditions 
                Awareness <<NOTE: 42 USC 280g-8.>> Act (Public Law 110-
                374; 122 Stat. 4051)) is redesignated as section 399T.

SEC. 4004. EDUCATION <<NOTE: 42 USC 300u-12.>> AND OUTREACH CAMPAIGN 
            REGARDING PREVENTIVE BENEFITS.

    (a) In General.--The Secretary of Health and Human Services 
(referred to in this section as the ``Secretary'') shall provide for the 
planning and implementation of a national public-private partnership for 
a prevention and health promotion outreach and education campaign to 
raise public awareness of health improvement across the life span. Such 
campaign shall include the dissemination of information that--
            (1) describes the importance of utilizing preventive 
        services to promote wellness, reduce health disparities, and 
        mitigate chronic disease;
            (2) promotes the use of preventive services recommended by 
        the United States Preventive Services Task Force and the 
        Community Preventive Services Task Force;
            (3) encourages healthy behaviors linked to the prevention of 
        chronic diseases;
            (4) explains the preventive services covered under health 
        plans offered through a Gateway;
            (5) describes additional preventive care supported by the 
        Centers for Disease Control and Prevention, the Health Resources 
        and Services Administration, the Substance Abuse and Mental 
        Health Services Administration, the Advisory Committee on 
        Immunization Practices, and other appropriate agencies; and
            (6) includes general health promotion information.

[[Page 124 STAT. 545]]

    (b) Consultation.--In coordinating the campaign under subsection 
(a), the Secretary shall consult with the Institute of Medicine to 
provide ongoing advice on evidence-based scientific information for 
policy, program development, and evaluation.
    (c) Media Campaign.--
            (1) In general.--Not <<NOTE: Deadline.>> later than 1 year 
        after the date of enactment of this Act, the Secretary, acting 
        through the Director of the Centers for Disease Control and 
        Prevention, shall establish and implement a national science-
        based media campaign on health promotion and disease prevention.
            (2) Requirement of campaign.--The campaign implemented under 
        paragraph (1)--
                    (A) shall be designed to address proper nutrition, 
                regular exercise, smoking cessation, obesity reduction, 
                the 5 leading disease killers in the United States, and 
                secondary prevention through disease screening 
                promotion;
                    (B) shall be carried out through competitively bid 
                contracts awarded to entities providing for the 
                professional production and design of such campaign;
                    (C) may include the use of television, radio, 
                Internet, and other commercial marketing venues and may 
                be targeted to specific age groups based on peer-
                reviewed social research;
                    (D) shall not be duplicative of any other Federal 
                efforts relating to health promotion and disease 
                prevention; and
                    (E) may include the use of humor and nationally 
                recognized positive role models.
            (3) Evaluation.--The <<NOTE: Deadlines. Reports.>> Secretary 
        shall ensure that the campaign implemented under paragraph (1) 
        is subject to an independent evaluation every 2 years and shall 
        report every 2 years to Congress on the effectiveness of such 
        campaigns towards meeting science-based metrics.

    (d) Website.--The Secretary, in consultation with private-sector 
experts, shall maintain or enter into a contract to maintain an Internet 
website to provide science-based information on guidelines for 
nutrition, regular exercise, obesity reduction, smoking cessation, and 
specific chronic disease prevention. Such website shall be designed to 
provide information to health care providers and consumers.
    (e) Dissemination of <<NOTE: Plan.>> Information Through 
Providers.--The Secretary, acting through the Centers for Disease 
Control and Prevention, shall develop and implement a plan for the 
dissemination of health promotion and disease prevention information 
consistent with national priorities, to health care providers who 
participate in Federal programs, including programs administered by the 
Indian Health Service, the Department of Veterans Affairs, the 
Department of Defense, and the Health Resources and Services 
Administration, and Medicare and Medicaid.

    (f) Personalized Prevention Plans.--
            (1) Contract.--The Secretary, <<NOTE: Web site.>> acting 
        through the Director of the Centers for Disease Control and 
        Prevention, shall enter into a contract with a qualified entity 
        for the development and operation of a Federal Internet website 
        personalized prevention plan tool.
            (2) Use.--The website developed under paragraph (1) shall be 
        designed to be used as a source of the most up-to-date 
        scientific evidence relating to disease prevention for use by

[[Page 124 STAT. 546]]

        individuals. Such website shall contain a component that enables 
        an individual to determine their disease risk (based on personal 
        health and family history, BMI, and other relevant information) 
        relating to the 5 leading diseases in the United States, and 
        obtain personalized suggestions for preventing such diseases.

    (g) Internet Portal.--The Secretary shall establish an Internet 
portal for accessing risk-assessment tools developed and maintained by 
private and academic entities.
    (h) Priority Funding.--Funding for the activities authorized under 
this section shall take priority over funding provided through the 
Centers for Disease Control and Prevention for grants to States and 
other entities for similar purposes and goals as provided for in this 
section. Not to exceed $500,000,000 shall be expended on the campaigns 
and activities required under this section.
    (i) Public Awareness of Preventive and Obesity-related Services.--
            (1) Information to states.--The Secretary of Health and 
        Human Services shall provide guidance and relevant information 
        to States and health care providers regarding preventive and 
        obesity-related services that are available to Medicaid 
        enrollees, including obesity screening and counseling for 
        children and adults.
            (2) Information to enrollees.--Each State shall design a 
        public awareness campaign to educate Medicaid enrollees 
        regarding availability and coverage of such services, with the 
        goal of reducing incidences of obesity.
            (3) Report.--Not later than January 1, 2011, and every 3 
        years thereafter through January 1, 2017, the Secretary of 
        Health and Human Services shall report to Congress on the status 
        and effectiveness of efforts under paragraphs (1) and (2), 
        including summaries of the States' efforts to increase awareness 
        of coverage of obesity-related services.

    (j) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out this section.

      Subtitle B--Increasing Access to Clinical Preventive Services

SEC. 4101. SCHOOL-BASED HEALTH CENTERS.

    (a) Grants <<NOTE: 42 USC 280h-4.>> for the Establishment of School-
based Health Centers.--
            (1) Program.--The Secretary of Health and Human Services (in 
        this subsection referred to as the ``Secretary'') shall 
        establish a program to award grants to eligible entities to 
        support the operation of school-based health centers.
            (2) Eligibility.--To be eligible for a grant under this 
        subsection, an entity shall--
                    (A) be a school-based health center or a sponsoring 
                facility of a school-based health center; and
                    (B) submit an application at such time, in such 
                manner, and containing such information as the Secretary 
                may require, including at a minimum an assurance that 
                funds awarded under the grant shall not be used to 
                provide

[[Page 124 STAT. 547]]

                any service that is not authorized or allowed by 
                Federal, State, or local law.
            (3) Preference.--In awarding grants under this section, the 
        Secretary shall give preference to awarding grants for school-
        based health centers that serve a large population of children 
        eligible for medical assistance under the State Medicaid plan 
        under title XIX of the Social Security Act or under a waiver of 
        such plan or children eligible for child health assistance under 
        the State child health plan under title XXI of that Act (42 
        U.S.C. 1397aa et seq.).
            (4) Limitation on use of funds.--An eligible entity shall 
        use funds provided under a grant awarded under this subsection 
        only for expenditures for facilities (including the acquisition 
        or improvement of land, or the acquisition, construction, 
        expansion, replacement, or other improvement of any building or 
        other facility), equipment, or similar expenditures, as 
        specified by the Secretary. No funds provided under a grant 
        awarded under this section shall be used for expenditures for 
        personnel or to provide health services.
            (5) Appropriations.--Out of any funds in the Treasury not 
        otherwise appropriated, there is appropriated for each of fiscal 
        years 2010 through 2013, $50,000,000 for the purpose of carrying 
        out this subsection. Funds appropriated under this paragraph 
        shall remain available until expended.
            (6) Definitions.--In this subsection, the terms ``school-
        based health center'' and ``sponsoring facility'' have the 
        meanings given those terms in section 2110(c)(9) of the Social 
        Security Act (42 U.S.C. 1397jj(c)(9)).

    (b) Grants for the Operation of School-based Health Centers.--Part Q 
of title III of the Public Health Service Act (42 U.S.C. 280h et seq.) 
is amended by adding at the end the following:

``SEC. 399Z-1. <<NOTE: 42 USC 280h-5.>> SCHOOL-BASED HEALTH CENTERS.

    ``(a) Definitions; Establishment of Criteria.--In this section:
            ``(1) Comprehensive primary health services.--The term 
        `comprehensive primary health services' means the core services 
        offered by school-based health centers, which shall include the 
        following:
                    ``(A) Physical.--Comprehensive health assessments, 
                diagnosis, and treatment of minor, acute, and chronic 
                medical conditions, and referrals to, and follow-up for, 
                specialty care and oral health services.
                    ``(B) Mental health.--Mental health and substance 
                use disorder assessments, crisis intervention, 
                counseling, treatment, and referral to a continuum of 
                services including emergency psychiatric care, community 
                support programs, inpatient care, and outpatient 
                programs.
            ``(2) Medically underserved children and adolescents.--
                    ``(A) In general.--The term `medically underserved 
                children and adolescents' means a population of children 
                and adolescents who are residents of an area designated 
                as a medically underserved area or a health professional 
                shortage area by the Secretary.
                    ``(B) Criteria.--The Secretary shall prescribe 
                criteria for determining the specific shortages of 
                personal health

[[Page 124 STAT. 548]]

                services for medically underserved children and 
                adolescents under subparagraph (A) that shall--
                          ``(i) take into account any comments received 
                      by the Secretary from the chief executive officer 
                      of a State and local officials in a State; and
                          ``(ii) include factors indicative of the 
                      health status of such children and adolescents of 
                      an area, including the ability of the residents of 
                      such area to pay for health services, the 
                      accessibility of such services, the availability 
                      of health professionals to such children and 
                      adolescents, and other factors as determined 
                      appropriate by the Secretary.
            ``(3) School-based health center.--The term `school-based 
        health center' means a health clinic that--
                    ``(A) meets the definition of a school-based health 
                center under section 2110(c)(9)(A) of the Social 
                Security Act and is administered by a sponsoring 
                facility (as defined in section 2110(c)(9)(B) of the 
                Social Security Act);
                    ``(B) provides, at a minimum, comprehensive primary 
                health services during school hours to children and 
                adolescents by health professionals in accordance with 
                established standards, community practice, reporting 
                laws, and other State laws, including parental consent 
                and notification laws that are not inconsistent with 
                Federal law; and
                    ``(C) does not perform abortion services.

    ``(b) Authority To Award Grants.--The Secretary shall award grants 
for the costs of the operation of school-based health centers (referred 
to in this section as `SBHCs') that meet the requirements of this 
section.
    ``(c) Applications.--To be eligible to receive a grant under this 
section, an entity shall--
            ``(1) be an SBHC (as defined in subsection (a)(3)); and
            ``(2) submit to the Secretary an application at such time, 
        in such manner, and containing--
                    ``(A) evidence that the applicant meets all criteria 
                necessary to be designated an SBHC;
                    ``(B) evidence of local need for the services to be 
                provided by the SBHC;
                    ``(C) an assurance that--
                          ``(i) SBHC services will be provided to those 
                      children and adolescents for whom parental or 
                      guardian consent has been obtained in cooperation 
                      with Federal, State, and local laws governing 
                      health care service provision to children and 
                      adolescents;
                          ``(ii) the SBHC has made and will continue to 
                      make every reasonable effort to establish and 
                      maintain collaborative relationships with other 
                      health care providers in the catchment area of the 
                      SBHC;
                          ``(iii) the SBHC will provide on-site access 
                      during the academic day when school is in session 
                      and 24-hour coverage through an on-call system and 
                      through its backup health providers to ensure 
                      access to services on a year-round basis when the 
                      school or the SBHC is closed;
                          ``(iv) the SBHC will be integrated into the 
                      school environment and will coordinate health 
                      services with school personnel, such as 
                      administrators, teachers,

[[Page 124 STAT. 549]]

                      nurses, counselors, and support personnel, as well 
                      as with other community providers co-located at 
                      the school;
                          ``(v) the SBHC sponsoring facility assumes all 
                      responsibility for the SBHC administration, 
                      operations, and oversight; and
                          ``(vi) the SBHC will comply with Federal, 
                      State, and local laws concerning patient privacy 
                      and student records, including regulations 
                      promulgated under the Health Insurance Portability 
                      and Accountability Act of 1996 and section 444 of 
                      the General Education Provisions Act; and
                    ``(D) such other information as the Secretary may 
                require.

    ``(d) Preferences and Consideration.--In reviewing applications:
            ``(1) The Secretary may give preference to applicants who 
        demonstrate an ability to serve the following:
                    ``(A) Communities that have evidenced barriers to 
                primary health care and mental health and substance use 
                disorder prevention services for children and 
                adolescents.
                    ``(B) Communities with high per capita numbers of 
                children and adolescents who are uninsured, 
                underinsured, or enrolled in public health insurance 
                programs.
                    ``(C) Populations of children and adolescents that 
                have historically demonstrated difficulty in accessing 
                health and mental health and substance use disorder 
                prevention services.
            ``(2) The Secretary may give consideration to whether an 
        applicant has received a grant under subsection (a) of section 
        4101 of the Patient Protection and Affordable Care Act.

    ``(e) Waiver of Requirements.--The Secretary may--
            ``(1) under appropriate circumstances, waive the application 
        of all or part of the requirements of this subsection with 
        respect to an SBHC for not to exceed 2 years; and
            ``(2) upon a showing of good cause, waive the requirement 
        that the SBHC provide all required comprehensive primary health 
        services for a designated period of time to be determined by the 
        Secretary.

    ``(f) Use of Funds.--
            ``(1) Funds.--Funds awarded under a grant under this 
        section--
                    ``(A) may be used for--
                          ``(i) acquiring and leasing equipment 
                      (including the costs of amortizing the principle 
                      of, and paying interest on, loans for such 
                      equipment);
                          ``(ii) providing training related to the 
                      provision of required comprehensive primary health 
                      services and additional health services;
                          ``(iii) the management and operation of health 
                      center programs;
                          ``(iv) the payment of salaries for physicians, 
                      nurses, and other personnel of the SBHC; and
                    ``(B) may not be used to provide abortions.
            ``(2) Construction.--The Secretary may award grants which 
        may be used to pay the costs associated with expanding and 
        modernizing existing buildings for use as an SBHC,

[[Page 124 STAT. 550]]

        including the purchase of trailers or manufactured buildings to 
        install on the school property.
            ``(3) Limitations.--
                    ``(A) In general.--Any provider of services that is 
                determined by a State to be in violation of a State law 
                described in subsection (a)(3)(B) with respect to 
                activities carried out at a SBHC shall not be eligible 
                to receive additional funding under this section.
                    ``(B) No overlapping grant period.--No entity that 
                has received funding under section 330 for a grant 
                period shall be eligible for a grant under this section 
                for with respect to the same grant period.

    ``(g) Matching Requirement.--
            ``(1) In general.--Each eligible entity that receives a 
        grant under this section shall provide, from non-Federal 
        sources, an amount equal to 20 percent of the amount of the 
        grant (which may be provided in cash or in-kind) to carry out 
        the activities supported by the grant.
            ``(2) Waiver.--The Secretary may waive all or part of the 
        matching requirement described in paragraph (1) for any fiscal 
        year for the SBHC if the Secretary determines that applying the 
        matching requirement to the SBHC would result in serious 
        hardship or an inability to carry out the purposes of this 
        section.

    ``(h) Supplement, Not Supplant.--Grant funds provided under this 
section shall be used to supplement, not supplant, other Federal or 
State funds.
    ``(i) Evaluation.--The Secretary shall develop and implement a plan 
for evaluating SBHCs and monitoring quality performance under the awards 
made under this section.
    ``(j) Age Appropriate Services.--An eligible entity receiving funds 
under this section shall only provide age appropriate services through a 
SBHC funded under this section to an individual.
    ``(k) Parental Consent.--An eligible entity receiving funds under 
this section shall not provide services through a SBHC funded under this 
section to an individual without the consent of the parent or guardian 
of such individual if such individual is considered a minor under 
applicable State law.
    ``(l) Authorization of Appropriations.--For purposes of carrying out 
this section, there are authorized to be appropriated such sums as may 
be necessary for each of the fiscal years 2010 through 2014.''.

SEC. 4102. ORAL HEALTHCARE PREVENTION ACTIVITIES.

    (a) In General.--Title III of the Public Health Service Act (42 
U.S.C. 241 et seq.), as amended by section 3025, is amended by adding at 
the end the following:

             ``PART T--ORAL HEALTHCARE PREVENTION ACTIVITIES

``SEC. 399LL. ORAL <<NOTE: 42 USC 280k.>> HEALTHCARE PREVENTION 
            EDUCATION CAMPAIGN.

    ``(a) Establishment.--The Secretary, acting through the Director of 
the Centers for Disease Control and Prevention and in consultation with 
professional oral health organizations, shall, subject to the 
availability of appropriations, establish a 5-year national, public 
education campaign (referred to in this section

[[Page 124 STAT. 551]]

as the `campaign') that is focused on oral healthcare prevention and 
education, including prevention of oral disease such as early childhood 
and other caries, periodontal disease, and oral cancer.
    ``(b) Requirements.--In establishing the campaign, the Secretary 
shall--
            ``(1) ensure that activities are targeted towards specific 
        populations such as children, pregnant women, parents, the 
        elderly, individuals with disabilities, and ethnic and racial 
        minority populations, including Indians, Alaska Natives and 
        Native Hawaiians (as defined in section 4(c) of the Indian 
        Health Care Improvement Act) in a culturally and linguistically 
        appropriate manner; and
            ``(2) utilize science-based strategies to convey oral health 
        prevention messages that include, but are not limited to, 
        community water fluoridation and dental sealants.

    ``(c) Planning and Implementation.--Not 
later <<NOTE: Deadline.>> than 2 years after the date of enactment of 
this section, the Secretary shall begin implementing the 5-year 
campaign. During the 2-year period referred to in the previous sentence, 
the Secretary shall conduct planning activities with respect to the 
campaign.

``SEC. 399LL-1. RESEARCH-BASED <<NOTE: Grants. 42 USC 280k-1.>> DENTAL 
            CARIES DISEASE MANAGEMENT.

    ``(a) In General.--The Secretary, acting through the Director of the 
Centers for Disease Control and Prevention, shall award demonstration 
grants to eligible entities to demonstrate the effectiveness of 
research-based dental caries disease management activities.
    ``(b) Eligibility.--To be eligible for a grant under this section, 
an entity shall--
            ``(1) be a community-based provider of dental services (as 
        defined by the Secretary), including a Federally-qualified 
        health center, a clinic of a hospital owned or operated by a 
        State (or by an instrumentality or a unit of government within a 
        State), a State or local department of health, a dental program 
        of the Indian Health Service, an Indian tribe or tribal 
        organization, or an urban Indian organization (as such terms are 
        defined in section 4 of the Indian Health Care Improvement Act), 
        a health system provider, a private provider of dental services, 
        medical, dental, public health, nursing, nutrition educational 
        institutions, or national organizations involved in improving 
        children's oral health; and
            ``(2) submit <<NOTE: Submission.>> to the Secretary an 
        application at such time, in such manner, and containing such 
        information as the Secretary may require.

    ``(c) Use of Funds.--A grantee shall use amounts received under a 
grant under this section to demonstrate the effectiveness of research-
based dental caries disease management activities.
    ``(d) Use of Information.--The Secretary shall utilize information 
generated from grantees under this section in planning and implementing 
the public education campaign under section 399LL.

``SEC. 399LL-2. AUTHORIZATION <<NOTE: 42 USC 280k-2.>> OF 
            APPROPRIATIONS.

    ``There is authorized to be appropriated to carry out this part, 
such sums as may be necessary.''.
    (b) School-based Sealant Programs.--Section 317M(c)(1) of the Public 
Health Service Act (42 U.S.C. 247b-14(c)(1)) is amended by striking 
``may award grants to States and Indian tribes'' and

[[Page 124 STAT. 552]]

inserting ``shall award a grant to each of the 50 States and territories 
and to Indians, Indian tribes, tribal organizations and urban Indian 
organizations (as such terms are defined in section 4 of the Indian 
Health Care Improvement Act)''.
    (c) Oral Health Infrastructure.--Section 317M of the Public Health 
Service Act (42 U.S.C. 247b-14) is amended--
            (1) by redesignating subsections (d) and (e) as subsections 
        (e) and (f), respectively; and
            (2) by inserting after subsection (c), the following:

    ``(d) Oral Health Infrastructure.--
            ``(1) Cooperative agreements.--The Secretary, acting through 
        the Director of the Centers for Disease Control and Prevention, 
        shall enter into cooperative agreements with State, territorial, 
        and Indian tribes or tribal organizations (as those terms are 
        defined in section 4 of the Indian Health Care Improvement Act) 
        to establish oral health leadership and program guidance, oral 
        health data collection and interpretation, (including 
        determinants of poor oral health among vulnerable populations), 
        a multi-dimensional delivery system for oral health, and to 
        implement science-based programs (including dental sealants and 
        community water fluoridation) to improve oral health.
            ``(2) Authorization of appropriations.--There is authorized 
        to be appropriated such sums as necessary to carry out this 
        subsection for fiscal years 2010 through 2014.''.

    (d) Updating <<NOTE: 42 USC 280k-3.>> National Oral Healthcare 
Surveillance Activities.--
            (1) PRAMS.--
                    (A) In general.--The Secretary of Health and Human 
                Services (referred to in this subsection as the 
                ``Secretary'') shall carry out activities to update and 
                improve the Pregnancy Risk Assessment Monitoring System 
                (referred to in this section as ``PRAMS'') as it relates 
                to oral healthcare.
                    (B) State reports and mandatory measurements.--
                          (i) In general.--Not later than 5 years after 
                      the date of enactment of this Act, and every 5 
                      years thereafter, a State shall submit to the 
                      Secretary a report concerning activities conducted 
                      within the State under PRAMS.
                          (ii) Measurements.--The oral healthcare 
                      measurements developed by the Secretary for use 
                      under PRAMS shall be mandatory with respect to 
                      States for purposes of the State reports under 
                      clause (i).
                    (C) Funding.--There is authorized to be appropriated 
                to carry out this paragraph, such sums as may be 
                necessary.
            (2) National health and nutrition examination survey.--The 
        Secretary shall develop oral healthcare components that shall 
        include tooth-level surveillance for inclusion in the National 
        Health and Nutrition Examination Survey. 
        Such <<NOTE: Deadline.>> components shall be updated by the 
        Secretary at least every 6 years. 
        For <<NOTE: Definition.>> purposes of this paragraph, the term 
        ``tooth-level surveillance'' means a clinical examination where 
        an examiner looks at each dental surface, on each tooth in the 
        mouth and as expanded by the Division of Oral Health of the 
        Centers for Disease Control and Prevention.

[[Page 124 STAT. 553]]

            (3) Medical expenditures panel survey.--The Secretary shall 
        ensure that the Medical Expenditures Panel Survey by the Agency 
        for Healthcare Research and Quality includes the verification of 
        dental utilization, expenditure, and coverage findings through 
        conduct of a look-back analysis.
            (4) National oral health surveillance system.--
                    (A) Appropriations.--There is authorized to be 
                appropriated, such sums as may be necessary for each of 
                fiscal years 2010 through 2014 to increase the 
                participation of States in the National Oral Health 
                Surveillance System from 16 States to all 50 States, 
                territories, and District of Columbia.
                    (B) Requirements.--The Secretary shall ensure that 
                the National Oral Health Surveillance System include the 
                measurement of early childhood caries.

SEC. 4103. MEDICARE COVERAGE OF ANNUAL WELLNESS VISIT PROVIDING A 
            PERSONALIZED PREVENTION PLAN.

    (a) Coverage of Personalized Prevention Plan Services.--
            (1) In general.--Section 1861(s)(2) of the Social Security 
        Act (42 U.S.C. 1395x(s)(2)) is amended--
                    (A) in subparagraph (DD), by striking ``and'' at the 
                end;
                    (B) in subparagraph (EE), by adding ``and'' at the 
                end; and
                    (C) by adding at the end the following new 
                subparagraph:
            ``(FF) personalized prevention plan services (as defined in 
        subsection (hhh));''.
            (2) Conforming amendments.--Clauses (i) and (ii) of section 
        1861(s)(2)(K) of the Social Security Act (42 U.S.C. 
        1395x(s)(2)(K)) are each amended by striking ``subsection 
        (ww)(1)'' and inserting ``subsections (ww)(1) and (hhh)''.

    (b) Personalized Prevention Plan Services Defined.--Section 1861 of 
the Social Security Act (42 U.S.C. 1395x) is amended by adding at the 
end the following new subsection:

                         ``Annual Wellness Visit

    ``(hhh)(1) The term `personalized prevention plan services' means 
the creation of a plan for an individual--
            ``(A) that includes a health risk assessment (that meets the 
        guidelines established by the Secretary under paragraph (4)(A)) 
        of the individual that is completed prior to or as part of the 
        same visit with a health professional described in paragraph 
        (3); and
            ``(B) that--
                    ``(i) takes into account the results of the health 
                risk assessment; and
                    ``(ii) may contain the elements described in 
                paragraph (2).

    ``(2) Subject to paragraph (4)(H), the elements described in this 
paragraph are the following:
            ``(A) The establishment of, or an update to, the 
        individual's medical and family history.
            ``(B) A list of current providers and suppliers that are 
        regularly involved in providing medical care to the individual 
        (including a list of all prescribed medications).

[[Page 124 STAT. 554]]

            ``(C) A measurement of height, weight, body mass index (or 
        waist circumference, if appropriate), blood pressure, and other 
        routine measurements.
            ``(D) Detection of any cognitive impairment.
            ``(E) The establishment of, or an update to, the following:
                    ``(i) A screening schedule for the next 5 to 10 
                years, as appropriate, based on recommendations of the 
                United States Preventive Services Task Force and the 
                Advisory Committee on Immunization Practices, and the 
                individual's health status, screening history, and age-
                appropriate preventive services covered under this 
                title.
                    ``(ii) A list of risk factors and conditions for 
                which primary, secondary, or tertiary prevention 
                interventions are recommended or are underway, including 
                any mental health conditions or any such risk factors or 
                conditions that have been identified through an initial 
                preventive physical examination (as described under 
                subsection (ww)(1)), and a list of treatment options and 
                their associated risks and benefits.
            ``(F) The furnishing of personalized health advice and a 
        referral, as appropriate, to health education or preventive 
        counseling services or programs aimed at reducing identified 
        risk factors and improving self-management, or community-based 
        lifestyle interventions to reduce health risks and promote self-
        management and wellness, including weight loss, physical 
        activity, smoking cessation, fall prevention, and nutrition.
            ``(G) Any other element determined appropriate by the 
        Secretary.

    ``(3) A health professional described in this paragraph is--
            ``(A) a physician;
            ``(B) a practitioner described in clause (i) of section 
        1842(b)(18)(C); or
            ``(C) a medical professional (including a health educator, 
        registered dietitian, or nutrition professional) or a team of 
        medical professionals, as determined appropriate by the 
        Secretary, under the supervision of a physician.

    ``(4)(A) For <<NOTE: Deadline. Public 
information. Guidelines.>> purposes of paragraph (1)(A), the Secretary, 
not later than 1 year after the date of enactment of this subsection, 
shall establish publicly available guidelines for health risk 
assessments. Such guidelines shall be developed in consultation with 
relevant groups and entities and shall provide that a health risk 
assessment--
            ``(i) identify chronic diseases, injury risks, modifiable 
        risk factors, and urgent health needs of the individual; and
            ``(ii) may be furnished--
                    ``(I) through an interactive telephonic or web-based 
                program that meets the standards established under 
                subparagraph (B);
                    ``(II) during an encounter with a health care 
                professional;
                    ``(III) through community-based prevention programs; 
                or
                    ``(IV) through any other means the Secretary 
                determines appropriate to maximize accessibility and 
                ease of use by beneficiaries, while ensuring the privacy 
                of such beneficiaries.

[[Page 124 STAT. 555]]

    ``(B) Not <<NOTE: Deadline. Standards. Communications and tele- 
communications. Web site.>> later than 1 year after the date of 
enactment of this subsection, the Secretary shall establish standards 
for interactive telephonic or web-based programs used to furnish health 
risk assessments under subparagraph (A)(ii)(I). The Secretary may 
utilize any health risk assessment developed under section 4004(f) of 
the Patient Protection and Affordable Care Act as part of the 
requirement to develop a personalized prevention plan to comply with 
this subparagraph.

    ``(C)(i) Not later <<NOTE: Deadline. Public information. Assessment 
model.>> than 18 months after the date of enactment of this subsection, 
the Secretary shall develop and make available to the public a health 
risk assessment model. Such model shall meet the guidelines under 
subparagraph (A) and may be used to meet the requirement under paragraph 
(1)(A).

    ``(ii) Any health risk assessment that meets the guidelines under 
subparagraph (A) and is approved by the Secretary may be used to meet 
the requirement under paragraph (1)(A).
    ``(D) The Secretary may coordinate with community-based entities 
(including State Health Insurance Programs, Area Agencies on Aging, 
Aging and Disability Resource Centers, and the Administration on Aging) 
to--
            ``(i) ensure that health risk assessments are accessible to 
        beneficiaries; and
            ``(ii) provide appropriate support for the completion of 
        health risk assessments by beneficiaries.

    ``(E) The <<NOTE: Procedures.>> Secretary shall establish procedures 
to make beneficiaries and providers aware of the requirement that a 
beneficiary complete a health risk assessment prior to or at the same 
time as receiving personalized prevention plan services.

    ``(F) To the extent practicable, the Secretary shall encourage the 
use of, integration with, and coordination of health information 
technology (including use of technology that is compatible with 
electronic medical records and personal health records) and may 
experiment with the use of personalized technology to aid in the 
development of self-management skills and management of and adherence to 
provider recommendations in order to improve the health status of 
beneficiaries.
    ``(G)(i) A beneficiary shall only be eligible to receive an initial 
preventive physical examination (as defined under subsection (ww)(1)) at 
any time during the 12-month period after the date that the 
beneficiary's coverage begins under part B and shall be eligible to 
receive personalized prevention plan services under this subsection 
provided that the beneficiary has not received such services within the 
preceding 12-month period.
    ``(ii) The Secretary <<NOTE: Procedures.>> shall establish 
procedures to make beneficiaries aware of the option to select an 
initial preventive physical examination or personalized prevention plan 
services during the period of 12 months after the date that a 
beneficiary's coverage begins under part B, which shall include 
information regarding any relevant differences between such services.

    ``(H) The <<NOTE: Guidance.>> Secretary shall issue guidance that--
            ``(i) identifies elements under paragraph (2) that are 
        required to be provided to a beneficiary as part of their first 
        visit for personalized prevention plan services; and
            ``(ii) establishes a yearly schedule for appropriate 
        provision of such elements thereafter.''.

    (c) Payment and Elimination of Cost-Sharing.--

[[Page 124 STAT. 556]]

            (1) Payment and elimination of coinsurance.--Section 
        1833(a)(1) of the Social Security Act (42 U.S.C. 1395l(a)(1)) is 
        amended--
                    (A) in subparagraph (N), by inserting ``other than 
                personalized prevention plan services (as defined in 
                section 1861(hhh)(1))'' after ``(as defined in section 
                1848(j)(3))'';
                    (B) by striking ``and'' before ``(W)''; and
                    (C) by inserting before the semicolon at the end the 
                following: ``, and (X) with respect to personalized 
                prevention plan services (as defined in section 
                1861(hhh)(1)), the amount paid shall be 100 percent of 
                the lesser of the actual charge for the services or the 
                amount determined under the payment basis determined 
                under section 1848''.
            (2) Payment under physician fee schedule.--Section 
        1848(j)(3) of the Social Security Act (42 U.S.C. 1395w-4(j)(3)) 
        is amended by inserting ``(2)(FF) (including administration of 
        the health risk assessment) ,'' after ``(2)(EE),''.
            (3) Elimination of coinsurance in outpatient hospital 
        settings.--
                    (A) Exclusion from opd fee schedule.--Section 
                1833(t)(1)(B)(iv) of the Social Security Act (42 U.S.C. 
                1395l(t)(1)(B)(iv)) is amended by striking ``and 
                diagnostic mammography'' and inserting ``, diagnostic 
                mammography, or personalized prevention plan services 
                (as defined in section 1861(hhh)(1))''.
                    (B) Conforming amendments.--Section 1833(a)(2) of 
                the Social Security Act (42 U.S.C. 1395l(a)(2)) is 
                amended--
                          (i) in subparagraph (F), by striking ``and'' 
                      at the end;
                          (ii) in subparagraph (G)(ii), by striking the 
                      comma at the end and inserting ``; and''; and
                          (iii) by inserting after subparagraph (G)(ii) 
                      the following new subparagraph:
                    ``(H) with respect to personalized prevention plan 
                services (as defined in section 1861(hhh)(1)) furnished 
                by an outpatient department of a hospital, the amount 
                determined under paragraph (1)(X),''.
            (4) Waiver of application of deductible.--The first sentence 
        of section 1833(b) of the Social Security Act (42 U.S.C. 
        1395l(b)) is amended--
                    (A) by striking ``and'' before ``(9)''; and
                    (B) by inserting before the period the following: 
                ``, and (10) such deductible shall not apply with 
                respect to personalized prevention plan services (as 
                defined in section 1861(hhh)(1))''.

    (d) Frequency Limitation.--Section 1862(a) of the Social Security 
Act (42 U.S.C. 1395y(a)) is amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (N), by striking ``and'' at the 
                end;
                    (B) in subparagraph (O), by striking the semicolon 
                at the end and inserting ``, and''; and
                    (C) by adding at the end the following new 
                subparagraph:
            ``(P) in the case of personalized prevention plan services 
        (as defined in section 1861(hhh)(1)), which are performed more 
        frequently than is covered under such section;''; and

[[Page 124 STAT. 557]]

            (2) in paragraph (7), by striking ``or (K)'' and inserting 
        ``(K), or (P)''.

    (e) Effective <<NOTE: 42 USC 1395l note.>> Date.--The amendments 
made by this section shall apply to services furnished on or after 
January 1, 2011.

SEC. 4104. REMOVAL OF BARRIERS TO PREVENTIVE SERVICES IN MEDICARE.

    (a) Definition of Preventive Services.--Section 1861(ddd) of the 
Social Security Act (42 U.S.C. 1395x(ddd)) is amended--
            (1) in the heading, by inserting ``; Preventive Services'' 
        after ``Services'';
            (2) in paragraph (1), by striking ``not otherwise described 
        in this title'' and inserting ``not described in subparagraph 
        (A) or (C) of paragraph (3)''; and
            (3) by adding at the end the following new paragraph:

    ``(3) The term `preventive services' means the following:
            ``(A) The screening and preventive services described in 
        subsection (ww)(2) (other than the service described in 
        subparagraph (M) of such subsection).
            ``(B) An initial preventive physical examination (as defined 
        in subsection (ww)).
            ``(C) Personalized prevention plan services (as defined in 
        subsection (hhh)(1)).''.

    (b) Coinsurance.--
            (1) General application.--
                    (A) In general.--Section 1833(a)(1) of the Social 
                Security Act (42 U.S.C. 1395l(a)(1)), as amended by 
                section 4103(c)(1), is amended--
                          (i) in subparagraph (T), by inserting ``(or 
                      100 percent if such services are recommended with 
                      a grade of A or B by the United States Preventive 
                      Services Task Force for any indication or 
                      population and are appropriate for the 
                      individual)'' after ``80 percent'';
                          (ii) in subparagraph (W)--
                                    (I) in clause (i), by inserting 
                                ``(if such subparagraph were applied, by 
                                substituting `100 percent' for `80 
                                percent')'' after ``subparagraph (D)''; 
                                and
                                    (II) in clause (ii), by striking 
                                ``80 percent'' and inserting ``100 
                                percent'';
                          (iii) by striking ``and'' before ``(X)''; and
                          (iv) by inserting before the semicolon at the 
                      end the following: ``, and (Y) with respect to 
                      preventive services described in subparagraphs (A) 
                      and (B) of section 1861(ddd)(3) that are 
                      appropriate for the individual and, in the case of 
                      such services described in subparagraph (A), are 
                      recommended with a grade of A or B by the United 
                      States Preventive Services Task Force for any 
                      indication or population, the amount paid shall be 
                      100 percent of the lesser of the actual charge for 
                      the services or the amount determined under the 
                      fee schedule that applies to such services under 
                      this part''.
            (2) Elimination of coinsurance in outpatient hospital 
        settings.--
                    (A) Exclusion from opd fee schedule.--Section 
                1833(t)(1)(B)(iv) of the Social Security Act (42 U.S.C.

[[Page 124 STAT. 558]]

                1395l(t)(1)(B)(iv)), as amended by section 
                4103(c)(3)(A), is amended--
                          (i) by striking ``or'' before ``personalized 
                      prevention plan services''; and
                          (ii) by inserting before the period the 
                      following: ``, or preventive services described in 
                      subparagraphs (A) and (B) of section 1861(ddd)(3) 
                      that are appropriate for the individual and, in 
                      the case of such services described in 
                      subparagraph (A), are recommended with a grade of 
                      A or B by the United States Preventive Services 
                      Task Force for any indication or population''.
                    (B) Conforming amendments.--Section 1833(a)(2) of 
                the Social Security Act (42 U.S.C. 1395l(a)(2)), as 
                amended by section 4103(c)(3)(B), is amended--
                          (i) in subparagraph (G)(ii), by striking 
                      ``and'' after the semicolon at the end;
                          (ii) in subparagraph (H), by striking the 
                      comma at the end and inserting ``; and''; and
                          (iii) by inserting after subparagraph (H) the 
                      following new subparagraph:
                    ``(I) with respect to preventive services described 
                in subparagraphs (A) and (B) of section 1861(ddd)(3) 
                that are appropriate for the individual and are 
                furnished by an outpatient department of a hospital and, 
                in the case of such services described in subparagraph 
                (A), are recommended with a grade of A or B by the 
                United States Preventive Services Task Force for any 
                indication or population, the amount determined under 
                paragraph (1)(W) or (1)(Y),''.

    (c) Waiver of Application of Deductible for Preventive Services and 
Colorectal Cancer Screening Tests.--Section 1833(b) of the Social 
Security Act (42 U.S.C. 1395l(b)), as amended by section 4103(c)(4), is 
amended--
            (1) in paragraph (1), by striking ``items and services 
        described in section 1861(s)(10)(A)'' and inserting ``preventive 
        services described in subparagraph (A) of section 1861(ddd)(3) 
        that are recommended with a grade of A or B by the United States 
        Preventive Services Task Force for any indication or population 
        and are appropriate for the individual.''; and
            (2) by adding at the end the following new sentence: 
        ``Paragraph (1) of the first sentence of this subsection shall 
        apply with respect to a colorectal cancer screening test 
        regardless of the code that is billed for the establishment of a 
        diagnosis as a result of the test, or for the removal of tissue 
        or other matter or other procedure that is furnished in 
        connection with, as a result of, and in the same clinical 
        encounter as the screening test.''.

    (d) Effective <<NOTE: 42 USC 1395l note.>> Date.--The amendments 
made by this section shall apply to items and services furnished on or 
after January 1, 2011.

SEC. 4105. EVIDENCE-BASED COVERAGE OF PREVENTIVE SERVICES IN MEDICARE.

    (a) Authority To Modify or Eliminate Coverage of Certain Preventive 
Services.--Section 1834 of the Social Security Act (42 U.S.C. 1395m) is 
amended by adding at the end the following new subsection:

[[Page 124 STAT. 559]]

    ``(n) Authority To Modify or Eliminate Coverage of Certain 
Preventive Services.--Notwithstanding <<NOTE: Effective date.>> any 
other provision of this title, effective beginning on January 1, 2010, 
if the Secretary determines appropriate, the Secretary may--
            ``(1) modify--
                    ``(A) the coverage of any preventive service 
                described in subparagraph (A) of section 1861(ddd)(3) to 
                the extent that such modification is consistent with the 
                recommendations of the United States Preventive Services 
                Task Force; and
                    ``(B) the services included in the initial 
                preventive physical examination described in 
                subparagraph (B) of such section; and
            ``(2) provide that no payment shall be made under this title 
        for a preventive service described in subparagraph (A) of such 
        section that has not received a grade of A, B, C, or I by such 
        Task Force.''.

    (b) Construction.--Nothing <<NOTE: 42 USC 1395m note.>> in the 
amendment made by paragraph (1) shall be construed to affect the 
coverage of diagnostic or treatment services under title XVIII of the 
Social Security Act.

SEC. 4106. IMPROVING ACCESS TO PREVENTIVE SERVICES FOR ELIGIBLE ADULTS 
            IN MEDICAID.

    (a) Clarification of Inclusion of Services.--Section 1905(a)(13) of 
the Social Security Act (42 U.S.C. 1396d(a)(13)) is amended to read as 
follows:
            ``(13) other diagnostic, screening, preventive, and 
        rehabilitative services, including--
                    ``(A) any clinical preventive services that are 
                assigned a grade of A or B by the United States 
                Preventive Services Task Force;
                    ``(B) with respect to an adult individual, approved 
                vaccines recommended by the Advisory Committee on 
                Immunization Practices (an advisory committee 
                established by the Secretary, acting through the 
                Director of the Centers for Disease Control and 
                Prevention) and their administration; and
                    ``(C) any medical or remedial services (provided in 
                a facility, a home, or other setting) recommended by a 
                physician or other licensed practitioner of the healing 
                arts within the scope of their practice under State law, 
                for the maximum reduction of physical or mental 
                disability and restoration of an individual to the best 
                possible functional level;''.

    (b) Increased Fmap.--Section 1905(b) of the Social Security Act (42 
U.S.C. 1396d(b)), as amended by sections 2001(a)(3)(A) and 2004(c)(1), 
is amended in the first sentence--
            (1) by striking ``, and (4)'' and inserting ``, (4)''; and
            (2) by inserting before the period the following: ``, and 
        (5) in the case of a State that provides medical assistance for 
        services and vaccines described in subparagraphs (A) and (B) of 
        subsection (a)(13), and prohibits cost-sharing for such services 
        and vaccines, the Federal medical assistance percentage, as 
        determined under this subsection and subsection (y) (without 
        regard to paragraph (1)(C) of such subsection), shall be 
        increased by 1 percentage point with respect to medical

[[Page 124 STAT. 560]]

        assistance for such services and vaccines and for items and 
        services described in subsection (a)(4)(D)''.

    (c) Effective <<NOTE: 42 USC 1396d note.>> Date.--The amendments 
made under this section shall take effect on January 1, 2013.

SEC. 4107. COVERAGE OF COMPREHENSIVE TOBACCO CESSATION SERVICES FOR 
            PREGNANT WOMEN IN MEDICAID.

    (a) Requiring Coverage of Counseling and Pharmacotherapy for 
Cessation of Tobacco Use by Pregnant Women.--Section 1905 of the Social 
Security Act (42 U.S.C. 1396d), as amended by sections 2001(a)(3)(B) and 
2303, is further amended--
            (1) in subsection (a)(4)--
                    (A) by striking ``and'' before ``(C)''; and
                    (B) by inserting before the semicolon at the end the 
                following new subparagraph: ``; and (D) counseling and 
                pharmacotherapy for cessation of tobacco use by pregnant 
                women (as defined in subsection (bb))''; and
            (2) by adding at the end the following:

    ``(bb)(1) For <<NOTE: Definition.>> purposes of this title, the term 
`counseling and pharmacotherapy for cessation of tobacco use by pregnant 
women' means diagnostic, therapy, and counseling services and 
pharmacotherapy (including the coverage of prescription and 
nonprescription tobacco cessation agents approved by the Food and Drug 
Administration) for cessation of tobacco use by pregnant women who use 
tobacco products or who are being treated for tobacco use that is 
furnished--
            ``(A) by or under the supervision of a physician; or
            ``(B) by any other health care professional who--
                    ``(i) is legally authorized to furnish such services 
                under State law (or the State regulatory mechanism 
                provided by State law) of the State in which the 
                services are furnished; and
                    ``(ii) is authorized to receive payment for other 
                services under this title or is designated by the 
                Secretary for this purpose.

    ``(2) Subject to paragraph (3), such term is limited to--
            ``(A) services recommended with respect to pregnant women in 
        `Treating Tobacco Use and Dependence: 2008 Update: A Clinical 
        Practice Guideline', published by the Public Health Service in 
        May 2008, or any subsequent modification of such Guideline; and
            ``(B) such other services that the Secretary recognizes to 
        be effective for cessation of tobacco use by pregnant women.

    ``(3) Such term shall not include coverage for drugs or biologicals 
that are not otherwise covered under this title.''.
    (b) Exception From Optional Restriction Under Medicaid Prescription 
Drug Coverage.--Section 1927(d)(2)(F) of the Social Security Act (42 
U.S.C. 1396r-8(d)(2)(F)), as redesignated by section 2502(a), is amended 
by inserting before the period at the end the following: ``, except, in 
the case of pregnant women when recommended in accordance with the 
Guideline referred to in section 1905(bb)(2)(A), 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''.

[[Page 124 STAT. 561]]

    (c) Removal of Cost-Sharing for Counseling and Pharmacotherapy for 
Cessation of Tobacco Use by Pregnant Women.--
            (1) General cost-sharing limitations.--Section 1916 of the 
        Social Security Act (42 U.S.C. 1396o) is amended in each of 
        subsections (a)(2)(B) and (b)(2)(B) by inserting ``, and 
        counseling and pharmacotherapy for cessation of tobacco use by 
        pregnant women (as defined in section 1905(bb)) and covered 
        outpatient drugs (as defined in subsection (k)(2) of section 
        1927 and including nonprescription drugs described in subsection 
        (d)(2) of such section) that are prescribed for purposes of 
        promoting, and when used to promote, tobacco cessation by 
        pregnant women in accordance with the Guideline referred to in 
        section 1905(bb)(2)(A)'' after ``complicate the pregnancy''.
            (2) Application to alternative cost-sharing.--Section 
        1916A(b)(3)(B)(iii) of such Act (42 U.S.C. 1396o-
        1(b)(3)(B)(iii)) is amended by inserting ``, and counseling and 
        pharmacotherapy for cessation of tobacco use by pregnant women 
        (as defined in section 1905(bb))'' after ``complicate the 
        pregnancy''.

    (d) Effective <<NOTE: 42 USC 1396d note.>> Date.--The amendments 
made by this section shall take effect on October 1, 2010.

SEC. 4108. INCENTIVES <<NOTE: Grants. 42 USC 1396a note.>> FOR 
            PREVENTION OF CHRONIC DISEASES IN MEDICAID.

    (a) Initiatives.--
            (1) Establishment.--
                    (A) In general.--The Secretary shall award grants to 
                States to carry out initiatives to provide incentives to 
                Medicaid beneficiaries who--
                          (i) successfully participate in a program 
                      described in paragraph (3); and
                          (ii) upon completion of such participation, 
                      demonstrate changes in health risk and outcomes, 
                      including the adoption and maintenance of healthy 
                      behaviors by meeting specific targets (as 
                      described in subsection (c)(2)).
                    (B) Purpose.--The purpose of the initiatives under 
                this section is to test approaches that may encourage 
                behavior modification and determine scalable solutions.
            (2) Duration.--
                    (A) Initiation <<NOTE: Effective date.>> of program; 
                resources.--The Secretary shall awards grants to States 
                beginning on January 1, 2011, or beginning on the date 
                on which the Secretary develops program criteria, 
                whichever is <<NOTE: Criteria.>> earlier. The Secretary 
                shall develop program criteria for initiatives under 
                this section using relevant evidence-based research and 
                resources, including the Guide to Community Preventive 
                Services, the Guide to Clinical Preventive Services, and 
                the National Registry of Evidence-Based Programs and 
                Practices.
                    (B) Duration <<NOTE: Deadline.>> of program.--A 
                State awarded a grant to carry out initiatives under 
                this section shall carry out such initiatives within the 
                5-year period beginning on January 1, 2011, or beginning 
                on the date on which the Secretary develops program 
                criteria, whichever is earlier. Initiatives under this 
                section shall be carried out by a State for a period of 
                not less than 3 years.

[[Page 124 STAT. 562]]

            (3) Program described.--
                    (A) In general.--A program described in this 
                paragraph is a comprehensive, evidence-based, widely 
                available, and easily accessible program, proposed by 
                the State and approved by the Secretary, that is 
                designed and uniquely suited to address the needs of 
                Medicaid beneficiaries and has demonstrated success in 
                helping individuals achieve one or more of the 
                following:
                          (i) Ceasing use of tobacco products.
                          (ii) Controlling or reducing their weight.
                          (iii) Lowering their cholesterol.
                          (iv) Lowering their blood pressure.
                          (v) Avoiding the onset of diabetes or, in the 
                      case of a diabetic, improving the management of 
                      that condition.
                    (B) Co-morbidities.--A program under this section 
                may also address co-morbidities (including depression) 
                that are related to any of the conditions described in 
                subparagraph (A).
                    (C) Waiver authority.--The Secretary may waive the 
                requirements of section 1902(a)(1) (relating to 
                statewideness) of the Social Security Act for a State 
                awarded a grant to conduct an initiative under this 
                section and shall ensure that a State makes any program 
                described in subparagraph (A) available and accessible 
                to Medicaid beneficiaries.
                    (D) Flexibility in implementation.--A State may 
                enter into arrangements with providers participating in 
                Medicaid, community-based organizations, faith-based 
                organizations, public-private partnerships, Indian 
                tribes, or similar entities or organizations to carry 
                out programs described in subparagraph (A).
            (4) Application.--Following the development of program 
        criteria by the Secretary, a State may submit an application, in 
        such manner and containing such information as the Secretary may 
        require, that shall include a proposal for programs described in 
        paragraph (3)(A) and a plan to make Medicaid beneficiaries and 
        providers participating in Medicaid who reside in the State 
        aware and informed about such programs.

    (b) Education and Outreach Campaign.--
            (1) State awareness.--The Secretary shall conduct an 
        outreach and education campaign to make States aware of the 
        grants under this section.
            (2) Provider and beneficiary education.--A State awarded a 
        grant to conduct an initiative under this section shall conduct 
        an outreach and education campaign to make Medicaid 
        beneficiaries and providers participating in Medicaid who reside 
        in the State aware of the programs described in subsection 
        (a)(3) that are to be carried out by the State under the grant.

    (c) Impact.--A State awarded a grant to conduct an initiative under 
this section shall develop and implement a system to--
            (1) track Medicaid beneficiary participation in the program 
        and validate changes in health risk and outcomes with clinical 
        data, including the adoption and maintenance of health behaviors 
        by such beneficiaries;

[[Page 124 STAT. 563]]

            (2) to the extent practicable, establish standards and 
        health status targets for Medicaid beneficiaries participating 
        in the program and measure the degree to which such standards 
        and targets are met;
            (3) evaluate the effectiveness of the program and provide 
        the Secretary with such evaluations;
            (4) report <<NOTE: Reports.>> to the Secretary on processes 
        that have been developed and lessons learned from the program; 
        and
            (5) report <<NOTE: Reports.>> on preventive services as part 
        of reporting on quality measures for Medicaid managed care 
        programs.

    (d) Evaluations and Reports.--
            (1) Independent <<NOTE: Contracts.>> assessment.--The 
        Secretary shall enter into a contract with an independent entity 
        or organization to conduct an evaluation and assessment of the 
        initiatives carried out by States under this section, for the 
        purpose of determining--
                    (A) the effect of such initiatives on the use of 
                health care services by Medicaid beneficiaries 
                participating in the program;
                    (B) the extent to which special populations 
                (including adults with disabilities, adults with chronic 
                illnesses, and children with special health care needs) 
                are able to participate in the program;
                    (C) the level of satisfaction of Medicaid 
                beneficiaries with respect to the accessibility and 
                quality of health care services provided through the 
                program; and
                    (D) the administrative costs incurred by State 
                agencies that are responsible for administration of the 
                program.
            (2) State reporting.--A State awarded a grant to carry out 
        initiatives under this section shall submit reports to the 
        Secretary, on a semi-annual basis, regarding the programs that 
        are supported by the grant funds. Such report shall include 
        information, as specified by the Secretary, regarding--
                    (A) the specific uses of the grant funds;
                    (B) an assessment of program implementation and 
                lessons learned from the programs;
                    (C) an assessment of quality improvements and 
                clinical outcomes under such programs; and
                    (D) estimates of cost savings resulting from such 
                programs.
            (3) Initial report.--Not later than January 1, 2014, the 
        Secretary shall submit to Congress an initial report on such 
        initiatives based on information provided by States through 
        reports required under paragraph (2). The initial report shall 
        include an interim evaluation of the effectiveness of the 
        initiatives carried out with grants awarded under this section 
        and a recommendation regarding whether funding for expanding or 
        extending the initiatives should be extended beyond January 1, 
        2016.
            (4) Final report.--Not later than July 1, 2016, the 
        Secretary shall submit to Congress a final report on the program 
        that includes the results of the independent assessment required 
        under paragraph (1), together with recommendations for such 
        legislation and administrative action as the Secretary 
        determines appropriate.

[[Page 124 STAT. 564]]

    (e) No Effect on Eligibility for, or Amount of, Medicaid or Other 
Benefits.--Any incentives provided to a Medicaid beneficiary 
participating in a program described in subsection (a)(3) shall not be 
taken into account for purposes of determining the beneficiary's 
eligibility for, or amount of, benefits under the Medicaid program or 
any program funded in whole or in part with Federal funds.
    (f) Funding.--Out of any funds in the Treasury not otherwise 
appropriated, there are appropriated for the 5-year period beginning on 
January 1, 2011, $100,000,000 to the Secretary to carry out this 
section. Amounts appropriated under this subsection shall remain 
available until expended.
    (g) Definitions.--In this section:
            (1) Medicaid beneficiary.--The term ``Medicaid beneficiary'' 
        means an individual who is eligible for medical assistance under 
        a State plan or waiver under title XIX of the Social Security 
        Act (42 U.S.C. 1396 et seq.) and is enrolled in such plan or 
        waiver.
            (2) 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.).

               Subtitle C--Creating Healthier Communities

SEC. 4201. COMMUNITY <<NOTE: 42 USC 300u-13.>> TRANSFORMATION GRANTS.

    (a) In General.--The Secretary of Health and Human Services 
(referred to in this section as the ``Secretary''), acting through the 
Director of the Centers for Disease Control and Prevention (referred to 
in this section as the ``Director''), shall award competitive grants to 
State and local governmental agencies and community-based organizations 
for the implementation, evaluation, and dissemination of evidence-based 
community preventive health activities in order to reduce chronic 
disease rates, prevent the development of secondary conditions, address 
health disparities, and develop a stronger evidence-base of effective 
prevention programming.
    (b) Eligibility.--To be eligible to receive a grant under subsection 
(a), an entity shall--
            (1) be--
                    (A) a State governmental agency;
                    (B) a local governmental agency;
                    (C) a national network of community-based 
                organizations;
                    (D) a State or local non-profit organization; or
                    (E) an Indian tribe; and
            (2) submit to the Director an application at such time, in 
        such a manner, and containing such information as the Director 
        may require, including a description of the program to be 
        carried out under the grant; and
            (3) demonstrate a history or capacity, if funded, to develop 
        relationships necessary to engage key stakeholders from multiple 
        sectors within and beyond health care and across a community, 
        such as healthy futures corps and health care providers.

    (c) Use of Funds.--

[[Page 124 STAT. 565]]

            (1) In general.--An eligible entity shall use amounts 
        received under a grant under this section to carry out programs 
        described in this subsection.
            (2) Community transformation plan.--
                    (A) In general.--An eligible entity that receives a 
                grant under this section shall submit to the Director 
                (for approval) a detailed plan that includes the policy, 
                environmental, programmatic, and as appropriate 
                infrastructure changes needed to promote healthy living 
                and reduce disparities.
                    (B) Activities.--Activities within the plan may 
                focus on (but not be limited to)--
                          (i) creating healthier school environments, 
                      including increasing healthy food options, 
                      physical activity opportunities, promotion of 
                      healthy lifestyle, emotional wellness, and 
                      prevention curricula, and activities to prevent 
                      chronic diseases;
                          (ii) creating the infrastructure to support 
                      active living and access to nutritious foods in a 
                      safe environment;
                          (iii) developing and promoting programs 
                      targeting a variety of age levels to increase 
                      access to nutrition, physical activity and smoking 
                      cessation, improve social and emotional wellness, 
                      enhance safety in a community, or address any 
                      other chronic disease priority area identified by 
                      the grantee;
                          (iv) assessing and implementing worksite 
                      wellness programming and incentives;
                          (v) working to highlight healthy options at 
                      restaurants and other food venues;
                          (vi) prioritizing strategies to reduce racial 
                      and ethnic disparities, including social, 
                      economic, and geographic determinants of health; 
                      and
                          (vii) addressing special populations needs, 
                      including all age groups and individuals with 
                      disabilities, and individuals in both urban and 
                      rural areas.
            (3) Community-based prevention health activities.--
                    (A) In general.--An eligible entity shall use 
                amounts received under a grant under this section to 
                implement a variety of programs, policies, and 
                infrastructure improvements to promote healthier 
                lifestyles.
                    (B) Activities.--An eligible entity shall implement 
                activities detailed in the community transformation plan 
                under paragraph (2).
                    (C) In-kind support.--An eligible entity may provide 
                in-kind resources such as staff, equipment, or office 
                space in carrying out activities under this section.
            (4) Evaluation.--
                    (A) In general.--An eligible entity shall use 
                amounts provided under a grant under this section to 
                conduct activities to measure changes in the prevalence 
                of chronic disease risk factors among community members 
                participating in preventive health activities
                    (B) Types of measures.--In carrying out subparagraph 
                (A), the eligible entity shall, with respect to 
                residents in the community, measure--
                          (i) changes in weight;

[[Page 124 STAT. 566]]

                          (ii) changes in proper nutrition;
                          (iii) changes in physical activity;
                          (iv) changes in tobacco use prevalence;
                          (v) changes in emotional well-being and 
                      overall mental health;
                          (vi) other factors using community-specific 
                      data from the Behavioral Risk Factor Surveillance 
                      Survey; and
                          (vii) other factors as determined by the 
                      Secretary.
                    (C) Reporting.--An eligible entity shall annually 
                submit to the Director a report containing an evaluation 
                of activities carried out under the grant.
            (5) Dissemination.--A grantee under this section shall--
                    (A) meet at least annually in regional or national 
                meetings to discuss challenges, best practices, and 
                lessons learned with respect to activities carried out 
                under the grant; and
                    (B) develop models for the replication of successful 
                programs and activities and the mentoring of other 
                eligible entities.

    (d) Training.--
            (1) In general.--The Director shall develop a program to 
        provide training for eligible entities on effective strategies 
        for the prevention and control of chronic disease and the link 
        between physical, emotional, and social well-being.
            (2) Community transformation plan.--The Director shall 
        provide appropriate feedback and technical assistance to 
        grantees to establish community transformation plans
            (3) Evaluation.--The Director shall provide a literature 
        review and framework for the evaluation of programs conducted as 
        part of the grant program under this section, in addition to 
        working with academic institutions or other entities with 
        expertise in outcome evaluation.

    (e) Prohibition.--A grantee shall not use funds provided under a 
grant under this section to create video games or to carry out any other 
activities that may lead to higher rates of obesity or inactivity.
    (f) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section, such sums as may be necessary 
for each fiscal years 2010 through 2014.

SEC. 4202. HEALTHY <<NOTE: 42 USC 300u-14.>> AGING, LIVING WELL; 
            EVALUATION OF COMMUNITY-BASED PREVENTION AND WELLNESS 
            PROGRAMS FOR MEDICARE BENEFICIARIES.

    (a) Healthy Aging, Living Well.--
            (1) In general.--The Secretary of Health and Human Services 
        (referred to in this section as the ``Secretary''), acting 
        through the Director of the Centers for Disease Control and 
        Prevention, shall award grants to State or local health 
        departments and Indian tribes to carry out 5-year pilot programs 
        to provide public health community interventions, screenings, 
        and where necessary, clinical referrals for individuals who are 
        between 55 and 64 years of age.
            (2) Eligibility.--To be eligible to receive a grant under 
        paragraph (1), an entity shall--
                    (A) be--
                          (i) a State health department;

[[Page 124 STAT. 567]]

                          (ii) a local health department; or
                          (iii) an Indian tribe;
                    (B) submit to the Secretary an application at such 
                time, in such manner, and containing such information as 
                the Secretary may require including a description of the 
                program to be carried out under the grant;
                    (C) design a strategy for improving the health of 
                the 55-to-64 year-old population through community-based 
                public health interventions; and
                    (D) demonstrate the capacity, if funded, to develop 
                the relationships necessary with relevant health 
                agencies, health care providers, community-based 
                organizations, and insurers to carry out the activities 
                described in paragraph (3), such relationships to 
                include the identification of a community-based clinical 
                partner, such as a community health center or rural 
                health clinic.
            (3) Use of funds.--
                    (A) In general.--A State or local health department 
                shall use amounts received under a grant under this 
                subsection to carry out a program to provide the 
                services described in this paragraph to individuals who 
                are between 55 and 64 years of age.
                    (B) Public health interventions.--
                          (i) In general.--In developing and 
                      implementing such activities, a grantee shall 
                      collaborate with the Centers for Disease Control 
                      and Prevention and the Administration on Aging, 
                      and relevant local agencies and organizations.
                          (ii) Types of intervention activities.--
                      Intervention activities conducted under this 
                      subparagraph may include efforts to improve 
                      nutrition, increase physical activity, reduce 
                      tobacco use and substance abuse, improve mental 
                      health, and promote healthy lifestyles among the 
                      target population.
                    (C) Community preventive screenings.--
                          (i) In general.--In addition to community-wide 
                      public health interventions, a State or local 
                      health department shall use amounts received under 
                      a grant under this subsection to conduct ongoing 
                      health screening to identify risk factors for 
                      cardiovascular disease, cancer, stroke, and 
                      diabetes among individuals in both urban and rural 
                      areas who are between 55 and 64 years of age.
                          (ii) Types of screening activities.--Screening 
                      activities conducted under this subparagraph may 
                      include--
                                    (I) mental health/behavioral health 
                                and substance use disorders;
                                    (II) physical activity, smoking, and 
                                nutrition; and
                                    (III) any other measures deemed 
                                appropriate by the Secretary.
                          (iii) Monitoring.--
                      Grantees <<NOTE: Records.>> under this section 
                      shall maintain records of screening results under 
                      this subparagraph to establish the baseline data 
                      for monitoring the targeted population

[[Page 124 STAT. 568]]

                    (D) Clinical referral/treatment for chronic 
                diseases.--
                          (i) In general.--A State or local health 
                      department shall use amounts received under a 
                      grant under this subsection to ensure that 
                      individuals between 55 and 64 years of age who are 
                      found to have chronic disease risk factors through 
                      the screening activities described in subparagraph 
                      (C)(ii), receive clinical referral/treatment for 
                      follow-up services to reduce such risk.
                          (ii) Mechanism.--
                                    (I) Identification and determination 
                                of status.--With respect to each 
                                individual with risk factors for or 
                                having heart disease, stroke, diabetes, 
                                or any other condition for which such 
                                individual was screened under 
                                subparagraph (C), a grantee under this 
                                section shall determine whether or not 
                                such individual is covered under any 
                                public or private health insurance 
                                program.
                                    (II) Insured individuals.--An 
                                individual determined to be covered 
                                under a health insurance program under 
                                subclause (I) shall be referred by the 
                                grantee to the existing providers under 
                                such program or, if such individual does 
                                not have a current provider, to a 
                                provider who is in-network with respect 
                                to the program involved.
                                    (III) Uninsured individuals.--With 
                                respect to an individual determined to 
                                be uninsured under subclause (I), the 
                                grantee's community-based clinical 
                                partner described in paragraph (4)(D) 
                                shall assist the individual in 
                                determining eligibility for available 
                                public coverage options and identify 
                                other appropriate community health care 
                                resources and assistance programs.
                          (iii) Public health intervention program.--A 
                      State or local health department shall use amounts 
                      received under a grant under this subsection to 
                      enter into contracts with community health centers 
                      or rural health clinics and mental health and 
                      substance use disorder service providers to assist 
                      in the referral/treatment of at risk patients to 
                      community resources for clinical follow-up and 
                      help determine eligibility for other public 
                      programs.
                    (E) Grantee evaluation.--An eligible entity shall 
                use amounts provided under a grant under this subsection 
                to conduct activities to measure changes in the 
                prevalence of chronic disease risk factors among 
                participants.
            (4) Pilot program evaluation.--The Secretary shall conduct 
        an annual evaluation of the effectiveness of the pilot program 
        under this subsection. In determining such effectiveness, the 
        Secretary shall consider changes in the prevalence of 
        uncontrolled chronic disease risk factors among new Medicare 
        enrollees (or individuals nearing enrollment, including those 
        who are 63 and 64 years of age) who reside in States or 
        localities receiving grants under this section as compared with 
        national and historical data for those States and localities for 
        the same population.

[[Page 124 STAT. 569]]

            (5) Authorization of appropriations.--There are authorized 
        to be appropriated to carry out this subsection, such sums as 
        may be necessary for each of fiscal years 2010 through 2014.

    (b) Evaluation and Plan for Community-based Prevention and Wellness 
Programs for Medicare Beneficiaries.--
            (1) In general.--The Secretary shall conduct an evaluation 
        of community-based prevention and wellness programs and develop 
        a plan for promoting healthy lifestyles and chronic disease 
        self-management for Medicare beneficiaries.
            (2) Medicare evaluation of prevention and wellness 
        programs.--
                    (A) In general.--The Secretary shall evaluate 
                community prevention and wellness programs including 
                those that are sponsored by the Administration on Aging, 
                are evidence-based, and have demonstrated potential to 
                help Medicare beneficiaries (particularly beneficiaries 
                that have attained 65 years of age) reduce their risk of 
                disease, disability, and injury by making healthy 
                lifestyle choices, including exercise, diet, and self-
                management of chronic diseases.
                    (B) Evaluation.--The evaluation under subparagraph 
                (A) shall consist of the following:
                          (i) Evidence review.--The Secretary shall 
                      review available evidence, literature, best 
                      practices, and resources that are relevant to 
                      programs that promote healthy lifestyles and 
                      reduce risk factors for the Medicare population. 
                      The Secretary may determine the scope of the 
                      evidence review and such issues to be considered, 
                      which shall include, at a minimum--
                                    (I) physical activity, nutrition, 
                                and obesity;
                                    (II) falls;
                                    (III) chronic disease self-
                                management; and
                                    (IV) mental health.
                          (ii) Independent evaluation of evidence-based 
                      community prevention and wellness programs.--The 
                      Administrator of the Centers for Medicare & 
                      Medicaid Services, in consultation with the 
                      Assistant Secretary for Aging, shall, to the 
                      extent feasible and practicable, conduct an 
                      evaluation of existing community prevention and 
                      wellness programs that are sponsored by the 
                      Administration on Aging to assess the extent to 
                      which Medicare beneficiaries who participate in 
                      such programs--
                                    (I) reduce their health risks, 
                                improve their health outcomes, and adopt 
                                and maintain healthy behaviors;
                                    (II) improve their ability to manage 
                                their chronic conditions; and
                                    (III) reduce their utilization of 
                                health services and associated costs 
                                under the Medicare program for 
                                conditions that are amenable to 
                                improvement under such programs.
            (3) Report.--Not later than September 30, 2013, the 
        Secretary shall submit to Congress a report that includes--
                    (A) recommendations for such legislation and 
                administrative action as the Secretary determines 
                appropriate to

[[Page 124 STAT. 570]]

                promote healthy lifestyles and chronic disease self-
                management for Medicare beneficiaries;
                    (B) any relevant findings relating to the evidence 
                review under paragraph (2)(B)(i); and
                    (C) the results of the evaluation under paragraph 
                (2)(B)(ii).
            (4) Funding.--For purposes of carrying out this subsection, 
        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 Supplemental 
        Medical Insurance Trust Fund under section 1841 of such Act (42 
        U.S.C. 1395t), in such proportion as the Secretary determines 
        appropriate, of $50,000,000 to the Centers for Medicare & 
        Medicaid Services Program Management Account. Amounts 
        transferred under the preceding sentence shall remain available 
        until expended.
            (5) Administration.--Chapter 35 of title 44, United States 
        Code shall not apply to the this subsection.
            (6) Medicare <<NOTE: Definition.>> beneficiary.--In this 
        subsection, the term ``Medicare beneficiary'' means an 
        individual who is entitled to benefits under part A of title 
        XVIII of the Social Security Act and enrolled under part B of 
        such title.

SEC. 4203. REMOVING BARRIERS AND IMPROVING ACCESS TO WELLNESS FOR 
            INDIVIDUALS WITH DISABILITIES.

    Title V of the Rehabilitation Act of 1973 (29 U.S.C. 791 et seq.) is 
amended by adding at the end of the following:

``SEC. 510. ESTABLISHMENT <<NOTE: 29 USC 794f.>> OF STANDARDS FOR 
            ACCESSIBLE MEDICAL DIAGNOSTIC EQUIPMENT.

    ``(a) Standards.--Not <<NOTE: Deadline.>> later than 24 months after 
the date of enactment of the Affordable Health Choices Act, the 
Architectural and Transportation Barriers Compliance Board shall, in 
consultation with the Commissioner of the Food and Drug Administration, 
promulgate regulatory standards in accordance with the Administrative 
Procedure Act (2 U.S.C. 551 et seq.) setting forth the minimum technical 
criteria for medical diagnostic equipment used in (or in conjunction 
with) physician's offices, clinics, emergency rooms, hospitals, and 
other medical settings. The standards shall ensure that such equipment 
is accessible to, and usable by, individuals with accessibility needs, 
and shall allow independent entry to, use of, and exit from the 
equipment by such individuals to the maximum extent possible.

    ``(b) Medical Diagnostic Equipment Covered.--The standards issued 
under subsection (a) for medical diagnostic equipment shall apply to 
equipment that includes examination tables, examination chairs 
(including chairs used for eye examinations or procedures, and dental 
examinations or procedures), weight scales, mammography equipment, x-ray 
machines, and other radiological equipment commonly used for diagnostic 
purposes by health professionals.
    ``(c) Review and Amendment.--The Architectural and Transportation 
Barriers Compliance Board, in consultation with the Commissioner of the 
Food and Drug Administration, shall periodically review and, as 
appropriate, amend the standards in accordance with the Administrative 
Procedure Act (2 U.S.C. 551 et seq.).''.

[[Page 124 STAT. 571]]

SEC. 4204. IMMUNIZATIONS.

    (a) State Authority To Purchase Recommended Vaccines for Adults.--
Section 317 of the Public Health Service Act (42 U.S.C. 247b) is amended 
by adding at the end the following:
    ``(l) Authority to Purchase Recommended Vaccines for Adults.--
            ``(1) In general.--The Secretary may negotiate and enter 
        into contracts with manufacturers of vaccines for the purchase 
        and delivery of vaccines for adults as provided for under 
        subsection (e).
            ``(2) State purchase.--A State may obtain additional 
        quantities of such adult vaccines (subject to amounts specified 
        to the Secretary by the State in advance of negotiations) 
        through the purchase of vaccines from manufacturers at the 
        applicable price negotiated by the Secretary under this 
        subsection.''.

    (b) Demonstration Program to Improve Immunization Coverage.--Section 
317 of the Public Health Service Act (42 U.S.C. 247b), as amended by 
subsection (a), is further amended by adding at the end the following:
    ``(m) Demonstration <<NOTE: Grants.>> Program To Improve 
Immunization Coverage.--
            ``(1) In general.--The Secretary, acting through the 
        Director of the Centers for Disease Control and Prevention, 
        shall establish a demonstration program to award grants to 
        States to improve the provision of recommended immunizations for 
        children, adolescents, and adults through the use of evidence-
        based, population-based interventions for high-risk populations.
            ``(2) State plan.--To be eligible for a grant under 
        paragraph (1), a State shall submit to the Secretary an 
        application at such time, in such manner, and containing such 
        information as the Secretary may require, including a State plan 
        that describes the interventions to be implemented under the 
        grant and how such interventions match with local needs and 
        capabilities, as determined through consultation with local 
        authorities.
            ``(3) Use of funds.--Funds received under a grant under this 
        subsection shall be used to implement interventions that are 
        recommended by the Task Force on Community Preventive Services 
        (as established by the Secretary, acting through the Director of 
        the Centers for Disease Control and Prevention) or other 
        evidence-based interventions, including--
                    ``(A) providing immunization reminders or recalls 
                for target populations of clients, patients, and 
                consumers;
                    ``(B) educating targeted populations and health care 
                providers concerning immunizations in combination with 
                one or more other interventions;
                    ``(C) reducing out-of-pocket costs for families for 
                vaccines and their administration;
                    ``(D) carrying out immunization-promoting strategies 
                for participants or clients of public programs, 
                including assessments of immunization status, referrals 
                to health care providers, education, provision of on-
                site immunizations, or incentives for immunization;

[[Page 124 STAT. 572]]

                    ``(E) providing for home visits that promote 
                immunization through education, assessments of need, 
                referrals, provision of immunizations, or other 
                services;
                    ``(F) providing reminders or recalls for 
                immunization providers;
                    ``(G) conducting assessments of, and providing 
                feedback to, immunization providers;
                    ``(H) any combination of one or more interventions 
                described in this paragraph; or
                    ``(I) immunization information systems to allow all 
                States to have electronic databases for immunization 
                records.
            ``(4) Consideration.--In awarding grants under this 
        subsection, the Secretary shall consider any reviews or 
        recommendations of the Task Force on Community Preventive 
        Services.
            ``(5) Evaluation.--Not <<NOTE: Deadline.>> later than 3 
        years after the date on which a State receives a grant under 
        this subsection, the State shall submit to the Secretary an 
        evaluation of progress made toward improving immunization 
        coverage rates among high-risk populations within the State.
            ``(6) Report to congress.--Not later than 4 years after the 
        date of enactment of the Affordable Health Choices Act, the 
        Secretary shall submit to Congress a report concerning the 
        effectiveness of the demonstration program established under 
        this subsection together with recommendations on whether to 
        continue and expand such program.
            ``(7) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out this subsection, such sums as 
        may be necessary for each of fiscal years 2010 through 2014.''.

    (c) Reauthorization of Immunization Program.--Section 317(j) of the 
Public Health Service Act (42 U.S.C. 247b(j)) is amended--
            (1) in paragraph (1), by striking ``for each of the fiscal 
        years 1998 through 2005''; and
            (2) in paragraph (2), by striking ``after October 1, 
        1997,''.

    (d) Rule of <<NOTE: 42 USC 247b note.>> Construction Regarding 
Access to Immunizations.--Nothing in this section (including the 
amendments made by this section), or any other provision of this Act 
(including any amendments made by this Act) shall be construed to 
decrease children's access to immunizations.

    (e) GAO Study and Report on Medicare Beneficiary Access to 
Vaccines.--
            (1) Study.--The Comptroller General of the United States (in 
        this section referred to as the ``Comptroller General'') shall 
        conduct a study on the ability of Medicare beneficiaries who 
        were 65 years of age or older to access routinely recommended 
        vaccines covered under the prescription drug program under part 
        D of title XVIII of the Social Security Act over the period 
        since the establishment of such program. Such study shall 
        include the following:
                    (A) An analysis and determination of--
                          (i) the number of Medicare beneficiaries who 
                      were 65 years of age or older and were eligible 
                      for a routinely recommended vaccination that was 
                      covered under part D;

[[Page 124 STAT. 573]]

                          (ii) the number of such beneficiaries who 
                      actually received a routinely recommended 
                      vaccination that was covered under part D; and
                          (iii) any barriers to access by such 
                      beneficiaries to routinely recommended 
                      vaccinations that were covered under part D.
                    (B) A summary of the findings and recommendations by 
                government agencies, departments, and advisory bodies 
                (as well as relevant professional organizations) on the 
                impact of coverage under part D of routinely recommended 
                adult immunizations for access to such immunizations by 
                Medicare beneficiaries.
            (2) Report.--Not later than June 1, 2011, the Comptroller 
        General shall submit to the appropriate committees of 
        jurisdiction of the House of Representatives and the Senate a 
        report containing the results of the study conducted under 
        paragraph (1), together with recommendations for such 
        legislation and administrative action as the Comptroller General 
        determines appropriate.
            (3) Funding.--Out of any funds in the Treasury not otherwise 
        appropriated, there are appropriated $1,000,000 for fiscal year 
        2010 to carry out this subsection.

SEC. 4205. NUTRITION LABELING OF STANDARD MENU ITEMS AT CHAIN 
            RESTAURANTS.

    (a) Technical Amendments.--Section 403(q)(5)(A) of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 343(q)(5)(A)) is amended--
            (1) in subitem (i), by inserting at the beginning ``except 
        as provided in clause (H)(ii)(III),''; and
            (2) in subitem (ii), by inserting at the beginning ``except 
        as provided in clause (H)(ii)(III),''.

    (b) Labeling Requirements.--Section 403(q)(5) of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 343(q)(5)) is amended by adding at the 
end the following:
    ``(H) Restaurants, Retail Food Establishments, and Vending 
Machines.--
            ``(i) General requirements for restaurants and similar 
        retail food establishments.--Except for food described in 
        subclause (vii), in the case of food that is a standard menu 
        item that is offered for sale in a restaurant or similar retail 
        food establishment that is part of a chain with 20 or more 
        locations doing business under the same name (regardless of the 
        type of ownership of the locations) and offering for sale 
        substantially the same menu items, the restaurant or similar 
        retail food establishment shall disclose the information 
        described in subclauses (ii) and (iii).
            ``(ii) Information required to be disclosed by restaurants 
        and retail food establishments.--Except as provided in subclause 
        (vii), the restaurant or similar retail food establishment shall 
        disclose in a clear and conspicuous manner--
                    ``(I)(aa) in a nutrient content disclosure statement 
                adjacent to the name of the standard menu item, so as to 
                be clearly associated with the standard menu item, on 
                the menu listing the item for sale, the number of 
                calories

[[Page 124 STAT. 574]]

                contained in the standard menu item, as usually prepared 
                and offered for sale; and
                    ``(bb) a succinct statement concerning suggested 
                daily caloric intake, as specified by the Secretary by 
                regulation and posted prominently on the menu and 
                designed to enable the public to understand, in the 
                context of a total daily diet, the significance of the 
                caloric information that is provided on the menu;
                    ``(II)(aa) in a nutrient content disclosure 
                statement adjacent to the name of the standard menu 
                item, so as to be clearly associated with the standard 
                menu item, on the menu board, including a drive-through 
                menu board, the number of calories contained in the 
                standard menu item, as usually prepared and offered for 
                sale; and
                    ``(bb) a succinct statement concerning suggested 
                daily caloric intake, as specified by the Secretary by 
                regulation and posted prominently on the menu board, 
                designed to enable the public to understand, in the 
                context of a total daily diet, the significance of the 
                nutrition information that is provided on the menu 
                board;
            ``(III) in a written form, available on the premises of the 
        restaurant or similar retail establishment and to the consumer 
        upon request, the nutrition information required under clauses 
        (C) and (D) of subparagraph (1); and
            ``(IV) on the menu or menu board, a prominent, clear, and 
        conspicuous statement regarding the availability of the 
        information described in item (III).
            ``(iii) Self-service food and food on display.--Except as 
        provided in subclause (vii), in the case of food sold at a salad 
        bar, buffet line, cafeteria line, or similar self-service 
        facility, and for self-service beverages or food that is on 
        display and that is visible to customers, a restaurant or 
        similar retail food establishment shall place adjacent to each 
        food offered a sign that lists calories per displayed food item 
        or per serving.
            ``(iv) Reasonable basis.--For the purposes of this clause, a 
        restaurant or similar retail food establishment shall have a 
        reasonable basis for its nutrient content disclosures, including 
        nutrient databases, cookbooks, laboratory analyses, and other 
        reasonable means, as described in section 101.10 of title 21, 
        Code of Federal Regulations (or any successor regulation) or in 
        a related guidance of the Food and Drug Administration.
            ``(v) Menu variability and combination meals.--The Secretary 
        shall establish by regulation standards for determining and 
        disclosing the nutrient content for standard menu items that 
        come in different flavors, varieties, or combinations, but which 
        are listed as a single menu item, such as soft drinks, ice 
        cream, pizza, doughnuts, or children's combination meals, 
        through means determined by the Secretary, including ranges, 
        averages, or other methods.
            ``(vi) Additional information.--If the Secretary determines 
        that a nutrient, other than a nutrient required under subclause 
        (ii)(III), should be disclosed for the purpose of providing 
        information to assist consumers in maintaining healthy dietary 
        practices, the Secretary may require, by regulation, disclosure 
        of such nutrient in the written form required under subclause 
        (ii)(III).
            ``(vii) Nonapplicability to certain food.--

[[Page 124 STAT. 575]]

                    ``(I) In general.--Subclauses (i) through (vi) do 
                not apply to--
                          ``(aa) items that are not listed on a menu or 
                      menu board (such as condiments and other items 
                      placed on the table or counter for general use);
                          ``(bb) daily specials, temporary menu items 
                      appearing on the menu for less than 60 days per 
                      calendar year, or custom orders; or
                          ``(cc) such other food that is part of a 
                      customary market test appearing on the menu for 
                      less than 90 days, under terms and conditions 
                      established by the Secretary.
                    ``(II) Written <<NOTE: Applicability.>> forms.--
                Subparagraph (5)(C) shall apply to any regulations 
                promulgated under subclauses (ii)(III) and (vi).
            ``(viii) Vending machines.--
                    ``(I) In general.--In the case of an article of food 
                sold from a vending machine that--
                          ``(aa) does not permit a prospective purchaser 
                      to examine the Nutrition Facts Panel before 
                      purchasing the article or does not otherwise 
                      provide visible nutrition information at the point 
                      of purchase; and
                          ``(bb) is operated by a person who is engaged 
                      in the business of owning or operating 20 or more 
                      vending machines,
                the vending machine operator shall provide a sign in 
                close proximity to each article of food or the selection 
                button that includes a clear and conspicuous statement 
                disclosing the number of calories contained in the 
                article.
            ``(ix) Voluntary provision of nutrition information.--
                    ``(I) In general.--An authorized official of any 
                restaurant or similar retail food establishment or 
                vending machine operator not subject to the requirements 
                of this clause may elect to be subject to the 
                requirements of such clause, by registering biannually 
                the name and address of such restaurant or similar 
                retail food establishment or vending machine operator 
                with the Secretary, as specified by the Secretary by 
                regulation.
                    ``(II) Registration.--
                Within <<NOTE: Deadline. Notice. Federal Register, 
                publication.>> 120 days of enactment of this clause, the 
                Secretary shall publish a notice in the Federal Register 
                specifying the terms and conditions for implementation 
                of item (I), pending promulgation of regulations.
                    ``(III) Rule of construction.--Nothing in this 
                subclause shall be construed to authorize the Secretary 
                to require an application, review, or licensing process 
                for any entity to register with the Secretary, as 
                described in such item.
            ``(x) Regulations.--
                    ``(I) Proposed <<NOTE: Deadline.>> regulation.--Not 
                later than 1 year after the date of enactment of this 
                clause, the Secretary shall promulgate proposed 
                regulations to carry out this clause.
                    ``(II) Contents.--In promulgating regulations, the 
                Secretary shall--
                          ``(aa) consider standardization of recipes and 
                      methods of preparation, reasonable variation in 
                      serving

[[Page 124 STAT. 576]]

                      size and formulation of menu items, space on menus 
                      and menu boards, inadvertent human error, training 
                      of food service workers, variations in 
                      ingredients, and other factors, as the Secretary 
                      determines; and
                          ``(bb) specify the format and manner of the 
                      nutrient content disclosure requirements under 
                      this subclause.
                    ``(III) Reporting.--The Secretary shall 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 quarterly report that 
                describes the Secretary's progress toward promulgating 
                final regulations under this subparagraph.
            ``(xi) Definition.--In this clause, the term `menu' or `menu 
        board' means the primary writing of the restaurant or other 
        similar retail food establishment from which a consumer makes an 
        order selection.''

    (c) National Uniformity.--Section 403A(a)(4) of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 343-1(a)(4)) is amended by striking 
``except a requirement for nutrition labeling of food which is exempt 
under subclause (i) or (ii) of section 403(q)(5)(A)'' and inserting 
``except that this paragraph does not apply to food that is offered for 
sale in a restaurant or similar retail food establishment that is not 
part of a chain with 20 or more locations doing business under the same 
name (regardless of the type of ownership of the locations) and offering 
for sale substantially the same menu items unless such restaurant or 
similar retail food establishment complies with the voluntary provision 
of nutrition information requirements under section 403(q)(5)(H)(ix)''.
    (d) Rule of <<NOTE: 21 USC 343 note.>> Construction.--Nothing in the 
amendments made by this section shall be construed--
            (1) to preempt any provision of State or local law, unless 
        such provision establishes or continues into effect nutrient 
        content disclosures of the type required under section 
        403(q)(5)(H) of the Federal Food, Drug, and Cosmetic Act (as 
        added by subsection (b)) and is expressly preempted under 
        subsection (a)(4) of such section;
            (2) to apply to any State or local requirement respecting a 
        statement in the labeling of food that provides for a warning 
        concerning the safety of the food or component of the food; or
            (3) except as provided in section 403(q)(5)(H)(ix) of the 
        Federal Food, Drug, and Cosmetic Act (as added by subsection 
        (b)), to apply to any restaurant or similar retail food 
        establishment other than a restaurant or similar retail food 
        establishment described in section 403(q)(5)(H)(i) of such Act.

SEC. 4206. DEMONSTRATION PROJECT CONCERNING INDIVIDUALIZED WELLNESS 
            PLAN.

    Section 330 of the Public Health Service Act (42 U.S.C. 245b) is 
amended by adding at the end the following:
    ``(s) Demonstration Program for Individualized Wellness Plans.--
            ``(1) In general.--The Secretary shall establish a pilot 
        program to test the impact of providing at-risk populations who 
        utilize community health centers funded under this section an 
        individualized wellness plan that is designed to reduce risk

[[Page 124 STAT. 577]]

        factors for preventable conditions as identified by a 
        comprehensive risk-factor assessment.
            ``(2) Agreements.--The Secretary shall enter into agreements 
        with not more than 10 community health centers funded under this 
        section to conduct activities under the pilot program under 
        paragraph (1).
            ``(3) Wellness plans.--
                    ``(A) In general.--An individualized wellness plan 
                prepared under the pilot program under this subsection 
                may include one or more of the following as appropriate 
                to the individual's identified risk factors:
                          ``(i) Nutritional counseling.
                          ``(ii) A physical activity plan.
                          ``(iii) Alcohol and smoking cessation 
                      counseling and services.
                          ``(iv) Stress management.
                          ``(v) Dietary supplements that have health 
                      claims approved by the Secretary.
                          ``(vi) Compliance assistance provided by a 
                      community health center employee.
                    ``(B) Risk factors.--Wellness plan risk factors 
                shall include--
                          ``(i) weight;
                          ``(ii) tobacco and alcohol use;
                          ``(iii) exercise rates;
                          ``(iv) nutritional status; and
                          ``(v) blood pressure.
                    ``(C) Comparisons.--Individualized wellness plans 
                shall make comparisons between the individual involved 
                and a control group of individuals with respect to the 
                risk factors described in subparagraph (B).
            ``(4) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out this subsection, such sums as 
        may be necessary.''.

SEC. 4207. REASONABLE BREAK TIME FOR NURSING MOTHERS.

    Section 7 of the Fair Labor Standards Act of 1938 (29 U.S.C. 207) is 
amended by adding at the end the following:
    ``(r)(1) An employer shall provide--
            ``(A) a reasonable break time for an employee to express 
        breast milk for her nursing child for 1 year after the child's 
        birth each time such employee has need to express the milk; and
            ``(B) a place, other than a bathroom, that is shielded from 
        view and free from intrusion from coworkers and the public, 
        which may be used by an employee to express breast milk.

    ``(2) An employer shall not be required to compensate an employee 
receiving reasonable break time under paragraph (1) for any work time 
spent for such purpose.
    ``(3) An employer that employs less than 50 employees shall not be 
subject to the requirements of this subsection, if such requirements 
would impose an undue hardship by causing the employer significant 
difficulty or expense when considered in relation to the size, financial 
resources, nature, or structure of the employer's business.

[[Page 124 STAT. 578]]

    ``(4) Nothing in this subsection shall preempt a State law that 
provides greater protections to employees than the protections provided 
for under this subsection.''.

     Subtitle D--Support for Prevention and Public Health Innovation

SEC. 4301. RESEARCH <<NOTE: 42 USC 300u-15.>> ON OPTIMIZING THE DELIVERY 
            OF PUBLIC HEALTH SERVICES.

    (a) In General.--The Secretary of Health and Human Services 
(referred to in this section as the ``Secretary''), acting through the 
Director of the Centers for Disease Control and Prevention, shall 
provide funding for research in the area of public health services and 
systems.
    (b) Requirements of Research.--Research supported under this section 
shall include--
            (1) examining evidence-based practices relating to 
        prevention, with a particular focus on high priority areas as 
        identified by the Secretary in the National Prevention Strategy 
        or Healthy People 2020, and including comparing community-based 
        public health interventions in terms of effectiveness and cost;
            (2) analyzing the translation of interventions from academic 
        settings to real world settings; and
            (3) identifying effective strategies for organizing, 
        financing, or delivering public health services in real world 
        community settings, including comparing State and local health 
        department structures and systems in terms of effectiveness and 
        cost.

    (c) Existing Partnerships.--Research supported under this section 
shall be coordinated with the Community Preventive Services Task Force 
and carried out by building on existing partnerships within the Federal 
Government while also considering initiatives at the State and local 
levels and in the private sector.
    (d) Annual Report.--The Secretary shall, on an annual basis, submit 
to Congress a report concerning the activities and findings with respect 
to research supported under this section.

SEC. 4302. UNDERSTANDING HEALTH DISPARITIES: DATA COLLECTION AND 
            ANALYSIS.

    (a) Uniform Categories and Collection Requirements.--The Public 
Health Service Act (42 U.S.C. 201 et seq.) is amended by adding at the 
end the following:

          ``TITLE XXXI--DATA COLLECTION, ANALYSIS, AND QUALITY

``SEC. 3101. <<NOTE: 42 USC 300kk.>> DATA COLLECTION, ANALYSIS, AND 
            QUALITY.

    ``(a) Data Collection.--
            ``(1) In <<NOTE: Deadline.>> general.--The Secretary shall 
        ensure that, by not later than 2 years after the date of 
        enactment of this title, any federally conducted or supported 
        health care or public health program, activity or survey 
        (including Current Population Surveys and American Community 
        Surveys conducted

[[Page 124 STAT. 579]]

        by the Bureau of Labor Statistics and the Bureau of the Census) 
        collects and reports, to the extent practicable--
                    ``(A) data on race, ethnicity, sex, primary 
                language, and disability status for applicants, 
                recipients, or participants;
                    ``(B) data at the smallest geographic level such as 
                State, local, or institutional levels if such data can 
                be aggregated;
                    ``(C) sufficient data to generate statistically 
                reliable estimates by racial, ethnic, sex, primary 
                language, and disability status subgroups for 
                applicants, recipients or participants using, if needed, 
                statistical oversamples of these subpopulations; and
                    ``(D) any other demographic data as deemed 
                appropriate by the Secretary regarding health 
                disparities.
            ``(2) Collection standards.--In collecting data described in 
        paragraph (1), the Secretary or designee shall--
                    ``(A) use Office of Management and Budget standards, 
                at a minimum, for race and ethnicity measures;
                    ``(B) develop standards for the measurement of sex, 
                primary language, and disability status;
                    ``(C) develop standards for the collection of data 
                described in paragraph (1) that, at a minimum--
                          ``(i) collects self-reported data by the 
                      applicant, recipient, or participant; and
                          ``(ii) collects data from a parent or legal 
                      guardian if the applicant, recipient, or 
                      participant is a minor or legally incapacitated;
                    ``(D) survey health care providers and establish 
                other procedures in order to assess access to care and 
                treatment for individuals with disabilities and to 
                identify--
                          ``(i) locations where individuals with 
                      disabilities access primary, acute (including 
                      intensive), and long-term care;
                          ``(ii) the number of providers with accessible 
                      facilities and equipment to meet the needs of the 
                      individuals with disabilities, including medical 
                      diagnostic equipment that meets the minimum 
                      technical criteria set forth in section 510 of the 
                      Rehabilitation Act of 1973; and
                          ``(iii) the number of employees of health care 
                      providers trained in disability awareness and 
                      patient care of individuals with disabilities; and
                    ``(E) require that any reporting requirement imposed 
                for purposes of measuring quality under any ongoing or 
                federally conducted or supported health care or public 
                health program, activity, or survey includes 
                requirements for the collection of data on individuals 
                receiving health care items or services under such 
                programs activities by race, ethnicity, sex, primary 
                language, and disability status.
            ``(3) Data management.--In collecting data described in 
        paragraph (1), the Secretary, acting through the National 
        Coordinator for Health Information Technology shall--
                    ``(A) develop <<NOTE: Standards.>> national 
                standards for the management of data collected; and
                    ``(B) develop interoperability and security systems 
                for data management.

[[Page 124 STAT. 580]]

    ``(b) Data Analysis.--
            ``(1) In general.--For each federally conducted or supported 
        health care or public health program or activity, the Secretary 
        shall analyze data collected under paragraph (a) to detect and 
        monitor trends in health disparities (as defined for purposes of 
        section 485E) at the Federal and State levels.

    ``(c) Data Reporting and Dissemination.--
            ``(1) In general.--The Secretary shall make the analyses 
        described in (b) available to--
                    ``(A) the Office of Minority Health;
                    ``(B) the National Center on Minority Health and 
                Health Disparities;
                    ``(C) the Agency for Healthcare Research and 
                Quality;
                    ``(D) the Centers for Disease Control and 
                Prevention;
                    ``(E) the Centers for Medicare & Medicaid Services;
                    ``(F) the Indian Health Service and epidemiology 
                centers funded under the Indian Health Care Improvement 
                Act;
                    ``(G) the Office of Rural health;
                    ``(H) other agencies within the Department of Health 
                and Human Services; and
                    ``(I) other entities as determined appropriate by 
                the Secretary.
            ``(2) Reporting of data.--The Secretary shall report data 
        and analyses described in (a) and (b) through--
                    ``(A) public <<NOTE: Public information. Web 
                sites.>> postings on the Internet websites of the 
                Department of Health and Human Services; and
                    ``(B) any other reporting or dissemination 
                mechanisms determined appropriate by the Secretary.
            ``(3) Availability of data.--The Secretary may make data 
        described in (a) and (b) available for additional research, 
        analyses, and dissemination to other Federal agencies, non-
        governmental entities, and the public, in accordance with any 
        Federal agency's data user agreements.

    ``(d) Limitations on Use of Data.--Nothing in this section shall be 
construed to permit the use of information collected under this section 
in a manner that would adversely affect any individual.
    ``(e) Protection and Sharing of Data.--
            ``(1) Privacy and other safeguards.--The Secretary shall 
        ensure (through the promulgation of regulations or otherwise) 
        that--
                    ``(A) all data collected pursuant to subsection (a) 
                is protected--
                          ``(i) under privacy protections that are at 
                      least as broad as those that the Secretary applies 
                      to other health data under the regulations 
                      promulgated under section 264(c) of the Health 
                      Insurance Portability and Accountability Act of 
                      1996 (Public Law 104-191; 110 Stat. 2033); and
                          ``(ii) from all inappropriate internal use by 
                      any entity that collects, stores, or receives the 
                      data, including use of such data in determinations 
                      of eligibility (or continued eligibility) in 
                      health plans, and from other inappropriate uses, 
                      as defined by the Secretary; and

[[Page 124 STAT. 581]]

                    ``(B) all appropriate information security 
                safeguards are used in the collection, analysis, and 
                sharing of data collected pursuant to subsection (a).
            ``(2) Data <<NOTE: Procedures.>> sharing.--The Secretary 
        shall establish procedures for sharing data collected pursuant 
        to subsection (a), measures relating to such data, and analyses 
        of such data, with other relevant Federal and State agencies 
        including the agencies, centers, and entities within the 
        Department of Health and Human Services specified in subsection 
        (c)(1)..

    ``(f) Data on Rural Underserved Populations.--The Secretary shall 
ensure that any data collected in accordance with this section regarding 
racial and ethnic minority groups are also collected regarding 
underserved rural and frontier populations.
    ``(g) Authorization of Appropriations.--For the purpose of carrying 
out this section, there are authorized to be appropriated such sums as 
may be necessary for each of fiscal years 2010 through 2014.
    ``(h) Requirement for Implementation.--Notwithstanding any other 
provision of this section, data may not be collected under this section 
unless funds are directly appropriated for such purpose in an 
appropriations Act.
    ``(i) Consultation.--The Secretary shall consult with the Director 
of the Office of Personnel Management, the Secretary of Defense, the 
Secretary of Veterans Affairs, the Director of the Bureau of the Census, 
the Commissioner of Social Security, and the head of other appropriate 
Federal agencies in carrying out this section.''.
    (b) Addressing Health Care Disparities in Medicaid and CHIP.--
            (1) Standardized collection requirements included in state 
        plans.--
                    (A) Medicaid.--Section 1902(a) of the Social 
                Security Act (42 U.S.C. 1396a(a)), as amended by section 
                2001(d), is amended--
                          (i) in paragraph 4), by striking ``and'' at 
                      the end;
                          (ii) in paragraph (75), by striking the period 
                      at the end and inserting ``; and''; and
                          (iii) by inserting after paragraph (75) the 
                      following new paragraph:
            ``(76) provide that any data collected under the State plan 
        meets the requirements of section 3101 of the Public Health 
        Service Act.''.
                    (B) CHIP.--Section 2108(e) of the Social Security 
                Act (42 U.S.C. 1397hh(e)) is amended by adding at the 
                end the following new paragraph:
            ``(7) Data collected and reported in accordance with section 
        3101 of the Public Health Service Act, with respect to 
        individuals enrolled in the State child health plan (and, in the 
        case of enrollees under 19 years of age, their parents or legal 
        guardians), including data regarding the primary language of 
        such individuals, parents, and legal guardians.''.
            (2) Extending medicare requirement to address health 
        disparities data collection to medicaid and chip.--Title XIX of 
        the Social Security Act (42 U.S.C. 1396 et seq.), as amended by 
        section 2703 is amended by adding at the end the following new 
        section:

[[Page 124 STAT. 582]]

``SEC. 1946. <<NOTE: 42 USC 1396w-5.>> ADDRESSING HEALTH CARE 
            DISPARITIES.

    ``(a) Evaluating Data Collection Approaches.--The Secretary shall 
evaluate approaches for the collection of data under this title and 
title XXI, to be performed in conjunction with existing quality 
reporting requirements and programs under this title and title XXI, that 
allow for the ongoing, accurate, and timely collection and evaluation of 
data on disparities in health care services and performance on the basis 
of race, ethnicity, sex, primary language, and disability status. In 
conducting such evaluation, the Secretary shall consider the following 
objectives:
            ``(1) Protecting patient privacy.
            ``(2) Minimizing the administrative burdens of data 
        collection and reporting on States, providers, and health plans 
        participating under this title or title XXI.
            ``(3) Improving program data under this title and title XXI 
        on race, ethnicity, sex, primary language, and disability 
        status.

    ``(b) Reports to Congress.--
            ``(1) Report on evaluation.--Not later than 18 months after 
        the date of the enactment of this section, the Secretary shall 
        submit to Congress a report on the evaluation conducted under 
        subsection (a). Such report shall, taking into consideration the 
        results of such evaluation--
                    ``(A) identify approaches (including defining 
                methodologies) for identifying and collecting and 
                evaluating data on health care disparities on the basis 
                of race, ethnicity, sex, primary language, and 
                disability status for the programs under this title and 
                title XXI; and
                    ``(B) include recommendations on the most effective 
                strategies and approaches to reporting HEDIS quality 
                measures as required under section 1852(e)(3) and other 
                nationally recognized quality performance measures, as 
                appropriate, on such bases.
            ``(2) Reports on data analyses.--Not later than 4 years 
        after the date of the enactment of this section, and 4 years 
        thereafter, the Secretary shall submit to Congress a report that 
        includes recommendations for improving the identification of 
        health care disparities for beneficiaries under this title and 
        under title XXI based on analyses of the data collected under 
        subsection (c).

    ``(c) Implementing <<NOTE: Deadline.>> Effective Approaches.--Not 
later than 24 months after the date of the enactment of this section, 
the Secretary shall implement the approaches identified in the report 
submitted under subsection (b)(1) for the ongoing, accurate, and timely 
collection and evaluation of data on health care disparities on the 
basis of race, ethnicity, sex, primary language, and disability 
status.''.

SEC. 4303. CDC AND EMPLOYER-BASED WELLNESS PROGRAMS.

    Title III of the Public Health Service Act (42 U.S.C. 241 et seq.), 
by section 4102, is further amended by adding at the end the following:

[[Page 124 STAT. 583]]

                ``PART U--EMPLOYER-BASED WELLNESS PROGRAM

``SEC. 399MM. <<NOTE: 42 USC 280l.>> TECHNICAL ASSISTANCE FOR EMPLOYER-
            BASED WELLNESS PROGRAMS.

    ``In order to expand the utilization of evidence-based prevention 
and health promotion approaches in the workplace, the Director shall--
            ``(1) provide employers (including small, medium, and large 
        employers, as determined by the Director) with technical 
        assistance, consultation, tools, and other resources in 
        evaluating such employers' employer-based wellness programs, 
        including--
                    ``(A) measuring the participation and methods to 
                increase participation of employees in such programs;
                    ``(B) developing standardized measures that assess 
                policy, environmental and systems changes necessary to 
                have a positive health impact on employees' health 
                behaviors, health outcomes, and health care 
                expenditures; and
                    ``(C) evaluating such programs as they relate to 
                changes in the health status of employees, the 
                absenteeism of employees, the productivity of employees, 
                the rate of workplace injury, and the medical costs 
                incurred by employees; and
            ``(2) build evaluation capacity among workplace staff by 
        training employers on how to evaluate employer-based wellness 
        programs by ensuring evaluation resources, technical assistance, 
        and consultation are available to workplace staff as needed 
        through such mechanisms as web portals, call centers, or other 
        means.

``SEC. 399MM-1. <<NOTE: 42 USC 280l-1.>> NATIONAL WORKSITE HEALTH 
            POLICIES AND PROGRAMS STUDY.

    ``(a) In <<NOTE: Deadline. Determination.>> General.--In order to 
assess, analyze, and monitor over time data about workplace policies and 
programs, and to develop instruments to assess and evaluate 
comprehensive workplace chronic disease prevention and health promotion 
programs, policies and practices, not later than 2 years after the date 
of enactment of this part, and at regular intervals (to be determined by 
the Director) thereafter, the Director shall conduct a national worksite 
health policies and programs survey to assess employer-based health 
policies and programs.

    ``(b) Report.--Upon the completion of each study under subsection 
(a), the Director shall submit to Congress a report that includes the 
recommendations of the Director for the implementation of effective 
employer-based health policies and programs.

``SEC. 399MM-2. <<NOTE: 42 USC 280l-2.>> PRIORITIZATION OF EVALUATION BY 
            SECRETARY.

    ``The Secretary shall evaluate, in accordance with this part, all 
programs funded through the Centers for Disease Control and Prevention 
before conducting such an evaluation of privately funded programs unless 
an entity with a privately funded wellness program requests such an 
evaluation.

``SEC. 399MM-3. <<NOTE: 42 USC 280l-3.>> PROHIBITION OF FEDERAL 
            WORKPLACE WELLNESS REQUIREMENTS.

    ``Notwithstanding any other provision of this part, any 
recommendations, data, or assessments carried out under this part

[[Page 124 STAT. 584]]

shall not be used to mandate requirements for workplace wellness 
programs.''.

SEC. 4304. EPIDEMIOLOGY-LABORATORY CAPACITY GRANTS.

    Title XXVIII of the Public Health Service Act (42 U.S.C. 300hh et 
seq.) is amended by adding at the end the following:

     ``Subtitle C--Strengthening Public Health Surveillance Systems

``SEC. 2821. <<NOTE: 42 USC 300hh-31.>> EPIDEMIOLOGY-LABORATORY CAPACITY 
            GRANTS.

    ``(a) In General.--Subject to the availability of appropriations, 
the Secretary, acting through the Director of the Centers for Disease 
Control and Prevention, shall establish an Epidemiology and Laboratory 
Capacity Grant Program to award grants to State health departments as 
well as local health departments and tribal jurisdictions that meet such 
criteria as the Director determines appropriate. Academic centers that 
assist State and eligible local and tribal health departments may also 
be eligible for funding under this section as the Director determines 
appropriate. Grants shall be awarded under this section to assist public 
health agencies in improving surveillance for, and response to, 
infectious diseases and other conditions of public health importance 
by--
            ``(1) strengthening epidemiologic capacity to identify and 
        monitor the occurrence of infectious diseases and other 
        conditions of public health importance;
            ``(2) enhancing laboratory practice as well as systems to 
        report test orders and results electronically;
            ``(3) improving information systems including developing and 
        maintaining an information exchange using national guidelines 
        and complying with capacities and functions determined by an 
        advisory council established and appointed by the Director; and
            ``(4) developing and implementing prevention and control 
        strategies.

    ``(b) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $190,000,000 for each of fiscal 
years 2010 through 2013, of which--
            ``(1) not less than $95,000,000 shall be made available each 
        such fiscal year for activities under paragraphs (1) and (4) of 
        subsection (a);
            ``(2) not less than $60,000,000 shall be made available each 
        such fiscal year for activities under subsection (a)(3); and
            ``(3) not less than $32,000,000 shall be made available each 
        such fiscal year for activities under subsection (a)(2).''.

SEC. 4305. ADVANCING RESEARCH AND TREATMENT FOR PAIN CARE MANAGEMENT.

    (a) Institute of Medicine Conference on Pain.--
            (1) Convening.--Not <<NOTE: Deadline. Contracts.>> later 
        than 1 year after funds are appropriated to carry out this 
        subsection, the Secretary of Health and Human Services shall 
        seek to enter into an agreement with the Institute of Medicine 
        of the National Academies to convene a Conference on Pain (in 
        this subsection referred to as ``the Conference'').

[[Page 124 STAT. 585]]

            (2) Purposes.--The purposes of the Conference shall be to--
                    (A) increase the recognition of pain as a 
                significant public health problem in the United States;
                    (B) evaluate the adequacy of assessment, diagnosis, 
                treatment, and management of acute and chronic pain in 
                the general population, and in identified racial, 
                ethnic, gender, age, and other demographic groups that 
                may be disproportionately affected by inadequacies in 
                the assessment, diagnosis, treatment, and management of 
                pain;
                    (C) identify barriers to appropriate pain care;
                    (D) establish an agenda for action in both the 
                public and private sectors that will reduce such 
                barriers and significantly improve the state of pain 
                care research, education, and clinical care in the 
                United States.
            (3) Other appropriate entity.--If the Institute of Medicine 
        declines to enter into an agreement under paragraph (1), the 
        Secretary of Health and Human Services may enter into such 
        agreement with another appropriate entity.
            (4) Report.--A report summarizing the Conference's findings 
        and recommendations shall be submitted to the Congress not later 
        than June 30, 2011.
            (5) Authorization of appropriations.--For the purpose of 
        carrying out this subsection, there is authorized to be 
        appropriated such sums as may be necessary for each of fiscal 
        years 2010 and 2011.

    (b) Pain Research at National Institutes of Health.--Part B of title 
IV of the Public Health Service Act (42 U.S.C. 284 et seq.) is amended 
by adding at the end the following:

``SEC. 409J. <<NOTE: 42 USC 284q.>> PAIN RESEARCH.

    ``(a) Research Initiatives.--
            ``(1) In general.--The Director of NIH is encouraged to 
        continue and expand, through the Pain Consortium, an aggressive 
        program of basic and clinical research on the causes of and 
        potential treatments for pain.
            ``(2) Annual recommendations.--Not less than annually, the 
        Pain Consortium, in consultation with the Division of Program 
        Coordination, Planning, and Strategic Initiatives, shall develop 
        and submit to the Director of NIH recommendations on appropriate 
        pain research initiatives that could be undertaken with funds 
        reserved under section 402A(c)(1) for the Common Fund or 
        otherwise available for such initiatives.
            ``(3) Definition.--In this subsection, the term `Pain 
        Consortium' means the Pain Consortium of the National Institutes 
        of Health or a similar trans-National Institutes of Health 
        coordinating entity designated by the Secretary for purposes of 
        this subsection.

    ``(b) Interagency Pain Research Coordinating Committee.--
            ``(1) Establishment.--The <<NOTE: Deadline.>> Secretary 
        shall establish not later than 1 year after the date of the 
        enactment of this section and as necessary maintain a committee, 
        to be known as the Interagency Pain Research Coordinating 
        Committee (in this section referred to as the `Committee'), to 
        coordinate all efforts within the Department of Health and Human 
        Services and other Federal agencies that relate to pain 
        research.

[[Page 124 STAT. 586]]

            ``(2) Membership.--
                    ``(A) In general.--The Committee shall be composed 
                of the following voting members:
                          ``(i) Not more than 7 voting Federal 
                      representatives appoint by the Secretary from 
                      agencies that conduct pain care research and 
                      treatment.
                          ``(ii) 12 additional voting members appointed 
                      under subparagraph (B).
                    ``(B) Additional members.--The Committee shall 
                include additional voting members appointed by the 
                Secretary as follows:
                          ``(i) 6 non-Federal members shall be appointed 
                      from among scientists, physicians, and other 
                      health professionals.
                          ``(ii) 6 members shall be appointed from 
                      members of the general public, who are 
                      representatives of leading research, advocacy, and 
                      service organizations for individuals with pain-
                      related conditions.
                    ``(C) Nonvoting members.--The Committee shall 
                include such nonvoting members as the Secretary 
                determines to be appropriate.
            ``(3) Chairperson.--The voting members of the Committee 
        shall select a chairperson from among such members. The 
        selection of a chairperson shall be subject to the approval of 
        the Director of NIH.
            ``(4) Meetings.--The Committee shall meet at the call of the 
        chairperson of the Committee or upon the request of the Director 
        of NIH, but in no case less often than once each year.
            ``(5) Duties.--The Committee shall--
                    ``(A) develop a summary of advances in pain care 
                research supported or conducted by the Federal agencies 
                relevant to the diagnosis, prevention, and treatment of 
                pain and diseases and disorders associated with pain;
                    ``(B) identify critical gaps in basic and clinical 
                research on the symptoms and causes of pain;
                    ``(C) make recommendations to ensure that the 
                activities of the National Institutes of Health and 
                other Federal agencies are free of unnecessary 
                duplication of effort;
                    ``(D) make recommendations on how best to 
                disseminate information on pain care; and
                    ``(E) make recommendations on how to expand 
                partnerships between public entities and private 
                entities to expand collaborative, cross-cutting 
                research.
            ``(6) Review.--The Secretary shall review the necessity of 
        the Committee at least once every 2 years.''.

    (c) Pain Care Education and Training.--Part D of title VII of the 
Public Health Service Act (42 U.S.C. 294 et seq.) is amended by adding 
at the end the following new section:

``SEC. 759. PROGRAM <<NOTE: 42 USC 294i.>> FOR EDUCATION AND TRAINING IN 
            PAIN CARE.

    ``(a) In General.--The Secretary may make awards of grants, 
cooperative agreements, and contracts to health professions schools, 
hospices, and other public and private entities for the development and 
implementation of programs to provide education and training to health 
care professionals in pain care.

[[Page 124 STAT. 587]]

    ``(b) Certain Topics.--An award may be made under subsection (a) 
only if the applicant for the award agrees that the program carried out 
with the award will include information and education on--
            ``(1) recognized means for assessing, diagnosing, treating, 
        and managing pain and related signs and symptoms, including the 
        medically appropriate use of controlled substances;
            ``(2) applicable laws, regulations, rules, and policies on 
        controlled substances, including the degree to which 
        misconceptions and concerns regarding such laws, regulations, 
        rules, and policies, or the enforcement thereof, may create 
        barriers to patient access to appropriate and effective pain 
        care;
            ``(3) interdisciplinary approaches to the delivery of pain 
        care, including delivery through specialized centers providing 
        comprehensive pain care treatment expertise;
            ``(4) cultural, linguistic, literacy, geographic, and other 
        barriers to care in underserved populations; and
            ``(5) recent findings, developments, and improvements in the 
        provision of pain care.

    ``(c) Evaluation <<NOTE: Grants. Contracts.>> of Programs.--The 
Secretary shall (directly or through grants or contracts) provide for 
the evaluation of programs implemented under subsection (a) in order to 
determine the effect of such programs on knowledge and practice of pain 
care.

    ``(d) Pain Care Defined.--For purposes of this section the term 
`pain care' means the assessment, diagnosis, treatment, or management of 
acute or chronic pain regardless of causation or body location.
    ``(e) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section, such sums as may be necessary 
for each of the fiscal years 2010 through 2012. Amounts appropriated 
under this subsection shall remain available until expended.''.

SEC. 4306. FUNDING FOR CHILDHOOD OBESITY DEMONSTRATION PROJECT.

    Section 1139A(e)(8) of the Social Security Act (42 U.S.C. 1320b-
9a(e)(8)) is amended to read as follows:
            ``(8) Appropriation.--Out of any funds in the Treasury not 
        otherwise appropriated, there is appropriated to carry out this 
        subsection, $25,000,000 for the period of fiscal years 2010 
        through 2014.''.

                  Subtitle E--Miscellaneous Provisions

SEC. 4401. SENSE OF THE SENATE CONCERNING CBO SCORING.

    (a) Finding.--The Senate finds that the costs of prevention programs 
are difficult to estimate due in part because prevention initiatives are 
hard to measure and results may occur outside the 5 and 10 year budget 
windows.
    (b) Sense of Congress.--It is the sense of the Senate that Congress 
should work with the Congressional Budget Office to develop better 
methodologies for scoring progress to be made in prevention and wellness 
programs.

[[Page 124 STAT. 588]]

SEC. 4402. EFFECTIVENESS OF FEDERAL HEALTH AND WELLNESS INITIATIVES.

    To determine whether existing Federal health and wellness 
initiatives are effective in achieving their stated goals, the Secretary 
of Health and Human Services shall--
            (1) conduct <<NOTE: Evaluation.>> an evaluation of such 
        programs as they relate to changes in health status of the 
        American public and specifically on the health status of the 
        Federal workforce, including absenteeism of employees, the 
        productivity of employees, the rate of workplace injury, and the 
        medical costs incurred by employees, and health conditions, 
        including workplace fitness, healthy food and beverages, and 
        incentives in the Federal Employee Health Benefits Program; and
            (2) <<NOTE: Reports.>> submit to Congress a report 
        concerning such evaluation, which shall include conclusions 
        concerning the reasons that such existing programs have proven 
        successful or not successful and what factors contributed to 
        such conclusions.

                     TITLE V--HEALTH CARE WORKFORCE

                   Subtitle A--Purpose and Definitions

SEC. 5001. <<NOTE: 42 USC 294q note.>> PURPOSE.

    The purpose of this title is to improve access to and the delivery 
of health care services for all individuals, particularly low income, 
underserved, uninsured, minority, health disparity, and rural 
populations by--
            (1) gathering and assessing comprehensive data in order for 
        the health care workforce to meet the health care needs of 
        individuals, including research on the supply, demand, 
        distribution, diversity, and skills needs of the health care 
        workforce;
            (2) increasing the supply of a qualified health care 
        workforce to improve access to and the delivery of health care 
        services for all individuals;
            (3) enhancing health care workforce education and training 
        to improve access to and the delivery of health care services 
        for all individuals; and
            (4) providing support to the existing health care workforce 
        to improve access to and the delivery of health care services 
        for all individuals.

SEC. 5002. <<NOTE: 42 USC 294q note.>> DEFINITIONS.

    (a) This Title.--In this title:
            (1) Allied health professional.--The term ``allied health 
        professional'' means an allied health professional as defined in 
        section 799B(5) of the Public Heath Service Act (42 U.S.C. 
        295p(5)) who--
                    (A) has graduated and received an allied health 
                professions degree or certificate from an institution of 
                higher education; and
                    (B) is employed with a Federal, State, local or 
                tribal public health agency, or in a setting where 
                patients might require health care services, including 
                acute care facilities, ambulatory care facilities, 
                personal residences, and other

[[Page 124 STAT. 589]]

                settings located in health professional shortage areas, 
                medically underserved areas, or medically underserved 
                populations, as recognized by the Secretary of Health 
                and Human Services.
            (2) Health care career pathway.--The term ``healthcare 
        career pathway'' means a rigorous, engaging, and high quality 
        set of courses and services that--
                    (A) includes an articulated sequence of academic and 
                career courses, including 21st century skills;
                    (B) is aligned with the needs of healthcare 
                industries in a region or State;
                    (C) prepares students for entry into the full range 
                of postsecondary education options, including registered 
                apprenticeships, and careers;
                    (D) provides academic and career counseling in 
                student-to-counselor ratios that allow students to make 
                informed decisions about academic and career options;
                    (E) meets State academic standards, State 
                requirements for secondary school graduation and is 
                aligned with requirements for entry into postsecondary 
                education, and applicable industry standards; and
                    (F) leads to 2 or more credentials, including--
                          (i) a secondary school diploma; and
                          (ii) a postsecondary degree, an apprenticeship 
                      or other occupational certification, a 
                      certificate, or a license.
            (3) Institution of higher education.--The term ``institution 
        of higher education'' has the meaning given the term in sections 
        101 and 102 of the Higher Education Act of 1965 (20 U.S.C. 1001 
        and 1002).
            (4) Low income individual, state workforce investment board, 
        and local workforce investment board.--
                    (A) Low-income individual.--The term ``low-income 
                individual'' has the meaning given that term in section 
                101 of the Workforce investment Act of 1998 (29 U.S.C. 
                2801).
                    (B) State workforce investment board; local 
                workforce investment board.--The terms ``State workforce 
                investment board'' and ``local workforce investment 
                board'', refer to a State workforce investment board 
                established under section 111 of the Workforce 
                Investment Act of 1998 (29 U.S.C. 2821) and a local 
                workforce investment board established under section 117 
                of such Act (29 U.S.C. 2832), respectively.
            (5) Postsecondary education.--The term ``postsecondary 
        education'' means--
                    (A) a 4-year program of instruction, or not less 
                than a 1-year program of instruction that is acceptable 
                for credit toward an associate or a baccalaureate 
                degree, offered by an institution of higher education; 
                or
                    (B) a certificate or registered apprenticeship 
                program at the postsecondary level offered by an 
                institution of higher education or a non-profit 
                educational institution.
            (6) Registered apprenticeship program.--The term 
        ``registered apprenticeship program'' means an industry skills 
        training program at the postsecondary level that combines 
        technical and theoretical training through structure on the job

[[Page 124 STAT. 590]]

        learning with related instruction (in a classroom or through 
        distance learning) while an individual is employed, working 
        under the direction of qualified personnel or a mentor, and 
        earning incremental wage increases aligned to enhance job 
        proficiency, resulting in the acquisition of a nationally 
        recognized and portable certificate, under a plan approved by 
        the Office of Apprenticeship or a State agency recognized by the 
        Department of Labor.

    (b) Title VII of the Public Health Service Act.--Section 799B of the 
Public Health Service Act (42 U.S.C. 295p) is amended--
            (1) by striking paragraph (3) and inserting the following:
            ``(3) Physician assistant education program.--The term 
        `physician assistant education program' means an educational 
        program in a public or private institution in a State that--
                    ``(A) has as its objective the education of 
                individuals who, upon completion of their studies in the 
                program, be qualified to provide primary care medical 
                services with the supervision of a physician; and
                    ``(B) is accredited by the Accreditation Review 
                Commission on Education for the Physician Assistant.''; 
                and
            (2) by adding at the end the following:
            ``(12) Area health education center.--The term `area health 
        education center' means a public or nonprofit private 
        organization that has a cooperative agreement or contract in 
        effect with an entity that has received an award under 
        subsection (a)(1) or (a)(2) of section 751, satisfies the 
        requirements in section 751(d)(1), and has as one of its 
        principal functions the operation of an area health education 
        center. Appropriate organizations may include hospitals, health 
        organizations with accredited primary care training programs, 
        accredited physician assistant educational programs associated 
        with a college or university, and universities or colleges not 
        operating a school of medicine or osteopathic medicine.
            ``(13) Area health education center program.--The term `area 
        health education center program' means cooperative program 
        consisting of an entity that has received an award under 
        subsection (a)(1) or (a)(2) of section 751 for the purpose of 
        planning, developing, operating, and evaluating an area health 
        education center program and one or more area health education 
        centers, which carries out the required activities described in 
        section 751(c), satisfies the program requirements in such 
        section, has as one of its principal functions identifying and 
        implementing strategies and activities that address health care 
        workforce needs in its service area, in coordination with the 
        local workforce investment boards.
            ``(14) Clinical social worker.--The term `clinical social 
        worker' has the meaning given the term in section 1861(hh)(1) of 
        the Social Security Act (42 U.S.C. 1395x(hh)(1)).
            ``(15) Cultural competency.--The term `cultural competency' 
        shall be defined by the Secretary in a manner consistent with 
        section 1707(d)(3).
            ``(16) Direct care worker.--The term `direct care worker' 
        has the meaning given that term in the 2010 Standard 
        Occupational Classifications of the Department of Labor for Home 
        Health Aides [31-1011], Psychiatric Aides [31-1013], Nursing 
        Assistants [31-1014], and Personal Care Aides [39-9021].

[[Page 124 STAT. 591]]

            ``(17) Federally qualified health center.--The term 
        `Federally qualified health center' has the meaning given that 
        term in section 1861(aa) of the Social Security Act (42 U.S.C. 
        1395x(aa)).
            ``(18) Frontier health professional shortage area.--The term 
        `frontier health professional shortage area' means an area--
                    ``(A) with a population density less than 6 persons 
                per square mile within the service area; and
                    ``(B) with respect to which the distance or time for 
                the population to access care is excessive.
            ``(19) Graduate psychology.--The term `graduate psychology' 
        means an accredited program in professional psychology.
            ``(20) Health disparity population.--The term `health 
        disparity population' has the meaning given such term in section 
        903(d)(1).
            ``(21) Health literacy.--The term `health literacy' means 
        the degree to which an individual has the capacity to obtain, 
        communicate, process, and understand health information and 
        services in order to make appropriate health decisions.
            ``(22) Mental health service professional.--The term `mental 
        health service professional' means an individual with a graduate 
        or postgraduate degree from an accredited institution of higher 
        education in psychiatry, psychology, school psychology, 
        behavioral pediatrics, psychiatric nursing, social work, school 
        social work, substance abuse disorder prevention and treatment, 
        marriage and family counseling, school counseling, or 
        professional counseling.
            ``(23) One-stop delivery system center.--The term `one-stop 
        delivery system' means a one-stop delivery system described in 
        section 134(c) of the Workforce Investment Act of 1998 (29 
        U.S.C. 2864(c)).
            ``(24) Paraprofessional child and adolescent mental health 
        worker.--The term `paraprofessional child and adolescent mental 
        health worker' means an individual who is not a mental or 
        behavioral health service professional, but who works at the 
        first stage of contact with children and families who are 
        seeking mental or behavioral health services, including 
        substance abuse prevention and treatment services.
            ``(25) Racial and ethnic minority group; racial and ethnic 
        minority population.--The terms `racial and ethnic minority 
        group' and `racial and ethnic minority population' have the 
        meaning given the term `racial and ethnic minority group' in 
        section 1707.
            ``(26) Rural health clinic.--The term `rural health clinic' 
        has the meaning given that term in section 1861(aa) of the 
        Social Security Act (42 U.S.C. 1395x(aa)).''.

    (c) Title VIII of the Public Health Service Act.--Section 801 of the 
Public Health Service Act (42 U.S.C. 296) is amended--
            (1) in paragraph (2)--
                    (A) by striking ``means a'' and inserting ``means an 
                accredited (as defined in paragraph 6)''; and
                    (B) by striking the period as inserting the 
                following: ``where graduates are--
                    ``(A) authorized to sit for the National Council 
                Licensure EXamination-Registered Nurse (NCLEX-RN); or

[[Page 124 STAT. 592]]

                    ``(B) licensed registered nurses who will receive a 
                graduate or equivalent degree or training to become an 
                advanced education nurse as defined by section 
                811(b).''; and
            (2) by adding at the end the following:
            ``(16) Accelerated nursing degree program.--The term 
        `accelerated nursing degree program' means a program of 
        education in professional nursing offered by an accredited 
        school of nursing in which an individual holding a bachelors 
        degree in another discipline receives a BSN or MSN degree in an 
        accelerated time frame as determined by the accredited school of 
        nursing.
            ``(17) Bridge or degree completion program.--The term 
        `bridge or degree completion program' means a program of 
        education in professional nursing offered by an accredited 
        school of nursing, as defined in paragraph (2), that leads to a 
        baccalaureate degree in nursing. Such programs may include, 
        Registered Nurse (RN) to Bachelor's of Science of Nursing (BSN) 
        programs, RN to MSN (Master of Science of Nursing) programs, or 
        BSN to Doctoral programs.''.

          Subtitle B--Innovations in the Health Care Workforce

SEC. 5101. <<NOTE: 42 USC 294q.>> NATIONAL HEALTH CARE WORKFORCE 
            COMMISSION.

    (a) Purpose.--It is the purpose of this section to establish a 
National Health Care Workforce Commission that--
            (1) serves as a national resource for Congress, the 
        President, States, and localities;
            (2) communicates and coordinates with the Departments of 
        Health and Human Services, Labor, Veterans Affairs, Homeland 
        Security, and Education on related activities administered by 
        one or more of such Departments;
            (3) develops and commissions evaluations of education and 
        training activities to determine whether the demand for health 
        care workers is being met;
            (4) identifies barriers to improved coordination at the 
        Federal, State, and local levels and recommend ways to address 
        such barriers; and
            (5) encourages innovations to address population needs, 
        constant changes in technology, and other environmental factors.

    (b) Establishment.--There is hereby established the National Health 
Care Workforce Commission (in this section referred to as the 
``Commission'').
    (c) Membership.--
            (1) Number and appointment.--The Commission shall be 
        composed of 15 members to be appointed by the Comptroller 
        General, without regard to section 5 of the Federal Advisory 
        Committee Act (5 U.S.C. App.).
            (2) Qualifications.--
                    (A) In general.--The membership of the Commission 
                shall include individuals--
                          (i) with national recognition for their 
                      expertise in health care labor market analysis, 
                      including health care workforce analysis; health 
                      care finance and

[[Page 124 STAT. 593]]

                      economics; health care facility management; health 
                      care plans and integrated delivery systems; health 
                      care workforce education and training; health care 
                      philanthropy; providers of health care services; 
                      and other related fields; and
                          (ii) who will provide a combination of 
                      professional perspectives, broad geographic 
                      representation, and a balance between urban, 
                      suburban, rural, and frontier representatives.
                    (B) Inclusion.--
                          (i) In general.--The membership of the 
                      Commission shall include no less than one 
                      representative of--
                                    (I) the health care workforce and 
                                health professionals;
                                    (II) employers;
                                    (III) third-party payers;
                                    (IV) individuals skilled in the 
                                conduct and interpretation of health 
                                care services and health economics 
                                research;
                                    (V) representatives of consumers;
                                    (VI) labor unions;
                                    (VII) State or local workforce 
                                investment boards; and
                                    (VIII) educational institutions 
                                (which may include elementary and 
                                secondary institutions, institutions of 
                                higher education, including 2 and 4 year 
                                institutions, or registered 
                                apprenticeship programs).
                          (ii) Additional members.--The remaining 
                      membership may include additional representatives 
                      from clause (i) and other individuals as 
                      determined appropriate by the Comptroller General 
                      of the United States.
                    (C) Majority non-providers.--Individuals who are 
                directly involved in health professions education or 
                practice shall not constitute a majority of the 
                membership of the Commission.
                    (D) Ethical <<NOTE: Public 
                information.>> disclosure.--The Comptroller General 
                shall establish a system for public disclosure by 
                members of the Commission of financial and other 
                potential conflicts of interest relating to such 
                members. Members of the Commission shall be treated as 
                employees of Congress for purposes of applying title I 
                of the Ethics in Government Act of 1978. Members of the 
                Commission shall not be treated as special government 
                employees under title 18, United States Code.
            (3) Terms.--
                    (A) In general.--The terms of members of the 
                Commission shall be for 3 years except that the 
                Comptroller General shall designate staggered terms for 
                the members first appointed.
                    (B) Vacancies.--Any member appointed to fill a 
                vacancy occurring before the expiration of the term for 
                which the member's predecessor was appointed shall be 
                appointed only for the remainder of that term. A member 
                may serve after the expiration of that member's term 
                until a successor has taken office. A vacancy in the 
                Commission

[[Page 124 STAT. 594]]

                shall be filled in the manner in which the original 
                appointment was made.
                    (C) Initial appointments.--
                The <<NOTE: Deadline.>> Comptroller General shall make 
                initial appointments of members to the Commission not 
                later than September 30, 2010.
            (4) Compensation.--While serving on the business of the 
        Commission (including travel time), a member of the Commission 
        shall be entitled to compensation at the per diem equivalent of 
        the rate provided for level IV of the Executive Schedule under 
        section 5315 of tile 5, United States Code, and while so serving 
        away from home and the member's regular place of business, a 
        member may be allowed travel expenses, as authorized by the 
        Chairman of the <<NOTE: Applicability.>> Commission. Physicians 
        serving as personnel of the Commission may be provided a 
        physician comparability allowance by the Commission in the same 
        manner as Government physicians may be provided such an 
        allowance by an agency under section 5948 of title 5, United 
        States Code, and for such purpose subsection (i) of such section 
        shall apply to the Commission in the same manner as it applies 
        to the Tennessee Valley Authority. For purposes of pay (other 
        than pay of members of the Commission) and employment benefits, 
        rights, and privileges, all personnel of the Commission shall be 
        treated as if they were employees of the United States Senate. 
        Personnel of the Commission shall not be treated as employees of 
        the Government Accountability Office for any purpose.
            (5) Chairman, vice chairman.--
        The <<NOTE: Designation.>> Comptroller General shall designate a 
        member of the Commission, at the time of appointment of the 
        member, as Chairman and a member as Vice Chairman for that term 
        of appointment, except that in the case of vacancy of the 
        chairmanship or vice chairmanship, the Comptroller General may 
        designate another member for the remainder of that member's 
        term.
            (6) Meetings.--The Commission shall meet at the call of the 
        chairman, but no less frequently than on a quarterly basis.

    (d) Duties.--
            (1) Recognition, dissemination, and communication.--The 
        Commission shall--
                    (A) recognize efforts of Federal, State, and local 
                partnerships to develop and offer health care career 
                pathways of proven effectiveness;
                    (B) disseminate information on promising retention 
                practices for health care professionals; and
                    (C) communicate information on important policies 
                and practices that affect the recruitment, education and 
                training, and retention of the health care workforce.
            (2) Review of health care workforce and annual reports.--In 
        order to develop a fiscally sustainable integrated workforce 
        that supports a high-quality, readily accessible health care 
        delivery system that meets the needs of patients and 
        populations, the Commission, in consultation with relevant 
        Federal, State, and local agencies, shall--
                    (A) review current and projected health care 
                workforce supply and demand, including the topics 
                described in paragraph (3);

[[Page 124 STAT. 595]]

                    (B) make recommendations to Congress and the 
                Administration concerning national health care workforce 
                priorities, goals, and policies;
                    (C) by not later than October 1 of each year 
                (beginning with 2011), submit a report to Congress and 
                the Administration containing the results of such 
                reviews and recommendations concerning related policies; 
                and
                    (D) by not later than April 1 of each year 
                (beginning with 2011), submit a report to Congress and 
                the Administration containing a review of, and 
                recommendations on, at a minimum one high priority area 
                as described in paragraph (4).
            (3) Specific topics to be reviewed.--The topics described in 
        this paragraph include--
                    (A) current health care workforce supply and 
                distribution, including demographics, skill sets, and 
                demands, with projected demands during the subsequent 10 
                and 25 year periods;
                    (B) health care workforce education and training 
                capacity, including the number of students who have 
                completed education and training, including registered 
                apprenticeships; the number of qualified faculty; the 
                education and training infrastructure; and the education 
                and training demands, with projected demands during the 
                subsequent 10 and 25 year periods;
                    (C) the education loan and grant programs in titles 
                VII and VIII of the Public Health Service Act (42 U.S.C. 
                292 et seq. and 296 et seq.), with recommendations on 
                whether such programs should become part of the Higher 
                Education Act of 1965 (20 U.S.C. 1001 et seq);
                    (D) the implications of new and existing Federal 
                policies which affect the health care workforce, 
                including Medicare and Medicaid graduate medical 
                education policies, titles VII and VIII of the Public 
                Health Service Act (42 U.S.C. 292 et seq. and 296 et 
                seq.), the National Health Service Corps (with 
                recommendations for aligning such programs with national 
                health workforce priorities and goals), and other health 
                care workforce programs, including those supported 
                through the Workforce Investment Act of 1998 (29 U.S.C. 
                2801 et seq.), the Carl D. Perkins Career and Technical 
                Education Act of 2006 (20 U.S.C. 2301 et seq.), the 
                Higher Education Act of 1965 (20 U.S.C. 1001 et seq.), 
                and any other Federal health care workforce programs;
                    (E) the health care workforce needs of special 
                populations, such as minorities, rural populations, 
                medically underserved populations, gender specific 
                needs, individuals with disabilities, and geriatric and 
                pediatric populations with recommendations for new and 
                existing Federal policies to meet the needs of these 
                special populations; and
                    (F) recommendations creating or revising national 
                loan repayment programs and scholarship programs to 
                require low-income, minority medical students to serve 
                in their home communities, if designated as medical 
                underserved community.
            (4) High priority areas.--

[[Page 124 STAT. 596]]

                    (A) In general.--The initial high priority topics 
                described in this paragraph include each of the 
                following:
                          (i) Integrated health care workforce planning 
                      that identifies health care professional skills 
                      needed and maximizes the skill sets of health care 
                      professionals across disciplines.
                          (ii) An analysis of the nature, scopes of 
                      practice, and demands for health care workers in 
                      the enhanced information technology and management 
                      workplace.
                          (iii) An analysis of how to align Medicare and 
                      Medicaid graduate medical education policies with 
                      national workforce goals.
                          (iv) The education and training capacity, 
                      projected demands, and integration with the health 
                      care delivery system of each of the following:
                                    (I) Nursing workforce capacity at 
                                all levels.
                                    (II) Oral health care workforce 
                                capacity at all levels.
                                    (III) Mental and behavioral health 
                                care workforce capacity at all levels.
                                    (IV) Allied health and public health 
                                care workforce capacity at all levels.
                                    (V) Emergency medical service 
                                workforce capacity, including the 
                                retention and recruitment of the 
                                volunteer workforce, at all levels.
                                    (VI) The geographic distribution of 
                                health care providers as compared to the 
                                identified health care workforce needs 
                                of States and regions.
                    (B) Future determinations.--The Commission may 
                require that additional topics be included under 
                subparagraph (A). The appropriate committees of Congress 
                may recommend to the Commission the inclusion of other 
                topics for health care workforce development areas that 
                require special attention.
            (5) Grant program.--The Commission shall--
                    (A) review <<NOTE: Review. Reports.>> implementation 
                progress reports on, and report to Congress about, the 
                State Health Care Workforce Development Grant program 
                established in section 5102;
                    (B) in collaboration with the Department of Labor 
                and in coordination with the Department of Education and 
                other relevant Federal agencies, make recommendations to 
                the fiscal and administrative agent under section 
                5102(b) for grant recipients under section 5102;
                    (C) assess the implementation of the grants under 
                such section; and
                    (D) collect performance and report information, 
                including identified models and best practices, on 
                grants from the fiscal and administrative agent under 
                such section and distribute this information to 
                Congress, relevant Federal agencies, and to the public.
            (6) Study.--The Commission shall study effective mechanisms 
        for financing education and training for careers in health care, 
        including public health and allied health.
            (7) Recommendations.--The Commission shall submit 
        recommendations to Congress, the Department of Labor, and the 
        Department of Health and Human Services about improving

[[Page 124 STAT. 597]]

        safety, health, and worker protections in the workplace for the 
        health care workforce.
            (8) Assessment.--The Commission shall assess and receive 
        reports from the National Center for Health Care Workforce 
        Analysis established under section 761(b) of the Public Service 
        Health Act (as amended by section 5103).

    (e) Consultation With Federal, State, and Local Agencies, Congress, 
and Other Organizations.--
            (1) In general.--The Commission shall consult with Federal 
        agencies (including the Departments of Health and Human 
        Services, Labor, Education, Commerce, Agriculture, Defense, and 
        Veterans Affairs and the Environmental Protection Agency), 
        Congress, the Medicare Payment Advisory Commission, the Medicaid 
        and CHIP Payment and Access Commission, and, to the extent 
        practicable, with State and local agencies, Indian tribes, 
        voluntary health care organizations, professional societies, and 
        other relevant public-private health care partnerships.
            (2) Obtaining official data.--The Commission, consistent 
        with established privacy rules, may secure directly from any 
        department or agency of the Executive Branch information 
        necessary to enable the Commission to carry out this section.
            (3) Detail of federal government employees.--An employee of 
        the Federal Government may be detailed to the Commission without 
        reimbursement. The detail of such an employee shall be without 
        interruption or loss of civil service status.

    (f) Director and Staff; Experts and Consultants.--Subject to such 
review as the Comptroller General of the United States determines to be 
necessary to ensure the efficient administration of the Commission, the 
Commission may--
            (1) employ and fix the compensation of an executive director 
        that shall not exceed the rate of basic pay payable for level V 
        of the Executive Schedule and such other personnel as may be 
        necessary to carry out its duties (without regard to the 
        provisions of title 5, United States Code, governing 
        appointments in the competitive service);
            (2) seek such assistance and support as may be required in 
        the performance of its duties from appropriate Federal 
        departments and agencies;
            (3) enter into contracts or make other arrangements, as may 
        be necessary for the conduct of the work of the Commission 
        (without regard to section 3709 of the Revised Statutes (41 
        U.S.C. 5));
            (4) make advance, progress, and other payments which relate 
        to the work of the Commission;
            (5) provide transportation and subsistence for persons 
        serving without compensation; and
            (6) prescribe such rules and regulations as the Commission 
        determines to be necessary with respect to the internal 
        organization and operation of the Commission.

    (g) Powers.--
            (1) Data collection.--In order to carry out its functions 
        under this section, the Commission shall--
                    (A) utilize existing information, both published and 
                unpublished, where possible, collected and assessed 
                either by its own staff or under other arrangements made 
                in

[[Page 124 STAT. 598]]

                accordance with this section, including coordination 
                with the Bureau of Labor Statistics;
                    (B) carry out, or award grants or contracts for the 
                carrying out of, original research and development, 
                where existing information is inadequate, and
                    (C) adopt procedures allowing interested parties to 
                submit information for the Commission's use in making 
                reports and recommendations.
            (2) Access of the government accountability office to 
        information.--The Comptroller General of the United States shall 
        have unrestricted access to all deliberations, records, and data 
        of the Commission, immediately upon request.
            (3) Periodic audit.--The Commission shall be subject to 
        periodic audit by an independent public accountant under 
        contract to the Commission.

    (h) Authorization of Appropriations.--
            (1) Request for appropriations.--The Commission shall submit 
        requests for appropriations in the same manner as the 
        Comptroller General of the United States submits requests for 
        appropriations. Amounts so appropriated for the Commission shall 
        be separate from amounts appropriated for the Comptroller 
        General.
            (2) Authorization.--There are authorized to be appropriated 
        such sums as may be necessary to carry out this section.
            (3) Gifts and services.--The Commission may not accept 
        gifts, bequeaths, or donations of property, but may accept and 
        use donations of services for purposes of carrying out this 
        section.

    (i) Definitions.--In this section:
            (1) Health care workforce.--The term ``health care 
        workforce'' includes all health care providers with direct 
        patient care and support responsibilities, such as physicians, 
        nurses, nurse practitioners, primary care providers, preventive 
        medicine physicians, optometrists, ophthalmologists, physician 
        assistants, pharmacists, dentists, dental hygienists, and other 
        oral healthcare professionals, allied health professionals, 
        doctors of chiropractic, community health workers, health care 
        paraprofessionals, direct care workers, psychologists and other 
        behavioral and mental health professionals (including substance 
        abuse prevention and treatment providers), social workers, 
        physical and occupational therapists, certified nurse midwives, 
        podiatrists, the EMS workforce (including professional and 
        volunteer ambulance personnel and firefighters who perform 
        emergency medical services), licensed complementary and 
        alternative medicine providers, integrative health 
        practitioners, public health professionals, and any other health 
        professional that the Comptroller General of the United States 
        determines appropriate.
            (2) Health professionals.--The term ``health professionals'' 
        includes--
                    (A) dentists, dental hygienists, primary care 
                providers, specialty physicians, nurses, nurse 
                practitioners, physician assistants, psychologists and 
                other behavioral and mental health professionals 
                (including substance abuse prevention and treatment 
                providers), social workers, physical and occupational 
                therapists, public health professionals, clinical

[[Page 124 STAT. 599]]

                pharmacists, allied health professionals, doctors of 
                chiropractic, community health workers, school nurses, 
                certified nurse midwives, podiatrists, licensed 
                complementary and alternative medicine providers, the 
                EMS workforce (including professional and volunteer 
                ambulance personnel and firefighters who perform 
                emergency medical services), and integrative health 
                practitioners;
                    (B) national representatives of health 
                professionals;
                    (C) representatives of schools of medicine, 
                osteopathy, nursing, dentistry, optometry, pharmacy, 
                chiropractic, allied health, educational programs for 
                public health professionals, behavioral and mental 
                health professionals (as so defined), social workers, 
                pharmacists, physical and occupational therapists, oral 
                health care industry dentistry and dental hygiene, and 
                physician assistants;
                    (D) representatives of public and private teaching 
                hospitals, and ambulatory health facilities, including 
                Federal medical facilities; and
                    (E) any other health professional the Comptroller 
                General of the United States determines appropriate.

SEC. 5102. STATE <<NOTE: 42 USC 294r.>> HEALTH CARE WORKFORCE 
            DEVELOPMENT GRANTS.

    (a) Establishment.--There is established a competitive health care 
workforce development grant program (referred to in this section as the 
``program'') for the purpose of enabling State partnerships to complete 
comprehensive planning and to carry out activities leading to coherent 
and comprehensive health care workforce development strategies at the 
State and local levels.
    (b) Fiscal and Administrative Agent.--The Health Resources and 
Services Administration of the Department of Health and Human Services 
(referred to in this section as the ``Administration'') shall be the 
fiscal and administrative agent for the grants awarded under 
this <<NOTE: Review.>> section. The Administration is authorized to 
carry out the program, in consultation with the National Health Care 
Workforce Commission (referred to in this section as the 
``Commission''), which shall review reports on the development, 
implementation, and evaluation activities of the grant program, 
including--
            (1) administering the grants;
            (2) providing technical assistance to grantees; and
            (3) reporting performance information to the Commission.

    (c) Planning Grants.--
            (1) Amount and duration.--A planning grant shall be awarded 
        under this subsection for a period of not more than one year and 
        the maximum award may not be more than $150,000.
            (2) Eligibility.--To be eligible to receive a planning 
        grant, an entity shall be an eligible partnership. An eligible 
        partnership shall be a State workforce investment board, if it 
        includes or modifies the members to include at least one 
        representative from each of the following: health care employer, 
        labor organization, a public 2-year institution of higher 
        education, a public 4-year institution of higher education, the 
        recognized State federation of labor, the State public secondary 
        education agency, the State P-16 or P-20 Council if such a 
        council exists, and a philanthropic organization that is 
        actively engaged in providing learning, mentoring, and work 
        opportunities to recruit,

[[Page 124 STAT. 600]]

        educate, and train individuals for, and retain individuals in, 
        careers in health care and related industries.
            (3) Fiscal and administrative agent.--The Governor of the 
        State receiving a planning grant has the authority to appoint a 
        fiscal and an administrative agency for the partnership.
            (4) Application.--Each State partnership desiring a planning 
        grant shall submit an application to the Administrator of the 
        Administration at such time and in such manner, and accompanied 
        by such information as the Administrator may reasonable require. 
        Each application submitted for a planning grant shall describe 
        the members of the State partnership, the activities for which 
        assistance is sought, the proposed performance benchmarks to be 
        used to measure progress under the planning grant, a budget for 
        use of the funds to complete the required activities described 
        in paragraph (5), and such additional assurance and information 
        as the Administrator determines to be essential to ensure 
        compliance with the grant program requirements.
            (5) Required activities.--A State partnership receiving a 
        planning grant shall carry out the following:
                    (A) Analyze State labor market information in order 
                to create health care career pathways for students and 
                adults, including dislocated workers.
                    (B) Identify current and projected high demand State 
                or regional health care sectors for purposes of planning 
                career pathways.
                    (C) Identify existing Federal, State, and private 
                resources to recruit, educate or train, and retain a 
                skilled health care workforce and strengthen 
                partnerships.
                    (D) Describe the academic and health care industry 
                skill standards for high school graduation, for entry 
                into postsecondary education, and for various 
                credentials and licensure.
                    (E) Describe State secondary and postsecondary 
                education and training policies, models, or practices 
                for the health care sector, including career information 
                and guidance counseling.
                    (F) Identify Federal or State policies or rules to 
                developing a coherent and comprehensive health care 
                workforce development strategy and barriers and a plan 
                to resolve these barriers.
                    (G) Participate in the Administration's evaluation 
                and reporting activities.
            (6) Performance and evaluation.--Before the State 
        partnership receives a planning grant, such partnership and the 
        Administrator of the Administration shall jointly determine the 
        performance benchmarks that will be established for the purposes 
        of the planning grant.
            (7) Match.--Each State partnership receiving a planning 
        grant shall provide an amount, in cash or in kind, that is not 
        less that 15 percent of the amount of the grant, to carry out 
        the activities supported by the grant. The matching requirement 
        may be provided from funds available under other Federal, State, 
        local or private sources to carry out the activities.
            (8) Report.--

[[Page 124 STAT. 601]]

                    (A) Report to administration.--Not later than 1 year 
                after a State partnership receives a planning grant, the 
                partnership shall submit a report to the Administration 
                on the State's performance of the activities under the 
                grant, including the use of funds, including matching 
                funds, to carry out required activities, and a 
                description of the progress of the State workforce 
                investment board in meeting the performance benchmarks.
                    (B) Report to congress.--The Administration shall 
                submit a report to Congress analyzing the planning 
                activities, performance, and fund utilization of each 
                State grant recipient, including an identification of 
                promising practices and a profile of the activities of 
                each State grant recipient.

    (d) Implementation Grants.--
            (1) In general.--The Administration shall--
                    (A) competitively award implementation grants to 
                State partnerships to enable such partnerships to 
                implement activities that will result in a coherent and 
                comprehensive plan for health workforce development that 
                will address current and projected workforce demands 
                within the State; and
                    (B) inform the Commission and Congress about the 
                awards made.
            (2) Duration.--An implementation grant shall be awarded for 
        a period of no more than 2 years, except in those cases where 
        the Administration determines that the grantee is high 
        performing and the activities supported by the grant warrant up 
        to 1 additional year of funding.
            (3) Eligibility.--To be eligible for an implementation 
        grant, a State partnership shall have--
                    (A) received a planning grant under subsection (c) 
                and completed all requirements of such grant; or
                    (B) completed a satisfactory application, including 
                a plan to coordinate with required partners and complete 
                the required activities during the 2 year period of the 
                implementation grant.
            (4) Fiscal and administrative agent.--A State partnership 
        receiving an implementation grant shall appoint a fiscal and an 
        administration agent for the implementation of such grant.
            (5) Application.--Each eligible State partnership desiring 
        an implementation grant shall submit an application to the 
        Administration at such time, in such manner, and accompanied by 
        such information as the Administration may reasonably require. 
        Each application submitted shall include--
                    (A) a description of the members of the State 
                partnership;
                    (B) a description of how the State partnership 
                completed the required activities under the planning 
                grant, if applicable;
                    (C) a description of the activities for which 
                implementation grant funds are sought, including grants 
                to regions by the State partnership to advance coherent 
                and comprehensive regional health care workforce 
                planning activities;
                    (D) a description of how the State partnership will 
                coordinate with required partners and complete the

[[Page 124 STAT. 602]]

                required partnership activities during the duration of 
                an implementation grant;
                    (E) a budget proposal of the cost of the activities 
                supported by the implementation grant and a timeline for 
                the provision of matching funds required;
                    (F) proposed performance benchmarks to be used to 
                assess and evaluate the progress of the partnership 
                activities;
                    (G) a description of how the State partnership will 
                collect data to report progress in grant activities; and
                    (H) such additional assurances as the Administration 
                determines to be essential to ensure compliance with 
                grant requirements.
            (6) Required activities.--
                    (A) In general.--A State partnership that receives 
                an implementation grant may reserve not less than 60 
                percent of the grant funds to make grants to be 
                competitively awarded by the State partnership, 
                consistent with State procurement rules, to encourage 
                regional partnerships to address health care workforce 
                development needs and to promote innovative health care 
                workforce career pathway activities, including career 
                counseling, learning, and employment.
                    (B) Eligible partnership duties.--An eligible State 
                partnership receiving an implementation grant shall--
                          (i) identify and convene regional leadership 
                      to discuss opportunities to engage in statewide 
                      health care workforce development planning, 
                      including the potential use of competitive grants 
                      to improve the development, distribution, and 
                      diversity of the regional health care workforce; 
                      the alignment of curricula for health care 
                      careers; and the access to quality career 
                      information and guidance and education and 
                      training opportunities;
                          (ii) in consultation with key stakeholders and 
                      regional leaders, take appropriate steps to reduce 
                      Federal, State, or local barriers to a 
                      comprehensive and coherent strategy, including 
                      changes in State or local policies to foster 
                      coherent and comprehensive health care workforce 
                      development activities, including health care 
                      career pathways at the regional and State levels, 
                      career planning information, retraining for 
                      dislocated workers, and as appropriate, requests 
                      for Federal program or administrative waivers;
                          (iii) develop, disseminate, and review with 
                      key stakeholders a preliminary statewide strategy 
                      that addresses short- and long-term health care 
                      workforce development supply versus demand;
                          (iv) convene State partnership members on a 
                      regular basis, and at least on a semiannual basis;
                          (v) assist leaders at the regional level to 
                      form partnerships, including technical assistance 
                      and capacity building activities;

[[Page 124 STAT. 603]]

                          (vi) collect and assess data on and report on 
                      the performance benchmarks selected by the State 
                      partnership and the Administration for 
                      implementation activities carried out by regional 
                      and State partnerships; and
                          (vii) participate in the Administration's 
                      evaluation and reporting activities.
            (7) Performance and evaluation.--Before the State 
        partnership receives an implementation grant, it and the 
        Administrator shall jointly determine the performance benchmarks 
        that shall be established for the purposes of the implementation 
        grant.
            (8) Match.--Each State partnership receiving an 
        implementation grant shall provide an amount, in cash or in kind 
        that is not less than 25 percent of the amount of the grant, to 
        carry out the activities supported by the grant. The matching 
        funds may be provided from funds available from other Federal, 
        State, local, or private sources to carry out such activities.
            (9) Reports.--
                    (A) Report to administration.--For each year of the 
                implementation grant, the State partnership receiving 
                the implementation grant shall submit a report to the 
                Administration on the performance of the State of the 
                grant activities, including a description of the use of 
                the funds, including matched funds, to complete 
                activities, and a description of the performance of the 
                State partnership in meeting the performance benchmarks.
                    (B) Report to congress.--The Administration shall 
                submit a report to Congress analyzing implementation 
                activities, performance, and fund utilization of the 
                State grantees, including an identification of promising 
                practices and a profile of the activities of each State 
                grantee.

    (e) Authorization for Appropriations.--
            (1) Planning grants.--There are authorized to be 
        appropriated to award planning grants under subsection (c) 
        $8,000,000 for fiscal year 2010, and such sums as may be 
        necessary for each subsequent fiscal year.
            (2) Implementation grants.--There are authorized to be 
        appropriated to award implementation grants under subsection 
        (d), $150,000,000 for fiscal year 2010, and such sums as may be 
        necessary for each subsequent fiscal year.

SEC. 5103. HEALTH CARE WORKFORCE ASSESSMENT.

    (a) In <<NOTE: 42 USC 294n.>> General.--Section 761 of the Public 
Health Service Act (42 U.S.C. 294m) is amended--
            (1) by redesignating subsection (c) as subsection (e);
            (2) by striking subsection (b) and inserting the following:

    ``(b) National Center for Health Care Workforce Analysis.--
            ``(1) Establishment.--The Secretary shall establish the 
        National Center for Health Workforce Analysis (referred to in 
        this section as the `National Center').
            ``(2) Purposes.--The National Center, in coordination to the 
        extent practicable with the National Health Care Workforce

[[Page 124 STAT. 604]]

        Commission (established in section 5101 of the Patient 
        Protection and Affordable Care Act), and relevant regional and 
        State centers and agencies, shall--
                    ``(A) provide for the development of information 
                describing and analyzing the health care workforce and 
                workforce related issues;
                    ``(B) carry out the activities under section 792(a);
                    ``(C) annually evaluate programs under this title;
                    ``(D) develop and publish performance measures and 
                benchmarks for programs under this title; and
                    ``(E) establish, <<NOTE: Internet 
                registry.>> maintain, and publicize a national Internet 
                registry of each grant awarded under this title and a 
                database to collect data from longitudinal evaluations 
                (as described in subsection (d)(2)) on performance 
                measures (as developed under sections 749(d)(3), 
                757(d)(3), and 762(a)(3)).
            ``(3) Collaboration and data sharing.--
                    ``(A) In general.--The National Center shall 
                collaborate with Federal agencies and relevant 
                professional and educational organizations or societies 
                for the purpose of linking data regarding grants awarded 
                under this title.
                    ``(B) Contracts for health workforce analysis.--For 
                the purpose of carrying out the activities described in 
                subparagraph (A), the National Center may enter into 
                contracts with relevant professional and educational 
                organizations or societies.

    ``(c) State and Regional Centers for Health Workforce Analysis.--
            ``(1) In general.--
        The <<NOTE: Grants. Contracts.>> Secretary shall award grants 
        to, or enter into contracts with, eligible entities for purposes 
        of--
                    ``(A) collecting, analyzing, and reporting data 
                regarding programs under this title to the National 
                Center and to the public; and
                    ``(B) providing technical assistance to local and 
                regional entities on the collection, analysis, and 
                reporting of data.
            ``(2) Eligible entities.--To be eligible for a grant or 
        contract under this subsection, an entity shall--
                    ``(A) be a State, a State workforce investment 
                board, a public health or health professions school, an 
                academic health center, or an appropriate public or 
                private nonprofit entity; and
                    ``(B) submit to the Secretary an application at such 
                time, in such manner, and containing such information as 
                the Secretary may require.

    ``(d) Increase in Grants for Longitudinal Evaluations.--
            ``(1) In general.--The Secretary shall increase the amount 
        awarded to an eligible entity under this title for a 
        longitudinal evaluation of individuals who have received 
        education, training, or financial assistance from programs under 
        this title.
            ``(2) Capability.--A longitudinal evaluation shall be 
        capable of--
                    ``(A) studying practice patterns; and
                    ``(B) collecting and reporting data on performance 
                measures developed under sections 749(d)(3), 757(d)(3), 
                and 762(a)(3).

[[Page 124 STAT. 605]]

            ``(3) Guidelines.--A longitudinal evaluation shall comply 
        with guidelines issued under sections 749(d)(4), 757(d)(4), and 
        762(a)(4).
            ``(4) Eligible entities.--To be eligible to obtain an 
        increase under this section, an entity shall be a recipient of a 
        grant or contract under this title.''; and
            (3) in subsection (e), as so redesignated--
                    (A) by striking paragraph (1) and inserting the 
                following:
            ``(1) In <<NOTE: Appropriation authorization.>> general.--
                    ``(A) National center.--To carry out subsection (b), 
                there are authorized to be appropriated $7,500,000 for 
                each of fiscal years 2010 through 2014.
                    ``(B) State and regional centers.--To carry out 
                subsection (c), there are authorized to be appropriated 
                $4,500,000 for each of fiscal years 2010 through 2014.
                    ``(C) Grants for longitudinal evaluations.--To carry 
                out subsection (d), there are authorized to be 
                appropriated such sums as may be necessary for fiscal 
                years 2010 through 2014.''; and
            (4) in paragraph (2), by striking ``subsection (a)'' and 
        inserting ``paragraph (1)''.

    (b) Transfers.--Not <<NOTE: Deadline. 42 USC 294n note.>> later than 
180 days after the date of enactment of this Act, the responsibilities 
and resources of the National Center for Health Workforce Analysis, as 
in effect on the date before the date of enactment of this Act, shall be 
transferred to the National Center for Health Care Workforce Analysis 
established under section 761 of the Public Health Service Act, as 
amended by subsection (a).

    (c) Use of Longitudinal Evaluations.--Section 791(a)(1) of the 
Public Health Service Act (42 U.S.C. 295j(a)(1)) is amended--
            (1) in subparagraph (A), by striking ``or'' at the end;
            (2) in subparagraph (B), by striking the period and 
        inserting ``; or''; and
            (3) by adding at the end the following:
                    ``(C) utilizes a longitudinal evaluation (as 
                described in section 761(d)(2)) and reports data from 
                such system to the national workforce database (as 
                established under section 761(b)(2)(E)).''.

    (d) Performance Measures; Guidelines for Longitudinal Evaluations.--
            (1) Advisory <<NOTE: 42 USC 293l.>> committee on training in 
        primary care medicine and dentistry.--Section 748(d) of the 
        Public Health Service Act is amended--
                    (A) in paragraph (1), by striking ``and'' at the 
                end;
                    (B) in paragraph (2), by striking the period and 
                inserting a semicolon; and
                    (C) by adding at the end the following:
            ``(3) develop, publish, and implement performance measures 
        for programs under this part;
            ``(4) develop and publish guidelines for longitudinal 
        evaluations (as described in section 761(d)(2)) for programs 
        under this part; and
            ``(5) recommend appropriation levels for programs under this 
        part.''.

[[Page 124 STAT. 606]]

            (2) Advisory committee on interdisciplinary, community-based 
        linkages.--Section 756(d) of the Public Health Service 
        Act <<NOTE: 42 USC 294f.>> is amended--
                    (A) in paragraph (1), by striking ``and'' at the 
                end;
                    (B) in paragraph (2), by striking the period and 
                inserting a semicolon; and
                    (C) by adding at the end the following:
            ``(3) develop, publish, and implement performance measures 
        for programs under this part;
            ``(4) develop and publish guidelines for longitudinal 
        evaluations (as described in section 761(d)(2)) for programs 
        under this part; and
            ``(5) recommend appropriation levels for programs under this 
        part.''.
            (3) Advisory council on graduate medical education.--Section 
        762(a) of the Public Health Service Act (42 U.S.C. 294o(a)) is 
        amended--
                    (A) in paragraph (1), by striking ``and'' at the 
                end;
                    (B) in paragraph (2), by striking the period and 
                inserting a semicolon; and
                    (C) by adding at the end the following:
            ``(3) develop, publish, and implement performance measures 
        for programs under this title, except for programs under part C 
        or D;
            ``(4) develop and publish guidelines for longitudinal 
        evaluations (as described in section 761(d)(2)) for programs 
        under this title, except for programs under part C or D; and
            ``(5) recommend appropriation levels for programs under this 
        title, except for programs under part C or D.''.

     Subtitle C--Increasing the Supply of the Health Care Workforce

SEC. 5201. FEDERALLY SUPPORTED STUDENT LOAN FUNDS.

    (a) Medical Schools and Primary Health Care.--Section 723 of the 
Public Health Service Act (42 U.S.C. 292s) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1), by striking subparagraph (B) 
                and inserting the following:
                    ``(B) to practice in such care for 10 years 
                (including residency training in primary health care) or 
                through the date on which the loan is repaid in full, 
                whichever occurs first.''; and
                    (B) by striking paragraph (3) and inserting the 
                following:
            ``(3) Noncompliance by student.--Each agreement entered into 
        with a student pursuant to paragraph (1) shall provide that, if 
        the student fails to comply with such agreement, the loan 
        involved will begin to accrue interest at a rate of 2 percent 
        per year greater than the rate at which the student would pay if 
        compliant in such year.''; and
            (2) by adding at the end the following:

    ``(d) Sense of Congress.--It is the sense of Congress that funds 
repaid under the loan program under this section should not be 
transferred to the Treasury of the United States or otherwise used for 
any other purpose other than to carry out this section.''.

[[Page 124 STAT. 607]]

    (b) Student <<NOTE: 42 USC 292s note.>> Loan Guidelines.--The 
Secretary of Health and Human Services shall not require parental 
financial information for an independent student to determine financial 
need under section 723 of the Public Health Service Act (42 U.S.C. 292s) 
and the determination of need for such information shall be at the 
discretion of applicable school loan officer. The Secretary shall amend 
guidelines issued by the Health Resources and Services Administration in 
accordance with the preceding sentence.

SEC. 5202. NURSING STUDENT LOAN PROGRAM.

    (a) Loan Agreements.--Section 836(a) of the Public Health Service 
Act (42 U.S.C. 297b(a)) is amended--
            (1) by striking ``$2,500'' and inserting ``$3,300'';
            (2) by striking ``$4,000'' and inserting ``$5,200''; and
            (3) by striking ``$13,000'' and all that follows through the 
        period and inserting ``$17,000 in the case of any student during 
        fiscal years 2010 and 2011. After fiscal year 2011, such amounts 
        shall be adjusted to provide for a cost-of-attendance increase 
        for the yearly loan rate and the aggregate of the loans.''.

    (b) Loan Provisions.--Section 836(b) of the Public Health Service 
Act (42 U.S.C. 297b(b)) is amended--
            (1) in paragraph (1)(C), by striking ``1986'' and inserting 
        ``2000''; and
            (2) in paragraph (3), by striking ``the date of enactment of 
        the Nurse Training Amendments of 1979'' and inserting 
        ``September 29, 1995''.

SEC. 5203. HEALTH CARE WORKFORCE LOAN REPAYMENT PROGRAMS.

    Part E of title VII of the Public Health Service Act (42 U.S.C. 294n 
et seq.) is amended by adding at the end the following:

             ``Subpart 3--Recruitment and Retention Programs

``SEC. 775. INVESTMENT <<NOTE: 42 USC 295f.>> IN TOMORROW'S PEDIATRIC 
            HEALTH CARE WORKFORCE.

    ``(a) Establishment.--The Secretary shall establish and carry out a 
pediatric specialty loan repayment program under which the eligible 
individual agrees to be employed full-time for a specified period (which 
shall not be less than 2 years) in providing pediatric medical 
subspecialty, pediatric surgical specialty, or child and adolescent 
mental and behavioral health care, including substance abuse prevention 
and treatment services.
    ``(b) Program Administration.--Through <<NOTE: Contracts.>> the 
program established under this section, the Secretary shall enter into 
contracts with qualified health professionals under which--
            ``(1) such qualified health professionals will agree to 
        provide pediatric medical subspecialty, pediatric surgical 
        specialty, or child and adolescent mental and behavioral health 
        care in an area with a shortage of the specified pediatric 
        subspecialty that has a sufficient pediatric population to 
        support such pediatric subspecialty, as determined by the 
        Secretary; and
            ``(2) the Secretary agrees to make payments on the principal 
        and interest of undergraduate, graduate, or graduate medical 
        education loans of professionals described in paragraph (1) of 
        not more than $35,000 a year for each year of agreed upon 
        service under such paragraph for a period of not more than 3 
        years during the qualified health professional's--

[[Page 124 STAT. 608]]

                    ``(A) participation in an accredited pediatric 
                medical subspecialty, pediatric surgical specialty, or 
                child and adolescent mental health subspecialty 
                residency or fellowship; or
                    ``(B) employment as a pediatric medical 
                subspecialist, pediatric surgical specialist, or child 
                and adolescent mental health professional serving an 
                area or population described in such paragraph.

    ``(c) In General.--
            ``(1) Eligible <<NOTE: Definitions.>> individuals.--
                    ``(A) Pediatric medical specialists and pediatric 
                surgical specialists.--For purposes of contracts with 
                respect to pediatric medical specialists and pediatric 
                surgical specialists, the term `qualified health 
                professional' means a licensed physician who--
                          ``(i) is entering or receiving training in an 
                      accredited pediatric medical subspecialty or 
                      pediatric surgical specialty residency or 
                      fellowship; or
                          ``(ii) has completed (but not prior to the end 
                      of the calendar year in which this section is 
                      enacted) the training described in subparagraph 
                      (B).
                    ``(B) Child and adolescent mental and behavioral 
                health.--For purposes of contracts with respect to child 
                and adolescent mental and behavioral health care, the 
                term `qualified health professional' means a health care 
                professional who--
                          ``(i) has received specialized training or 
                      clinical experience in child and adolescent mental 
                      health in psychiatry, psychology, school 
                      psychology, behavioral pediatrics, psychiatric 
                      nursing, social work, school social work, 
                      substance abuse disorder prevention and treatment, 
                      marriage and family therapy, school counseling, or 
                      professional counseling;
                          ``(ii) has a license or certification in a 
                      State to practice allopathic medicine, osteopathic 
                      medicine, psychology, school psychology, 
                      psychiatric nursing, social work, school social 
                      work, marriage and family therapy, school 
                      counseling, or professional counseling; or
                          ``(iii) is a mental health service 
                      professional who completed (but not before the end 
                      of the calendar year in which this section is 
                      enacted) specialized training or clinical 
                      experience in child and adolescent mental health 
                      described in clause (i).
            ``(2) Additional eligibility requirements.--The Secretary 
        may not enter into a contract under this subsection with an 
        eligible individual unless--
                    ``(A) the individual agrees to work in, or for a 
                provider serving, a health professional shortage area or 
                medically underserved area, or to serve a medically 
                underserved population;
                    ``(B) the individual is a United States citizen or a 
                permanent legal United States resident; and
                    ``(C) if the individual is enrolled in a graduate 
                program, the program is accredited, and the individual 
                has an acceptable level of academic standing (as 
                determined by the Secretary).

[[Page 124 STAT. 609]]

    ``(d) Priority.--In entering into contracts under this subsection, 
the Secretary shall give priority to applicants who--
            ``(1) are or will be working in a school or other pre-
        kindergarten, elementary, or secondary education setting;
            ``(2) have familiarity with evidence-based methods and 
        cultural and linguistic competence health care services; and
            ``(3) demonstrate financial need.

    ``(e) Authorization of Appropriations.--There is authorized to be 
appropriated $30,000,000 for each of fiscal years 2010 through 2014 to 
carry out subsection (c)(1)(A) and $20,000,000 for each of fiscal years 
2010 through 2013 to carry out subsection (c)(1)(B).''.

SEC. 5204. PUBLIC HEALTH WORKFORCE RECRUITMENT AND RETENTION PROGRAMS.

    Part E of title VII of the Public Health Service Act (42 U.S.C. 294n 
et seq.), as amended by section 5203, is further amended by adding at 
the end the following:

``SEC. 776. PUBLIC <<NOTE: 42 USC 295f-1.>> HEALTH WORKFORCE LOAN 
            REPAYMENT PROGRAM.

    ``(a) Establishment.--The Secretary shall establish the Public 
Health Workforce Loan Repayment Program (referred to in this section as 
the `Program') to assure an adequate supply of public health 
professionals to eliminate critical public health workforce shortages in 
Federal, State, local, and tribal public health agencies.
    ``(b) Eligibility.--To be eligible to participate in the Program, an 
individual shall--
            ``(1)(A) be accepted for enrollment, or be enrolled, as a 
        student in an accredited academic educational institution in a 
        State or territory in the final year of a course of study or 
        program leading to a public health or health professions degree 
        or certificate; and have accepted employment with a Federal, 
        State, local, or tribal public health agency, or a related 
        training fellowship, as recognized by the Secretary, to commence 
        upon graduation;
            ``(B)(i) have graduated, during the preceding 10-year 
        period, from an accredited educational institution in a State or 
        territory and received a public health or health professions 
        degree or certificate; and
            ``(ii) be employed by, or have accepted employment with, a 
        Federal, State, local, or tribal public health agency or a 
        related training fellowship, as recognized by the Secretary;
            ``(2) be a United States citizen; and
            ``(3)(A) submit an application to the Secretary to 
        participate in the Program;
            ``(B) execute a written contract as required in subsection 
        (c); and
            ``(4) not have received, for the same service, a reduction 
        of loan obligations under section 455(m), 428J, 428K, 428L, or 
        460 of the Higher Education Act of 1965.

    ``(c) Contract.--The written contract (referred to in this section 
as the `written contract') between the Secretary and an individual shall 
contain--
            ``(1) an agreement on the part of the Secretary that the 
        Secretary will repay on behalf of the individual loans incurred 
        by the individual in the pursuit of the relevant degree or 
        certificate in accordance with the terms of the contract;
            ``(2) an agreement on the part of the individual that the 
        individual will serve in the full-time employment of a Federal,

[[Page 124 STAT. 610]]

        State, local, or tribal public health agency or a related 
        fellowship program in a position related to the course of study 
        or program for which the contract was awarded for a period of 
        time (referred to in this section as the `period of obligated 
        service') equal to the greater of--
                    ``(A) 3 years; or
                    ``(B) such longer period of time as determined 
                appropriate by the Secretary and the individual;
            ``(3) an agreement, as appropriate, on the part of the 
        individual to relocate to a priority service area (as determined 
        by the Secretary) in exchange for an additional loan repayment 
        incentive amount to be determined by the Secretary;
            ``(4) a provision that any financial obligation of the 
        United States arising out of a contract entered into under this 
        section and any obligation of the individual that is conditioned 
        thereon, is contingent on funds being appropriated for loan 
        repayments under this section;
            ``(5) a statement of the damages to which the United States 
        is entitled, under this section for the individual's breach of 
        the contract; and
            ``(6) such other statements of the rights and liabilities of 
        the Secretary and of the individual, not inconsistent with this 
        section.

    ``(d) Payments.--
            ``(1) In general.--A loan repayment provided for an 
        individual under a written contract under the Program shall 
        consist of payment, in accordance with paragraph (2), on behalf 
        of the individual of the principal, interest, and related 
        expenses on government and commercial loans received by the 
        individual regarding the undergraduate or graduate education of 
        the individual (or both), which loans were made for tuition 
        expenses incurred by the individual.
            ``(2) Payments for years served.--For each year of obligated 
        service that an individual contracts to serve under subsection 
        (c) the Secretary may pay up to $35,000 on behalf of the 
        individual for loans described in paragraph (1). With respect to 
        participants under the Program whose total eligible loans are 
        less than $105,000, the Secretary shall pay an amount that does 
        not exceed \1/3\ of the eligible loan balance for each year of 
        obligated service of the individual.
            ``(3) Tax liability.--For the purpose of providing 
        reimbursements for tax liability resulting from payments under 
        paragraph (2) on behalf of an individual, the Secretary shall, 
        in addition to such payments, make payments to the individual in 
        an amount not to exceed 39 percent of the total amount of loan 
        repayments made for the taxable year involved.

    ``(e) Postponing Obligated Service.--With respect to an individual 
receiving a degree or certificate from a health professions or other 
related school, the date of the initiation of the period of obligated 
service may be postponed as approved by the Secretary.
    ``(f) Breach of Contract.--An <<NOTE: Penalty.>> individual who 
fails to comply with the contract entered into under subsection (c) 
shall be subject to the same financial penalties as provided for under 
section 338E for breaches of loan repayment contracts under section 
338B.

    ``(g) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $195,000,000 for fiscal

[[Page 124 STAT. 611]]

year 2010, and such sums as may be necessary for each of fiscal years 
2011 through 2015.''.

SEC. 5205. ALLIED HEALTH WORKFORCE RECRUITMENT AND RETENTION PROGRAMS.

    (a) Purpose.--The <<NOTE: 20 USC 1078-11 note.>> purpose of this 
section is to assure an adequate supply of allied health professionals 
to eliminate critical allied health workforce shortages in Federal, 
State, local, and tribal public health agencies or in settings where 
patients might require health care services, including acute care 
facilities, ambulatory care facilities, personal residences and other 
settings, as recognized by the Secretary of Health and Human Services by 
authorizing an Allied Health Loan Forgiveness Program.

    (b) Allied Health Workforce Recruitment and Retention Program.--
Section 428K of the Higher Education Act of 1965 (20 U.S.C. 1078-11) is 
amended--
            (1) in subsection (b), by adding at the end the following:
            ``(18) Allied health professionals.--The individual is 
        employed full-time as an allied health professional--
                    ``(A) in a Federal, State, local, or tribal public 
                health agency; or
                    ``(B) in a setting where patients might require 
                health care services, including acute care facilities, 
                ambulatory care facilities, personal residences and 
                other settings located in health professional shortage 
                areas, medically underserved areas, or medically 
                underserved populations, as recognized by the Secretary 
                of Health and Human Services.''; and
            (2) in subsection (g)--
                    (A) by redesignating paragraphs (1) through (9) as 
                paragraphs (2) through (10), respectively; and
                    (B) by inserting before paragraph (2) (as 
                redesignated by subparagraph (A)) the following:
            ``(1) Allied <<NOTE: Definition.>> health professional.--The 
        term `allied health professional' means an allied health 
        professional as defined in section 799B(5) of the Public Heath 
        Service Act (42 U.S.C. 295p(5)) who--
                    ``(A) has graduated and received an allied health 
                professions degree or certificate from an institution of 
                higher education; and
                    ``(B) is employed with a Federal, State, local or 
                tribal public health agency, or in a setting where 
                patients might require health care services, including 
                acute care facilities, ambulatory care facilities, 
                personal residences and other settings located in health 
                professional shortage areas, medically underserved 
                areas, or medically underserved populations, as 
                recognized by the Secretary of Health and Human 
                Services.''.

SEC. 5206. GRANTS FOR STATE AND LOCAL PROGRAMS.

    (a) In General.--Section 765(d) of the Public Health Service Act (42 
U.S.C. 295(d)) is amended--
            (1) in paragraph (7), by striking ``; or'' and inserting a 
        semicolon;
            (2) by redesignating paragraph (8) as paragraph (9); and
            (3) by inserting after paragraph (7) the following:
            ``(8) public health workforce loan repayment programs; or''.

[[Page 124 STAT. 612]]

    (b) Training for Mid-career Public Health Professionals.--Part E of 
title VII of the Public Health Service Act (42 U.S.C. 294n et seq.), as 
amended by section 5204, is further amended by adding at the end the 
following:

``SEC. 777. TRAINING <<NOTE: 42 USC 295f-2.>> FOR MID-CAREER PUBLIC AND 
            ALLIED HEALTH PROFESSIONALS.

    ``(a) In General.--The Secretary may make grants to, or enter into 
contracts with, any eligible entity to award scholarships to eligible 
individuals to enroll in degree or professional training programs for 
the purpose of enabling mid-career professionals in the public health 
and allied health workforce to receive additional training in the field 
of public health and allied health.
    ``(b) <<NOTE: Definitions.>>  Eligibility.--
            ``(1) Eligible entity.--The term `eligible entity' indicates 
        an accredited educational institution that offers a course of 
        study, certificate program, or professional training program in 
        public or allied health or a related discipline, as determined 
        by the Secretary
            ``(2) Eligible individuals.--The term `eligible individuals' 
        includes those individuals employed in public and allied health 
        positions at the Federal, State, tribal, or local level who are 
        interested in retaining or upgrading their education.

    ``(c) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section, $60,000,000 for fiscal year 2010 
and such sums as may be necessary for each of fiscal years 2011 through 
2015. Fifty percent of appropriated funds shall be allotted to public 
health mid-career professionals and 50 percent shall be allotted to 
allied health mid-career professionals.''.

SEC. 5207. FUNDING FOR NATIONAL HEALTH SERVICE CORPS.

    Section 338H(a) of the Public Health Service Act (42 U.S.C. 254q(a)) 
is amended to read as follows:
    ``(a) Authorization of Appropriations.--For the purpose of carrying 
out this section, there is authorized to be appropriated, out of any 
funds in the Treasury not otherwise appropriated, the following:
            ``(1) For fiscal year 2010, $320,461,632.
            ``(2) For fiscal year 2011, $414,095,394.
            ``(3) For fiscal year 2012, $535,087,442.
            ``(4) For fiscal year 2013, $691,431,432.
            ``(5) For fiscal year 2014, $893,456,433.
            ``(6) For fiscal year 2015, $1,154,510,336.
            ``(7) For fiscal year 2016, and each subsequent fiscal year, 
        the amount appropriated for the preceding fiscal year adjusted 
        by the product of--
                    ``(A) one plus the average percentage increase in 
                the costs of health professions education during the 
                prior fiscal year; and
                    ``(B) one plus the average percentage change in the 
                number of individuals residing in health professions 
                shortage areas designated under section 333 during the 
                prior fiscal year, relative to the number of individuals 
                residing in such areas during the previous fiscal 
                year.''.

SEC. 5208. NURSE-MANAGED HEALTH CLINICS.

    (a) Purpose.--The <<NOTE: 42 USC 254c-1a note.>> purpose of this 
section is to fund the development and operation of nurse-managed health 
clinics.

[[Page 124 STAT. 613]]

    (b) Grants.--Subpart 1 of part D of title III of the Public Health 
Service Act (42 U.S.C. 254b et seq.) is amended by inserting after 
section 330A the following:

``SEC. 330A-1. <<NOTE: 42 USC 254c-1a.>> GRANTS TO NURSE-MANAGED HEALTH 
            CLINICS.

    ``(a) Definitions.--
            ``(1) Comprehensive primary health care services.--In this 
        section, the term `comprehensive primary health care services' 
        means the primary health services described in section 
        330(b)(1).
            ``(2) Nurse-managed health clinic.--The term `nurse-managed 
        health clinic' means a nurse-practice arrangement, managed by 
        advanced practice nurses, that provides primary care or wellness 
        services to underserved or vulnerable populations and that is 
        associated with a school, college, university or department of 
        nursing, federally qualified health center, or independent 
        nonprofit health or social services agency.

    ``(b) Authority to Award Grants.--The Secretary shall award grants 
for the cost of the operation of nurse-managed health clinics that meet 
the requirements of this section.
    ``(c) Applications.--To be eligible to receive a grant under this 
section, an entity shall--
            ``(1) be an NMHC; and
            ``(2) submit to the Secretary an application at such time, 
        in such manner, and containing--
                    ``(A) assurances that nurses are the major providers 
                of services at the NMHC and that at least 1 advanced 
                practice nurse holds an executive management position 
                within the organizational structure of the NMHC;
                    ``(B) an assurance that the NMHC will continue 
                providing comprehensive primary health care services or 
                wellness services without regard to income or insurance 
                status of the patient for the duration of the grant 
                period; and
                    ``(C) an assurance that, not later than 90 days of 
                receiving a grant under this section, the NMHC will 
                establish a community advisory committee, for which a 
                majority of the members shall be individuals who are 
                served by the NMHC.

    ``(d) Grant Amount.--The <<NOTE: Determination.>> amount of any 
grant made under this section for any fiscal year shall be determined by 
the Secretary, taking into account--
            ``(1) the financial need of the NMHC, considering State, 
        local, and other operational funding provided to the NMHC; and
            ``(2) other factors, as the Secretary determines 
        appropriate.

    ``(e) Authorization of Appropriations.--For the purposes of carrying 
out this section, there are authorized to be appropriated $50,000,000 
for the fiscal year 2010 and such sums as may be necessary for each of 
the fiscal years 2011 through 2014.''.

SEC. 5209. <<NOTE: 42 USC 238f note.>> ELIMINATION OF CAP ON 
            COMMISSIONED CORPS.

    Section 202 of the Department of Health and Human Services 
Appropriations Act, 1993 (Public Law 102-394) is amended by striking 
``not to exceed 2,800''.

[[Page 124 STAT. 614]]

SEC. 5210. ESTABLISHING A READY RESERVE CORPS.

    Section 203 of the Public Health Service Act (42 U.S.C. 204) is 
amended to read as follows:

``SEC. 203. COMMISSIONED CORPS AND READY RESERVE CORPS.

    ``(a) Establishment.--
            ``(1) In general.--There shall be in the Service a 
        commissioned Regular Corps and a Ready Reserve Corps for service 
        in time of national emergency.
            ``(2) Requirement.--All commissioned officers shall be 
        citizens of the United States and shall be appointed without 
        regard to the civil-service laws and compensated without regard 
        to the Classification Act of 1923, as amended.
            ``(3) Appointment.--
        Commissioned <<NOTE: President.>> officers of the Ready Reserve 
        Corps shall be appointed by the President and commissioned 
        officers of the Regular Corps shall be appointed by the 
        President with the advice and consent of the Senate.
            ``(4) Active duty.--Commissioned officers of the Ready 
        Reserve Corps shall at all times be subject to call to active 
        duty by the Surgeon General, including active duty for the 
        purpose of training.
            ``(5) Warrant officers.--Warrant officers may be appointed 
        to the Service for the purpose of providing support to the 
        health and delivery systems maintained by the Service and any 
        warrant officer appointed to the Service shall be considered for 
        purposes of this Act and title 37, United States Code, to be a 
        commissioned officer within the Commissioned Corps of the 
        Service.

    ``(b) Assimilating Reserve Corp Officers Into the Regular Corps.--
Effective <<NOTE: Effective date.>> on the date of enactment of the 
Patient Protection and Affordable Care Act, all individuals classified 
as officers in the Reserve Corps under this section (as such section 
existed on the day before the date of enactment of such Act) and serving 
on active duty shall be deemed to be commissioned officers of the 
Regular Corps.

    ``(c) Purpose and Use of Ready Research.--
            ``(1) Purpose.--The purpose of the Ready Reserve Corps is to 
        fulfill the need to have additional Commissioned Corps personnel 
        available on short notice (similar to the uniformed service's 
        reserve program) to assist regular Commissioned Corps personnel 
        to meet both routine public health and emergency response 
        missions.
            ``(2) Uses.--The Ready Reserve Corps shall--
                    ``(A) participate in routine training to meet the 
                general and specific needs of the Commissioned Corps;
                    ``(B) be available and ready for involuntary calls 
                to active duty during national emergencies and public 
                health crises, similar to the uniformed service reserve 
                personnel;
                    ``(C) be available for backfilling critical 
                positions left vacant during deployment of active duty 
                Commissioned Corps members, as well as for deployment to 
                respond to public health emergencies, both foreign and 
                domestic; and
                    ``(D) be available for service assignment in 
                isolated, hardship, and medically underserved 
                communities (as defined in section 799B) to improve 
                access to health services.

[[Page 124 STAT. 615]]

    ``(d) Funding.--For the purpose of carrying out the duties and 
responsibilities of the Commissioned Corps under this section, there are 
authorized to be appropriated $5,000,000 for each of fiscal years 2010 
through 2014 for recruitment and training and $12,500,000 for each of 
fiscal years 2010 through 2014 for the 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.

    Part C of title VII (42 U.S.C. 293k et seq.) is amended by striking 
section 747 and inserting the following:

``SEC. 747. <<NOTE: 42 USC 293k.>> PRIMARY CARE TRAINING AND 
            ENHANCEMENT.

    ``(a) Support and Development of Primary Care Training Programs.--
            ``(1) In general.--The Secretary may make grants to, or 
        enter into contracts with, an accredited public or nonprofit 
        private hospital, school of medicine or osteopathic medicine, 
        academically affiliated physician assistant training program, or 
        a public or private nonprofit entity which the Secretary has 
        determined is capable of carrying out such grant or contract--
                    ``(A) to plan, develop, operate, or participate in 
                an accredited professional training program, including 
                an accredited residency or internship program in the 
                field of family medicine, general internal medicine, or 
                general pediatrics for medical students, interns, 
                residents, or practicing physicians as defined by the 
                Secretary;
                    ``(B) to provide need-based financial assistance in 
                the form of traineeships and fellowships to medical 
                students, interns, residents, practicing physicians, or 
                other medical personnel, who are participants in any 
                such program, and who plan to specialize or work in the 
                practice of the fields defined in subparagraph (A);
                    ``(C) to plan, develop, and operate a program for 
                the training of physicians who plan to teach in family 
                medicine, general internal medicine, or general 
                pediatrics training programs;
                    ``(D) to plan, develop, and operate a program for 
                the training of physicians teaching in community-based 
                settings;
                    ``(E) to provide financial assistance in the form of 
                traineeships and fellowships to physicians who are 
                participants in any such programs and who plan to teach 
                or conduct research in a family medicine, general 
                internal medicine, or general pediatrics training 
                program;
                    ``(F) to plan, develop, and operate a physician 
                assistant education program, and for the training of 
                individuals who will teach in programs to provide such 
                training;
                    ``(G) to plan, develop, and operate a demonstration 
                program that provides training in new competencies, as 
                recommended by the Advisory Committee on Training in

[[Page 124 STAT. 616]]

                Primary Care Medicine and Dentistry and the National 
                Health Care Workforce Commission established in section 
                5101 of the Patient Protection and Affordable Care Act, 
                which may include--
                          ``(i) providing training to primary care 
                      physicians relevant to providing care through 
                      patient-centered medical homes (as defined by the 
                      Secretary for purposes of this section);
                          ``(ii) developing tools and curricula relevant 
                      to patient-centered medical homes; and
                          ``(iii) providing continuing education to 
                      primary care physicians relevant to patient-
                      centered medical homes; and
                    ``(H) to plan, develop, and operate joint degree 
                programs to provide interdisciplinary and 
                interprofessional graduate training in public health and 
                other health professions to provide training in 
                environmental health, infectious disease control, 
                disease prevention and health promotion, epidemiological 
                studies and injury control.
            ``(2) Duration of awards.--The period during which payments 
        are made to an entity from an award of a grant or contract under 
        this subsection shall be 5 years.

    ``(b) Capacity Building in Primary Care.--
            ``(1) In general.--The Secretary may make grants to or enter 
        into contracts with accredited schools of medicine or 
        osteopathic medicine to establish, maintain, or improve--
                    ``(A) academic units or programs that improve 
                clinical teaching and research in fields defined in 
                subsection (a)(1)(A); or
                    ``(B) programs that integrate academic 
                administrative units in fields defined in subsection 
                (a)(1)(A) to enhance interdisciplinary recruitment, 
                training, and faculty development.
            ``(2) Preference in making awards under this subsection.--In 
        making awards of grants and contracts under paragraph (1), the 
        Secretary shall give preference to any qualified applicant for 
        such an award that agrees to expend the award for the purpose 
        of--
                    ``(A) establishing academic units or programs in 
                fields defined in subsection (a)(1)(A); or
                    ``(B) substantially expanding such units or 
                programs.
            ``(3) Priorities in making awards.--In awarding grants or 
        contracts under paragraph (1), the Secretary shall give priority 
        to qualified applicants that--
                    ``(A) proposes a collaborative project between 
                academic administrative units of primary care;
                    ``(B) proposes innovative approaches to clinical 
                teaching using models of primary care, such as the 
                patient centered medical home, team management of 
                chronic disease, and interprofessional integrated models 
                of health care that incorporate transitions in health 
                care settings and integration physical and mental health 
                provision;
                    ``(C) have a record of training the greatest 
                percentage of providers, or that have demonstrated 
                significant improvements in the percentage of providers 
                trained, who enter and remain in primary care practice;

[[Page 124 STAT. 617]]

                    ``(D) have a record of training individuals who are 
                from underrepresented minority groups or from a rural or 
                disadvantaged background;
                    ``(E) provide training in the care of vulnerable 
                populations such as children, older adults, homeless 
                individuals, victims of abuse or trauma, individuals 
                with mental health or substance-related disorders, 
                individuals with HIV/AIDS, and individuals with 
                disabilities;
                    ``(F) establish formal relationships and submit 
                joint applications with federally qualified health 
                centers, rural health clinics, area health education 
                centers, or clinics located in underserved areas or that 
                serve underserved populations;
                    ``(G) teach trainees the skills to provide 
                interprofessional, integrated care through collaboration 
                among health professionals;
                    ``(H) provide training in enhanced communication 
                with patients, evidence-based practice, chronic disease 
                management, preventive care, health information 
                technology, or other competencies as recommended by the 
                Advisory Committee on Training in Primary Care Medicine 
                and Dentistry and the National Health Care Workforce 
                Commission established in section 5101 of the Patient 
                Protection and Affordable Care Act; or
                    ``(I) provide training in cultural competency and 
                health literacy.
            ``(4) Duration of awards.--The period during which payments 
        are made to an entity from an award of a grant or contract under 
        this subsection shall be 5 years.

    ``(c) Authorization of Appropriations.--
            ``(1) In general.--For purposes of carrying out this section 
        (other than subsection (b)(1)(B)), there are authorized to be 
        appropriated $125,000,000 for fiscal year 2010, and such sums as 
        may be necessary for each of fiscal years 2011 through 2014.
            ``(2) Training programs.--Fifteen percent of the amount 
        appropriated pursuant to paragraph (1) in each such fiscal year 
        shall be allocated to the physician assistant training programs 
        described in subsection (a)(1)(F), which prepare students for 
        practice in primary care.
            ``(3) Integrating academic administrative units.--For 
        purposes of carrying out subsection (b)(1)(B), there are 
        authorized to be appropriated $750,000 for each of fiscal years 
        2010 through 2014.''.

SEC. 5302. TRAINING OPPORTUNITIES FOR DIRECT CARE WORKERS.

    Part C of title VII of the Public Health Service Act (42 U.S.C. 293k 
et seq.) is amended by inserting after section 747, as amended by 
section 5301, the following:

``SEC. 747A. TRAINING <<NOTE: 42 USC 293k-1.>> OPPORTUNITIES FOR DIRECT 
            CARE WORKERS.

    ``(a) In General.--The <<NOTE: Grants.>> Secretary shall award 
grants to eligible entities to enable such entities to provide new 
training opportunities for direct care workers who are employed in long-
term care settings such as nursing homes (as defined in section 
1908(e)(1) of the Social Security Act (42 U.S.C. 1396g(e)(1)), assisted 
living facilities

[[Page 124 STAT. 618]]

and skilled nursing facilities, intermediate care facilities for 
individuals with mental retardation, home and community based settings, 
and any other setting the Secretary determines to be appropriate.

    ``(b) Eligibility.--To be eligible to receive a grant under this 
section, an entity shall--
            ``(1) be an institution of higher education (as defined in 
        section 102 of the Higher Education Act of 1965 (20 U.S.C. 
        1002)) that--
                    ``(A) is accredited by a nationally recognized 
                accrediting agency or association listed under section 
                101(c) of the Higher Education Act of 1965 (20 U.S.C. 
                1001(c)); and
                    ``(B) has established a public-private educational 
                partnership with a nursing home or skilled nursing 
                facility, agency or entity providing home and community 
                based services to individuals with disabilities, or 
                other long-term care provider; and
            ``(2) submit to the Secretary an application at such time, 
        in such manner, and containing such information as the Secretary 
        may require.

    ``(c) Use of Funds.--An eligible entity shall use amounts awarded 
under a grant under this section to provide assistance to eligible 
individuals to offset the cost of tuition and required fees for 
enrollment in academic programs provided by such entity.
    ``(d) Eligible Individual.--
            ``(1) Eligibility.--To be eligible for assistance under this 
        section, an individual shall be enrolled in courses provided by 
        a grantee under this subsection and maintain satisfactory 
        academic progress in such courses.
            ``(2) Condition of assistance.--As a condition of receiving 
        assistance under this section, an individual shall agree that, 
        following completion of the assistance period, the individual 
        will work in the field of geriatrics, disability services, long 
        term services and supports, or chronic care management for a 
        minimum of 2 years under guidelines set by the Secretary.

    ``(e) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section, $10,000,000 for the period of 
fiscal years 2011 through 2013.''.

SEC. 5303. TRAINING IN GENERAL, PEDIATRIC, AND PUBLIC HEALTH DENTISTRY.

    Part C of Title VII of the Public Health Service Act (42 U.S.C. 293k 
et seq.) is amended by--
            (1) redesignating section 748, <<NOTE: 42 USC 293l.>> as 
        amended by section 5103 of this Act, as section 749; and
            (2) inserting after section 747A, as added by section 5302, 
        the following:

``SEC. 748. <<NOTE: 42 USC 293k-2.>> TRAINING IN GENERAL, PEDIATRIC, AND 
            PUBLIC HEALTH DENTISTRY.

    ``(a) Support and Development of Dental Training Programs.--
            ``(1) In general.--The Secretary may make grants to, or 
        enter into contracts with, a school of dentistry, public or 
        nonprofit private hospital, or a public or private nonprofit 
        entity which the Secretary has determined is capable of carrying 
        out such grant or contract--
                    ``(A) to plan, develop, and operate, or participate 
                in, an approved professional training program in the 
                field

[[Page 124 STAT. 619]]

                of general dentistry, pediatric dentistry, or public 
                health dentistry for dental students, residents, 
                practicing dentists, dental hygienists, or other 
                approved primary care dental trainees, that emphasizes 
                training for general, pediatric, or public health 
                dentistry;
                    ``(B) to provide financial assistance to dental 
                students, residents, practicing dentists, and dental 
                hygiene students who are in need thereof, who are 
                participants in any such program, and who plan to work 
                in the practice of general, pediatric, public heath 
                dentistry, or dental hygiene;
                    ``(C) to plan, develop, and operate a program for 
                the training of oral health care providers who plan to 
                teach in general, pediatric, public health dentistry, or 
                dental hygiene;
                    ``(D) to provide financial assistance in the form of 
                traineeships and fellowships to dentists who plan to 
                teach or are teaching in general, pediatric, or public 
                health dentistry;
                    ``(E) to meet the costs of projects to establish, 
                maintain, or improve dental faculty development programs 
                in primary care (which may be departments, divisions or 
                other units);
                    ``(F) to meet the costs of projects to establish, 
                maintain, or improve predoctoral and postdoctoral 
                training in primary care programs;
                    ``(G) to create a loan repayment program for faculty 
                in dental programs; and
                    ``(H) to provide technical assistance to pediatric 
                training programs in developing and implementing 
                instruction regarding the oral health status, dental 
                care needs, and risk-based clinical disease management 
                of all pediatric populations with an emphasis on 
                underserved children.
            ``(2) Faculty loan repayment.--
                    ``(A) In general.--A grant or contract under 
                subsection (a)(1)(G) may be awarded to a program of 
                general, pediatric, or public health dentistry described 
                in such subsection to plan, develop, and operate a loan 
                repayment program under which--
                          ``(i) individuals agree to serve full-time as 
                      faculty members; and
                          ``(ii) the program of general, pediatric or 
                      public health dentistry agrees to pay the 
                      principal and interest on the outstanding student 
                      loans of the individuals.
                    ``(B) Manner of payments.--With respect to the 
                payments described in subparagraph (A)(ii), upon 
                completion by an individual of each of the first, 
                second, third, fourth, and fifth years of service, the 
                program shall pay an amount equal to 10, 15, 20, 25, and 
                30 percent, respectively, of the individual's student 
                loan balance as calculated based on principal and 
                interest owed at the initiation of the agreement.

    ``(b) Eligible Entity.--For purposes of this subsection, entities 
eligible for such grants or contracts in general, pediatric, or public 
health dentistry shall include entities that have programs in dental or 
dental hygiene schools, or approved residency or advanced education 
programs in the practice of general, pediatric, or public health 
dentistry. Eligible entities may partner with schools of public

[[Page 124 STAT. 620]]

health to permit the education of dental students, residents, and dental 
hygiene students for a master's year in public health at a school of 
public health.
    ``(c) Priorities in Making Awards.--With respect to training 
provided for under this section, the Secretary shall give priority in 
awarding grants or contracts to the following:
            ``(1) Qualified applicants that propose collaborative 
        projects between departments of primary care medicine and 
        departments of general, pediatric, or public health dentistry.
            ``(2) Qualified applicants that have a record of training 
        the greatest percentage of providers, or that have demonstrated 
        significant improvements in the percentage of providers, who 
        enter and remain in general, pediatric, or public health 
        dentistry.
            ``(3) Qualified applicants that have a record of training 
        individuals who are from a rural or disadvantaged background, or 
        from underrepresented minorities.
            ``(4) Qualified applicants that establish formal 
        relationships with Federally qualified health centers, rural 
        health centers, or accredited teaching facilities and that 
        conduct training of students, residents, fellows, or faculty at 
        the center or facility.
            ``(5) Qualified applicants that conduct teaching programs 
        targeting vulnerable populations such as older adults, homeless 
        individuals, victims of abuse or trauma, individuals with mental 
        health or substance-related disorders, individuals with 
        disabilities, and individuals with HIV/AIDS, and in the risk-
        based clinical disease management of all populations.
            ``(6) Qualified applicants that include educational 
        activities in cultural competency and health literacy.
            ``(7) Qualified applicants that have a high rate for placing 
        graduates in practice settings that serve underserved areas or 
        health disparity populations, or who achieve a significant 
        increase in the rate of placing graduates in such settings.
            ``(8) Qualified applicants that intend to establish a 
        special populations oral health care education center or 
        training program for the didactic and clinical education of 
        dentists, dental health professionals, and dental hygienists who 
        plan to teach oral health care for people with developmental 
        disabilities, cognitive impairment, complex medical problems, 
        significant physical limitations, and vulnerable elderly.

    ``(d) Application.--An eligible entity desiring a grant 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.
    ``(e) Duration of Award.--The period during which payments are made 
to an entity from an award of a grant or contract under subsection (a) 
shall be 5 years. The provision of such payments shall be subject to 
annual approval by the Secretary and subject to the availability of 
appropriations for the fiscal year involved to make the payments.
    ``(f) Authorizations of Appropriations.--For the purpose of carrying 
out subsections (a) and (b), there is authorized to be appropriated 
$30,000,000 for fiscal year 2010 and such sums as may be necessary for 
each of fiscal years 2011 through 2015.
    ``(g) Carryover Funds.--An entity that receives an award under this 
section may carry over funds from 1 fiscal year to another without 
obtaining approval from the Secretary. In no case

[[Page 124 STAT. 621]]

may any funds be carried over pursuant to the preceding sentence for 
more than 3 years.''.

SEC. 5304. ALTERNATIVE DENTAL HEALTH CARE PROVIDERS DEMONSTRATION 
            PROJECT.

    Subpart X of part D of title III of the Public Health Service Act 
(42 U.S.C. 256f et seq.) is amended by adding at the end the following:

``SEC. 340G-1. <<NOTE: 42 USC 256g-1.>> DEMONSTRATION PROGRAM.

    ``(a) In General. <<NOTE: Grants.>> --
            ``(1) Authorization.--The Secretary is authorized to award 
        grants to 15 eligible entities to enable such entities to 
        establish a demonstration program to establish training programs 
        to train, or to employ, alternative dental health care providers 
        in order to increase access to dental health care services in 
        rural and other underserved communities.
            ``(2) Definition.--The term `alternative dental health care 
        providers' includes community dental health coordinators, 
        advance practice dental hygienists, independent dental 
        hygienists, supervised dental hygienists, primary care 
        physicians, dental therapists, dental health aides, and any 
        other health professional that the Secretary determines 
        appropriate.

    ``(b) Timeframe.--The demonstration projects funded under this 
section shall begin not later than 2 years after the date of enactment 
of this section, and shall conclude not later than 7 years after such 
date of enactment.
    ``(c) Eligible Entities.--To be eligible to receive a grant under 
subsection (a), an entity shall--
            ``(1) be--
                    ``(A) an institution of higher education, including 
                a community college;
                    ``(B) a public-private partnership;
                    ``(C) a federally qualified health center;
                    ``(D) an Indian Health Service facility or a tribe 
                or tribal organization (as such terms are defined in 
                section 4 of the Indian Self-Determination and Education 
                Assistance Act);
                    ``(E) a State or county public health clinic, a 
                health facility operated by an Indian tribe or tribal 
                organization, or urban Indian organization providing 
                dental services; or
                    ``(F) a public hospital or health system;
            ``(2) be within a program accredited by the Commission on 
        Dental Accreditation or within a dental education program in an 
        accredited institution; and
            ``(3) shall submit an application to the Secretary at such 
        time, in such manner, and containing such information as the 
        Secretary may require.

    ``(d) Administrative Provisions.--
            ``(1) Amount of grant.--Each grant under this section shall 
        be in an amount that is not less than $4,000,000 for the 5-year 
        period during which the demonstration project being conducted.
            ``(2) Disbursement of funds.--
                    ``(A) Preliminary disbursements. <<NOTE: Effective 
                date.>> --Beginning 1 year after the enactment of this 
                section, the Secretary may disperse to any entity 
                receiving a grant under this section

[[Page 124 STAT. 622]]

                not more than 20 percent of the total funding awarded to 
                such entity under such grant, for the purpose of 
                enabling the entity to plan the demonstration project to 
                be conducted under such grant.
                    ``(B) Subsequent disbursements.--The remaining 
                amount of grant funds not dispersed under subparagraph 
                (A) shall be dispersed such that not less than 15 
                percent of such remaining amount is dispersed each 
                subsequent year.

    ``(e) Compliance With State Requirements.--Each entity receiving a 
grant under this section shall certify that it is in compliance with all 
applicable State licensing requirements.
    ``(f) <<NOTE: Contracts.>> Evaluation.--The Secretary shall contract 
with the Director of the Institute of Medicine to conduct a study of the 
demonstration programs conducted under this section that shall provide 
analysis, based upon quantitative and qualitative data, regarding access 
to dental health care in the United States.

    ``(g) Clarification Regarding Dental Health Aide Program.--Nothing 
in this section shall prohibit a dental health aide training program 
approved by the Indian Health Service from being eligible for a grant 
under this section.
    ``(h) Authorization of Appropriations.--There is authorized to be 
appropriated such sums as may be necessary to carry out this section.''.

SEC. 5305. GERIATRIC EDUCATION AND TRAINING; CAREER AWARDS; 
            COMPREHENSIVE GERIATRIC EDUCATION.

    (a) Workforce Development; Career Awards.--Section 753 of the Public 
Health Service Act (42 U.S.C. 294c) is amended by adding at the end the 
following:
    ``(d) Geriatric Workforce Development.--
            ``(1) In general. <<NOTE: Grants. Contracts.>> --The 
        Secretary shall award grants or contracts under this subsection 
        to entities that operate a geriatric education center pursuant 
        to subsection (a)(1).
            ``(2) Application.--To be eligible for an award under 
        paragraph (1), an entity described in such paragraph shall 
        submit to the Secretary an application at such time, in such 
        manner, and containing such information as the Secretary may 
        require.
            ``(3) Use of funds.--Amounts awarded under a grant or 
        contract under paragraph (1) shall be used to--
                    ``(A) carry out the fellowship program described in 
                paragraph (4); and
                    ``(B) carry out 1 of the 2 activities described in 
                paragraph (5).
            ``(4) Fellowship program.--
                    ``(A) In general.--Pursuant to paragraph (3), a 
                geriatric education center that receives an award under 
                this subsection shall use such funds to offer short-term 
                intensive courses (referred to in this subsection as a 
                `fellowship') that focus on geriatrics, chronic care 
                management, and long-term care that provide supplemental 
                training for faculty members in medical schools and 
                other health professions schools with programs in 
                psychology, pharmacy, nursing, social work, dentistry, 
                public health, allied health, or other health 
                disciplines, as approved by the Secretary. Such a 
                fellowship shall be open to current faculty, and

[[Page 124 STAT. 623]]

                appropriately credentialed volunteer faculty and 
                practitioners, who do not have formal training in 
                geriatrics, to upgrade their knowledge and clinical 
                skills for the care of older adults and adults with 
                functional limitations and to enhance their 
                interdisciplinary teaching skills.
                    ``(B) Location.--A fellowship shall be offered 
                either at the geriatric education center that is 
                sponsoring the course, in collaboration with other 
                geriatric education centers, or at medical schools, 
                schools of dentistry, schools of nursing, schools of 
                pharmacy, schools of social work, graduate programs in 
                psychology, or allied health and other health 
                professions schools approved by the Secretary with which 
                the geriatric education centers are affiliated.
                    ``(C) CME credit.--Participation in a fellowship 
                under this paragraph shall be accepted with respect to 
                complying with continuing health profession education 
                requirements. As a condition of such acceptance, the 
                recipient shall agree to subsequently provide a minimum 
                of 18 hours of voluntary instructional support through a 
                geriatric education center that is providing clinical 
                training to students or trainees in long-term care 
                settings.
            ``(5) Additional required activities described.--Pursuant to 
        paragraph (3), a geriatric education center that receives an 
        award under this subsection shall use such funds to carry out 1 
        of the following 2 activities.
                    ``(A) Family caregiver and direct care provider 
                training.--A geriatric education center that receives an 
                award under this subsection shall offer at least 2 
                courses each year, at no charge or nominal cost, to 
                family caregivers and direct care providers that are 
                designed to provide practical training for supporting 
                frail elders and individuals with 
                disabilities. <<NOTE: Requirements.>> The Secretary 
                shall require such Centers to work with appropriate 
                community partners to develop training program content 
                and to publicize the availability of training courses in 
                their service areas. All family caregiver and direct 
                care provider training programs shall include 
                instruction on the management of psychological and 
                behavioral aspects of dementia, communication techniques 
                for working with individuals who have dementia, and the 
                appropriate, safe, and effective use of medications for 
                older adults.
                    ``(B) Incorporation of best practices.--A geriatric 
                education center that receives an award under this 
                subsection shall develop and include material on 
                depression and other mental disorders common among older 
                adults, medication safety issues for older adults, and 
                management of the psychological and behavioral aspects 
                of dementia and communication techniques with 
                individuals who have dementia in all training courses, 
                where appropriate.
            ``(6) Targets.--A geriatric education center that receives 
        an award under this subsection shall meet targets approved by 
        the Secretary for providing geriatric training to a certain 
        number of faculty or practitioners during the term of the award, 
        as well as other parameters established by the Secretary.
            ``(7) Amount of award.--An award under this subsection shall 
        be in an amount of $150,000. Not more than 24 geriatric 
        education centers may receive an award under this subsection.

[[Page 124 STAT. 624]]

            ``(8) Maintenance of effort.--A geriatric education center 
        that receives an award under this subsection shall provide 
        assurances to the Secretary that funds provided to the geriatric 
        education center under this subsection will be used only to 
        supplement, not to supplant, the amount of Federal, State, and 
        local funds otherwise expended by the geriatric education 
        center.
            ``(9) Authorization of appropriations.--In addition to any 
        other funding available to carry out this section, there is 
        authorized to be appropriated to carry out this subsection, 
        $10,800,000 for the period of fiscal year 2011 through 2014.

    ``(e) Geriatric Career Incentive Awards.--
            ``(1) In general. <<NOTE: Grants. Contracts.>> --The 
        Secretary shall award grants or contracts under this section to 
        individuals described in paragraph (2) to foster greater 
        interest among a variety of health professionals in entering the 
        field of geriatrics, long-term care, and chronic care 
        management.
            ``(2) Eligible individuals.--To be eligible to received an 
        award under paragraph (1), an individual shall--
                    ``(A) be an advanced practice nurse, a clinical 
                social worker, a pharmacist, or student of psychology 
                who is pursuing a doctorate or other advanced degree in 
                geriatrics or related fields in an accredited health 
                professions school; and
                    ``(B) submit to the Secretary an application at such 
                time, in such manner, and containing such information as 
                the Secretary may require.
            ``(3) Condition of award.--As a condition of receiving an 
        award under this subsection, an individual shall agree that, 
        following completion of the award period, the individual will 
        teach or practice in the field of geriatrics, long-term care, or 
        chronic care management for a minimum of 5 years under 
        guidelines set by the Secretary.
            ``(4) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out this subsection, $10,000,000 for 
        the period of fiscal years 2011 through 2013.''.

    (b) Expansion of Eligibility for Geriatric Academic Career Awards; 
Payment to Institution.--Section 753(c) of the Public Health Service Act 
294(c)) <<NOTE: 42 USC 294c.>> is amended--
            (1) by redesignating paragraphs (4) and (5) as paragraphs 
        (5) and (6), respectively;
            (2) by striking paragraph (2) through paragraph (3) and 
        inserting the following:
            ``(2) Eligible individuals.--To be eligible to receive an 
        Award under paragraph (1), an individual shall--
                    ``(A) be board certified or board eligible in 
                internal medicine, family practice, psychiatry, or 
                licensed dentistry, or have completed any required 
                training in a discipline and employed in an accredited 
                health professions school that is approved by the 
                Secretary;
                    ``(B) have completed an approved fellowship program 
                in geriatrics or have completed specialty training in 
                geriatrics as required by the discipline and any 
                addition geriatrics training as required by the 
                Secretary; and
                    ``(C) have a junior (non-tenured) faculty 
                appointment at an accredited (as determined by the 
                Secretary) school of medicine, osteopathic medicine, 
                nursing, social work,

[[Page 124 STAT. 625]]

                psychology, dentistry, pharmacy, or other allied health 
                disciplines in an accredited health professions school 
                that is approved by the Secretary.
            ``(3) Limitations.--No Award under paragraph (1) may be made 
        to an eligible individual unless the individual--
                    ``(A) has submitted to the Secretary an application, 
                at such time, in such manner, and containing such 
                information as the Secretary may require, and the 
                Secretary has approved such application;
                    ``(B) provides, in such form and manner as the 
                Secretary may require, assurances that the individual 
                will meet the service requirement described in paragraph 
                (6); and
                    ``(C) provides, in such form and manner as the 
                Secretary may require, assurances that the individual 
                has a full-time faculty appointment in a health 
                professions institution and documented commitment from 
                such institution to spend 75 percent of the total time 
                of such individual on teaching and developing skills in 
                interdisciplinary education in geriatrics.
            ``(4) Maintenance of effort.--An eligible individual that 
        receives an Award under paragraph (1) shall provide assurances 
        to the Secretary that funds provided to the eligible individual 
        under this subsection will be used only to supplement, not to 
        supplant, the amount of Federal, State, and local funds 
        otherwise expended by the eligible individual.''; and
            (3) in paragraph (5), as so designated--
                    (A) in subparagraph (A)--
                          (i) by inserting ``for individuals who are 
                      physicians'' after ``this section''; and
                          (ii) <<NOTE: Determination.>> by inserting 
                      after the period at the end the following: ``The 
                      Secretary shall determine the amount of an Award 
                      under this section for individuals who are not 
                      physicians.''; and
                    (B) by adding at the end the following:
                    ``(C) Payment to institution.--The Secretary shall 
                make payments to institutions which include schools of 
                medicine, osteopathic medicine, nursing, social work, 
                psychology, dentistry, and pharmacy, or other allied 
                health discipline in an accredited health professions 
                school that is approved by the Secretary.''.

    (c) Comprehensive Geriatric Education.--Section 855 of the Public 
Health Service Act (42 U.S.C. 298) is amended--
            (1) in subsection (b)--
                    (A) in paragraph (3), by striking ``or'' at the end;
                    (B) in paragraph (4), by striking the period and 
                inserting ``; or''; and
                    (C) by adding at the end the following:
            ``(5) establish traineeships for individuals who are 
        preparing for advanced education nursing degrees in geriatric 
        nursing, long-term care, gero-psychiatric nursing or other 
        nursing areas that specialize in the care of the elderly 
        population.''; and
            (2) in subsection (e), by striking ``2003 through 2007'' and 
        inserting ``2010 through 2014''.

[[Page 124 STAT. 626]]

SEC. 5306. MENTAL AND BEHAVIORAL HEALTH EDUCATION AND TRAINING GRANTS.

    (a) In General.--Part D of title VII (42 U.S.C. 294 et seq.) is 
amended by--
            (1) <<NOTE: 42 USC 294g.>> striking section 757;
            (2) <<NOTE: 42 USC 294f.>> redesignating section 756 (as 
        amended by section 5103) as section 757; and
            (3) inserting after section 755 the following:

``SEC. 756. <<NOTE: 42 USC 294e-1.>> MENTAL AND BEHAVIORAL HEALTH 
            EDUCATION AND TRAINING GRANTS.

    ``(a) Grants Authorized.--The Secretary may award grants to eligible 
institutions of higher education to support the recruitment of students 
for, and education and clinical experience of the students in--
            ``(1) baccalaureate, master's, and doctoral degree programs 
        of social work, as well as the development of faculty in social 
        work;
            ``(2) accredited master's, doctoral, internship, and post-
        doctoral residency programs of psychology for the development 
        and implementation of interdisciplinary training of psychology 
        graduate students for providing behavioral and mental health 
        services, including substance abuse prevention and treatment 
        services;
            ``(3) accredited institutions of higher education or 
        accredited professional training programs that are establishing 
        or expanding internships or other field placement programs in 
        child and adolescent mental health in psychiatry, psychology, 
        school psychology, behavioral pediatrics, psychiatric nursing, 
        social work, school social work, substance abuse prevention and 
        treatment, marriage and family therapy, school counseling, or 
        professional counseling; and
            ``(4) State-licensed mental health nonprofit and for-profit 
        organizations to enable such organizations to pay for programs 
        for preservice or in-service training of paraprofessional child 
        and adolescent mental health workers.

    ``(b) Eligibility Requirements.--To be eligible for a grant under 
this section, an institution shall demonstrate--
            ``(1) participation in the institutions' programs of 
        individuals and groups from different racial, ethnic, cultural, 
        geographic, religious, linguistic, and class backgrounds, and 
        different genders and sexual orientations;
            ``(2) knowledge and understanding of the concerns of the 
        individuals and groups described in subsection (a);
            ``(3) any internship or other field placement program 
        assisted under the grant will prioritize cultural and linguistic 
        competency;
            ``(4) the institution will provide to the Secretary such 
        data, assurances, and information as the Secretary may require; 
        and
            ``(5) with respect to any violation of the agreement between 
        the Secretary and the institution, the institution will pay such 
        liquidated damages as prescribed by the Secretary by regulation.

    ``(c) Institutional Requirement.--For grants authorized under 
subsection (a)(1), at least 4 of the grant recipients shall

[[Page 124 STAT. 627]]

be historically black colleges or universities or other minority-serving 
institutions.
    ``(d) Priority.--
            ``(1) In selecting the grant recipients in social work under 
        subsection (a)(1), the Secretary shall give priority to 
        applicants that--
                    ``(A) are accredited by the Council on Social Work 
                Education;
                    ``(B) have a graduation rate of not less than 80 
                percent for social work students; and
                    ``(C) exhibit an ability to recruit social workers 
                from and place social workers in areas with a high need 
                and high demand population.
            ``(2) In selecting the grant recipients in graduate 
        psychology under subsection (a)(2), the Secretary shall give 
        priority to institutions in which training focuses on the needs 
        of vulnerable groups such as older adults and children, 
        individuals with mental health or substance-related disorders, 
        victims of abuse or trauma and of combat stress disorders such 
        as posttraumatic stress disorder and traumatic brain injuries, 
        homeless individuals, chronically ill persons, and their 
        families.
            ``(3) In selecting the grant recipients in training programs 
        in child and adolescent mental health under subsections (a)(3) 
        and (a)(4), the Secretary shall give priority to applicants 
        that--
                    ``(A) have demonstrated the ability to collect data 
                on the number of students trained in child and 
                adolescent mental health and the populations served by 
                such students after graduation or completion of 
                preservice or in-service training;
                    ``(B) have demonstrated familiarity with evidence-
                based methods in child and adolescent mental health 
                services, including substance abuse prevention and 
                treatment services;
                    ``(C) have programs designed to increase the number 
                of professionals and paraprofessionals serving high-
                priority populations and to applicants who come from 
                high-priority communities and plan to serve medically 
                underserved populations, in health professional shortage 
                areas, or in medically underserved areas;
                    ``(D) offer curriculum taught collaboratively with a 
                family on the consumer and family lived experience or 
                the importance of family-professional or family-
                paraprofessional partnerships; and
                    ``(E) provide services through a community mental 
                health program described in section 1913(b)(1).

    ``(e) Authorization of Appropriation.--For the fiscal years 2010 
through 2013, there is authorized to be appropriated to carry out this 
section--
            ``(1) $8,000,000 for training in social work in subsection 
        (a)(1);
            ``(2) $12,000,000 for training in graduate psychology in 
        subsection (a)(2), of which not less than $10,000,000 shall be 
        allocated for doctoral, postdoctoral, and internship level 
        training;
            ``(3) $10,000,000 for training in professional child and 
        adolescent mental health in subsection (a)(3); and

[[Page 124 STAT. 628]]

            ``(4) $5,000,000 for training in paraprofessional child and 
        adolescent work in subsection (a)(4).''.

    (b) Conforming Amendments.--Section 757(b)(2) of the Public Health 
Service Act, as redesignated by subsection (a) <<NOTE: 42 USC 294f.>> , 
is amended by striking ``sections 751(a)(1)(A), 751(a)(1)(B), 753(b), 
754(3)(A), and 755(b)'' and inserting ``sections 751(b)(1)(A), 753(b), 
and 755(b)''.

SEC. 5307. CULTURAL COMPETENCY, PREVENTION, AND PUBLIC HEALTH AND 
            INDIVIDUALS WITH DISABILITIES TRAINING.

    (a) Title VII.--Section 741 of the Public Health Service Act (42 
U.S.C. 293e) is amended--
            (1) in subsection (a)--
                    (A) by striking the subsection heading and inserting 
                ``Cultural Competency, Prevention, and Public Health and 
                Individuals With Disability Grants''; and
                    (B) in paragraph (1), by striking ``for the purpose 
                of'' and all that follows through the period at the end 
                and inserting ``for the development, evaluation, and 
                dissemination of research, demonstration projects, and 
                model curricula for cultural competency, prevention, 
                public health proficiency, reducing health disparities, 
                and aptitude for working with individuals with 
                disabilities training for use in health professions 
                schools and continuing education programs, and for other 
                purposes determined as appropriate by the Secretary.''; 
                and
            (2) by striking subsection (b) and inserting the following:

    ``(b) Collaboration.--In carrying out subsection (a), the Secretary 
shall collaborate with health professional societies, licensing and 
accreditation entities, health professions schools, and experts in 
minority health and cultural competency, prevention, and public health 
and disability groups, community-based organizations, and other 
organizations as determined appropriate by the Secretary. The Secretary 
shall coordinate with curricula and research and demonstration projects 
developed under section 807.
    ``(c) Dissemination.--
            ``(1) In general.--Model curricula developed under this 
        section shall be disseminated through the Internet Clearinghouse 
        under section 270 and such other means as determined appropriate 
        by the Secretary.
            ``(2) Evaluation.--The Secretary shall evaluate the adoption 
        and the implementation of cultural competency, prevention, and 
        public health, and working with individuals with a disability 
        training curricula, and the facilitate inclusion of these 
        competency measures in quality measurement systems as 
        appropriate.

    ``(d) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section such sums as may be necessary for 
each of fiscal years 2010 through 2015.''.
    (b) Title VIII.--Section 807 of the Public Health Service Act (42 
U.S.C. 296e-1) is amended--
            (1) in subsection (a)--
                    (A) by striking the subsection heading and inserting 
                ``Cultural Competency, Prevention, and Public Health and 
                Individuals With Disability Grants''; and
                    (B) by striking ``for the purpose of'' and all that 
                follows through ``health care.'' and inserting ``for the 
                development,

[[Page 124 STAT. 629]]

                evaluation, and dissemination of research, demonstration 
                projects, and model curricula for cultural competency, 
                prevention, public health proficiency, reducing health 
                disparities, and aptitude for working with individuals 
                with disabilities training for use in health professions 
                schools and continuing education programs, and for other 
                purposes determined as appropriate by the Secretary.''; 
                and
            (2) by redesignating subsection (b) as subsection (d);
            (3) by inserting after subsection (a) the following:

    ``(b) Collaboration.--In carrying out subsection (a), the Secretary 
shall collaborate with the entities described in section 741(b). The 
Secretary shall coordinate with curricula and research and demonstration 
projects developed under such section 741.
    ``(c) Dissemination.--Model curricula developed under this section 
shall be disseminated and evaluated in the same manner as model 
curricula developed under section 741, as described in subsection (c) of 
such section.''; and
            (4) in subsection (d), as so redesignated--
                    (A) by striking ``subsection (a)'' and inserting 
                ``this section''; and
                    (B) by striking ``2001 through 2004'' and inserting 
                ``2010 through 2015''.

SEC. 5308. ADVANCED NURSING EDUCATION GRANTS.

    Section 811 of the Public Health Service Act (42 U.S.C. 296j) is 
amended--
            (1) in subsection (c)--
                    (A) in the subsection heading, by striking ``and 
                Nurse Midwifery Programs''; and
                    (B) by striking ``and nurse midwifery'';
            (2) in subsection (f)--
                    (A) by striking paragraph (2); and
                    (B) by redesignating paragraph (3) as paragraph (2); 
                and
            (3) by redesignating subsections (d), (e), and (f) as 
        subsections (e), (f), and (g), respectively; and
            (4) by inserting after subsection (c), the following:

    ``(d) Authorized Nurse-midwifery Programs.--Midwifery programs that 
are eligible for support under this section are educational programs 
that--
            ``(1) have as their objective the education of midwives; and
            ``(2) are accredited by the American College of Nurse-
        Midwives Accreditation Commission for Midwifery Education.''.

SEC. 5309. NURSE EDUCATION, PRACTICE, AND RETENTION GRANTS.

    (a) In General.--Section 831 of the Public Health Service Act (42 
U.S.C. 296p) is amended--
            (1) in the section heading, by striking ``retention'' and 
        inserting ``quality'';
            (2) in subsection (a)--
                    (A) in paragraph (1), by adding ``or'' after the 
                semicolon;
                    (B) by striking paragraph (2); and
                    (C) by redesignating paragraph (3) as paragraph (2);
            (3) in subsection (b)(3), by striking ``managed care, 
        quality improvement'' and inserting ``coordinated care'';
            (4) in subsection (g), by inserting ``, as defined in 
        section 801(2),'' after ``school of nursing''; and

[[Page 124 STAT. 630]]

            (5) in subsection (h), by striking ``2003 through 2007'' and 
        inserting ``2010 through 2014''.

    (b) Nurse Retention Grants.--Title VIII of the Public Health Service 
Act is amended by inserting after section 831 (42 U.S.C. 296b) the 
following:

``SEC. 831A. <<NOTE: 42 USC 296p-1.>> NURSE RETENTION GRANTS.

    ``(a) Retention Priority Areas.--The Secretary may award grants to, 
and enter into contracts with, eligible entities to enhance the nursing 
workforce by initiating and maintaining nurse retention programs 
pursuant to subsection (b) or (c).
    ``(b) Grants for Career Ladder Program.--The Secretary may award 
grants to, and enter into contracts with, eligible entities for 
programs--
            ``(1) to promote career advancement for individuals 
        including licensed practical nurses, licensed vocational nurses, 
        certified nurse assistants, home health aides, diploma degree or 
        associate degree nurses, to become baccalaureate prepared 
        registered nurses or advanced education nurses in order to meet 
        the needs of the registered nurse workforce;
            ``(2) developing and implementing internships and residency 
        programs in collaboration with an accredited school of nursing, 
        as defined by section 801(2), to encourage mentoring and the 
        development of specialties; or
            ``(3) to assist individuals in obtaining education and 
        training required to enter the nursing profession and advance 
        within such profession.

    ``(c) Enhancing Patient Care Delivery Systems.--
            ``(1) Grants.--The Secretary may award grants to eligible 
        entities to improve the retention of nurses and enhance patient 
        care that is directly related to nursing activities by enhancing 
        collaboration and communication among nurses and other health 
        care professionals, and by promoting nurse involvement in the 
        organizational and clinical decision-making processes of a 
        health care facility.
            ``(2) Priority.--In making awards of grants under this 
        subsection, the Secretary shall give preference to applicants 
        that have not previously received an award under this subsection 
        (or section 831(c) as such section existed on the day before the 
        date of enactment of this section).
            ``(3) Continuation of an award.--The Secretary shall make 
        continuation of any award under this subsection beyond the 
        second year of such award contingent on the recipient of such 
        award having demonstrated to the Secretary measurable and 
        substantive improvement in nurse retention or patient care.

    ``(d) Other Priority Areas.--The Secretary may award grants to, or 
enter into contracts with, eligible entities to address other areas that 
are of high priority to nurse retention, as determined by the Secretary.
    ``(e) Report.--The Secretary shall submit to the Congress before the 
end of each fiscal year a report on the grants awarded and the contracts 
entered into under this section. Each such report shall identify the 
overall number of such grants and contracts and provide an explanation 
of why each such grant or contract will meet the priority need of the 
nursing workforce.

[[Page 124 STAT. 631]]

    ``(f) Eligible Entity.--For purposes of this section, the term 
`eligible entity' includes an accredited school of nursing, as defined 
by section 801(2), a health care facility, or a partnership of such a 
school and facility.
    ``(g) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be necessary for 
each of fiscal years 2010 through 2012.''.

SEC. 5310. LOAN REPAYMENT AND SCHOLARSHIP PROGRAM.

    (a) Loan Repayments and Scholarships.--Section 846(a)(3) of the 
Public Health Service Act (42 U.S.C. 297n(a)(3)) is amended by inserting 
before the semicolon the following: ``, or in a accredited school of 
nursing, as defined by section 801(2), as nurse faculty''.
    (b) Technical and Conforming Amendments.--Title VIII (42 U.S.C. 296 
et seq.) is amended--
            (1) by redesignating section 810 <<NOTE: 42 USC 
        296g.>> (relating to prohibition against discrimination by 
        schools on the basis of sex) as section 809 and moving such 
        section so that it follows section 808;
            (2) in sections 835, 836, 838, 840, and 842, <<NOTE: 42 USC 
        297a, 297b, 297d, 297g, 297i.>>  by striking the term ``this 
        subpart'' each place it appears and inserting ``this part'';
            (3) in section 836(h), <<NOTE: 42 USC 297b.>> by striking 
        the last sentence;
            (4) in section 836, by redesignating subsection (l) as 
        subsection (k);
            (5) in section 839, <<NOTE: 42 USC 297e.>> by striking 
        ``839'' and all that follows through ``(a)'' and inserting 
        ``839. (a)'';
            (6) in section 835(b), <<NOTE: 42 USC 297a.>> by striking 
        ``841'' each place it appears and inserting ``871'';
            (7) by redesignating section 841 <<NOTE: 42 USC 298d.>> as 
        section 871, moving part F to the end of the title, and 
        redesignating such part as part I;
            (8) in part G--
                    (A) by redesignating section 845 <<NOTE: 42 USC 
                297t.>>  as section 851; and
                    (B) by redesignating part G as part F;
            (9) in part H--
                    (A) by redesignating sections 851 and 852 <<NOTE: 42 
                USC 297w, 297x.>> as sections 861 and 862, respectively; 
                and
                    (B) by redesignating part H as part G; and
            (10) in part I--
                    (A) by redesignating section 855, <<NOTE: 42 USC 
                298.>>  as amended by section 5305, as section 865; and
                    (B) by redesignating part I as part H.

SEC. 5311. NURSE FACULTY LOAN PROGRAM.

    (a) In General.--Section 846A of the Public Health Service Act (42 
U.S.C. 297n-1) is amended--
            (1) in subsection (a)--
                    (A) in the subsection heading, by striking 
                ``Establishment'' and inserting ``School of Nursing 
                Student Loan Fund''; and
                    (B) by inserting ``accredited'' after ``agreement 
                with any'';
            (2) in subsection (c)--
                    (A) in paragraph (2), by striking ``$30,000'' and 
                all that follows through the semicolon and inserting 
                ``$35,500, during fiscal years 2010 and 2011 fiscal 
                years (after fiscal year 2011, such amounts shall be 
                adjusted to provide for

[[Page 124 STAT. 632]]

                a cost-of-attendance increase for the yearly loan rate 
                and the aggregate loan;''; and
                    (B) in paragraph (3)(A), by inserting ``an 
                accredited'' after ``faculty member in'';
            (3) in subsection (e), by striking ``a school'' and 
        inserting ``an accredited school''; and
            (4) in subsection (f), by striking ``2003 through 2007'' and 
        inserting ``2010 through 2014''.

    (b) Eligible Individual Student Loan Repayment.--Title VIII of the 
Public Health Service Act is amended by inserting after section 846A (42 
U.S.C. 297n-1) the following:

``SEC. 847. <<NOTE: 42 USC 297o.>> ELIGIBLE INDIVIDUAL STUDENT LOAN 
            REPAYMENT.

    ``(a) In General.--The Secretary, acting through the Administrator 
of the Health Resources and Services Administration, may enter into an 
agreement with eligible individuals for the repayment of education 
loans, in accordance with this section, to increase the number of 
qualified nursing faculty.
    ``(b) Agreements.--Each agreement entered into under this subsection 
shall require that the eligible individual shall serve as a full-time 
member of the faculty of an accredited school of nursing, for a total 
period, in the aggregate, of at least 4 years during the 6-year period 
beginning on the later of--
            ``(1) the date on which the individual receives a master's 
        or doctorate nursing degree from an accredited school of 
        nursing; or
            ``(2) the date on which the individual enters into an 
        agreement under this subsection.

    ``(c) Agreement Provisions.--Agreements entered into pursuant to 
subsection (b) shall be entered into on such terms and conditions as the 
Secretary may determine, except that--
            ``(1) <<NOTE: Deadline.>> not more than 10 months after the 
        date on which the 6-year period described under subsection (b) 
        begins, but in no case before the individual starts as a full-
        time member of the faculty of an accredited school of nursing 
        the Secretary shall begin making payments, for and on behalf of 
        that individual, on the outstanding principal of, and interest 
        on, any loan of that individual obtained to pay for such degree;
            ``(2) for an individual who has completed a master's in 
        nursing or equivalent degree in nursing--
                    ``(A) payments may not exceed $10,000 per calendar 
                year; and
                    ``(B) total payments may not exceed $40,000 during 
                the 2010 and 2011 fiscal years (after fiscal year 2011, 
                such amounts shall be adjusted to provide for a cost-of-
                attendance increase for the yearly loan rate and the 
                aggregate loan); and
            ``(3) for an individual who has completed a doctorate or 
        equivalent degree in nursing--
                    ``(A) payments may not exceed $20,000 per calendar 
                year; and
                    ``(B) total payments may not exceed $80,000 during 
                the 2010 and 2011 fiscal years (adjusted for subsequent 
                fiscal years as provided for in the same manner as in 
                paragraph (2)(B)).

    ``(d) Breach of Agreement.--

[[Page 124 STAT. 633]]

            ``(1) In general.--In the case of any agreement made under 
        subsection (b), the individual is liable to the Federal 
        Government for the total amount paid by the Secretary under such 
        agreement, and for interest on such amount at the maximum legal 
        prevailing rate, if the individual fails to meet the agreement 
        terms required under such subsection.
            ``(2) Waiver or suspension of liability.--In the case of an 
        individual making an agreement for purposes of paragraph (1), 
        the Secretary shall provide for the waiver or suspension of 
        liability under such paragraph if compliance by the individual 
        with the agreement involved is impossible or would involve 
        extreme hardship to the individual or if enforcement of the 
        agreement with respect to the individual would be 
        unconscionable.
            ``(3) Date certain for recovery.--Subject to paragraph (2), 
        any amount that the Federal Government is entitled to recover 
        under paragraph (1) shall be paid to the United States not later 
        than the expiration of the 3-year period beginning on the date 
        the United States becomes so entitled.
            ``(4) Availability.--Amounts recovered under paragraph (1) 
        shall be available to the Secretary for making loan repayments 
        under this section and shall remain available for such purpose 
        until expended.

    ``(e) Eligible Individual Defined.--For purposes of this section, 
the term `eligible individual' means an individual who--
            ``(1) is a United States citizen, national, or lawful 
        permanent resident;
            ``(2) holds an unencumbered license as a registered nurse; 
        and
            ``(3) has either already completed a master's or doctorate 
        nursing program at an accredited school of nursing or is 
        currently enrolled on a full-time or part-time basis in such a 
        program.

    ``(f) Priority.--For the purposes of this section and section 846A, 
funding priority will be awarded to School of Nursing Student Loans that 
support doctoral nursing students or Individual Student Loan Repayment 
that support doctoral nursing students.
    ``(g) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be necessary for 
each of fiscal years 2010 through 2014.''.

SEC. 5312. AUTHORIZATION OF APPROPRIATIONS FOR PARTS B THROUGH D OF 
            TITLE VIII.

    Section 871 of the Public Health Service Act, as redesignated and 
moved by section 5310, is amended to read as follows:

``SEC. 871. <<NOTE: 42 USC 298d.>> AUTHORIZATION OF APPROPRIATIONS.

    ``For the purpose of carrying out parts B, C, and D (subject to 
section 851(g)), there are authorized to be appropriated $338,000,000 
for fiscal year 2010, and such sums as may be necessary for each of the 
fiscal years 2011 through 2016.''.

SEC. 5313. GRANTS TO PROMOTE THE COMMUNITY HEALTH WORKFORCE.

    (a) In General.--Part P of title III of the Public Health Service 
Act (42 U.S.C. 280g et seq.) is amended by adding at the end the 
following:

[[Page 124 STAT. 634]]

``SEC. 399V. <<NOTE: 42 USC 280g-11.>> GRANTS TO PROMOTE POSITIVE HEALTH 
            BEHAVIORS AND OUTCOMES.

    ``(a) Grants Authorized.--The Director of the Centers for Disease 
Control and Prevention, in collaboration with the Secretary, shall award 
grants to eligible entities to promote positive health behaviors and 
outcomes for populations in medically underserved communities through 
the use of community health workers.
    ``(b) Use of Funds.--Grants awarded under subsection (a) shall be 
used to support community health workers--
            ``(1) to educate, guide, and provide outreach in a community 
        setting regarding health problems prevalent in medically 
        underserved communities, particularly racial and ethnic minority 
        populations;
            ``(2) to educate and provide guidance regarding effective 
        strategies to promote positive health behaviors and discourage 
        risky health behaviors;
            ``(3) to educate and provide outreach regarding enrollment 
        in health insurance including the Children's Health Insurance 
        Program under title XXI of the Social Security Act, Medicare 
        under title XVIII of such Act and Medicaid under title XIX of 
        such Act;
            ``(4) to identify, educate, refer, and enroll underserved 
        populations to appropriate healthcare agencies and community-
        based programs and organizations in order to increase access to 
        quality healthcare services and to eliminate duplicative care; 
        or
            ``(5) to educate, guide, and provide home visitation 
        services regarding maternal health and prenatal care.

    ``(c) Application.--Each eligible entity that desires to receive a 
grant under subsection (a) shall submit an application to the Secretary, 
at such time, in such manner, and accompanied by such information as the 
Secretary may require.
    ``(d) Priority.--In awarding grants under subsection (a), the 
Secretary shall give priority to applicants that--
            ``(1) propose to target geographic areas--
                    ``(A) with a high percentage of residents who are 
                eligible for health insurance but are uninsured or 
                underinsured;
                    ``(B) with a high percentage of residents who suffer 
                from chronic diseases; or
                    ``(C) with a high infant mortality rate;
            ``(2) have experience in providing health or health-related 
        social services to individuals who are underserved with respect 
        to such services; and
            ``(3) have documented community activity and experience with 
        community health workers.

    ``(e) Collaboration With Academic Institutions and the One-stop 
Delivery System.--The Secretary shall encourage community health worker 
programs receiving funds under this section to collaborate with academic 
institutions and one-stop delivery systems under section 134(c) of the 
Workforce Investment Act of 1998. Nothing in this section shall be 
construed to require such collaboration.
    ``(f) Evidence-based Interventions.--The Secretary shall encourage 
community health worker programs receiving funding under this section to 
implement a process or an outcome-based

[[Page 124 STAT. 635]]

payment system that rewards community health workers for connecting 
underserved populations with the most appropriate services at the most 
appropriate time. Nothing in this section shall be construed to require 
such a payment.
    ``(g) Quality Assurance and Cost 
Effectiveness. <<NOTE: Guidelines.>> --The Secretary shall establish 
guidelines for assuring the quality of the training and supervision of 
community health workers under the programs funded under this section 
and for assuring the cost-effectiveness of such programs.

    ``(h) Monitoring.--The Secretary shall monitor community health 
worker programs identified in approved applications under this section 
and shall determine whether such programs are in compliance with the 
guidelines established under subsection (g).
    ``(i) Technical Assistance.--The Secretary may provide technical 
assistance to community health worker programs identified in approved 
applications under this section with respect to planning, developing, 
and operating programs under the grant.
    ``(j) Authorization of Appropriations.--There are authorized to be 
appropriated, such sums as may be necessary to carry out this section 
for each of fiscal years 2010 through 2014.
    ``(k) Definitions.--In this section:
            ``(1) Community health worker.--The term `community health 
        worker', as defined by the Department of Labor as Standard 
        Occupational Classification [21-1094] means an individual who 
        promotes health or nutrition within the community in which the 
        individual resides--
                    ``(A) by serving as a liaison between communities 
                and healthcare agencies;
                    ``(B) by providing guidance and social assistance to 
                community residents;
                    ``(C) by enhancing community residents' ability to 
                effectively communicate with healthcare providers;
                    ``(D) by providing culturally and linguistically 
                appropriate health or nutrition education;
                    ``(E) by advocating for individual and community 
                health;
                    ``(F) by providing referral and follow-up services 
                or otherwise coordinating care; and
                    ``(G) by proactively identifying and enrolling 
                eligible individuals in Federal, State, local, private 
                or nonprofit health and human services programs.
            ``(2) Community setting.--The term `community setting' means 
        a home or a community organization located in the neighborhood 
        in which a participant in the program under this section 
        resides.
            ``(3) Eligible entity.--The term `eligible entity' means a 
        public or nonprofit private entity (including a State or public 
        subdivision of a State, a public health department, a free 
        health clinic, a hospital, or a Federally-qualified health 
        center (as defined in section 1861(aa) of the Social Security 
        Act)), or a consortium of any such entities.
            ``(4) Medically underserved community.--The term `medically 
        underserved community' means a community identified by a State--
                    ``(A) that has a substantial number of individuals 
                who are members of a medically underserved population, 
                as defined by section 330(b)(3); and

[[Page 124 STAT. 636]]

                    ``(B) a significant portion of which is a health 
                professional shortage area as designated under section 
                332.''.

SEC. 5314. FELLOWSHIP TRAINING IN PUBLIC HEALTH.

    Part E of title VII of the Public Health Service Act (42 U.S.C. 294n 
et seq.), as amended by section 5206, is further amended by adding at 
the end the following:

``SEC. 778. <<NOTE: 42 USC 295f-3.>> FELLOWSHIP TRAINING IN APPLIED 
            PUBLIC HEALTH EPIDEMIOLOGY, PUBLIC HEALTH LABORATORY 
            SCIENCE, PUBLIC HEALTH INFORMATICS, AND EXPANSION OF THE 
            EPIDEMIC INTELLIGENCE SERVICE.

    ``(a) In General.--The Secretary may carry out activities to address 
documented workforce shortages in State and local health departments in 
the critical areas of applied public health epidemiology and public 
health laboratory science and informatics and may expand the Epidemic 
Intelligence Service.
    ``(b) Specific Uses.--In carrying out subsection (a), the Secretary 
shall provide for the expansion of existing fellowship programs operated 
through the Centers for Disease Control and Prevention in a manner that 
is designed to alleviate shortages of the type described in subsection 
(a).
    ``(c) Other Programs.--The Secretary may provide for the expansion 
of other applied epidemiology training programs that meet objectives 
similar to the objectives of the programs described in subsection (b).
    ``(d) Work Obligation.--Participation in fellowship training 
programs under this section shall be deemed to be service for purposes 
of satisfying work obligations stipulated in contracts under section 
338I(j).
    ``(e) General Support.--Amounts may be used from grants awarded 
under this section to expand the Public Health Informatics Fellowship 
Program at the Centers for Disease Control and Prevention to better 
support all public health systems at all levels of government.
    ``(f) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $39,500,000 for each of fiscal 
years 2010 through 2013, of which--
            ``(1) $5,000,000 shall be made available in each such fiscal 
        year for epidemiology fellowship training program activities 
        under subsections (b) and (c);
            ``(2) $5,000,000 shall be made available in each such fiscal 
        year for laboratory fellowship training programs under 
        subsection (b);
            ``(3) $5,000,000 shall be made available in each such fiscal 
        year for the Public Health Informatics Fellowship Program under 
        subsection (e); and
            ``(4) $24,500,000 shall be made available for expanding the 
        Epidemic Intelligence Service under subsection (a).''.

SEC. 5315. UNITED STATES PUBLIC HEALTH SCIENCES TRACK.

    Title II of the Public Health Service Act (42 U.S.C. 202 et seq.) is 
amended by adding at the end the following:

[[Page 124 STAT. 637]]

          ``PART D--UNITED STATES PUBLIC HEALTH SCIENCES TRACK

``SEC. 271. <<NOTE: 42 USC 239l.>> ESTABLISHMENT.

    ``(a) United States Public Health Services Track.--
            ``(1) In general.--There is hereby authorized to be 
        established a United States Public Health Sciences Track 
        (referred to in this part as the `Track'), at sites to be 
        selected by the Secretary, with authority to grant appropriate 
        advanced degrees in a manner that uniquely emphasizes team-based 
        service, public health, epidemiology, and emergency preparedness 
        and response. It shall be so organized as to graduate not less 
        than--
                    ``(A) 150 medical students annually, 10 of whom 
                shall be awarded studentships to the Uniformed Services 
                University of Health Sciences;
                    ``(B) 100 dental students annually;
                    ``(C) 250 nursing students annually;
                    ``(D) 100 public health students annually;
                    ``(E) 100 behavioral and mental health professional 
                students annually;
                    ``(F) 100 physician assistant or nurse practitioner 
                students annually; and
                    ``(G) 50 pharmacy students annually.
            ``(2) Locations.--The Track shall be located at existing and 
        accredited, affiliated health professions education training 
        programs at academic health centers located in regions of the 
        United States determined appropriate by the Surgeon General, in 
        consultation with the National Health Care Workforce Commission 
        established in section 5101 of the Patient Protection and 
        Affordable Care Act.

    ``(b) Number of Graduates.--Except as provided in subsection (a), 
the number of persons to be graduated from the Track shall be prescribed 
by the Secretary. In so prescribing the number of persons to be 
graduated from the Track, the Secretary shall institute actions 
necessary to ensure the maximum number of first-year enrollments in the 
Track consistent with the academic capacity of the affiliated sites and 
the needs of the United States for medical, dental, and nursing 
personnel.
    ``(c) Development.--The development of the Track may be by such 
phases as the Secretary may prescribe subject to the requirements of 
subsection (a).
    ``(d) Integrated Longitudinal Plan.--The Surgeon General shall 
develop an integrated longitudinal plan for health professions 
continuing education throughout the continuum of health-related 
education, training, and practice. Training under such plan shall 
emphasize patient-centered, interdisciplinary, and care coordination 
skills. Experience with deployment of emergency response teams shall be 
included during the clinical experiences.
    ``(e) Faculty Development.--The Surgeon General shall develop 
faculty development programs and curricula in decentralized venues of 
health care, to balance urban, tertiary, and inpatient venues.

``SEC. 272. <<NOTE: 42 USC 239l-1.>> ADMINISTRATION.

    ``(a) In General.--The business of the Track shall be conducted by 
the Surgeon General with funds appropriated for and provided

[[Page 124 STAT. 638]]

by the Department of Health and Human Services. The National Health Care 
Workforce Commission shall assist the Surgeon General in an advisory 
capacity.
    ``(b) Faculty.--
            ``(1) In general.--The Surgeon General, after considering 
        the recommendations of the National Health Care Workforce 
        Commission, shall obtain the services of such professors, 
        instructors, and administrative and other employees as may be 
        necessary to operate the Track, but utilize when possible, 
        existing affiliated health professions training institutions. 
        Members of the faculty and staff shall be employed under salary 
        schedules and granted retirement and other related benefits 
        prescribed by the Secretary so as to place the employees of the 
        Track faculty on a comparable basis with the employees of fully 
        accredited schools of the health professions within the United 
        States.
            ``(2) Titles.--The Surgeon General may confer academic 
        titles, as appropriate, upon the members of the faculty.
            ``(3) Nonapplication of provisions.--The limitations in 
        section 5373 of title 5, United States Code, shall not apply to 
        the authority of the Surgeon General under paragraph (1) to 
        prescribe salary schedules and other related benefits.

    ``(c) Agreements.--The Surgeon General may negotiate agreements with 
agencies of the Federal Government to utilize on a reimbursable basis 
appropriate existing Federal medical resources located in the United 
States (or locations selected in accordance with section 271(a)(2)). 
Under such agreements the facilities concerned will retain their 
identities and basic missions. The Surgeon General may negotiate 
affiliation agreements with accredited universities and health 
professions training institutions in the United States. Such agreements 
may include provisions for payments for educational services provided 
students participating in Department of Health and Human Services 
educational programs.
    ``(d) Programs.--The Surgeon General may establish the following 
educational programs for Track students:
            ``(1) Postdoctoral, postgraduate, and technological 
        programs.
            ``(2) A cooperative program for medical, dental, physician 
        assistant, pharmacy, behavioral and mental health, public 
        health, and nursing students.
            ``(3) Other programs that the Surgeon General determines 
        necessary in order to operate the Track in a cost-effective 
        manner.

    ``(e) Continuing Medical Education.--The Surgeon General shall 
establish programs in continuing medical education for members of the 
health professions to the end that high standards of health care may be 
maintained within the United States.
    ``(f) Authority of the Surgeon General.--
            ``(1) <<NOTE: Contracts. Grants.>> In general.--The Surgeon 
        General is authorized--
                    ``(A) to enter into contracts with, accept grants 
                from, and make grants to any nonprofit entity for the 
                purpose of carrying out cooperative enterprises in 
                medical, dental, physician assistant, pharmacy, 
                behavioral and mental health, public health, and nursing 
                research, consultation, and education;
                    ``(B) to enter into contracts with entities under 
                which the Surgeon General may furnish the services of 
                such

[[Page 124 STAT. 639]]

                professional, technical, or clerical personnel as may be 
                necessary to fulfill cooperative enterprises undertaken 
                by the Track;
                    ``(C) to accept, hold, administer, invest, and spend 
                any gift, devise, or bequest of personal property made 
                to the Track, including any gift, devise, or bequest for 
                the support of an academic chair, teaching, research, or 
                demonstration project;
                    ``(D) to enter into agreements with entities that 
                may be utilized by the Track for the purpose of 
                enhancing the activities of the Track in education, 
                research, and technological applications of knowledge; 
                and
                    ``(E) to accept the voluntary services of guest 
                scholars and other persons.
            ``(2) Limitation.--The Surgeon General may not enter into 
        any contract with an entity if the contract would obligate the 
        Track to make outlays in advance of the enactment of budget 
        authority for such outlays.
            ``(3) Scientists.--Scientists or other medical, dental, or 
        nursing personnel utilized by the Track under an agreement 
        described in paragraph (1) may be appointed to any position 
        within the Track and may be permitted to perform such duties 
        within the Track as the Surgeon General may approve.
            ``(4) Volunteer services.--A person who provides voluntary 
        services under the authority of subparagraph (E) of paragraph 
        (1) shall be considered to be an employee of the Federal 
        Government for the purposes of chapter 81 of title 5, relating 
        to compensation for work-related injuries, and to be an employee 
        of the Federal Government for the purposes of chapter 171 of 
        title 28, relating to tort claims. Such a person who is not 
        otherwise employed by the Federal Government shall not be 
        considered to be a Federal employee for any other purpose by 
        reason of the provision of such services.

``SEC. 273. <<NOTE: 42 USC 239l-2.>> STUDENTS; SELECTION; OBLIGATION.

    ``(a) Student Selection.--
            ``(1) In general.--Medical, dental, physician assistant, 
        pharmacy, behavioral and mental health, public health, and 
        nursing students at the Track shall be selected under procedures 
        prescribed by the Surgeon General. In so prescribing, the 
        Surgeon General shall consider the recommendations of the 
        National Health Care Workforce Commission.
            ``(2) Priority.--In developing admissions procedures under 
        paragraph (1), the Surgeon General shall ensure that such 
        procedures give priority to applicant medical, dental, physician 
        assistant, pharmacy, behavioral and mental health, public 
        health, and nursing students from rural communities and 
        underrepresented minorities.

    ``(b) Contract and Service Obligation.--
            ``(1) Contract.--Upon being admitted to the Track, a 
        medical, dental, physician assistant, pharmacy, behavioral and 
        mental health, public health, or nursing student shall enter 
        into a written contract with the Surgeon General that shall 
        contain--
                    ``(A) an agreement under which--
                          ``(i) subject to subparagraph (B), the Surgeon 
                      General agrees to provide the student with tuition 
                      (or

[[Page 124 STAT. 640]]

                      tuition remission) and a student stipend 
                      (described in paragraph (2)) in each school year 
                      for a period of years (not to exceed 4 school 
                      years) determined by the student, during which 
                      period the student is enrolled in the Track at an 
                      affiliated or other participating health 
                      professions institution pursuant to an agreement 
                      between the Track and such institution; and
                          ``(ii) subject to subparagraph (B), the 
                      student agrees--
                                    ``(I) to accept the provision of 
                                such tuition and student stipend to the 
                                student;
                                    ``(II) to maintain enrollment at the 
                                Track until the student completes the 
                                course of study involved;
                                    ``(III) while enrolled in such 
                                course of study, to maintain an 
                                acceptable level of academic standing 
                                (as determined by the Surgeon General);
                                    ``(IV) if pursuing a degree from a 
                                school of medicine or osteopathic 
                                medicine, dental, public health, or 
                                nursing school or a physician assistant, 
                                pharmacy, or behavioral and mental 
                                health professional program, to complete 
                                a residency or internship in a specialty 
                                that the Surgeon General determines is 
                                appropriate; and
                                    ``(V) to serve for a period of time 
                                (referred to in this part as the `period 
                                of obligated service') within the 
                                Commissioned Corps of the Public Health 
                                Service equal to 2 years for each school 
                                year during which such individual was 
                                enrolled at the College, reduced as 
                                provided for in paragraph (3);
                    ``(B) a provision that any financial obligation of 
                the United States arising out of a contract entered into 
                under this part and any obligation of the student which 
                is conditioned thereon, is contingent upon funds being 
                appropriated to carry out this part;
                    ``(C) a statement of the damages to which the United 
                States is entitled for the student's breach of the 
                contract; and
                    ``(D) such other statements of the rights and 
                liabilities of the Secretary and of the individual, not 
                inconsistent with the provisions of this part.
            ``(2) Tuition and student stipend.--
                    ``(A) Tuition remission rates.--The Surgeon General, 
                based on the recommendations of the National Health Care 
                Workforce Commission, shall establish Federal tuition 
                remission rates to be used by the Track to provide 
                reimbursement to affiliated and other participating 
                health professions institutions for the cost of 
                educational services provided by such institutions to 
                Track students. The agreement entered into by such 
                participating institutions under paragraph (1)(A)(i) 
                shall contain an agreement to accept as payment in full 
                the established remission rate under this subparagraph.
                    ``(B) Stipend.--The Surgeon General, based on the 
                recommendations of the National Health Care Workforce

[[Page 124 STAT. 641]]

                Commission, shall establish and update Federal stipend 
                rates for payment to students under this part.
            ``(3) Reductions in the period of obligated service.--The 
        period of obligated service under paragraph (1)(A)(ii)(V) shall 
        be reduced--
                    ``(A) in the case of a student who elects to 
                participate in a high-needs speciality residency (as 
                determined by the National Health Care Workforce 
                Commission), by 3 months for each year of such 
                participation (not to exceed a total of 12 months); and
                    ``(B) in the case of a student who, upon completion 
                of their residency, elects to practice in a Federal 
                medical facility (as defined in section 781(e)) that is 
                located in a health professional shortage area (as 
                defined in section 332), by 3 months for year of full-
                time practice in such a facility (not to exceed a total 
                of 12 months).

    ``(c) Second 2 Years of Service.--During the third and fourth years 
in which a medical, dental, physician assistant, pharmacy, behavioral 
and mental health, public health, or nursing student is enrolled in the 
Track, training should be designed to prioritize clinical rotations in 
Federal medical facilities in health professional shortage areas, and 
emphasize a balance of hospital and community-based experiences, and 
training within interdisciplinary teams.
    ``(d) Dentist, Physician Assistant, Pharmacist, Behavioral and 
Mental Health Professional, Public Health Professional, and Nurse 
Training.--The Surgeon General shall establish provisions applicable 
with respect to dental, physician assistant, pharmacy, behavioral and 
mental health, public health, and nursing students that are comparable 
to those for medical students under this section, including service 
obligations, tuition support, and stipend support. The Surgeon General 
shall give priority to health professions training institutions that 
train medical, dental, physician assistant, pharmacy, behavioral and 
mental health, public health, and nursing students for some significant 
period of time together, but at a minimum have a discrete and shared 
core curriculum.
    ``(e) <<NOTE: Criteria.>> Elite Federal Disaster Teams.--The Surgeon 
General, in consultation with the Secretary, the Director of the Centers 
for Disease Control and Prevention, and other appropriate military and 
Federal government agencies, shall develop criteria for the appointment 
of highly qualified Track faculty, medical, dental, physician assistant, 
pharmacy, behavioral and mental health, public health, and nursing 
students, and graduates to elite Federal disaster preparedness teams to 
train and to respond to public health emergencies, natural disasters, 
bioterrorism events, and other emergencies.

    ``(f) <<NOTE: Regulations.>> Student Dropped From Track in Affiliate 
School.--A medical, dental, physician assistant, pharmacy, behavioral 
and mental health, public health, or nursing student who, under 
regulations prescribed by the Surgeon General, is dropped from the Track 
in an affiliated school for deficiency in conduct or studies, or for 
other reasons, shall be liable to the United States for all tuition and 
stipend support provided to the student.

[[Page 124 STAT. 642]]

``SEC. 274. <<NOTE: 42 USC 239l-3.>> FUNDING.

    ``Beginning <<NOTE: Effective date.>> with fiscal year 2010, the 
Secretary shall transfer from the Public Health and Social Services 
Emergency Fund such sums as may be necessary to carry out this part.''.

        Subtitle E--Supporting the Existing Health Care Workforce

SEC. 5401. CENTERS OF EXCELLENCE.

    Section 736 of the Public Health Service Act (42 U.S.C. 293) is 
amended by striking subsection (h) and inserting the following:
    ``(h) <<NOTE: Grants.>> Formula for Allocations.--
            ``(1) <<NOTE: Applicability.>> Allocations.--Based on the 
        amount appropriated under subsection (i) for a fiscal year, the 
        following subparagraphs shall apply as appropriate:
                    ``(A) In general.--If the amounts appropriated under 
                subsection (i) for a fiscal year are $24,000,000 or 
                less--
                          ``(i) the Secretary shall make available 
                      $12,000,000 for grants under subsection (a) to 
                      health professions schools that meet the 
                      conditions described in subsection (c)(2)(A); and
                          ``(ii) and available after grants are made 
                      with funds under clause (i), the Secretary shall 
                      make available--
                                    ``(I) 60 percent of such amount for 
                                grants under subsection (a) to health 
                                professions schools that meet the 
                                conditions described in paragraph (3) or 
                                (4) of subsection (c) (including meeting 
                                the conditions under subsection (e)); 
                                and
                                    ``(II) 40 percent of such amount for 
                                grants under subsection (a) to health 
                                professions schools that meet the 
                                conditions described in subsection 
                                (c)(5).
                    ``(B) Funding in excess of $24,000,000.--If amounts 
                appropriated under subsection (i) for a fiscal year 
                exceed $24,000,000 but are less than $30,000,000--
                          ``(i) 80 percent of such excess amounts shall 
                      be made available for grants under subsection (a) 
                      to health professions schools that meet the 
                      requirements described in paragraph (3) or (4) of 
                      subsection (c) (including meeting conditions 
                      pursuant to subsection (e)); and
                          ``(ii) 20 percent of such excess amount shall 
                      be made available for grants under subsection (a) 
                      to health professions schools that meet the 
                      conditions described in subsection (c)(5).
                    ``(C) Funding in excess of $30,000,000.--If amounts 
                appropriated under subsection (i) for a fiscal year 
                exceed $30,000,000 but are less than $40,000,000, the 
                Secretary shall make available--
                          ``(i) not less than $12,000,000 for grants 
                      under subsection (a) to health professions schools 
                      that meet the conditions described in subsection 
                      (c)(2)(A);
                          ``(ii) not less than $12,000,000 for grants 
                      under subsection (a) to health professions schools 
                      that meet the conditions described in paragraph 
                      (3) or (4) of

[[Page 124 STAT. 643]]

                      subsection (c) (including meeting conditions 
                      pursuant to subsection (e));
                          ``(iii) not less than $6,000,000 for grants 
                      under subsection (a) to health professions schools 
                      that meet the conditions described in subsection 
                      (c)(5); and
                          ``(iv) after grants are made with funds under 
                      clauses (i) through (iii), any remaining excess 
                      amount for grants under subsection (a) to health 
                      professions schools that meet the conditions 
                      described in paragraph (2)(A), (3), (4), or (5) of 
                      subsection (c).
                    ``(D) Funding in excess of $40,000,000.--If amounts 
                appropriated under subsection (i) for a fiscal year are 
                $40,000,000 or more, the Secretary shall make 
                available--
                          ``(i) not less than $16,000,000 for grants 
                      under subsection (a) to health professions schools 
                      that meet the conditions described in subsection 
                      (c)(2)(A);
                          ``(ii) not less than $16,000,000 for grants 
                      under subsection (a) to health professions schools 
                      that meet the conditions described in paragraph 
                      (3) or (4) of subsection (c) (including meeting 
                      conditions pursuant to subsection (e));
                          ``(iii) not less than $8,000,000 for grants 
                      under subsection (a) to health professions schools 
                      that meet the conditions described in subsection 
                      (c)(5); and
                          ``(iv) after grants are made with funds under 
                      clauses (i) through (iii), any remaining funds for 
                      grants under subsection (a) to health professions 
                      schools that meet the conditions described in 
                      paragraph (2)(A), (3), (4), or (5) of subsection 
                      (c).
            ``(2) No limitation.--Nothing in this subsection shall be 
        construed as limiting the centers of excellence referred to in 
        this section to the designated amount, or to preclude such 
        entities from competing for grants under this section.
            ``(3) Maintenance of effort.--
                    ``(A) In general.--With respect to activities for 
                which a grant made under this part are authorized to be 
                expended, the Secretary may not make such a grant to a 
                center of excellence for any fiscal year unless the 
                center agrees to maintain expenditures of non-Federal 
                amounts for such activities at a level that is not less 
                than the level of such expenditures maintained by the 
                center for the fiscal year preceding the fiscal year for 
                which the school receives such a grant.
                    ``(B) Use of federal funds.--With respect to any 
                Federal amounts received by a center of excellence and 
                available for carrying out activities for which a grant 
                under this part is authorized to be expended, the center 
                shall, before expending the grant, expend the Federal 
                amounts obtained from sources other than the grant, 
                unless given prior approval from the Secretary.

    ``(i) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section--
            ``(1) $50,000,000 for each of the fiscal years 2010 through 
        2015; and
            ``(2) and such sums as are necessary for each subsequent 
        fiscal year.''.

[[Page 124 STAT. 644]]

SEC. 5402. HEALTH CARE PROFESSIONALS TRAINING FOR DIVERSITY.

    (a) Loan Repayments and Fellowships Regarding Faculty Positions.--
Section 738(a)(1) of the Public Health Service Act (42 U.S.C. 
293b(a)(1)) is amended by striking ``$20,000 of the principal and 
interest of the educational loans of such individuals.'' and inserting 
``$30,000 of the principal and interest of the educational loans of such 
individuals.''.
    (b) Scholarships for Disadvantaged Students.--Section 740(a) of such 
Act (42 U.S.C. 293d(a)) is amended by striking ``$37,000,000'' and all 
that follows through ``2002'' and inserting ``$51,000,000 for fiscal 
year 2010, and such sums as may be necessary for each of the fiscal 
years 2011 through 2014''.
    (c) Reauthorization for Loan Repayments and Fellowships Regarding 
Faculty Positions.--Section 740(b) of such Act (42 U.S.C. 293d(b)) is 
amended by striking ``appropriated'' and all that follows through the 
period at the end and inserting ``appropriated, $5,000,000 for each of 
the fiscal years 2010 through 2014.''.
    (d) Reauthorization for Educational Assistance in the Health 
Professions Regarding Individuals From a Disadvantaged Background.--
Section 740(c) of such Act (42 U.S.C. 293d(c)) is amended by striking 
the first sentence and inserting the following: ``For the purpose of 
grants and contracts under section 739(a)(1), there is authorized to be 
appropriated $60,000,000 for fiscal year 2010 and such sums as may be 
necessary for each of the fiscal years 2011 through 2014.''

SEC. 5403. INTERDISCIPLINARY, COMMUNITY-BASED LINKAGES.

    (a) Area Health Education Centers.--Section 751 of the Public Health 
Service Act (42 U.S.C. 294a) is amended to read as follows:

``SEC. 751. AREA HEALTH EDUCATION CENTERS.

    ``(a) Establishment of Awards.--The Secretary shall make the 
following 2 types of awards in accordance with this section:
            ``(1) Infrastructure development award.--The Secretary shall 
        make awards to eligible entities to enable such entities to 
        initiate health care workforce educational programs or to 
        continue to carry out comparable programs that are operating at 
        the time the award is made by planning, developing, operating, 
        and evaluating an area health education center program.
            ``(2) Point of service maintenance and enhancement award.--
        The Secretary shall make awards to eligible entities to maintain 
        and improve the effectiveness and capabilities of an existing 
        area health education center program, and make other 
        modifications to the program that are appropriate due to changes 
        in demographics, needs of the populations served, or other 
        similar issues affecting the area health education center 
        program. For the purposes of this section, the term `Program' 
        refers to the area health education center program.

    ``(b) Eligible Entities; Application.--
            ``(1) <<NOTE: Definitions.>> Eligible entities.--
                    ``(A) Infrastructure development.--For purposes of 
                subsection (a)(1), the term `eligible entity' means a 
                school of medicine or osteopathic medicine, an 
                incorporated consortium of such schools, or the parent 
                institutions of such a school. With respect to a State 
                in which no area

[[Page 124 STAT. 645]]

                health education center program is in operation, the 
                Secretary may award a grant or contract under subsection 
                (a)(1) to a school of nursing.
                    ``(B) Point of service maintenance and 
                enhancement.--For purposes of subsection (a)(2), the 
                term `eligible entity' means an entity that has received 
                funds under this section, is operating an area health 
                education center program, including an area health 
                education center or centers, and has a center or centers 
                that are no longer eligible to receive financial 
                assistance under subsection (a)(1).
            ``(2) Application.--An eligible entity desiring to receive 
        an award 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) Use of Funds.--
            ``(1) Required activities. <<NOTE: Grants.>> --An eligible 
        entity shall use amounts awarded under a grant under subsection 
        (a)(1) or (a)(2) to carry out the following activities:
                    ``(A) Develop and implement strategies, in 
                coordination with the applicable one-stop delivery 
                system under section 134(c) of the Workforce Investment 
                Act of 1998, to recruit individuals from 
                underrepresented minority populations or from 
                disadvantaged or rural backgrounds into health 
                professions, and support such individuals in attaining 
                such careers.
                    ``(B) Develop and implement strategies to foster and 
                provide community-based training and education to 
                individuals seeking careers in health professions within 
                underserved areas for the purpose of developing and 
                maintaining a diverse health care workforce that is 
                prepared to deliver high-quality care, with an emphasis 
                on primary care, in underserved areas or for health 
                disparity populations, in collaboration with other 
                Federal and State health care workforce development 
                programs, the State workforce agency, and local 
                workforce investment boards, and in health care safety 
                net sites.
                    ``(C) Prepare individuals to more effectively 
                provide health services to underserved areas and health 
                disparity populations through field placements or 
                preceptorships in conjunction with community-based 
                organizations, accredited primary care residency 
                training programs, Federally qualified health centers, 
                rural health clinics, public health departments, or 
                other appropriate facilities.
                    ``(D) Conduct and participate in interdisciplinary 
                training that involves physicians, physician assistants, 
                nurse practitioners, nurse midwives, dentists, 
                psychologists, pharmacists, optometrists, community 
                health workers, public and allied health professionals, 
                or other health professionals, as practicable.
                    ``(E) Deliver or facilitate continuing education and 
                information dissemination programs for health care 
                professionals, with an emphasis on individuals providing 
                care in underserved areas and for health disparity 
                populations.
                    ``(F) Propose and implement effective program and 
                outcomes measurement and evaluation strategies.

[[Page 124 STAT. 646]]

                    ``(G) Establish a youth public health program to 
                expose and recruit high school students into health 
                careers, with a focus on careers in public health.
            ``(2) Innovative opportunities.--An eligible entity may use 
        amounts awarded under a grant under subsection (a)(1) or 
        subsection (a)(2) to carry out any of the following activities:
                    ``(A) Develop and implement innovative curricula in 
                collaboration with community-based accredited primary 
                care residency training programs, Federally qualified 
                health centers, rural health clinics, behavioral and 
                mental health facilities, public health departments, or 
                other appropriate facilities, with the goal of 
                increasing the number of primary care physicians and 
                other primary care providers prepared to serve in 
                underserved areas and health disparity populations.
                    ``(B) Coordinate community-based participatory 
                research with academic health centers, and facilitate 
                rapid flow and dissemination of evidence-based health 
                care information, research results, and best practices 
                to improve quality, efficiency, and effectiveness of 
                health care and health care systems within community 
                settings.
                    ``(C) Develop and implement other strategies to 
                address identified workforce needs and increase and 
                enhance the health care workforce in the area served by 
                the area health education center program.

    ``(d) Requirements.--
            ``(1) Area health education center program.--In carrying out 
        this section, the Secretary shall ensure the following:
                    ``(A) An entity that receives an award under this 
                section shall conduct at least 10 percent of clinical 
                education required for medical students in community 
                settings that are removed from the primary teaching 
                facility of the contracting institution for grantees 
                that operate a school of medicine or osteopathic 
                medicine. In States in which an entity that receives an 
                award under this section is a nursing school or its 
                parent institution, the Secretary shall alternatively 
                ensure that--
                          ``(i) the nursing school conducts at least 10 
                      percent of clinical education required for nursing 
                      students in community settings that are remote 
                      from the primary teaching facility of the school; 
                      and
                          ``(ii) the entity receiving the award 
                      maintains a written agreement with a school of 
                      medicine or osteopathic medicine to place students 
                      from that school in training sites in the area 
                      health education center program area.
                    ``(B) An entity receiving funds under subsection 
                (a)(2) does not distribute such funding to a center that 
                is eligible to receive funding under subsection (a)(1).
            ``(2) Area health education center.--The Secretary shall 
        ensure that each area health education center program includes 
        at least 1 area health education center, and that each such 
        center--
                    ``(A) is a public or private organization whose 
                structure, governance, and operation is independent from 
                the awardee and the parent institution of the awardee;

[[Page 124 STAT. 647]]

                    ``(B) is not a school of medicine or osteopathic 
                medicine, the parent institution of such a school, or a 
                branch campus or other subunit of a school of medicine 
                or osteopathic medicine or its parent institution, or a 
                consortium of such entities;
                    ``(C) designates an underserved area or population 
                to be served by the center which is in a location 
                removed from the main location of the teaching 
                facilities of the schools participating in the program 
                with such center and does not duplicate, in whole or in 
                part, the geographic area or population served by any 
                other center;
                    ``(D) fosters networking and collaboration among 
                communities and between academic health centers and 
                community-based centers;
                    ``(E) serves communities with a demonstrated need of 
                health professionals in partnership with academic 
                medical centers;
                    ``(F) addresses the health care workforce needs of 
                the communities served in coordination with the public 
                workforce investment system; and
                    ``(G) has a community-based governing or advisory 
                board that reflects the diversity of the communities 
                involved.

    ``(e) Matching Funds.--With respect to the costs of operating a 
program through a grant under this section, to be eligible for financial 
assistance under this section, an entity shall make available (directly 
or through contributions from State, county or municipal governments, or 
the private sector) recurring non-Federal contributions in cash or in 
kind, toward such costs in an amount that is equal to not less than 50 
percent of such costs. At least 25 percent of the total required non-
Federal contributions shall be in cash. An entity may apply to the 
Secretary for a waiver of not more than 75 percent of the matching fund 
amount required by the entity for each of the first 3 years the entity 
is funded through a grant under subsection (a)(1).
    ``(f) Limitation.--Not less than 75 percent of the total amount 
provided to an area health education center program under subsection 
(a)(1) or (a)(2) shall be allocated to the area health education centers 
participating in the program under this section. <<NOTE: Waiver 
authority.>>  To provide needed flexibility to newly funded area health 
education center programs, the Secretary may waive the requirement in 
the sentence for the first 2 years of a new area health education center 
program funded under subsection (a)(1).

    ``(g) Award.--An award to an entity under this section shall be not 
less than $250,000 annually per area health education center included in 
the program involved. If amounts appropriated to carry out this section 
are not sufficient to comply with the preceding sentence, the Secretary 
may reduce the per center amount provided for in such sentence as 
necessary, provided the distribution established in subsection (j)(2) is 
maintained.
    ``(h) Project Terms.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        period during which payments may be made under an award under 
        subsection (a)(1) may not exceed--
                    ``(A) in the case of a program, 12 years; or
                    ``(B) in the case of a center within a program, 6 
                years.

[[Page 124 STAT. 648]]

            ``(2) Exception.--The periods described in paragraph (1) 
        shall not apply to programs receiving point of service 
        maintenance and enhancement awards under subsection (a)(2) to 
        maintain existing centers and activities.

    ``(i) Inapplicability of Provision.--Notwithstanding any other 
provision of this title, section 791(a) shall not apply to an area 
health education center funded under this section.
    ``(j) Authorization of Appropriations.--
            ``(1) In general.--There is authorized to be appropriated to 
        carry out this section $125,000,000 for each of the fiscal years 
        2010 through 2014.
            ``(2) Requirements.--Of the amounts appropriated for a 
        fiscal year under paragraph (1)--
                    ``(A) not more than 35 percent shall be used for 
                awards under subsection (a)(1);
                    ``(B) not less than 60 percent shall be used for 
                awards under subsection (a)(2);
                    ``(C) not more than 1 percent shall be used for 
                grants and contracts to implement outcomes evaluation 
                for the area health education centers; and
                    ``(D) not more than 4 percent shall be used for 
                grants and contracts to provide technical assistance to 
                entities receiving awards under this section.
            ``(3) Carryover funds.--An entity that receives an award 
        under this section may carry over funds from 1 fiscal year to 
        another without obtaining approval from the Secretary. In no 
        case may any funds be carried over pursuant to the preceding 
        sentence for more than 3 years.

    ``(k) Sense of Congress.--It is the sense of the Congress that every 
State have an area health education center program in effect under this 
section.''.
    (b) Continuing Educational Support for Health Professionals Serving 
in Underserved Communities.--Part D of title VII of the Public Health 
Service Act (42 U.S.C. 294 et seq.) is amended by striking section 
752 <<NOTE: 42 USC 294b.>> and inserting the following:

``SEC. 752. CONTINUING EDUCATIONAL SUPPORT FOR HEALTH PROFESSIONALS 
            SERVING IN UNDERSERVED COMMUNITIES.

    ``(a) In General. <<NOTE: Grants. Contracts.>> --The Secretary shall 
make grants to, and enter into contracts with, eligible entities to 
improve health care, increase retention, increase representation of 
minority faculty members, enhance the practice environment, and provide 
information dissemination and educational support to reduce professional 
isolation through the timely dissemination of research findings using 
relevant resources.

    ``(b) Eligible Entities. <<NOTE: Definition.>> --For purposes of 
this section, the term `eligible entity' means an entity described in 
section 799(b).

    ``(c) Application.--An eligible entity desiring to receive an award 
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.
    ``(d) Use of Funds.--An eligible entity shall use amounts awarded 
under a grant or contract under this section to provide

[[Page 124 STAT. 649]]

innovative supportive activities to enhance education through distance 
learning, continuing educational activities, collaborative conferences, 
and electronic and telelearning activities, with priority for primary 
care.
    ``(e) Authorization.--There is authorized to be appropriated to 
carry out this section $5,000,000 for each of the fiscal years 2010 
through 2014, and such sums as may be necessary for each subsequent 
fiscal year.''.

SEC. 5404. WORKFORCE DIVERSITY GRANTS.

    Section 821 of the Public Health Service Act (42 U.S.C. 296m) is 
amended--
            (1) in subsection (a)--
                    (A) by striking ``The Secretary may'' and inserting 
                the following:
            ``(1) Authority.--The Secretary may'';
                    (B) by striking ``pre-entry preparation, and 
                retention activities'' and inserting the following: 
                ``stipends for diploma or associate degree nurses to 
                enter a bridge or degree completion program, student 
                scholarships or stipends for accelerated nursing degree 
                programs, pre-entry preparation, advanced education 
                preparation, and retention activities''; and
            (2) in subsection (b)--
                    (A) by striking ``First'' and all that follows 
                through ``including the'' and inserting ``National 
                Advisory Council on Nurse Education and Practice and 
                consult with nursing associations including the National 
                Coalition of Ethnic Minority Nurse Associations,''; and
                    (B) by inserting before the period the following: 
                ``, and other organizations determined appropriate by 
                the Secretary''.

SEC. 5405. PRIMARY CARE EXTENSION PROGRAM.

    Part P of title III of the Public Health Service Act (42 U.S.C. 280g 
et seq.), as amended by section 5313, is further amended by adding at 
the end the following:

``SEC. 399W. <<NOTE: 42 USC 280g-12.>> PRIMARY CARE EXTENSION PROGRAM.

    ``(a) Establishment, Purpose and Definition.--
            ``(1) In general.--The Secretary, acting through the 
        Director of the Agency for Healthcare Research and Quality, 
        shall establish a Primary Care Extension Program.
            ``(2) Purpose.--The Primary Care Extension Program shall 
        provide support and assistance to primary care providers to 
        educate providers about preventive medicine, health promotion, 
        chronic disease management, mental and behavioral health 
        services (including substance abuse prevention and treatment 
        services), and evidence-based and evidence-informed therapies 
        and techniques, in order to enable providers to incorporate such 
        matters into their practice and to improve community health by 
        working with community-based health connectors (referred to in 
        this section as `Health Extension Agents').
            ``(3) Definitions.--In this section:
                    ``(A) Health extension agent.--The term `Health 
                Extension Agent' means any local, community-based health 
                worker who facilitates and provides assistance to 
                primary care practices by implementing quality 
                improvement or

[[Page 124 STAT. 650]]

                system redesign, incorporating the principles of the 
                patient-centered medical home to provide high-quality, 
                effective, efficient, and safe primary care and to 
                provide guidance to patients in culturally and 
                linguistically appropriate ways, and linking practices 
                to diverse health system resources.
                    ``(B) Primary care provider.--The term `primary care 
                provider' means a clinician who provides integrated, 
                accessible health care services and who is accountable 
                for addressing a large majority of personal health care 
                needs, including providing preventive and health 
                promotion services for men, women, and children of all 
                ages, developing a sustained partnership with patients, 
                and practicing in the context of family and community, 
                as recognized by a State licensing or regulatory 
                authority, unless otherwise specified in this section.

    ``(b) Grants To Establish State Hubs and Local Primary Care 
Extension Agencies.--
            ``(1) Grants.--The Secretary shall award competitive grants 
        to States for the establishment of State- or multistate-level 
        primary care Primary Care Extension Program State Hubs (referred 
        to in this section as `Hubs').
            ``(2) Composition of hubs.--A Hub established by a State 
        pursuant to paragraph (1)--
                    ``(A) shall consist of, at a minimum, the State 
                health department, the entity responsible for 
                administering the State Medicaid program (if other than 
                the State health department), the State-level entity 
                administering the Medicare program, and the departments 
                of 1 or more health professions schools in the State 
                that train providers in primary care; and
                    ``(B) may include entities such as hospital 
                associations, primary care practice-based research 
                networks, health professional societies, State primary 
                care associations, State licensing boards, organizations 
                with a contract with the Secretary under section 1153 of 
                the Social Security Act, consumer groups, and other 
                appropriate entities.

    ``(c) State and Local Activities.--
            ``(1) Hub activities.--Hubs established under a grant under 
        subsection (b) shall--
                    ``(A) <<NOTE: Plan.>> submit to the Secretary a plan 
                to coordinate functions with quality improvement 
                organizations and area health education centers if such 
                entities are members of the Hub not described in 
                subsection (b)(2)(A);
                    ``(B) <<NOTE: Contracts.>> contract with a county- 
                or local-level entity that shall serve as the Primary 
                Care Extension Agency to administer the services 
                described in paragraph (2);
                    ``(C) organize and administer grant funds to county- 
                or local-level Primary Care Extension Agencies that 
                serve a catchment area, as determined by the State; and
                    ``(D) organize State-wide or multistate networks of 
                local-level Primary Care Extension Agencies to share and 
                disseminate information and practices.
            ``(2) Local primary care extension agency activities.--
                    ``(A) Required activities.--Primary Care Extension 
                Agencies established by a Hub under paragraph (1) 
                shall--

[[Page 124 STAT. 651]]

                          ``(i) assist primary care providers to 
                      implement a patient-centered medical home to 
                      improve the accessibility, quality, and efficiency 
                      of primary care services, including health homes;
                          ``(ii) develop and support primary care 
                      learning communities to enhance the dissemination 
                      of research findings for evidence-based practice, 
                      assess implementation of practice improvement, 
                      share best practices, and involve community 
                      clinicians in the generation of new knowledge and 
                      identification of important questions for 
                      research;
                          ``(iii) participate in a national network of 
                      Primary Care Extension Hubs and propose how the 
                      Primary Care Extension Agency will share and 
                      disseminate lessons learned and best practices; 
                      and
                          ``(iv) <<NOTE: Plan.>> develop a plan for 
                      financial sustainability involving State, local, 
                      and private contributions, to provide for the 
                      reduction in Federal funds that is expected after 
                      an initial 6-year period of program establishment, 
                      infrastructure development, and planning.
                    ``(B) Discretionary activities.--Primary Care 
                Extension Agencies established by a Hub under paragraph 
                (1) may--
                          ``(i) provide technical assistance, training, 
                      and organizational support for community health 
                      teams established under section 3602 of the 
                      Patient Protection and Affordable Care Act;
                          ``(ii) collect data and provision of primary 
                      care provider feedback from standardized 
                      measurements of processes and outcomes to aid in 
                      continuous performance improvement;
                          ``(iii) collaborate with local health 
                      departments, community health centers, tribes and 
                      tribal entities, and other community agencies to 
                      identify community health priorities and local 
                      health workforce needs, and participate in 
                      community-based efforts to address the social and 
                      primary determinants of health, strengthen the 
                      local primary care workforce, and eliminate health 
                      disparities;
                          ``(iv) develop measures to monitor the impact 
                      of the proposed program on the health of practice 
                      enrollees and of the wider community served; and
                          ``(v) participate in other activities, as 
                      determined appropriate by the Secretary.

    ``(d) Federal Program Administration.--
            ``(1) Grants; types.--Grants awarded under subsection (b) 
        shall be--
                    ``(A) program grants, that are awarded to State or 
                multistate entities that submit fully-developed plans 
                for the implementation of a Hub, for a period of 6 
                years; or
                    ``(B) planning grants, that are awarded to State or 
                multistate entities with the goal of developing a plan 
                for a Hub, for a period of 2 years.
            ``(2) Applications.--To be eligible for a grant under 
        subsection (b), a State or multistate entity shall submit to the

[[Page 124 STAT. 652]]

        Secretary an application, at such time, in such manner, and 
        containing such information as the Secretary may require.
            ``(3) <<NOTE: Appointment.>> Evaluation.--A State that 
        receives a grant under subsection (b) shall be evaluated at the 
        end of the grant period by an evaluation panel appointed by the 
        Secretary.
            ``(4) Continuing support.--After the sixth year in which 
        assistance is provided to a State under a grant awarded under 
        subsection (b), the State may receive additional support under 
        this section if the State program has received satisfactory 
        evaluations with respect to program performance and the merits 
        of the State sustainability plan, as determined by the 
        Secretary.
            ``(5) Limitation.--A State shall not use in excess of 10 
        percent of the amount received under a grant to carry out 
        administrative activities under this section. Funds awarded 
        pursuant to this section shall not be used for funding direct 
        patient care.

    ``(e) Requirements on the Secretary. <<NOTE: Consultation.>> --In 
carrying out this section, the Secretary shall consult with the heads of 
other Federal agencies with demonstrated experience and expertise in 
health care and preventive medicine, such as the Centers for Disease 
Control and Prevention, the Substance Abuse and Mental Health 
Administration, the Health Resources and Services Administration, the 
National Institutes of Health, the Office of the National Coordinator 
for Health Information Technology, the Indian Health Service, the 
Agricultural Cooperative Extension Service of the Department of 
Agriculture, and other entities, as the Secretary determines 
appropriate.

    ``(f) Authorization of Appropriations.--To awards grants as provided 
in subsection (d), there are authorized to be appropriated $120,000,000 
for each of fiscal years 2011 and 2012, and such sums as may be 
necessary to carry out this section for each of fiscal years 2013 
through 2014.''.

 Subtitle F--Strengthening Primary Care and Other Workforce Improvements

SEC. 5501. EXPANDING ACCESS TO PRIMARY CARE SERVICES AND GENERAL SURGERY 
            SERVICES.

    (a) Incentive Payment Program for Primary Care Services.--
            (1) In general.--Section 1833 of the Social Security Act (42 
        U.S.C. 1395l) is amended by adding at the end the following new 
        subsection:

    ``(x) Incentive Payments for Primary Care Services.--
            ``(1) In general. <<NOTE: Time period.>> --In the case of 
        primary care services furnished on or after January 1, 2011, and 
        before January 1, 2016, by a primary care practitioner, in 
        addition to the amount of payment that would otherwise be made 
        for such services under this part, there also shall be paid (on 
        a monthly or quarterly basis) an amount equal to 10 percent of 
        the payment amount for the service under this part.
            ``(2) Definitions.--In this subsection:
                    ``(A) Primary care practitioner.--The term `primary 
                care practitioner' means an individual--
                          ``(i) who--

[[Page 124 STAT. 653]]

                                    ``(I) is a physician (as described 
                                in section 1861(r)(1)) who has a primary 
                                specialty designation of family 
                                medicine, internal medicine, geriatric 
                                medicine, or pediatric medicine; or
                                    ``(II) is a nurse practitioner, 
                                clinical nurse specialist, or physician 
                                assistant (as those terms are defined in 
                                section 1861(aa)(5)); and
                          ``(ii) for whom primary care services 
                      accounted for at least 60 percent of the allowed 
                      charges under this part for such physician or 
                      practitioner in a prior period as determined 
                      appropriate by the Secretary.
                    ``(B) Primary care services.--The term `primary care 
                services' means services identified, as of January 1, 
                2009, by the following HCPCS codes (and as subsequently 
                modified by the Secretary):
                          ``(i) 99201 through 99215.
                          ``(ii) 99304 through 99340.
                          ``(iii) 99341 through 99350.
            ``(3) <<NOTE: Determination.>> Coordination with other 
        payments.--The amount of the additional payment for a service 
        under this subsection and subsection (m) shall be determined 
        without regard to any additional payment for the service under 
        subsection (m) and this subsection, respectively.
            ``(4) Limitation on review.--There shall be no 
        administrative or judicial review under section 1869, 1878, or 
        otherwise, respecting the identification of primary care 
        practitioners under this subsection.''.
            (2) Conforming amendment.--Section 1834(g)(2)(B) of the 
        Social Security Act (42 U.S.C. 1395m(g)(2)(B)) is amended by 
        adding at the end the following sentence: ``Section 1833(x) 
        shall not be taken into account in determining the amounts that 
        would otherwise be paid pursuant to the preceding sentence.''.

    (b) Incentive Payment Program for Major Surgical Procedures 
Furnished in Health Professional Shortage Areas.--
            (1) In general. <<NOTE: Time period.>> --Section 1833 of the 
        Social Security Act (42 U.S.C. 1395l), as amended by subsection 
        (a)(1), is amended by adding at the end the following new 
        subsection:

    ``(y) Incentive Payments for Major Surgical Procedures Furnished in 
Health Professional Shortage Areas.--
            ``(1) In general.--In the case of major surgical procedures 
        furnished on or after January 1, 2011, and before January 1, 
        2016, by a general surgeon in an area that is designated (under 
        section 332(a)(1)(A) of the Public Health Service Act) as a 
        health professional shortage area as identified by the Secretary 
        prior to the beginning of the year involved, in addition to the 
        amount of payment that would otherwise be made for such services 
        under this part, there also shall be paid (on a monthly or 
        quarterly basis) an amount equal to 10 percent of the payment 
        amount for the service under this part.
            ``(2) Definitions.--In this subsection:
                    ``(A) General surgeon.--In this subsection, the term 
                `general surgeon' means a physician (as described in 
                section 1861(r)(1)) who has designated CMS specialty 
                code 02-General Surgery as their primary specialty code 
                in the physician's enrollment under section 1866(j).
                    ``(B) Major surgical procedures.--The term `major 
                surgical procedures' means physicians' services which 
                are

[[Page 124 STAT. 654]]

                surgical procedures for which a 10-day or 90-day global 
                period is used for payment under the fee schedule under 
                section 1848(b).
            ``(3) Coordination with other payments.--The amount of the 
        additional payment for a service under this subsection and 
        subsection (m) shall be determined without regard to any 
        additional payment for the service under subsection (m) and this 
        subsection, respectively.
            ``(4) Application.--The provisions of paragraph (2) and (4) 
        of subsection (m) shall apply to the determination of additional 
        payments under this subsection in the same manner as such 
        provisions apply to the determination of additional payments 
        under subsection (m).''.
            (2) Conforming amendment.--Section 1834(g)(2)(B) of the 
        Social Security Act (42 U.S.C. 1395m(g)(2)(B)), as amended by 
        subsection (a)(2), is amended by striking ``Section 1833(x)'' 
        and inserting ``Subsections (x) and (y) of section 1833'' in the 
        last sentence.

    (c) Budget-neutrality Adjustment.--Section 1848(c)(2)(B) of the 
Social Security Act (42 U.S.C. 1395w-4(c)(2)(B)) is amended by adding at 
the end the following new clause:
                          ``(vii) Adjustment for certain physician 
                      incentive payments. <<NOTE: Applicability.>> --
                      Fifty percent of the additional expenditures under 
                      this part attributable to subsections (x) and (y) 
                      of section 1833 for a year (as estimated by the 
                      Secretary) shall be taken into account in applying 
                      clause (ii)(II) for 2011 and subsequent years. In 
                      lieu of applying the budget-neutrality adjustments 
                      required under clause (ii)(II) to relative value 
                      units to account for such costs for the year, the 
                      Secretary shall apply such budget-neutrality 
                      adjustments to the conversion factor otherwise 
                      determined for the year. For 2011 and subsequent 
                      years, the Secretary shall increase the incentive 
                      payment otherwise applicable under section 1833(m) 
                      by a percent estimated to be equal to the 
                      additional expenditures estimated under the first 
                      sentence of this clause for such year that is 
                      applicable to physicians who primarily furnish 
                      services in areas designated (under section 
                      332(a)(1)(A) of the Public Health Service Act) as 
                      health professional shortage areas.''.

SEC. 5502. MEDICARE FEDERALLY QUALIFIED HEALTH CENTER IMPROVEMENTS.

    (a)  Expansion of Medicare-Covered Preventive Services at Federally 
Qualified Health Centers.--
            (1) In general.--Section 1861(aa)(3)(A) of the Social 
        Security Act <<NOTE: 42 USC 1395x.>> (42 U.S.C. 1395w 
        (aa)(3)(A)) is amended to read as follows:
                    ``(A) services of the type described subparagraphs 
                (A) through (C) of paragraph (1) and preventive services 
                (as defined in section 1861(ddd)(3)); and''.
            (2) Effective date. <<NOTE: Applicability. 42 USC 1395x 
        note.>> --The amendment made by paragraph (1) shall apply to 
        services furnished on or after January 1, 2011.

    (b) Prospective Payment System for Federally Qualified Health 
Centers.--Section 1834 of the Social Security Act (42

[[Page 124 STAT. 655]]

U.S.C. 1395m) is amended by adding at the end the following new 
subsection:
    ``(n) Development and Implementation of Prospective Payment 
System.--
            ``(1) Development.--
                    ``(A) In general.--The Secretary shall develop a 
                prospective payment system for payment for Federally 
                qualified health services furnished by Federally 
                qualified health centers under this title. Such system 
                shall include a process for appropriately describing the 
                services furnished by Federally qualified health 
                centers.
                    ``(B) Collection of data and evaluation.--The 
                Secretary shall require Federally qualified health 
                centers to submit to the Secretary such information as 
                the Secretary may require in order to develop and 
                implement the prospective payment system under this 
                paragraph and paragraph (2), respectively, including the 
                reporting of services using HCPCS codes.
            ``(2) Implementation.--
                    ``(A) In general. <<NOTE: Effective date.>> --
                Notwithstanding section 1833(a)(3)(B), the Secretary 
                shall provide, for cost reporting periods beginning on 
                or after October 1, 2014, for payments for Federally 
                qualified health services furnished by Federally 
                qualified health centers under this title in accordance 
                with the prospective payment system developed by the 
                Secretary under paragraph (1).
                    ``(B) Payments.--
                          ``(i) Initial payments.--The Secretary shall 
                      implement such prospective payment system so that 
                      the estimated amount of expenditures under this 
                      title for Federally qualified health services in 
                      the first year that the prospective payment system 
                      is implemented is equal to 103 percent of the 
                      estimated amount of expenditures under this title 
                      that would have occurred for such services in such 
                      year if the system had not been implemented.
                          ``(ii) Payments in subsequent years.--In the 
                      year after the first year of implementation of 
                      such system, and in each subsequent year, the 
                      payment rate for Federally qualified health 
                      services furnished in the year shall be equal to 
                      the payment rate established for such services 
                      furnished in the preceding year under this 
                      subparagraph increased by the percentage increase 
                      in the MEI (as defined in 1842(i)(3)) for the year 
                      involved.''.

SEC. 5503. DISTRIBUTION OF ADDITIONAL RESIDENCY POSITIONS.

    (a) In General.--Section 1886(h) of the Social Security Act (42 
U.S.C. 1395ww(h)) is amended--
            (1) in paragraph (4)(F)(i), by striking ``paragraph (7)'' 
        and inserting ``paragraphs (7) and (8)'';
            (2) in paragraph (4)(H)(i), by striking ``paragraph (7)'' 
        and inserting ``paragraphs (7) and (8)'';
            (3) in paragraph (7)(E), by inserting ``or paragraph (8)'' 
        before the period at the end; and
            (4) by adding at the end the following new paragraph:
            ``(8) Distribution of additional residency positions.--

[[Page 124 STAT. 656]]

                    ``(A) Reductions in limit based on unused 
                positions.--
                          ``(i) <<NOTE: Effective date.>> In general.--
                      Except as provided in clause (ii), if a hospital's 
                      reference resident level (as defined in 
                      subparagraph (H)(i)) is less than the otherwise 
                      applicable resident limit (as defined in 
                      subparagraph (H)(iii)), effective for portions of 
                      cost reporting periods occurring on or after July 
                      1, 2011, the otherwise applicable resident limit 
                      shall be reduced by 65 percent of the difference 
                      between such otherwise applicable resident limit 
                      and such reference resident level.
                          ``(ii) Exceptions.--This subparagraph shall 
                      not apply to--
                                    ``(I) a hospital located in a rural 
                                area (as defined in subsection 
                                (d)(2)(D)(ii)) with fewer than 250 acute 
                                care inpatient beds;
                                    ``(II) <<NOTE: Deadline.>> a 
                                hospital that was part of a qualifying 
                                entity which had a voluntary residency 
                                reduction plan approved under paragraph 
                                (6)(B) or under the authority of section 
                                402 of Public Law 90-248, if the 
                                hospital demonstrates to the Secretary 
                                that it has a specified plan in place 
                                for filling the unused positions by not 
                                later than 2 years after the date of 
                                enactment of this paragraph; or
                                    ``(III) a hospital described in 
                                paragraph (4)(H)(v).
                    ``(B) Distribution.--
                          ``(i) In general.--The Secretary shall 
                      increase the otherwise applicable resident limit 
                      for each qualifying hospital that submits an 
                      application under this subparagraph by such number 
                      as the Secretary may approve for portions of cost 
                      reporting periods occurring on or after July 1, 
                      2011. The aggregate number of increases in the 
                      otherwise applicable resident limit under this 
                      subparagraph shall be equal to the aggregate 
                      reduction in such limits attributable to 
                      subparagraph (A) (as estimated by the Secretary).
                          ``(ii) Requirements.--Subject to clause (iii), 
                      a hospital that receives an increase in the 
                      otherwise applicable resident limit under this 
                      subparagraph shall ensure, during the 5-year 
                      period beginning on the date of such increase, 
                      that--
                                    ``(I) the number of full-time 
                                equivalent primary care residents, as 
                                defined in paragraph (5)(H) (as 
                                determined by the Secretary), excluding 
                                any additional positions under subclause 
                                (II), is not less than the average 
                                number of full-time equivalent primary 
                                care residents (as so determined) during 
                                the 3 most recent cost reporting periods 
                                ending prior to the date of enactment of 
                                this paragraph; and
                                    ``(II) not less than 75 percent of 
                                the positions attributable to such 
                                increase are in a primary care or 
                                general surgery residency (as determined 
                                by the Secretary).

[[Page 124 STAT. 657]]

                      The Secretary may determine whether a hospital has 
                      met the requirements under this clause during such 
                      5-year period in such manner and at such time as 
                      the Secretary determines appropriate, including at 
                      the end of such 5-year period.
                          ``(iii) Redistribution of positions if 
                      hospital no longer meets certain requirements.--In 
                      the case where the Secretary determines that a 
                      hospital described in clause (ii) does not meet 
                      either of the requirements under subclause (I) or 
                      (II) of such clause, the Secretary shall--
                                    ``(I) reduce the otherwise 
                                applicable resident limit of the 
                                hospital by the amount by which such 
                                limit was increased under this 
                                paragraph; and
                                    ``(II) provide for the distribution 
                                of positions attributable to such 
                                reduction in accordance with the 
                                requirements of this paragraph.
                    ``(C) Considerations in redistribution.--In 
                determining for which hospitals the increase in the 
                otherwise applicable resident limit is provided under 
                subparagraph (B), the Secretary shall take into 
                account--
                          ``(i) <<NOTE: Effective date.>> the 
                      demonstration likelihood of the hospital filling 
                      the positions made available under this paragraph 
                      within the first 3 cost reporting periods 
                      beginning on or after July 1, 2011, as determined 
                      by the Secretary; and
                          ``(ii) whether the hospital has an accredited 
                      rural training track (as described in paragraph 
                      (4)(H)(iv)).
                    ``(D) Priority for certain areas.--In determining 
                for which hospitals the increase in the otherwise 
                applicable resident limit is provided under subparagraph 
                (B), subject to subparagraph (E), the Secretary shall 
                distribute the increase to hospitals based on the 
                following factors:
                          ``(i) Whether the hospital is located in a 
                      State with a resident-to-population ratio in the 
                      lowest quartile (as determined by the Secretary).
                          ``(ii) Whether the hospital is located in a 
                      State, a territory of the United States, or the 
                      District of Columbia that is among the top 10 
                      States, territories, or Districts in terms of the 
                      ratio of--
                                    ``(I) the total population of the 
                                State, territory, or District living in 
                                an area designated (under such section 
                                332(a)(1)(A)) as a health professional 
                                shortage area (as of the date of 
                                enactment of this paragraph); to
                                    ``(II) the total population of the 
                                State, territory, or District (as 
                                determined by the Secretary based on the 
                                most recent available population data 
                                published by the Bureau of the Census).
                          ``(iii) Whether the hospital is located in a 
                      rural area (as defined in subsection 
                      (d)(2)(D)(ii)).
                    ``(E) Reservation of positions for certain 
                hospitals.--
                          ``(i) In general.--Subject to clause (ii), the 
                      Secretary shall reserve the positions available 
                      for distribution under this paragraph as follows:

[[Page 124 STAT. 658]]

                                    ``(I) 70 percent of such positions 
                                for distribution to hospitals described 
                                in clause (i) of subparagraph (D).
                                    ``(II) 30 percent of such positions 
                                for distribution to hospitals described 
                                in clause (ii) and (iii) of such 
                                subparagraph.
                          ``(ii) Exception if positions not 
                      redistributed by july 1, 
                      2011. <<NOTE: Deadline.>> --In the case where the 
                      Secretary does not distribute positions to 
                      hospitals in accordance with clause (i) by July 1, 
                      2011, the Secretary shall distribute such 
                      positions to other hospitals in accordance with 
                      the considerations described in subparagraph (C) 
                      and the priority described in subparagraph (D).
                    ``(F) Limitation.--A hospital may not receive more 
                than 75 full-time equivalent additional residency 
                positions under this paragraph.
                    ``(G) Application of per resident amounts for 
                primary care and nonprimary care.--With respect to 
                additional residency positions in a hospital 
                attributable to the increase provided under this 
                paragraph, the approved FTE per resident amounts are 
                deemed to be equal to the hospital per resident amounts 
                for primary care and nonprimary care computed under 
                paragraph (2)(D) for that hospital.
                    ``(H) Definitions.--In this paragraph:
                          ``(i) Reference resident level.--The term 
                      `reference resident level' means, with respect to 
                      a hospital, the highest resident level for any of 
                      the 3 most recent cost reporting periods (ending 
                      before the date of the enactment of this 
                      paragraph) of the hospital for which a cost report 
                      has been settled (or, if not, submitted (subject 
                      to audit)), as determined by the Secretary.
                          ``(ii) Resident level.--The term `resident 
                      level' has the meaning given such term in 
                      paragraph (7)(C)(i).
                          ``(iii) Otherwise applicable resident limit.--
                      The term `otherwise applicable resident limit' 
                      means, with respect to a hospital, the limit 
                      otherwise applicable under subparagraphs (F)(i) 
                      and (H) of paragraph (4) on the resident level for 
                      the hospital determined without regard to this 
                      paragraph but taking into account paragraph 
                      (7)(A).''.

    (b) IME.--
            (1) In general.--Section 1886(d)(5)(B)(v) of the Social 
        Security Act (42 U.S.C. 1395ww(d)(5)(B)(v)), in the second 
        sentence, is amended--
                    (A) by striking ``subsection (h)(7)'' and inserting 
                ``subsections (h)(7) and (h)(8)''; and
                    (B) by striking ``it applies'' and inserting ``they 
                apply''.
            (2) Conforming amendment.--Section 1886(d)(5)(B) of the 
        Social Security Act (42 U.S.C. 1395ww(d)(5)(B)) is amended by 
        adding at the end the following clause:
            ``(x) <<NOTE: Effective date.>> For discharges occurring on 
        or after July 1, 2011, insofar as an additional payment amount 
        under this subparagraph is attributable to resident positions 
        distributed to a hospital under subsection (h)(8)(B), the 
        indirect teaching adjustment factor shall be computed in the 
        same manner as provided under clause (ii) with respect to such 
        resident positions.''.

[[Page 124 STAT. 659]]

    (c) Conforming Amendment.--Section 422(b)(2) of the Medicare 
Prescription Drug, Improvement, and Modernization Act of 2003 (Public 
Law 108-173) <<NOTE: 42 USC 1395ww note.>> is amended by striking 
``section 1886(h)(7)'' and all that follows and inserting ``paragraphs 
(7) and (8) of subsection (h) of section 1886 of the Social Security 
Act''.

SEC. 5504. <<NOTE: Effective dates.>>  COUNTING RESIDENT TIME IN 
            NONPROVIDER SETTINGS.

    (a) GME.--Section 1886(h)(4)(E) of the Social Security Act (42 
U.S.C. 1395ww(h)(4)(E)) is amended--
            (1) by striking ``shall be counted and that all the time'' 
        and inserting ``shall be counted and that--
                          ``(i) effective for cost reporting periods 
                      beginning before July 1, 2010, all the time;'';
            (2) in clause (i), as inserted by paragraph (1), by striking 
        the period at the end and inserting ``; and'';
            (3) by inserting after clause (i), as so inserted, the 
        following new clause:
                          ``(ii) effective for cost reporting periods 
                      beginning on or after July 1, 2010, all the time 
                      so spent by a resident shall be counted towards 
                      the determination of full-time equivalency, 
                      without regard to the setting in which the 
                      activities are performed, if a hospital incurs the 
                      costs of the stipends and fringe benefits of the 
                      resident during the time the resident spends in 
                      that setting. If more than one hospital incurs 
                      these costs, either directly or through a third 
                      party, such hospitals shall count a proportional 
                      share of the time, as determined by written 
                      agreement between the hospitals, that a resident 
                      spends training in that setting.''; and
            (4) <<NOTE: Records.>> by adding at the end the following 
        flush sentence:
                ``Any hospital claiming under this subparagraph for time 
                spent in a nonprovider setting shall maintain and make 
                available to the Secretary records regarding the amount 
                of such time and such amount in comparison with amounts 
                of such time in such base year as the Secretary shall 
                specify.''.

    (b) IME.--Section 1886(d)(5)(B)(iv) of the Social Security Act (42 
U.S.C. 1395ww(d)(5)) is amended--
            (1) by striking ``(iv) Effective for discharges occurring on 
        or after October 1, 1997'' and inserting <<NOTE: Time 
        period.>> ``(iv)(I) Effective for discharges occurring on or 
        after October 1, 1997, and before July 1, 2010''; and
            (2) by inserting after clause (I), as inserted by paragraph 
        (1), the following new subparagraph:
            ``(II) Effective for discharges occurring on or after July 
        1, 2010, all the time spent by an intern or resident in patient 
        care activities in a nonprovider setting shall be counted 
        towards the determination of full-time equivalency if a hospital 
        incurs the costs of the stipends and fringe benefits of the 
        intern or resident during the time the intern or resident spends 
        in that setting. If more than one hospital incurs these costs, 
        either directly or through a third party, such hospitals shall 
        count a proportional share of the time, as determined by written 
        agreement between the hospitals, that a resident spends training 
        in that setting.''.

[[Page 124 STAT. 660]]

    (c) Application. <<NOTE: 42 USC 1395ww note.>> --The amendments made 
by this section shall not be applied in a manner that requires reopening 
of any settled hospital cost reports as to which there is not a 
jurisdictionally proper appeal pending as of the date of the enactment 
of this Act on the issue of payment for indirect costs of medical 
education under section 1886(d)(5)(B) of the Social Security Act (42 
U.S.C. 1395ww(d)(5)(B)) or for direct graduate medical education costs 
under section 1886(h) of such Act (42 U.S.C. 1395ww(h)).

SEC. 5505. RULES FOR COUNTING RESIDENT TIME FOR DIDACTIC AND SCHOLARLY 
            ACTIVITIES AND OTHER ACTIVITIES.

    (a) GME.--Section 1886(h) of the Social Security Act (42 U.S.C. 
1395ww(h)), as amended by section 5504, is amended--
            (1) in paragraph (4)--
                    (A) in subparagraph (E), by striking ``Such rules'' 
                and inserting ``Subject to subparagraphs (J) and (K), 
                such rules''; and
                    (B) by adding at the end the following new 
                subparagraphs:
                    ``(J) Treatment of certain nonprovider and didactic 
                activities.--Such rules shall provide that all time 
                spent by an intern or resident in an approved medical 
                residency training program in a nonprovider setting that 
                is primarily engaged in furnishing patient care (as 
                defined in paragraph (5)(K)) in non-patient care 
                activities, such as didactic conferences and seminars, 
                but not including research not associated with the 
                treatment or diagnosis of a particular patient, as such 
                time and activities are defined by the Secretary, shall 
                be counted toward the determination of full-time 
                equivalency.
                    ``(K) <<NOTE: Definition.>> Treatment of certain 
                other activities.--In determining the hospital's number 
                of full-time equivalent residents for purposes of this 
                subsection, all the time that is spent by an intern or 
                resident in an approved medical residency training 
                program on vacation, sick leave, or other approved 
                leave, as such time is defined by the Secretary, and 
                that does not prolong the total time the resident is 
                participating in the approved program beyond the normal 
                duration of the program shall be counted toward the 
                determination of full-time equivalency.''; and
            (2) in paragraph (5), by adding at the end the following new 
        subparagraph:
                    ``(K) Nonprovider setting that is primarily engaged 
                in furnishing patient care.--The term `nonprovider 
                setting that is primarily engaged in furnishing patient 
                care' means a nonprovider setting in which the primary 
                activity is the care and treatment of patients, as 
                defined by the Secretary.''.

    (b) IME Determinations.--Section 1886(d)(5)(B) of such Act (42 
U.S.C. 1395ww(d)(5)(B)) is amended by adding at the end the following 
new clause:
                          ``(x)(I) <<NOTE: Applicability.>> The 
                      provisions of subparagraph (K) of subsection 
                      (h)(4) shall apply under this subparagraph in the 
                      same manner as they apply under such subsection.
                          ``(II) In determining the hospital's number of 
                      full-time equivalent residents for purposes of 
                      this subparagraph, all the time spent by an intern 
                      or resident

[[Page 124 STAT. 661]]

                      in an approved medical residency training program 
                      in non-patient care activities, such as didactic 
                      conferences and seminars, as such time and 
                      activities are defined by the Secretary, that 
                      occurs in the hospital shall be counted toward the 
                      determination of full-time equivalency if the 
                      hospital--
                                    ``(aa) is recognized as a subsection 
                                (d) hospital;
                                    ``(bb) is recognized as a subsection 
                                (d) Puerto Rico hospital;
                                    ``(cc) is reimbursed under a 
                                reimbursement system authorized under 
                                section 1814(b)(3); or
                                    ``(dd) is a provider-based hospital 
                                outpatient department.
                          ``(III) In determining the hospital's number 
                      of full-time equivalent residents for purposes of 
                      this subparagraph, all the time spent by an intern 
                      or resident in an approved medical residency 
                      training program in research activities that are 
                      not associated with the treatment or diagnosis of 
                      a particular patient, as such time and activities 
                      are defined by the Secretary, shall not be counted 
                      toward the determination of full-time 
                      equivalency.''.

    (c) <<NOTE: Applicability. 42 USC 1395ww note.>>  Effective Dates.--
            (1) In general.--Except as otherwise provided, the Secretary 
        of Health and Human Services shall implement the amendments made 
        by this section in a manner so as to apply to cost reporting 
        periods beginning on or after January 1, 1983.
            (2) GME.--Section 1886(h)(4)(J) of the Social Security Act, 
        as added by subsection (a)(1)(B), shall apply to cost reporting 
        periods beginning on or after July 1, 2009.
            (3) IME.--Section 1886(d)(5)(B)(x)(III) of the Social 
        Security Act, as added by subsection (b), shall apply to cost 
        reporting periods beginning on or after October 1, 2001. Such 
        section, as so added, shall not give rise to any inference as to 
        how the law in effect prior to such date should be interpreted.

SEC. 5506. PRESERVATION OF RESIDENT CAP POSITIONS FROM CLOSED HOSPITALS.

    (a) GME.--Section 1886(h)(4)(H) of the Social Security Act (42 
U.S.C. Section 1395ww(h)(4)(H)) is amended by adding at the end the 
following new clause:
                          ``(vi) Redistribution of residency slots after 
                      a hospital closes.--
                                    ``(I) <<NOTE: Regulations.>> In 
                                general.--Subject to the succeeding 
                                provisions of this clause, the Secretary 
                                shall, by regulation, establish a 
                                process under which, in the case where a 
                                hospital (other than a hospital 
                                described in clause (v)) with an 
                                approved medical residency program 
                                closes on or after a date that is 2 
                                years before the date of enactment of 
                                this clause, the Secretary shall 
                                increase the otherwise applicable 
                                resident limit under this paragraph for 
                                other hospitals in accordance with this 
                                clause.
                                    ``(II) Priority for hospitals in 
                                certain areas.--Subject to the 
                                succeeding provisions of this clause, in 
                                determining for which hospitals the

[[Page 124 STAT. 662]]

                                increase in the otherwise applicable 
                                resident limit is provided under such 
                                process, the Secretary shall distribute 
                                the increase to hospitals in the 
                                following priority order (with 
                                preference given within each category to 
                                hospitals that are members of the same 
                                affiliated group (as defined by the 
                                Secretary under clause (ii)) as the 
                                closed hospital):
                                            ``(aa) First, to hospitals 
                                        located in the same core-based 
                                        statistical area as, or a core-
                                        based statistical area 
                                        contiguous to, the hospital that 
                                        closed.
                                            ``(bb) Second, to hospitals 
                                        located in the same State as the 
                                        hospital that closed.
                                            ``(cc) Third, to hospitals 
                                        located in the same region of 
                                        the country as the hospital that 
                                        closed.
                                            ``(dd) Fourth, only if the 
                                        Secretary is not able to 
                                        distribute the increase to 
                                        hospitals described in item 
                                        (cc), to qualifying hospitals in 
                                        accordance with the provisions 
                                        of paragraph (8).
                                    ``(III) Requirement hospital likely 
                                to fill position within certain time 
                                period. <<NOTE: Determination.>> --The 
                                Secretary may only increase the 
                                otherwise applicable resident limit of a 
                                hospital under such process if the 
                                Secretary determines the hospital has 
                                demonstrated a likelihood of filling the 
                                positions made available under this 
                                clause within 3 years.
                                    ``(IV) Limitation.--The aggregate 
                                number of increases in the otherwise 
                                applicable resident limits for hospitals 
                                under this clause shall be equal to the 
                                number of resident positions in the 
                                approved medical residency programs that 
                                closed on or after the date described in 
                                subclause (I).
                                    ``(V) Administration.--Chapter 35 of 
                                title 44, United States Code, shall not 
                                apply to the implementation of this 
                                clause.''.

    (b) IME.--Section 1886(d)(5)(B)(v) of the Social Security Act (42 
U.S.C. 1395ww(d)(5)(B)(v)), in the second sentence, as amended by 
section 5503, is amended by striking ``subsections (h)(7) and (h)(8)'' 
and inserting ``subsections (h)(4)(H)(vi), (h)(7), and (h)(8)''.
    (c) <<NOTE: 42 USC 1395ww note.>> Application.--The amendments made 
by this section shall not be applied in a manner that requires reopening 
of any settled hospital cost reports as to which there is not a 
jurisdictionally proper appeal pending as of the date of the enactment 
of this Act on the issue of payment for indirect costs of medical 
education under section 1886(d)(5)(B) of the Social Security Act (42 
U.S.C. 1395ww(d)(5)(B)) or for direct graduate medical education costs 
under section 1886(h) of such Act (42 U.S.C. Section 1395ww(h)).

    (d) <<NOTE: 42 USC 1395ww note.>> Effect on Temporary FTE Cap 
Adjustments.--The Secretary of Health and Human Services shall give 
consideration to the effect of the amendments made by this section on 
any temporary adjustment to a hospital's FTE cap under section 413.79(h) 
of title 42, Code of Federal Regulations (as in effect on the date of 
enactment of this Act) in order to ensure that there is no duplication 
of FTE slots. Such amendments shall not affect the

[[Page 124 STAT. 663]]

application of section 1886(h)(4)(H)(v) of the Social Security Act (42 
U.S.C. 1395ww(h)(4)(H)(v)).

    (e) Conforming Amendment.--Section 1886(h)(7)(E) of the Social 
Security Act (42 U.S.C. 1395ww(h)(7)(E)), as amended by section 5503(a), 
is amended by striking ``paragraph or paragraph (8)'' and inserting 
``this paragraph, paragraph (8), or paragraph (4)(H)(vi)''.

SEC. 5507. DEMONSTRATION PROJECTS TO ADDRESS HEALTH PROFESSIONS 
            WORKFORCE NEEDS; EXTENSION OF FAMILY-TO-FAMILY HEALTH 
            INFORMATION CENTERS.

    (a) Authority To Conduct Demonstration Projects.--Title XX of the 
Social Security Act (42 U.S.C. 1397 et seq.) is amended by adding at the 
end the following:

``SEC. 2008. <<NOTE: 42 USC 1397g.>> DEMONSTRATION PROJECTS TO ADDRESS 
            HEALTH PROFESSIONS WORKFORCE NEEDS.

    ``(a) Demonstration Projects To Provide Low-Income Individuals With 
Opportunities for Education, Training, and Career Advancement To Address 
Health Professions Workforce Needs.--
            ``(1) Authority to award grants.--The Secretary, in 
        consultation with the Secretary of Labor, shall award grants to 
        eligible entities to conduct demonstration projects that are 
        designed to provide eligible individuals with the opportunity to 
        obtain education and training for occupations in the health care 
        field that pay well and are expected to either experience labor 
        shortages or be in high demand.
            ``(2) Requirements.--
                    ``(A) Aid and supportive services.--
                          ``(i) In general.--A demonstration project 
                      conducted by an eligible entity awarded a grant 
                      under this section shall, if appropriate, provide 
                      eligible individuals participating in the project 
                      with financial aid, child care, case management, 
                      and other supportive services.
                          ``(ii) Treatment.--Any aid, services, or 
                      incentives provided to an eligible beneficiary 
                      participating in a demonstration project under 
                      this section shall not be considered income, and 
                      shall not be taken into account for purposes of 
                      determining the individual's eligibility for, or 
                      amount of, benefits under any means-tested 
                      program.
                    ``(B) Consultation and coordination.--An eligible 
                entity applying for a grant to carry out a demonstration 
                project under this section shall demonstrate in the 
                application that the entity has consulted with the State 
                agency responsible for administering the State TANF 
                program, the local workforce investment board in the 
                area in which the project is to be conducted (unless the 
                applicant is such board), the State workforce investment 
                board established under section 111 of the Workforce 
                Investment Act of 1998, and the State Apprenticeship 
                Agency recognized under the Act of August 16, 1937 
                (commonly known as the `National Apprenticeship Act') 
                (or if no agency has been recognized in the State, the 
                Office of Apprenticeship of the Department of Labor) and 
                that the project will be carried out in coordination 
                with such entities.

[[Page 124 STAT. 664]]

                    ``(C) Assurance of opportunities for indian 
                populations. <<NOTE: Grants.>> --The Secretary shall 
                award at least 3 grants under this subsection to an 
                eligible entity that is an Indian tribe, tribal 
                organization, or Tribal College or University.
            ``(3) Reports and evaluation.--
                    ``(A) Eligible entities.--An eligible entity awarded 
                a grant to conduct a demonstration project under this 
                subsection shall submit interim reports to the Secretary 
                on the activities carried out under the project and a 
                final report on such activities upon the conclusion of 
                the entities' participation in the project. Such reports 
                shall include assessments of the effectiveness of such 
                activities with respect to improving outcomes for the 
                eligible individuals participating in the project and 
                with respect to addressing health professions workforce 
                needs in the areas in which the project is conducted.
                    ``(B) <<NOTE: Grants. Contracts.>> Evaluation.--The 
                Secretary shall, by grant, contract, or interagency 
                agreement, evaluate the demonstration projects conducted 
                under this subsection. Such evaluation shall include 
                identification of successful activities for creating 
                opportunities for developing and sustaining, 
                particularly with respect to low-income individuals and 
                other entry-level workers, a health professions 
                workforce that has accessible entry points, that meets 
                high standards for education, training, certification, 
                and professional development, and that provides 
                increased wages and affordable benefits, including 
                health care coverage, that are responsive to the 
                workforce's needs.
                    ``(C) Report to congress.--The Secretary shall 
                submit interim reports and, based on the evaluation 
                conducted under subparagraph (B), a final report to 
                Congress on the demonstration projects conducted under 
                this subsection.
            ``(4) Definitions.--In this subsection:
                    ``(A) Eligible entity.--The term `eligible entity' 
                means a State, an Indian tribe or tribal organization, 
                an institution of higher education, a local workforce 
                investment board established under section 117 of the 
                Workforce Investment Act of 1998, a sponsor of an 
                apprenticeship program registered under the National 
                Apprenticeship Act or a community-based organization.
                    ``(B) Eligible individual.--
                          ``(i) In general.--The term `eligible 
                      individual' means a individual receiving 
                      assistance under the State TANF program.
                          ``(ii) Other low-income individuals.--Such 
                      term may include other low-income individuals 
                      described by the eligible entity in its 
                      application for a grant under this section.
                    ``(C) Indian tribe; tribal organization.--The terms 
                `Indian tribe' and `tribal organization' have the 
                meaning given such terms in section 4 of the Indian 
                Self-Determination and Education Assistance Act (25 
                U.S.C. 450b).
                    ``(D) Institution of higher education.--The term 
                `institution of higher education' has the meaning given 
                that term in section 101 of the Higher Education Act of 
                1965 (20 U.S.C. 1001).

[[Page 124 STAT. 665]]

                    ``(E) State.--The term `State' means each of the 50 
                States, the District of Columbia, the Commonwealth of 
                Puerto Rico, the United States Virgin Islands, Guam, and 
                American Samoa.
                    ``(F) State tanf program.--The term `State TANF 
                program' means the temporary assistance for needy 
                families program funded under part A of title IV.
                    ``(G) Tribal college or university.--The term 
                `Tribal College or University' has the meaning given 
                that term in section 316(b) of the Higher Education Act 
                of 1965 (20 U.S.C. 1059c(b)).

    ``(b) Demonstration Project To Develop Training and Certification 
Programs for Personal or Home Care Aides.--
            ``(1) Authority to award grants. <<NOTE: Deadline.>> --Not 
        later than 18 months after the date of enactment of this 
        section, the Secretary shall award grants to eligible entities 
        that are States to conduct demonstration projects for purposes 
        of developing core training competencies and certification 
        programs for personal or home care aides. The Secretary shall--
                    ``(A) <<NOTE: Evaluation.>> evaluate the efficacy of 
                the core training competencies described in paragraph 
                (3)(A) for newly hired personal or home care aides and 
                the methods used by States to implement such core 
                training competencies in accordance with the issues 
                specified in paragraph (3)(B); and
                    ``(B) ensure that the number of hours of training 
                provided by States under the demonstration project with 
                respect to such core training competencies are not less 
                than the number of hours of training required under any 
                applicable State or Federal law or regulation.
            ``(2) Duration.--A demonstration project shall be conducted 
        under this subsection for not less than 3 years.
            ``(3) Core training competencies for personal or home care 
        aides.--
                    ``(A) In general.--The core training competencies 
                for personal or home care aides described in this 
                subparagraph include competencies with respect to the 
                following areas:
                          ``(i) The role of the personal or home care 
                      aide (including differences between a personal or 
                      home care aide employed by an agency and a 
                      personal or home care aide employed directly by 
                      the health care consumer or an independent 
                      provider).
                          ``(ii) Consumer rights, ethics, and 
                      confidentiality (including the role of proxy 
                      decision-makers in the case where a health care 
                      consumer has impaired decision-making capacity).
                          ``(iii) Communication, cultural and linguistic 
                      competence and sensitivity, problem solving, 
                      behavior management, and relationship skills.
                          ``(iv) Personal care skills.
                          ``(v) Health care support.
                          ``(vi) Nutritional support.
                          ``(vii) Infection control.
                          ``(viii) Safety and emergency training.
                          ``(ix) Training specific to an individual 
                      consumer's needs (including older individuals, 
                      younger individuals with disabilities, individuals 
                      with developmental

[[Page 124 STAT. 666]]

                      disabilities, individuals with dementia, and 
                      individuals with mental and behavioral health 
                      needs).
                          ``(x) Self-Care.
                    ``(B) Implementation.--The implementation issues 
                specified in this subparagraph include the following:
                          ``(i) The length of the training.
                          ``(ii) The appropriate trainer to student 
                      ratio.
                          ``(iii) The amount of instruction time spent 
                      in the classroom as compared to on-site in the 
                      home or a facility.
                          ``(iv) Trainer qualifications.
                          ``(v) Content for a `hands-on' and written 
                      certification exam.
                          ``(vi) Continuing education requirements.
            ``(4) Application and selection criteria.--
                    ``(A) In general.--
                          ``(i) Number of 
                      states. <<NOTE: Contracts.>> --The Secretary shall 
                      enter into agreements with not more than 6 States 
                      to conduct demonstration projects under this 
                      subsection.
                          ``(ii) Requirements for states.--An agreement 
                      entered into under clause (i) shall require that a 
                      participating State--
                                    ``(I) implement the core training 
                                competencies described in paragraph 
                                (3)(A); and
                                    ``(II) develop written materials and 
                                protocols for such core training 
                                competencies, including the development 
                                of a certification test for personal or 
                                home care aides who have completed such 
                                training competencies.
                          ``(iii) Consultation and collaboration with 
                      community and vocational colleges.--The Secretary 
                      shall encourage participating States to consult 
                      with community and vocational colleges regarding 
                      the development of curricula to implement the 
                      project with respect to activities, as applicable, 
                      which may include consideration of such colleges 
                      as partners in such implementation.
                    ``(B) Application and eligibility.--A State seeking 
                to participate in the project shall--
                          ``(i) submit an application to the Secretary 
                      containing such information and at such time as 
                      the Secretary may specify;
                          ``(ii) meet the selection criteria established 
                      under subparagraph (C); and
                          ``(iii) meet such additional criteria as the 
                      Secretary may specify.
                    ``(C) Selection criteria.--In selecting States to 
                participate in the program, the Secretary shall 
                establish criteria to ensure (if applicable with respect 
                to the activities involved)--
                          ``(i) geographic and demographic diversity;
                          ``(ii) that participating States offer medical 
                      assistance for personal care services under the 
                      State Medicaid plan;
                          ``(iii) that the existing training standards 
                      for personal or home care aides in each 
                      participating State--

[[Page 124 STAT. 667]]

                                    ``(I) are different from such 
                                standards in the other participating 
                                States; and
                                    ``(II) are different from the core 
                                training competencies described in 
                                paragraph (3)(A);
                          ``(iv) that participating States do not reduce 
                      the number of hours of training required under 
                      applicable State law or regulation after being 
                      selected to participate in the project; and
                          ``(v) that participating States recruit a 
                      minimum number of eligible health and long-term 
                      care providers to participate in the project.
                    ``(D) Technical assistance.--The Secretary shall 
                provide technical assistance to States in developing 
                written materials and protocols for such core training 
                competencies.
            ``(5) Evaluation and report.--
                    ``(A) <<NOTE: Contracts.>> Evaluation.--The 
                Secretary shall develop an experimental or control group 
                testing protocol in consultation with an independent 
                evaluation contractor selected by the Secretary. Such 
                contractor shall evaluate--
                          ``(i) the impact of core training competencies 
                      described in paragraph (3)(A), including curricula 
                      developed to implement such core training 
                      competencies, for personal or home care aides 
                      within each participating State on job 
                      satisfaction, mastery of job skills, beneficiary 
                      and family caregiver satisfaction with services, 
                      and additional measures determined by the 
                      Secretary in consultation with the expert panel;
                          ``(ii) the impact of providing such core 
                      training competencies on the existing training 
                      infrastructure and resources of States; and
                          ``(iii) whether a minimum number of hours of 
                      initial training should be required for personal 
                      or home care aides and, if so, what minimum number 
                      of hours should be required.
                    ``(B) Reports.--
                          ``(i) Report on initial implementation.--Not 
                      later than 2 years after the date of enactment of 
                      this section, the Secretary shall submit to 
                      Congress a report on the initial implementation of 
                      activities conducted under the demonstration 
                      project, including any available results of the 
                      evaluation conducted under subparagraph (A) with 
                      respect to such activities, together with such 
                      recommendations for legislation or administrative 
                      action as the Secretary determines appropriate.
                          ``(ii) Final report.--Not later than 1 year 
                      after the completion of the demonstration project, 
                      the Secretary shall submit to Congress a report 
                      containing the results of the evaluation conducted 
                      under subparagraph (A), together with such 
                      recommendations for legislation or administrative 
                      action as the Secretary determines appropriate.
            ``(6) Definitions.--In this subsection:
                    ``(A) Eligible health and long-term care provider.--
                The term `eligible health and long-term care provider' 
                means a personal or home care agency (including personal 
                or home care public authorities), a nursing home, a home 
                health agency (as defined in section 1861(o)), or

[[Page 124 STAT. 668]]

                any other health care provider the Secretary determines 
                appropriate which--
                          ``(i) is licensed or authorized to provide 
                      services in a participating State; and
                          ``(ii) receives payment for services under 
                      title XIX.
                    ``(B) Personal care services.--The term `personal 
                care services' has the meaning given such term for 
                purposes of title XIX.
                    ``(C) Personal or home care aide.--The term 
                `personal or home care aide' means an individual who 
                helps individuals who are elderly, disabled, ill, or 
                mentally disabled (including an individual with 
                Alzheimer's disease or other dementia) to live in their 
                own home or a residential care facility (such as a 
                nursing home, assisted living facility, or any other 
                facility the Secretary determines appropriate) by 
                providing routine personal care services and other 
                appropriate services to the individual.
                    ``(D) State.--The term `State' has the meaning given 
                that term for purposes of title XIX.

    ``(c) Funding.--
            ``(1) In general.--Subject to paragraph (2), out of any 
        funds in the Treasury not otherwise appropriated, there are 
        appropriated to the Secretary to carry out subsections (a) and 
        (b), $85,000,000 for each of fiscal years 2010 through 2014.
            ``(2) Training and certification programs for personal and 
        home care aides.--With respect to the demonstration projects 
        under subsection (b), the Secretary shall use $5,000,000 of the 
        amount appropriated under paragraph (1) for each of fiscal years 
        2010 through 2012 to carry out such projects. No funds 
        appropriated under paragraph (1) shall be used to carry out 
        demonstration projects under subsection (b) after fiscal year 
        2012.

    ``(d) Nonapplication.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        preceding sections of this title shall not apply to grant 
        awarded under this section.
            ``(2) Limitations on use of 
        grants. <<NOTE: Applicability.>> --Section 2005(a) (other than 
        paragraph (6)) shall apply to a grant awarded under this section 
        to the same extent and in the same manner as such section 
        applies to payments to States under this title.''.

    (b) Extension of Family-To-Family Health Information Centers.--
Section 501(c)(1)(A)(iii) of the Social Security Act (42 U.S.C. 
701(c)(1)(A)(iii)) is amended by striking ``fiscal year 2009'' and 
inserting ``each of fiscal years 2009 through 2012''.

SEC. 5508. INCREASING TEACHING CAPACITY.

    (a) Teaching Health Centers Training and Enhancement.--Part C of 
title VII of the Public Health Service Act (42 U.S.C. 293k et. seq.), as 
amended by section 5303, is further amended by inserting after section 
749 the following:

``SEC. 749A. <<NOTE: 42 USC 239l-1.>> TEACHING HEALTH CENTERS 
            DEVELOPMENT GRANTS.

    ``(a) Program Authorized.--The Secretary may award grants under this 
section to teaching health centers for the purpose of establishing new 
accredited or expanded primary care residency programs.

[[Page 124 STAT. 669]]

    ``(b) Amount and Duration.--Grants awarded under this section shall 
be for a term of not more than 3 years and the maximum award may not be 
more than $500,000.
    ``(c) Use of Funds.--Amounts provided under a grant under this 
section shall be used to cover the costs of--
            ``(1) establishing or expanding a primary care residency 
        training program described in subsection (a), including costs 
        associated with--
                    ``(A) curriculum development;
                    ``(B) recruitment, training and retention of 
                residents and faculty:
                    ``(C) accreditation by the Accreditation Council for 
                Graduate Medical Education (ACGME), the American Dental 
                Association (ADA), or the American Osteopathic 
                Association (AOA); and
                    ``(D) faculty salaries during the development phase; 
                and
            ``(2) technical assistance provided by an eligible entity.

    ``(d) Application.--A teaching health center seeking a grant under 
this section shall submit an application to the Secretary at such time, 
in such manner, and containing such information as the Secretary may 
require.
    ``(e) Preference for Certain Applications.--In selecting recipients 
for grants under this section, the Secretary shall give preference to 
any such application that documents an existing affiliation agreement 
with an area health education center program as defined in sections 751 
and 799B.
    ``(f) Definitions.--In this section:
            ``(1) Eligible entity.--The term `eligible entity' means an 
        organization capable of providing technical assistance including 
        an area health education center program as defined in sections 
        751 and 799B.
            ``(2) Primary care residency program.--The term `primary 
        care residency program' means an approved graduate medical 
        residency training program (as defined in section 340H) in 
        family medicine, internal medicine, pediatrics, internal 
        medicine-pediatrics, obstetrics and gynecology, psychiatry, 
        general dentistry, pediatric dentistry, and geriatrics.
            ``(3) Teaching health center.--
                    ``(A) In general.--The term `teaching health center' 
                means an entity that--
                          ``(i) is a community based, ambulatory patient 
                      care center; and
                          ``(ii) operates a primary care residency 
                      program.
                    ``(B) Inclusion of certain entities.--Such term 
                includes the following:
                          ``(i) A Federally qualified health center (as 
                      defined in section 1905(l)(2)(B), of the Social 
                      Security Act).
                          ``(ii) A community mental health center (as 
                      defined in section 1861(ff)(3)(B) of the Social 
                      Security Act).
                          ``(iii) A rural health clinic, as defined in 
                      section 1861(aa) of the Social Security Act.
                          ``(iv) A health center operated by the Indian 
                      Health Service, an Indian tribe or tribal 
                      organization, or an urban Indian organization (as 
                      defined in section 4 of the Indian Health Care 
                      Improvement Act).

[[Page 124 STAT. 670]]

                          ``(v) An entity receiving funds under title X 
                      of the Public Health Service Act.

    ``(g) Authorization of Appropriations.--There is authorized to be 
appropriated, $25,000,000 for fiscal year 2010, $50,000,000 for fiscal 
year 2011, $50,000,000 for fiscal year 2012, and such sums as may be 
necessary for each fiscal year thereafter to carry out this section. Not 
to exceed $5,000,000 annually may be used for technical assistance 
program grants.''.
    (b) National Health Service Corps Teaching Capacity.--Section 
338C(a) of the Public Health Service Act (42 U.S.C. 254m(a)) is amended 
to read as follows:
    ``(a) <<NOTE: Contracts.>> Service in Full-time Clinical Practice.--
Except as provided in section 338D, each individual who has entered into 
a written contract with the Secretary under section 338A or 338B shall 
provide service in the full-time clinical practice of such individual's 
profession as a member of the Corps for the period of obligated service 
provided in such contract. For the purpose of calculating time spent in 
full-time clinical practice under this subsection, up to 50 percent of 
time spent teaching by a member of the Corps may be counted toward his 
or her service obligation.''.

    (c) Payments to Qualified Teaching Health Centers.--Part D of title 
III of the Public Health Service Act (42 U.S.C. 254b et seq.) is amended 
by adding at the end the following:

    ``Subpart XI--Support of Graduate Medical Education in Qualified 
                         Teaching Health Centers

``SEC. 340H. <<NOTE: 42 USC 256h.>> PROGRAM OF PAYMENTS TO TEACHING 
            HEALTH CENTERS THAT OPERATE GRADUATE MEDICAL EDUCATION 
            PROGRAMS.

    ``(a) Payments.--Subject to subsection (h)(2), the Secretary shall 
make payments under this section for direct expenses and for indirect 
expenses to qualified teaching health centers that are listed as 
sponsoring institutions by the relevant accrediting body for expansion 
of existing or establishment of new approved graduate medical residency 
training programs.
    ``(b) Amount of Payments.--
            ``(1) In general.--Subject to paragraph (2), the amounts 
        payable under this section to qualified teaching health centers 
        for an approved graduate medical residency training program for 
        a fiscal year are each of the following amounts:
                    ``(A) Direct expense amount.--The amount determined 
                under subsection (c) for direct expenses associated with 
                sponsoring approved graduate medical residency training 
                programs.
                    ``(B) Indirect expense amount.--The amount 
                determined under subsection (d) for indirect expenses 
                associated with the additional costs relating to 
                teaching residents in such programs.
            ``(2) Capped amount.--
                    ``(A) In general.--The total of the payments made to 
                qualified teaching health centers under paragraph (1)(A) 
                or paragraph (1)(B) in a fiscal year shall not exceed 
                the amount of funds appropriated under subsection (g) 
                for such payments for that fiscal year.
                    ``(B) Limitation.--The Secretary shall limit the 
                funding of full-time equivalent residents in order to 
                ensure

[[Page 124 STAT. 671]]

                the direct and indirect payments as determined under 
                subsection (c) and (d) do not exceed the total amount of 
                funds appropriated in a fiscal year under subsection 
                (g).

    ``(c) Amount of Payment for Direct Graduate Medical Education.--
            ``(1) In general.--The amount determined under this 
        subsection for payments to qualified teaching health centers for 
        direct graduate expenses relating to approved graduate medical 
        residency training programs for a fiscal year is equal to the 
        product of--
                    ``(A) the updated national per resident amount for 
                direct graduate medical education, as determined under 
                paragraph (2); and
                    ``(B) the average number of full-time equivalent 
                residents in the teaching health center's graduate 
                approved medical residency training programs as 
                determined under section 1886(h)(4) of the Social 
                Security Act (without regard to the limitation under 
                subparagraph (F) of such section) during the fiscal 
                year.
            ``(2) Updated national per resident amount for direct 
        graduate medical education.--The updated per resident amount for 
        direct graduate medical education for a qualified teaching 
        health center for a fiscal year is an amount determined as 
        follows:
                    ``(A) Determination of qualified teaching health 
                center per resident amount.--The Secretary shall compute 
                for each individual qualified teaching health center a 
                per resident amount--
                          ``(i) by dividing the national average per 
                      resident amount computed under section 
                      340E(c)(2)(D) into a wage-related portion and a 
                      non-wage related portion by applying the 
                      proportion determined under subparagraph (B);
                          ``(ii) by multiplying the wage-related portion 
                      by the factor applied under section 1886(d)(3)(E) 
                      of the Social Security Act (but without 
                      application of section 4410 of the Balanced Budget 
                      Act of 1997 (42 U.S.C. 1395ww note)) during the 
                      preceding fiscal year for the teaching health 
                      center's area; and
                          ``(iii) by adding the non-wage-related portion 
                      to the amount computed under clause (ii).
                    ``(B) Updating rate.--The Secretary shall update 
                such per resident amount for each such qualified 
                teaching health center as determined appropriate by the 
                Secretary.

    ``(d) Amount of Payment for Indirect Medical Education.--
            ``(1) <<NOTE: Determination.>> In general.--The amount 
        determined under this subsection for payments to qualified 
        teaching health centers for indirect expenses associated with 
        the additional costs of teaching residents for a fiscal year is 
        equal to an amount determined appropriate by the Secretary.
            ``(2) Factors.--In determining the amount under paragraph 
        (1), the Secretary shall--
                    ``(A) evaluate indirect training costs relative to 
                supporting a primary care residency program in qualified 
                teaching health centers; and
                    ``(B) based on this evaluation, assure that the 
                aggregate of the payments for indirect expenses under 
                this section

[[Page 124 STAT. 672]]

                and the payments for direct graduate medical education 
                as determined under subsection (c) in a fiscal year do 
                not exceed the amount appropriated for such expenses as 
                determined in subsection (g).
            ``(3) Interim payment.--Before the Secretary makes a payment 
        under this subsection pursuant to a determination of indirect 
        expenses under paragraph (1), the Secretary may provide to 
        qualified teaching health centers a payment, in addition to any 
        payment made under subsection (c), for expected indirect 
        expenses associated with the additional costs of teaching 
        residents for a fiscal year, based on an estimate by the 
        Secretary.

    ``(e) Clarification Regarding Relationship to Other Payments for 
Graduate Medical Education.--Payments under this section--
            ``(1) shall be in addition to any payments--
                    ``(A) for the indirect costs of medical education 
                under section 1886(d)(5)(B) of the Social Security Act;
                    ``(B) for direct graduate medical education costs 
                under section 1886(h) of such Act; and
                    ``(C) for direct costs of medical education under 
                section 1886(k) of such Act;
            ``(2) shall not be taken into account in applying the 
        limitation on the number of total full-time equivalent residents 
        under subparagraphs (F) and (G) of section 1886(h)(4) of such 
        Act and clauses (v), (vi)(I), and (vi)(II) of section 
        1886(d)(5)(B) of such Act for the portion of time that a 
        resident rotates to a hospital; and
            ``(3) shall not include the time in which a resident is 
        counted toward full-time equivalency by a hospital under 
        paragraph (2) or under section 1886(d)(5)(B)(iv) of the Social 
        Security Act, section 1886(h)(4)(E) of such Act, or section 340E 
        of this Act.

    ``(f) <<NOTE: Determination.>> Reconciliation.--The Secretary shall 
determine any changes to the number of residents reported by a hospital 
in the application of the hospital for the current fiscal year to 
determine the final amount payable to the hospital for the current 
fiscal year for both direct expense and indirect expense amounts. Based 
on such determination, the Secretary shall recoup any overpayments made 
to pay any balance due to the extent possible. The final amount so 
determined shall be considered a final intermediary determination for 
the purposes of section 1878 of the Social Security Act and shall be 
subject to administrative and judicial review under that section in the 
same manner as the amount of payment under section 1186(d) of such Act 
is subject to review under such section.

    ``(g) Funding.--To carry out this section, there are appropriated 
such sums as may be necessary, not to exceed $230,000,000, for the 
period of fiscal years 2011 through 2015.
    ``(h) Annual Reporting Required.--
            ``(1) Annual report.--The report required under this 
        paragraph for a qualified teaching health center for a fiscal 
        year is a report that includes (in a form and manner specified 
        by the Secretary) the following information for the residency 
        academic year completed immediately prior to such fiscal year:
                    ``(A) The types of primary care resident approved 
                training programs that the qualified teaching health 
                center provided for residents.

[[Page 124 STAT. 673]]

                    ``(B) The number of approved training positions for 
                residents described in paragraph (4).
                    ``(C) The number of residents described in paragraph 
                (4) who completed their residency training at the end of 
                such residency academic year and care for vulnerable 
                populations living in underserved areas.
                    ``(D) Other information as deemed appropriate by the 
                Secretary.
            ``(2) Audit authority; limitation on payment.--
                    ``(A) Audit authority.--The Secretary may audit a 
                qualified teaching health center to ensure the accuracy 
                and completeness of the information submitted in a 
                report under paragraph (1).
                    ``(B) Limitation on payment.--A teaching health 
                center may only receive payment in a cost reporting 
                period for a number of such resident positions that is 
                greater than the base level of primary care resident 
                positions, as determined by the Secretary. For purposes 
                of this subparagraph, the `base level of primary care 
                residents' for a teaching health center is the level of 
                such residents as of a base period.
            ``(3) Reduction in payment for failure to report.--
                    ``(A) <<NOTE: Determination.>> In general.--The 
                amount payable under this section to a qualified 
                teaching health center for a fiscal year shall be 
                reduced by at least 25 percent if the Secretary 
                determines that--
                          ``(i) the qualified teaching health center has 
                      failed to provide the Secretary, as an addendum to 
                      the qualified teaching health center's application 
                      under this section for such fiscal year, the 
                      report required under paragraph (1) for the 
                      previous fiscal year; or
                          ``(ii) such report fails to provide complete 
                      and accurate information required under any 
                      subparagraph of such paragraph.
                    ``(B) Notice and opportunity to provide accurate and 
                missing information. <<NOTE: Deadline.>> --Before 
                imposing a reduction under subparagraph (A) on the basis 
                of a qualified teaching health center's failure to 
                provide complete and accurate information described in 
                subparagraph (A)(ii), the Secretary shall provide notice 
                to the teaching health center of such failure and the 
                Secretary's intention to impose such reduction and shall 
                provide the teaching health center with the opportunity 
                to provide the required information within the period of 
                30 days beginning on the date of such notice. If the 
                teaching health center provides such information within 
                such period, no reduction shall be made under 
                subparagraph (A) on the basis of the previous failure to 
                provide such information.
            ``(4) Residents.--The residents described in this paragraph 
        are those who are in part-time or full-time equivalent resident 
        training positions at a qualified teaching health center in any 
        approved graduate medical residency training program.

    ``(i) Regulations.--The Secretary shall promulgate regulations to 
carry out this section.
    ``(j) Definitions.--In this section:
            ``(1) Approved graduate medical residency training 
        program.--The term `approved graduate medical residency

[[Page 124 STAT. 674]]

        training program' means a residency or other postgraduate 
        medical training program--
                    ``(A) participation in which may be counted toward 
                certification in a specialty or subspecialty and 
                includes formal postgraduate training programs in 
                geriatric medicine approved by the Secretary; and
                    ``(B) that meets criteria for accreditation (as 
                established by the Accreditation Council for Graduate 
                Medical Education, the American Osteopathic Association, 
                or the American Dental Association).
            ``(2) Primary care residency program.--The term `primary 
        care residency program' has the meaning given that term in 
        section 749A.
            ``(3) Qualified teaching health center.--The term `qualified 
        teaching health center' has the meaning given the term `teaching 
        health center' in section 749A.''.

SEC. 5509. <<NOTE: 42 USC 1395ww note.>> GRADUATE NURSE EDUCATION 
            DEMONSTRATION.

    (a) In General.--
            (1) Establishment.--
                    (A) In general.--The Secretary shall establish a 
                graduate nurse education demonstration under title XVIII 
                of the Social Security Act (42 U.S.C. 1395 et seq.) 
                under which an eligible hospital may receive payment for 
                the hospital's reasonable costs (described in paragraph 
                (2)) for the provision of qualified clinical training to 
                advance practice nurses.
                    (B) Number.--The demonstration shall include up to 5 
                eligible hospitals.
                    (C) Written agreements.--Eligible hospitals selected 
                to participate in the demonstration shall enter into 
                written agreements pursuant to subsection (b) in order 
                to reimburse the eligible partners of the hospital the 
                share of the costs attributable to each partner.
            (2) Costs described.--
                    (A) In general.--Subject to subparagraph (B) and 
                subsection (d), the costs described in this paragraph 
                are the reasonable costs (as described in section 
                1861(v) of the Social Security Act (42 U.S.C. 1395x(v))) 
                of each eligible hospital for the clinical training 
                costs (as determined by the Secretary) that are 
                attributable to providing advanced practice registered 
                nurses with qualified training.
                    (B) <<NOTE: Time period.>> Limitation.--With respect 
                to a year, the amount reimbursed under subparagraph (A) 
                may not exceed the amount of costs described in 
                subparagraph (A) that are attributable to an increase in 
                the number of advanced practice registered nurses 
                enrolled in a program that provides qualified training 
                during the year and for which the hospital is being 
                reimbursed under the demonstration, as compared to the 
                average number of advanced practice registered nurses 
                who graduated in each year during the period beginning 
                on January 1, 2006, and ending on December 31, 2010 (as 
                determined by the Secretary) from the graduate nursing 
                education program operated by the applicable school of 
                nursing that is an eligible partner of the hospital for 
                purposes of the demonstration.

[[Page 124 STAT. 675]]

            (3) 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.
            (4) Administration.--Chapter 35 of title 44, United States 
        Code, shall not apply to the implementation of this section.

    (b) Written Agreements With Eligible Partners.--No payment shall be 
made under this section to an eligible hospital unless such hospital has 
in effect a written agreement with the eligible partners of the 
hospital. Such written agreement shall describe, at a minimum--
            (1) the obligations of the eligible partners with respect to 
        the provision of qualified training; and
            (2) the obligation of the eligible hospital to reimburse 
        such eligible partners applicable (in a timely manner) for the 
        costs of such qualified training attributable to partner.

    (c) <<NOTE: Deadline. Reports.>> Evaluation.--Not later than October 
17, 2017, the Secretary shall submit to Congress a report on the 
demonstration. Such report shall include an analysis of the following:
            (1) The growth in the number of advanced practice registered 
        nurses with respect to a specific base year as a result of the 
        demonstration.
            (2) The growth for each of the specialties described in 
        subparagraphs (A) through (D) of subsection (e)(1).
            (3) The costs to the Medicare program under title XVIII of 
        the Social Security Act as a result of the demonstration.
            (4) Other items the Secretary determines appropriate and 
        relevant.

    (d) Funding.--
            (1) In general.--There is hereby appropriated to the 
        Secretary, out of any funds in the Treasury not otherwise 
        appropriated, $50,000,000 for each of fiscal years 2012 through 
        2015 to carry out this section, including the design, 
        implementation, monitoring, and evaluation of the demonstration.
            (2) Proration.--If the aggregate payments to eligible 
        hospitals under the demonstration exceed $50,000,000 for a 
        fiscal year described in paragraph (1), the Secretary shall 
        prorate the payment amounts to each eligible hospital in order 
        to ensure that the aggregate payments do not exceed such amount.
            (3) Without fiscal year limitation.--Amounts appropriated 
        under this subsection shall remain available without fiscal year 
        limitation.

    (e) Definitions.--In this section:
            (1) Advanced practice registered nurse.--The term ``advanced 
        practice registered nurse'' includes the following:
                    (A) A clinical nurse specialist (as defined in 
                subsection (aa)(5) of section 1861 of the Social 
                Security Act (42 U.S.C. 1395x)).
                    (B) A nurse practitioner (as defined in such 
                subsection).
                    (C) A certified registered nurse anesthetist (as 
                defined in subsection (bb)(2) of such section).
                    (D) A certified nurse-midwife (as defined in 
                subsection (gg)(2) of such section).
            (2) Applicable non-hospital community-based care setting.--
        The term ``applicable non-hospital community-based care 
        setting'' means a non-hospital community-based care setting 
        which has entered into a written agreement (as described in 
        subsection (b)) with the eligible hospital participating in the

[[Page 124 STAT. 676]]

        demonstration. Such settings include Federally qualified health 
        centers, rural health clinics, and other non-hospital settings 
        as determined appropriate by the Secretary.
            (3) Applicable school of nursing.--The term ``applicable 
        school of nursing'' means an accredited school of nursing (as 
        defined in section 801 of the Public Health Service Act) which 
        has entered into a written agreement (as described in subsection 
        (b)) with the eligible hospital participating in the 
        demonstration.
            (4) Demonstration.--The term ``demonstration'' means the 
        graduate nurse education demonstration established under 
        subsection (a).
            (5) Eligible hospital.--The term ``eligible hospital'' means 
        a hospital (as defined in subsection (e) of section 1861 of the 
        Social Security Act (42 U.S.C. 1395x)) or a critical access 
        hospital (as defined in subsection (mm)(1) of such section) that 
        has a written agreement in place with--
                    (A) 1 or more applicable schools of nursing; and
                    (B) 2 or more applicable non-hospital community-
                based care settings.
            (6) Eligible partners.--The term ``eligible partners'' 
        includes the following:
                    (A) An applicable non-hospital community-based care 
                setting.
                    (B) An applicable school of nursing.
            (7) Qualified training.--
                    (A) In general.--The term ``qualified training'' 
                means training--
                          (i) that provides an advanced practice 
                      registered nurse with the clinical skills 
                      necessary to provide primary care, preventive 
                      care, transitional care, chronic care management, 
                      and other services appropriate for individuals 
                      entitled to, or enrolled for, benefits under part 
                      A of title XVIII of the Social Security Act, or 
                      enrolled under part B of such title; and
                          (ii) subject to subparagraph (B), at least 
                      half of which is provided in a non-hospital 
                      community-based care setting.
                    (B) Waiver of requirement half of training be 
                provided in non-hospital community-based care setting in 
                certain areas.--The Secretary may waive the requirement 
                under subparagraph (A)(ii) with respect to eligible 
                hospitals located in rural or medically underserved 
                areas.
            (8) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.

          Subtitle G--Improving Access to Health Care Services

SEC. 5601. SPENDING FOR FEDERALLY QUALIFIED HEALTH CENTERS (FQHCS).

    (a) In General.--Section 330(r) of the Public Health Service Act (42 
U.S.C. 254b(r)) is amended by striking paragraph (1) and inserting the 
following:

[[Page 124 STAT. 677]]

            ``(1) General amounts for grants.--For the purpose of 
        carrying out this section, in addition to the amounts authorized 
        to be appropriated under subsection (d), there is authorized to 
        be appropriated the following:
                    ``(A) For fiscal year 2010, $2,988,821,592.
                    ``(B) For fiscal year 2011, $3,862,107,440.
                    ``(C) For fiscal year 2012, $4,990,553,440.
                    ``(D) For fiscal year 2013, $6,448,713,307.
                    ``(E) For fiscal year 2014, $7,332,924,155.
                    ``(F) For fiscal year 2015, $8,332,924,155.
                    ``(G) For fiscal year 2016, and each subsequent 
                fiscal year, the amount appropriated for the preceding 
                fiscal year adjusted by the product of--
                          ``(i) one plus the average percentage increase 
                      in costs incurred per patient served; and
                          ``(ii) one plus the average percentage 
                      increase in the total number of patients 
                      served.''.

    (b) Rule of Construction.--Section 330(r) of the Public Health 
Service Act (42 U.S.C. 254b(r)) is amended by adding at the end the 
following:
            ``(4) Rule of construction with respect to rural health 
        clinics.--
                    ``(A) In general.--Nothing in this section shall be 
                construed to prevent a community health center from 
                contracting with a Federally certified rural health 
                clinic (as defined in section 1861(aa)(2) of the Social 
                Security Act), a low-volume hospital (as defined for 
                purposes of section 1886 of such Act), a critical access 
                hospital, a sole community hospital (as defined for 
                purposes of section 1886(d)(5)(D)(iii) of such Act), or 
                a medicare-dependent share hospital (as defined for 
                purposes of section 1886(d)(5)(G)(iv) of such Act) for 
                the delivery of primary health care services that are 
                available at the clinic or hospital to individuals who 
                would otherwise be eligible for free or reduced cost 
                care if that individual were able to obtain that care at 
                the community health center. Such services may be 
                limited in scope to those primary health care services 
                available in that clinic or hospitals.
                    ``(B) Assurances.--In order for a clinic or hospital 
                to receive funds under this section through a contract 
                with a community health center under subparagraph (A), 
                such clinic or hospital shall establish policies to 
                ensure--
                          ``(i) nondiscrimination based on the ability 
                      of a patient to pay; and
                          ``(ii) the establishment of a sliding fee 
                      scale for low-income patients.''.

SEC. 5602. <<NOTE: Deadlines. 42 USC 254b note.>> NEGOTIATED RULEMAKING 
            FOR DEVELOPMENT OF METHODOLOGY AND CRITERIA FOR DESIGNATING 
            MEDICALLY UNDERSERVED POPULATIONS AND HEALTH PROFESSIONS 
            SHORTAGE AREAS.

    (a) Establishment.--
            (1) In general.--The Secretary of Health and Human Services 
        (in this section referred to as the ``Secretary'') shall 
        establish, through a negotiated rulemaking process under 
        subchapter 3 of chapter 5 of title 5, United States Code, a 
        comprehensive methodology and criteria for designation of--

[[Page 124 STAT. 678]]

                    (A) medically underserved populations in accordance 
                with section 330(b)(3) of the Public Health Service Act 
                (42 U.S.C. 254b(b)(3));
                    (B) health professions shortage areas under section 
                332 of the Public Health Service Act (42 U.S.C. 254e).
            (2) Factors to consider.--In establishing the methodology 
        and criteria under paragraph (1), the Secretary--
                    (A) shall consult with relevant stakeholders who 
                will be significantly affected by a rule (such as 
                national, State and regional organizations representing 
                affected entities), State health offices, community 
                organizations, health centers and other affected 
                entities, and other interested parties; and
                    (B) shall take into account--
                          (i) the timely availability and 
                      appropriateness of data used to determine a 
                      designation to potential applicants for such 
                      designations;
                          (ii) the impact of the methodology and 
                      criteria on communities of various types and on 
                      health centers and other safety net providers;
                          (iii) the degree of ease or difficulty that 
                      will face potential applicants for such 
                      designations in securing the necessary data; and
                          (iv) the extent to which the methodology 
                      accurately measures various barriers that confront 
                      individuals and population groups in seeking 
                      health care services.

    (b) <<NOTE: Deadline.>> Publication of Notice.--In carrying out the 
rulemaking process under this subsection, the Secretary shall publish 
the notice provided for under section 564(a) of title 5, United States 
Code, by not later than 45 days after the date of the enactment of this 
Act.

    (c) Target Date for Publication of Rule.--As part of the notice 
under subsection (b), and for purposes of this subsection, the ``target 
date for publication'', as referred to in section 564(a)(5) of title 5, 
United Sates Code, shall be July 1, 2010.
    (d) <<NOTE: Deadlines.>> Appointment of Negotiated Rulemaking 
Committee and Facilitator.--The Secretary shall provide for--
            (1) the appointment of a negotiated rulemaking committee 
        under section 565(a) of title 5, United States Code, by not 
        later than 30 days after the end of the comment period provided 
        for under section 564(c) of such title; and
            (2) the nomination of a facilitator under section 566(c) of 
        such title 5 by not later than 10 days after the date of 
        appointment of the committee.

    (e) Preliminary Committee Report.--The negotiated rulemaking 
committee appointed under subsection (d) shall report to the Secretary, 
by not later than April 1, 2010, regarding the committee's progress on 
achieving a consensus with regard to the rulemaking proceeding and 
whether such consensus is likely to occur before one month before the 
target date for publication of the rule. If the committee reports that 
the committee has failed to make significant progress toward such 
consensus or is unlikely to reach such consensus by the target date, the 
Secretary may terminate such process and provide for the publication of 
a rule under this section through such other methods as the Secretary 
may provide.

[[Page 124 STAT. 679]]

    (f) Final Committee Report.--If the committee is not terminated 
under subsection (e), the rulemaking committee shall submit a report 
containing a proposed rule by not later than one month before the target 
publication date.
    (g) <<NOTE: Regulations. Federal Register, publication.>> Interim 
Final Effect.--The Secretary shall publish a rule under this section in 
the Federal Register by not later than the target publication 
date. <<NOTE: Effective date. Public information.>> Such rule shall be 
effective and final immediately on an interim basis, but is subject to 
change and revision after public notice and opportunity for a period (of 
not less than 90 days) for public comment. In connection with such rule, 
the Secretary shall specify the process for the timely review and 
approval of applications for such designations pursuant to such rules 
and consistent with this section.

    (h) Publication of Rule After Public Comment.--The Secretary shall 
provide for consideration of such comments and republication of such 
rule by not later than 1 year after the target publication date.

SEC. 5603. REAUTHORIZATION OF THE WAKEFIELD EMERGENCY MEDICAL SERVICES 
            FOR CHILDREN PROGRAM.

    Section 1910 of the Public Health Service Act (42 U.S.C. 300w-9) is 
amended--
            (1) in subsection (a), by striking ``3-year period (with an 
        optional 4th year'' and inserting ``4-year period (with an 
        optional 5th year''; and
            (2) in subsection (d)--
                    (A) by striking ``and such sums'' and inserting 
                ``such sums''; and
                    (B) by inserting before the period the following: 
                ``, $25,000,000 for fiscal year 2010, $26,250,000 for 
                fiscal year 2011, $27,562,500 for fiscal year 2012, 
                $28,940,625 for fiscal year 2013, and $30,387,656 for 
                fiscal year 2014''.

SEC. 5604. CO-LOCATING PRIMARY AND SPECIALTY CARE IN COMMUNITY-BASED 
            MENTAL HEALTH SETTINGS.

    Subpart 3 of part B of title V of the Public Health Service Act (42 
U.S.C. 290bb-31 et seq.) is amended by adding at the end the following:

``SEC. 520K. <<NOTE: 42 USC 290bb-42.>> AWARDS FOR CO-LOCATING PRIMARY 
            AND SPECIALTY CARE IN COMMUNITY-BASED MENTAL HEALTH 
            SETTINGS.

    ``(a) Definitions.--In this section:
            ``(1) Eligible entity.--The term `eligible entity' means a 
        qualified community mental health program defined under section 
        1913(b)(1).
            ``(2) Special populations.--The term `special populations' 
        means adults with mental illnesses who have co-occurring primary 
        care conditions and chronic diseases.

    ``(b) <<NOTE: Grants. Contracts.>> Program Authorized.--The 
Secretary, acting through the Administrator shall award grants and 
cooperative agreements to eligible entities to establish demonstration 
projects for the provision of coordinated and integrated services to 
special populations through the co-location of primary and specialty 
care services in community-based mental and behavioral health settings.

    ``(c) Application.--To be eligible to receive a grant or cooperative 
agreement under this section, an eligible entity shall submit an 
application to the Administrator at such time, in such manner,

[[Page 124 STAT. 680]]

and accompanied by such information as the Administrator may require, 
including a description of partnerships, or other arrangements with 
local primary care providers, including community health centers, to 
provide services to special populations.
    ``(d) Use of Funds.--
            ``(1) In general.--For the benefit of special populations, 
        an eligible entity shall use funds awarded under this section 
        for--
                    ``(A) the provision, by qualified primary care 
                professionals, of on site primary care services;
                    ``(B) reasonable costs associated with medically 
                necessary referrals to qualified specialty care 
                professionals, other coordinators of care or, if 
                permitted by the terms of the grant or cooperative 
                agreement, by qualified specialty care professionals on 
                a reasonable cost basis on site at the eligible entity;
                    ``(C) information technology required to accommodate 
                the clinical needs of primary and specialty care 
                professionals; or
                    ``(D) facility modifications needed to bring primary 
                and specialty care professionals on site at the eligible 
                entity.
            ``(2) Limitation.--Not to exceed 15 percent of grant or 
        cooperative agreement funds may be used for activities described 
        in subparagraphs (C) and (D) of paragraph (1).

    ``(e) <<NOTE: Deadline.>> Evaluation.--Not later than 90 days after 
a grant or cooperative agreement awarded under this section expires, an 
eligible entity shall submit to the Secretary the results of an 
evaluation to be conducted by the entity concerning the effectiveness of 
the activities carried out under the grant or agreement.

    ``(f) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section, $50,000,000 for fiscal year 2010 
and such sums as may be necessary for each of fiscal years 2011 through 
2014.''.

SEC. 5605. <<NOTE: 36 USC 150303 note.>> KEY NATIONAL INDICATORS.

    (a) Definitions.--In this section:
            (1) Academy.--The term ``Academy'' means the National 
        Academy of Sciences.
            (2) Commission.--The term ``Commission'' means the 
        Commission on Key National Indicators established under 
        subsection (b).
            (3) Institute.--The term ``Institute'' means a Key National 
        Indicators Institute as designated under subsection (c)(3).

    (b) Commission on Key National Indicators.--
            (1) Establishment.--There is established a ``Commission on 
        Key National Indicators''.
            (2) Membership.--
                    (A) Number and appointment.--The Commission shall be 
                composed of 8 members, to be appointed equally by the 
                majority and minority leaders of the Senate and the 
                Speaker and minority leader of the House of 
                Representatives.
                    (B) Prohibited appointments.--Members of the 
                Commission shall not include Members of Congress or 
                other elected Federal, State, or local government 
                officials.
                    (C) Qualifications.--In making appointments under 
                subparagraph (A), the majority and minority leaders of

[[Page 124 STAT. 681]]

                the Senate and the Speaker and minority leader of the 
                House of Representatives shall appoint individuals who 
                have shown a dedication to improving civic dialogue and 
                decision-making through the wide use of scientific 
                evidence and factual information.
                    (D) Period of appointment.--Each member of the 
                Commission shall be appointed for a 2-year term, except 
                that 1 initial appointment shall be for 3 years. Any 
                vacancies shall not affect the power and duties of the 
                Commission but shall be filled in the same manner as the 
                original appointment and shall last only for the 
                remainder of that term.
                    (E) Date.--Members of the Commission shall be 
                appointed by not later than 30 days after the date of 
                enactment of this Act.
                    (F) Initial organizing period.---Not later than 60 
                days after the date of enactment of this Act, the 
                Commission shall develop and implement a schedule for 
                completion of the review and reports required under 
                subsection (d).
                    (G) Co-chairpersons.--The Commission shall select 2 
                Co-Chairpersons from among its members.

    (c) Duties of the Commission.--
            (1) In general.--The Commission shall--
                    (A) conduct comprehensive oversight of a newly 
                established key national indicators system consistent 
                with the purpose described in this subsection;
                    (B) make recommendations on how to improve the key 
                national indicators system;
                    (C) coordinate with Federal Government users and 
                information providers to assure access to relevant and 
                quality data; and
                    (D) <<NOTE: Contracts.>> enter into contracts with 
                the Academy.
            (2) Reports.--
                    (A) Annual report to congress.--Not later than 1 
                year after the selection of the 2 Co-Chairpersons of the 
                Commission, and each subsequent year thereafter, the 
                Commission shall prepare and submit to the appropriate 
                Committees of Congress and the President a report that 
                contains a detailed statement of the recommendations, 
                findings, and conclusions of the Commission on the 
                activities of the Academy and a designated Institute 
                related to the establishment of a Key National Indicator 
                System.
                    (B) Annual report to the academy.--
                          (i) In general.--Not later than 6 months after 
                      the selection of the 2 Co-Chairpersons of the 
                      Commission, and each subsequent year thereafter, 
                      the Commission shall prepare and submit to the 
                      Academy and a designated Institute a report making 
                      recommendations concerning potential issue areas 
                      and key indicators to be included in the Key 
                      National Indicators.
                          (ii) Limitation.--The Commission shall not 
                      have the authority to direct the Academy or, if 
                      established, the Institute, to adopt, modify, or 
                      delete any key indicators.
            (3) Contract with the national academy of sciences.--
                    (A) In general.---As soon as practicable after the 
                selection of the 2 Co-Chairpersons of the Commission, 
                the

[[Page 124 STAT. 682]]

                Co-Chairpersons shall enter into an arrangement with the 
                National Academy of Sciences under which the Academy 
                shall--
                          (i) review available public and private sector 
                      research on the selection of a set of key national 
                      indicators;
                          (ii) determine how best to establish a key 
                      national indicator system for the United States, 
                      by either creating its own institutional 
                      capability or designating an independent private 
                      nonprofit organization as an Institute to 
                      implement a key national indicator system;
                          (iii) if the Academy designates an independent 
                      Institute under clause (ii), provide scientific 
                      and technical advice to the Institute and create 
                      an appropriate governance mechanism that balances 
                      Academy involvement and the independence of the 
                      Institute; and
                          (iv) <<NOTE: Reports.>> provide an annual 
                      report to the Commission addressing scientific and 
                      technical issues related to the key national 
                      indicator system and, if established, the 
                      Institute, and governance of the Institute's 
                      budget and operations.
                    (B) Participation.--In executing the arrangement 
                under subparagraph (A), the National Academy of Sciences 
                shall convene a multi-sector, multi-disciplinary process 
                to define major scientific and technical issues 
                associated with developing, maintaining, and evolving a 
                Key National Indicator System and, if an Institute is 
                established, to provide it with scientific and technical 
                advice.
                    (C) Establishment of a key national indicator 
                system.--
                          (i) In general.--In executing the arrangement 
                      under subparagraph (A), the National Academy of 
                      Sciences shall enable the establishment of a key 
                      national indicator system by--
                                    (I) creating its own institutional 
                                capability; or
                                    (II) partnering with an independent 
                                private nonprofit organization as an 
                                Institute to implement a key national 
                                indicator system.
                          (ii) Institute.--If the Academy designates an 
                      Institute under clause (i)(II), such Institute 
                      shall be a non-profit entity (as defined for 
                      purposes of section 501(c)(3) of the Internal 
                      Revenue Code of 1986) with an educational mission, 
                      a governance structure that emphasizes 
                      independence, and characteristics that make such 
                      entity appropriate for establishing a key national 
                      indicator system.
                          (iii) Responsibilities.--Either the Academy or 
                      the Institute designated under clause (i)(II) 
                      shall be responsible for the following:
                                    (I) Identifying and selecting issue 
                                areas to be represented by the key 
                                national indicators.
                                    (II) Identifying and selecting the 
                                measures used for key national 
                                indicators within the issue areas under 
                                subclause (I).

[[Page 124 STAT. 683]]

                                    (III) Identifying and selecting data 
                                to populate the key national indicators 
                                described under subclause (II).
                                    (IV) Designing, publishing, and 
                                maintaining a public website that 
                                contains a freely accessible database 
                                allowing public access to the key 
                                national indicators.
                                    (V) Developing a quality assurance 
                                framework to ensure rigorous and 
                                independent processes and the selection 
                                of quality data.
                                    (VI) Developing a budget for the 
                                construction and management of a 
                                sustainable, adaptable, and evolving key 
                                national indicator system that reflects 
                                all Commission funding of Academy and, 
                                if an Institute is established, 
                                Institute activities.
                                    (VII) <<NOTE: Reports.>> Reporting 
                                annually to the Commission regarding its 
                                selection of issue areas, key 
                                indicators, data, and progress toward 
                                establishing a web-accessible database.
                                    (VIII) Responding directly to the 
                                Commission in response to any Commission 
                                recommendations and to the Academy 
                                regarding any inquiries by the Academy.
                          (iv) Governance.--Upon the establishment of a 
                      key national indicator system, the Academy shall 
                      create an appropriate governance mechanism that 
                      incorporates advisory and control functions. If an 
                      Institute is designated under clause (i)(II), the 
                      governance mechanism shall balance appropriate 
                      Academy involvement and the independence of the 
                      Institute.
                          (v) Modification and changes.--The Academy 
                      shall retain the sole discretion, at any time, to 
                      alter its approach to the establishment of a key 
                      national indicator system or, if an Institute is 
                      designated under clause (i)(II), to alter any 
                      aspect of its relationship with the Institute or 
                      to designate a different non-profit entity to 
                      serve as the Institute.
                          (vi) Construction.--Nothing in this section 
                      shall be construed to limit the ability of the 
                      Academy or the Institute designated under clause 
                      (i)(II) to receive private funding for activities 
                      related to the establishment of a key national 
                      indicator system.
                    (D) Annual report.--As part of the arrangement under 
                subparagraph (A), the National Academy of Sciences 
                shall, not later than 270 days after the date of 
                enactment of this Act, and annually thereafter, submit 
                to the Co-Chairpersons of the Commission a report that 
                contains the findings and recommendations of the 
                Academy.

    (d) Government Accountability Office Study and Report.--
            (1) GAO study.--The Comptroller General of the United States 
        shall conduct a study of previous work conducted by all public 
        agencies, private organizations, or foreign countries with 
        respect to best practices for a key national indicator system. 
        The study shall be submitted to the appropriate authorizing 
        committees of Congress.

[[Page 124 STAT. 684]]

            (2) GAO financial audit.--If an Institute is established 
        under this section, the Comptroller General shall conduct an 
        annual audit of the financial statements of the Institute, in 
        accordance with generally accepted government auditing standards 
        and submit a report on such audit to the Commission and the 
        appropriate authorizing committees of Congress.
            (3) GAO programmatic review.--The Comptroller General of the 
        United States shall conduct programmatic assessments of the 
        Institute established under this section as determined necessary 
        by the Comptroller General and report the findings to the 
        Commission and to the appropriate authorizing committees of 
        Congress.

    (e) Authorization of Appropriations.--
            (1) In general.---There are authorized to be appropriated to 
        carry out the purposes of this section, $10,000,000 for fiscal 
        year 2010, and $7,500,000 for each of fiscal year 2011 through 
        2018.
            (2) Availability.---Amounts appropriated under paragraph (1) 
        shall remain available until expended.

                     Subtitle H--General Provisions

SEC. 5701. <<NOTE: 42 USC 204 note.>> REPORTS.

    (a) Reports by Secretary of Health and Human Services.--On an annual 
basis, the Secretary of Health and Human Services shall submit to the 
appropriate Committees of Congress a report on the activities carried 
out under the amendments made by this title, and the effectiveness of 
such activities.
    (b) Reports by Recipients of Funds.--The Secretary of Health and 
Human Services may require, as a condition of receiving funds under the 
amendments made by this title, that the entity receiving such award 
submit to such Secretary such reports as the such Secretary may require 
on activities carried out with such award, and the effectiveness of such 
activities.

              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.

    (a) In General.--Section 1877 of the Social Security Act (42 U.S.C. 
1395nn) is amended--
            (1) in subsection (d)(2)--
                    (A) in subparagraph (A), by striking ``and'' at the 
                end;
                    (B) in subparagraph (B), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(C) in the case where the entity is a hospital, 
                the hospital meets the requirements of paragraph 
                (3)(D).'';

[[Page 124 STAT. 685]]

            (2) in subsection (d)(3)--
                    (A) in subparagraph (B), by striking ``and'' at the 
                end;
                    (B) in subparagraph (C), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(D) <<NOTE: Deadline.>> the hospital meets the 
                requirements described in subsection (i)(1) not later 
                than 18 months after the date of the enactment of this 
                subparagraph.''; and
            (3) by adding at the end the following new subsection:

    ``(i) Requirements for Hospitals To Qualify for Rural Provider and 
Hospital Exception to Ownership or Investment Prohibition.--
            ``(1) Requirements described.--For purposes of subsection 
        (d)(3)(D), the requirements described in this paragraph for a 
        hospital are as follows:
                    ``(A) Provider agreement.--The hospital had--
                          ``(i) physician ownership or investment on 
                      February 1, 2010; and
                          ``(ii) a provider agreement under section 1866 
                      in effect on such date.
                    ``(B) Limitation on expansion of facility 
                capacity.--Except as provided in paragraph (3), the 
                number of operating rooms, procedure rooms, and beds for 
                which the hospital is licensed at any time on or after 
                the date of the enactment of this subsection is no 
                greater than the number of operating rooms, procedure 
                rooms, and beds for which the hospital is licensed as of 
                such date.
                    ``(C) Preventing conflicts of interest.--
                          ``(i) <<NOTE: Reports.>> The hospital submits 
                      to the Secretary an annual report containing a 
                      detailed description of--
                                    ``(I) the identity of each physician 
                                owner or investor and any other owners 
                                or investors of the hospital; and
                                    ``(II) the nature and extent of all 
                                ownership and investment interests in 
                                the hospital.
                          ``(ii) The hospital has procedures in place to 
                      require that any referring physician owner or 
                      investor discloses to the patient being referred, 
                      by a time that permits the patient to make a 
                      meaningful decision regarding the receipt of care, 
                      as determined by the Secretary--
                                    ``(I) the ownership or investment 
                                interest, as applicable, of such 
                                referring physician in the hospital; and
                                    ``(II) if applicable, any such 
                                ownership or investment interest of the 
                                treating physician.
                          ``(iii) The hospital does not condition any 
                      physician ownership or investment interests either 
                      directly or indirectly on the physician owner or 
                      investor making or influencing referrals to the 
                      hospital or otherwise generating business for the 
                      hospital.
                          ``(iv) The hospital discloses the fact that 
                      the hospital is partially owned or invested in by 
                      physicians--
                                    ``(I) on any public website for the 
                                hospital; and
                                    ``(II) in any public advertising for 
                                the hospital.
                    ``(D) Ensuring bona fide investment.--

[[Page 124 STAT. 686]]

                          ``(i) The percentage of the total value of the 
                      ownership or investment interests held in the 
                      hospital, or in an entity whose assets include the 
                      hospital, by physician owners or investors in the 
                      aggregate does not exceed such percentage as of 
                      the date of enactment of this subsection.
                          ``(ii) Any ownership or investment interests 
                      that the hospital offers to a physician owner or 
                      investor are not offered on more favorable terms 
                      than the terms offered to a person who is not a 
                      physician owner or investor.
                          ``(iii) The hospital (or any owner or investor 
                      in the hospital) does not directly or indirectly 
                      provide loans or financing for any investment in 
                      the hospital by a physician owner or investor.
                          ``(iv) The hospital (or any owner or investor 
                      in the hospital) does not directly or indirectly 
                      guarantee a loan, make a payment toward a loan, or 
                      otherwise subsidize a loan, for any individual 
                      physician owner or investor or group of physician 
                      owners or investors that is related to acquiring 
                      any ownership or investment interest in the 
                      hospital.
                          ``(v) Ownership or investment returns are 
                      distributed to each owner or investor in the 
                      hospital in an amount that is directly 
                      proportional to the ownership or investment 
                      interest of such owner or investor in the 
                      hospital.
                          ``(vi) Physician owners and investors do not 
                      receive, directly or indirectly, any guaranteed 
                      receipt of or right to purchase other business 
                      interests related to the hospital, including the 
                      purchase or lease of any property under the 
                      control of other owners or investors in the 
                      hospital or located near the premises of the 
                      hospital.
                          ``(vii) The hospital does not offer a 
                      physician owner or investor the opportunity to 
                      purchase or lease any property under the control 
                      of the hospital or any other owner or investor in 
                      the hospital on more favorable terms than the 
                      terms offered to an individual who is not a 
                      physician owner or investor.
                    ``(E) Patient safety.--
                          ``(i) Insofar as the hospital admits a patient 
                      and does not have any physician available on the 
                      premises to provide services during all hours in 
                      which the hospital is providing services to such 
                      patient, before admitting the patient--
                                    ``(I) the hospital discloses such 
                                fact to a patient; and
                                    ``(II) following such disclosure, 
                                the hospital receives from the patient a 
                                signed acknowledgment that the patient 
                                understands such fact.
                          ``(ii) The hospital has the capacity to--
                                    ``(I) provide assessment and initial 
                                treatment for patients; and
                                    ``(II) refer and transfer patients 
                                to hospitals with the capability to 
                                treat the needs of the patient involved.

[[Page 124 STAT. 687]]

                    ``(F) Limitation on application to certain converted 
                facilities.--The hospital was not converted from an 
                ambulatory surgical center to a hospital on or after the 
                date of enactment of this subsection.
            ``(2) <<NOTE: Deadline. Web posting.>> Publication of 
        information reported.--The Secretary shall publish, and update 
        on an annual basis, the information submitted by hospitals under 
        paragraph (1)(C)(i) on the public Internet website of the 
        Centers for Medicare & Medicaid Services.
            ``(3) Exception to prohibition on expansion of facility 
        capacity.--
                    ``(A) Process.--
                          ``(i) Establishment.--The Secretary shall 
                      establish and implement a process under which an 
                      applicable hospital (as defined in subparagraph 
                      (E)) may apply for an exception from the 
                      requirement under paragraph (1)(B).
                          ``(ii) Opportunity for community input.--The 
                      process under clause (i) shall provide individuals 
                      and entities in the community in which the 
                      applicable hospital applying for an exception is 
                      located with the opportunity to provide input with 
                      respect to the application.
                          ``(iii) Timing for implementation.--The 
                      Secretary shall implement the process under clause 
                      (i) on August 1, 2011.
                          ``(iv) <<NOTE: Deadline.>> Regulations.--Not 
                      later than July 1, 2011, the Secretary shall 
                      promulgate regulations to carry out the process 
                      under clause (i).
                    ``(B) Frequency.--The process described in 
                subparagraph (A) shall permit an applicable hospital to 
                apply for an exception up to once every 2 years.
                    ``(C) Permitted increase.--
                          ``(i) In general.--Subject to clause (ii) and 
                      subparagraph (D), an applicable hospital granted 
                      an exception under the process described in 
                      subparagraph (A) may increase the number of 
                      operating rooms, procedure rooms, and beds for 
                      which the applicable hospital is licensed above 
                      the baseline number of operating rooms, procedure 
                      rooms, and beds of the applicable hospital (or, if 
                      the applicable hospital has been granted a 
                      previous exception under this paragraph, above the 
                      number of operating rooms, procedure rooms, and 
                      beds for which the hospital is licensed after the 
                      application of the most recent increase under such 
                      an exception).
                          ``(ii) 100 percent increase limitation.--The 
                      Secretary shall not permit an increase in the 
                      number of operating rooms, procedure rooms, and 
                      beds for which an applicable hospital is licensed 
                      under clause (i) to the extent such increase would 
                      result in the number of operating rooms, procedure 
                      rooms, and beds for which the applicable hospital 
                      is licensed exceeding 200 percent of the baseline 
                      number of operating rooms, procedure rooms, and 
                      beds of the applicable hospital.
                          ``(iii) Baseline number of operating rooms, 
                      procedure rooms, and beds.--In this paragraph, the 
                      term `baseline number of operating rooms, 
                      procedure

[[Page 124 STAT. 688]]

                      rooms, and beds' means the number of operating 
                      rooms, procedure rooms, and beds for which the 
                      applicable hospital is licensed as of the date of 
                      enactment of this subsection.
                    ``(D) Increase limited to facilities on the main 
                campus of the hospital.--Any increase in the number of 
                operating rooms, procedure rooms, and beds for which an 
                applicable hospital is licensed pursuant to this 
                paragraph may only occur in facilities on the main 
                campus of the applicable hospital.
                    ``(E) Applicable hospital.--In this paragraph, the 
                term `applicable hospital' means a hospital--
                          ``(i) that is located in a county in which the 
                      percentage increase in the population during the 
                      most recent 5-year period (as of the date of the 
                      application under subparagraph (A)) is at least 
                      150 percent of the percentage increase in the 
                      population growth of the State in which the 
                      hospital is located during that period, as 
                      estimated by Bureau of the Census;
                          ``(ii) whose annual percent of total inpatient 
                      admissions that represent inpatient admissions 
                      under the program under title XIX is equal to or 
                      greater than the average percent with respect to 
                      such admissions for all hospitals located in the 
                      county in which the hospital is located;
                          ``(iii) that does not discriminate against 
                      beneficiaries of Federal health care programs and 
                      does not permit physicians practicing at the 
                      hospital to discriminate against such 
                      beneficiaries;
                          ``(iv) that is located in a State in which the 
                      average bed capacity in the State is less than the 
                      national average bed capacity; and
                          ``(v) that has an average bed occupancy rate 
                      that is greater than the average bed occupancy 
                      rate in the State in which the hospital is 
                      located.
                    ``(F) Procedure rooms.--In this subsection, the term 
                `procedure rooms' includes rooms in which 
                catheterizations, angiographies, angiograms, and 
                endoscopies are performed, except such term shall not 
                include emergency rooms or departments (exclusive of 
                rooms in which catheterizations, angiographies, 
                angiograms, and endoscopies are performed).
                    ``(G) <<NOTE: Deadline. Federal Register, 
                publication.>> Publication of final decisions.--Not 
                later than 60 days after receiving a complete 
                application under this paragraph, the Secretary shall 
                publish in the Federal Register the final decision with 
                respect to such application.
                    ``(H) Limitation on review.--There shall be no 
                administrative or judicial review under section 1869, 
                section 1878, or otherwise of the process under this 
                paragraph (including the establishment of such process).
            ``(4) Collection of ownership and investment information.--
        For purposes of subparagraphs (A)(i) and (D)(i) of paragraph 
        (1), the Secretary shall collect physician ownership and 
        investment information for each hospital.
            ``(5) Physician owner or investor defined.--For purposes of 
        this subsection, the term `physician owner or investor' means a 
        physician (or an immediate family member of such

[[Page 124 STAT. 689]]

        physician) with a direct or an indirect ownership or investment 
        interest in the hospital.
            ``(6) Clarification.--Nothing in this subsection shall be 
        construed as preventing the Secretary from revoking a hospital's 
        provider agreement if not in compliance with regulations 
        implementing section 1866.''.

    (b) Enforcement.--
            (1) <<NOTE: Procedures. 42 USC 1395nn note.>> Ensuring 
        compliance.--The Secretary of Health and Human Services shall 
        establish policies and procedures to ensure compliance with the 
        requirements described in subsection (i)(1) of section 1877 of 
        the Social Security Act, as added by subsection (a)(3), 
        beginning on the date such requirements first apply. Such 
        policies and procedures may include unannounced site reviews of 
        hospitals.
            (2) <<NOTE: Deadline.>> Audits.--Beginning not later than 
        November 1, 2011, the Secretary of Health and Human Services 
        shall conduct audits to determine if hospitals violate the 
        requirements referred to in paragraph (1).

SEC. 6002. TRANSPARENCY REPORTS AND REPORTING OF PHYSICIAN OWNERSHIP OR 
            INVESTMENT INTERESTS.

    Part A of title XI of the Social Security Act (42 U.S.C. 1301 et 
seq.) is amended by inserting after section 1128F the following new 
section:

``SEC. 1128G. <<NOTE: Electronic format. 42 USC 1320a-7h.>> TRANSPARENCY 
            REPORTS AND REPORTING OF PHYSICIAN OWNERSHIP OR INVESTMENT 
            INTERESTS.

    ``(a) Transparency Reports.--
            ``(1) Payments or other transfers of value.--
                    ``(A) In general.--On March 31, 2013, and on the 
                90th day of each calendar year beginning thereafter, any 
                applicable manufacturer that provides a payment or other 
                transfer of value to a covered recipient (or to an 
                entity or individual at the request of or designated on 
                behalf of a covered recipient), shall submit to the 
                Secretary, in such electronic form as the Secretary 
                shall require, the following information with respect to 
                the preceding calendar year:
                          ``(i) The name of the covered recipient.
                          ``(ii) The business address of the covered 
                      recipient and, in the case of a covered recipient 
                      who is a physician, the specialty and National 
                      Provider Identifier of the covered recipient.
                          ``(iii) The amount of the payment or other 
                      transfer of value.
                          ``(iv) The dates on which the payment or other 
                      transfer of value was provided to the covered 
                      recipient.
                          ``(v) A description of the form of the payment 
                      or other transfer of value, indicated (as 
                      appropriate for all that apply) as--
                                    ``(I) cash or a cash equivalent;
                                    ``(II) in-kind items or services;
                                    ``(III) stock, a stock option, or 
                                any other ownership interest, dividend, 
                                profit, or other return on investment; 
                                or
                                    ``(IV) any other form of payment or 
                                other transfer of value (as defined by 
                                the Secretary).

[[Page 124 STAT. 690]]

                          ``(vi) A description of the nature of the 
                      payment or other transfer of value, indicated (as 
                      appropriate for all that apply) as--
                                    ``(I) consulting fees;
                                    ``(II) compensation for services 
                                other than consulting;
                                    ``(III) honoraria;
                                    ``(IV) gift;
                                    ``(V) entertainment;
                                    ``(VI) food;
                                    ``(VII) travel (including the 
                                specified destinations);
                                    ``(VIII) education;
                                    ``(IX) research;
                                    ``(X) charitable contribution;
                                    ``(XI) royalty or license;
                                    ``(XII) current or prospective 
                                ownership or investment interest;
                                    ``(XIII) direct compensation for 
                                serving as faculty or as a speaker for a 
                                medical education program;
                                    ``(XIV) grant; or
                                    ``(XV) any other nature of the 
                                payment or other transfer of value (as 
                                defined by the Secretary).
                          ``(vii) If the payment or other transfer of 
                      value is related to marketing, education, or 
                      research specific to a covered drug, device, 
                      biological, or medical supply, the name of that 
                      covered drug, device, biological, or medical 
                      supply.
                          ``(viii) Any other categories of information 
                      regarding the payment or other transfer of value 
                      the Secretary determines appropriate.
                    ``(B) Special rule for certain payments or other 
                transfers of value.--In the case where an applicable 
                manufacturer provides a payment or other transfer of 
                value to an entity or individual at the request of or 
                designated on behalf of a covered recipient, the 
                applicable manufacturer shall disclose that payment or 
                other transfer of value under the name of the covered 
                recipient.
            ``(2) Physician ownership.--In addition to the requirement 
        under paragraph (1)(A), on March 31, 2013, and on the 90th day 
        of each calendar year beginning thereafter, any applicable 
        manufacturer or applicable group purchasing organization shall 
        submit to the Secretary, in such electronic form as the 
        Secretary shall require, the following information regarding any 
        ownership or investment interest (other than an ownership or 
        investment interest in a publicly traded security and mutual 
        fund, as described in section 1877(c)) held by a physician (or 
        an immediate family member of such physician (as defined for 
        purposes of section 1877(a))) in the applicable manufacturer or 
        applicable group purchasing organization during the preceding 
        year:
                    ``(A) The dollar amount invested by each physician 
                holding such an ownership or investment interest.
                    ``(B) The value and terms of each such ownership or 
                investment interest.

[[Page 124 STAT. 691]]

                    ``(C) Any payment or other transfer of value 
                provided to a physician holding such an ownership or 
                investment interest (or to an entity or individual at 
                the request of or designated on behalf of a physician 
                holding such an ownership or investment interest), 
                including the information described in clauses (i) 
                through (viii) of paragraph (1)(A), except that in 
                applying such clauses, `physician' shall be substituted 
                for `covered recipient' each place it appears.
                    ``(D) Any other information regarding the ownership 
                or investment interest the Secretary determines 
                appropriate.

    ``(b) Penalties for Noncompliance.--
            ``(1) Failure to report.--
                    ``(A) In general.--Subject to subparagraph (B) 
                except as provided in paragraph (2), any applicable 
                manufacturer or applicable group purchasing organization 
                that fails to submit information required under 
                subsection (a) in a timely manner in accordance with 
                rules or regulations promulgated to carry out such 
                subsection, shall be subject to a civil money penalty of 
                not less than $1,000, but not more than $10,000, for 
                each payment or other transfer of value or ownership or 
                investment interest not reported as required under such 
                subsection. Such penalty shall be imposed and collected 
                in the same manner as civil money penalties under 
                subsection (a) of section 1128A are imposed and 
                collected under that section.
                    ``(B) Limitation.--The total amount of civil money 
                penalties imposed under subparagraph (A) with respect to 
                each annual submission of information under subsection 
                (a) by an applicable manufacturer or applicable group 
                purchasing organization shall not exceed $150,000.
            ``(2) Knowing failure to report.--
                    ``(A) In general.--Subject to subparagraph (B), any 
                applicable manufacturer or applicable group purchasing 
                organization that knowingly fails to submit information 
                required under subsection (a) in a timely manner in 
                accordance with rules or regulations promulgated to 
                carry out such subsection, shall be subject to a civil 
                money penalty of not less than $10,000, but not more 
                than $100,000, for each payment or other transfer of 
                value or ownership or investment interest not reported 
                as required under such subsection. Such penalty shall be 
                imposed and collected in the same manner as civil money 
                penalties under subsection (a) of section 1128A are 
                imposed and collected under that section.
                    ``(B) Limitation.--The total amount of civil money 
                penalties imposed under subparagraph (A) with respect to 
                each annual submission of information under subsection 
                (a) by an applicable manufacturer or applicable group 
                purchasing organization shall not exceed $1,000,000.
            ``(3) Use of funds.--Funds collected by the Secretary as a 
        result of the imposition of a civil money penalty under this 
        subsection shall be used to carry out this section.

    ``(c) Procedures for Submission of Information and Public 
Availability.--
            ``(1) In general.--

[[Page 124 STAT. 692]]

                    ``(A) <<NOTE: Deadline.>> Establishment.--Not later 
                than October 1, 2011, the Secretary shall establish 
                procedures--
                          ``(i) for applicable manufacturers and 
                      applicable group purchasing organizations to 
                      submit information to the Secretary under 
                      subsection (a); and
                          ``(ii) for the Secretary to make such 
                      information submitted available to the public.
                    ``(B) Definition of terms.--The procedures 
                established under subparagraph (A) shall provide for the 
                definition of terms (other than those terms defined in 
                subsection (e)), as appropriate, for purposes of this 
                section.
                    ``(C) <<NOTE: Deadlines. Web posting.>> Public 
                availability.--Except as provided in subparagraph (E), 
                the procedures established under subparagraph (A)(ii) 
                shall ensure that, not later than September 30, 2013, 
                and on June 30 of each calendar year beginning 
                thereafter, the information submitted under subsection 
                (a) with respect to the preceding calendar year is made 
                available through an Internet website that--
                          ``(i) is searchable and is in a format that is 
                      clear and understandable;
                          ``(ii) contains information that is presented 
                      by the name of the applicable manufacturer or 
                      applicable group purchasing organization, the name 
                      of the covered recipient, the business address of 
                      the covered recipient, the specialty of the 
                      covered recipient, the value of the payment or 
                      other transfer of value, the date on which the 
                      payment or other transfer of value was provided to 
                      the covered recipient, the form of the payment or 
                      other transfer of value, indicated (as 
                      appropriate) under subsection (a)(1)(A)(v), the 
                      nature of the payment or other transfer of value, 
                      indicated (as appropriate) under subsection 
                      (a)(1)(A)(vi), and the name of the covered drug, 
                      device, biological, or medical supply, as 
                      applicable;
                          ``(iii) contains information that is able to 
                      be easily aggregated and downloaded;
                          ``(iv) contains a description of any 
                      enforcement actions taken to carry out this 
                      section, including any penalties imposed under 
                      subsection (b), during the preceding year;
                          ``(v) contains background information on 
                      industry-physician relationships;
                          ``(vi) in the case of information submitted 
                      with respect to a payment or other transfer of 
                      value described in subparagraph (E)(i), lists such 
                      information separately from the other information 
                      submitted under subsection (a) and designates such 
                      separately listed information as funding for 
                      clinical research;
                          ``(vii) contains any other information the 
                      Secretary determines would be helpful to the 
                      average consumer;
                          ``(viii) does not contain the National 
                      Provider Identifier of the covered recipient, and
                          ``(ix) subject to subparagraph (D), provides 
                      the applicable manufacturer, applicable group 
                      purchasing organization, or covered recipient an 
                      opportunity to review and submit corrections to 
                      the information submitted with respect to the 
                      applicable manufacturer,

[[Page 124 STAT. 693]]

                      applicable group purchasing organization, or 
                      covered recipient, respectively, for a period of 
                      not less than 45 days prior to such information 
                      being made available to the public.
                    ``(D) Clarification of time period for review and 
                corrections.--In no case may the 45-day period for 
                review and submission of corrections to information 
                under subparagraph (C)(ix) prevent such information from 
                being made available to the public in accordance with 
                the dates described in the matter preceding clause (i) 
                in subparagraph (C).
                    ``(E) Delayed publication for payments made pursuant 
                to product research or development agreements and 
                clinical investigations.--
                          ``(i) In general.--In the case of information 
                      submitted under subsection (a) with respect to a 
                      payment or other transfer of value made to a 
                      covered recipient by an applicable manufacturer 
                      pursuant to a product research or development 
                      agreement for services furnished in connection 
                      with research on a potential new medical 
                      technology or a new application of an existing 
                      medical technology or the development of a new 
                      drug, device, biological, or medical supply, or by 
                      an applicable manufacturer in connection with a 
                      clinical investigation regarding a new drug, 
                      device, biological, or medical supply, the 
                      procedures established under subparagraph (A)(ii) 
                      shall provide that such information is made 
                      available to the public on the first date 
                      described in the matter preceding clause (i) in 
                      subparagraph (C) after the earlier of the 
                      following:
                                    ``(I) The date of the approval or 
                                clearance of the covered drug, device, 
                                biological, or medical supply by the 
                                Food and Drug Administration.
                                    ``(II) Four calendar years after the 
                                date such payment or other transfer of 
                                value was made.
                          ``(ii) Confidentiality of information prior to 
                      publication.--Information described in clause (i) 
                      shall be considered confidential and shall not be 
                      subject to disclosure under section 552 of title 
                      5, United States Code, or any other similar 
                      Federal, State, or local law, until on or after 
                      the date on which the information is made 
                      available to the public under such clause.
            ``(2) Consultation.--In establishing the procedures under 
        paragraph (1), the Secretary shall consult with the Inspector 
        General of the Department of Health and Human Services, affected 
        industry, consumers, consumer advocates, and other interested 
        parties in order to ensure that the information made available 
        to the public under such paragraph is presented in the 
        appropriate overall context.

    ``(d) Annual Reports and Relation to State Laws.--
            ``(1) Annual report to congress.--Not later than April 1 of 
        each year beginning with 2013, the Secretary shall submit to 
        Congress a report that includes the following:
                    ``(A) The information submitted under subsection (a) 
                during the preceding year, aggregated for each 
                applicable manufacturer and applicable group purchasing 
                organization that submitted such information during such 
                year

[[Page 124 STAT. 694]]

                (except, in the case of information submitted with 
                respect to a payment or other transfer of value 
                described in subsection (c)(1)(E)(i), such information 
                shall be included in the first report submitted to 
                Congress after the date on which such information is 
                made available to the public under such subsection).
                    ``(B) A description of any enforcement actions taken 
                to carry out this section, including any penalties 
                imposed under subsection (b), during the preceding year.
            ``(2) Annual reports to states.--Not later than September 
        30, 2013 and on June 30 of each calendar year thereafter, the 
        Secretary shall submit to States a report that includes a 
        summary of the information submitted under subsection (a) during 
        the preceding year with respect to covered recipients in the 
        State (except, in the case of information submitted with respect 
        to a payment or other transfer of value described in subsection 
        (c)(1)(E)(i), such information shall be included in the first 
        report submitted to States after the date on which such 
        information is made available to the public under such 
        subsection).
            ``(3) Relation to state laws.--
                    ``(A) In general.--In the case of a payment or other 
                transfer of value provided by an applicable manufacturer 
                that is received by a covered recipient (as defined in 
                subsection (e)) on or after January 1, 2012, subject to 
                subparagraph (B), the provisions of this section shall 
                preempt any statute or regulation of a State or of a 
                political subdivision of a State that requires an 
                applicable manufacturer (as so defined) to disclose or 
                report, in any format, the type of information (as 
                described in subsection (a)) regarding such payment or 
                other transfer of value.
                    ``(B) No preemption of additional requirements.--
                Subparagraph (A) shall not preempt any statute or 
                regulation of a State or of a political subdivision of a 
                State that requires the disclosure or reporting of 
                information--
                          ``(i) not of the type required to be disclosed 
                      or reported under this section;
                          ``(ii) described in subsection (e)(10)(B), 
                      except in the case of information described in 
                      clause (i) of such subsection;
                          ``(iii) by any person or entity other than an 
                      applicable manufacturer (as so defined) or a 
                      covered recipient (as defined in subsection (e)); 
                      or
                          ``(iv) to a Federal, State, or local 
                      governmental agency for public health 
                      surveillance, investigation, or other public 
                      health purposes or health oversight purposes.
                    ``(C) Nothing in subparagraph (A) shall be construed 
                to limit the discovery or admissibility of information 
                described in such subparagraph in a criminal, civil, or 
                administrative proceeding.
            ``(4) Consultation.--The Secretary shall consult with the 
        Inspector General of the Department of Health and Human Services 
        on the implementation of this section.

    ``(e) Definitions.--In this section:
            ``(1) Applicable group purchasing organization.--The term 
        `applicable group purchasing organization' means a group

[[Page 124 STAT. 695]]

        purchasing organization (as defined by the Secretary) that 
        purchases, arranges for, or negotiates the purchase of a covered 
        drug, device, biological, or medical supply which is operating 
        in the United States, or in a territory, possession, or 
        commonwealth of the United States.
            ``(2) Applicable manufacturer.--The term `applicable 
        manufacturer' means a manufacturer of a covered drug, device, 
        biological, or medical supply which is operating in the United 
        States, or in a territory, possession, or commonwealth of the 
        United States.
            ``(3) Clinical investigation.--The term `clinical 
        investigation' means any experiment involving 1 or more human 
        subjects, or materials derived from human subjects, in which a 
        drug or device is administered, dispensed, or used.
            ``(4) Covered device.--The term `covered device' means any 
        device for which payment is available under title XVIII or a 
        State plan under title XIX or XXI (or a waiver of such a plan).
            ``(5) Covered drug, device, biological, or medical supply.--
        The term `covered drug, device, biological, or medical supply' 
        means any drug, biological product, device, or medical supply 
        for which payment is available under title XVIII or a State plan 
        under title XIX or XXI (or a waiver of such a plan).
            ``(6) Covered recipient.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `covered recipient' means the 
                following:
                          ``(i) A physician.
                          ``(ii) A teaching hospital.
                    ``(B) Exclusion.--Such term does not include a 
                physician who is an employee of the applicable 
                manufacturer that is required to submit information 
                under subsection (a).
            ``(7) Employee.--The term `employee' has the meaning given 
        such term in section 1877(h)(2).
            ``(8) Knowingly.--The term `knowingly' has the meaning given 
        such term in section 3729(b) of title 31, United States Code.
            ``(9) Manufacturer of a covered drug, device, biological, or 
        medical supply.--The term `manufacturer of a covered drug, 
        device, biological, or medical supply' means any entity which is 
        engaged in the production, preparation, propagation, 
        compounding, or conversion of a covered drug, device, 
        biological, or medical supply (or any entity under common 
        ownership with such entity which provides assistance or support 
        to such entity with respect to the production, preparation, 
        propagation, compounding, conversion, marketing, promotion, 
        sale, or distribution of a covered drug, device, biological, or 
        medical supply).
            ``(10) Payment or other transfer of value.--
                    ``(A) In general.--The term `payment or other 
                transfer of value' means a transfer of anything of 
                value. Such term does not include a transfer of anything 
                of value that is made indirectly to a covered recipient 
                through a third party in connection with an activity or 
                service in the case where the applicable manufacturer is 
                unaware of the identity of the covered recipient.

[[Page 124 STAT. 696]]

                    ``(B) Exclusions.--An applicable manufacturer shall 
                not be required to submit information under subsection 
                (a) with respect to the following:
                          ``(i) A transfer of anything the value of 
                      which is less than $10, unless the aggregate 
                      amount transferred to, requested by, or designated 
                      on behalf of the covered recipient by the 
                      applicable manufacturer during the calendar year 
                      exceeds $100. For calendar years after 2012, the 
                      dollar amounts specified in the preceding sentence 
                      shall be increased by the same percentage as the 
                      percentage increase in the consumer price index 
                      for all urban consumers (all items; U.S. city 
                      average) for the 12-month period ending with June 
                      of the previous year.
                          ``(ii) Product samples that are not intended 
                      to be sold and are intended for patient use.
                          ``(iii) Educational materials that directly 
                      benefit patients or are intended for patient use.
                          ``(iv) The loan of a covered device for a 
                      short-term trial period, not to exceed 90 days, to 
                      permit evaluation of the covered device by the 
                      covered recipient.
                          ``(v) Items or services provided under a 
                      contractual warranty, including the replacement of 
                      a covered device, where the terms of the warranty 
                      are set forth in the purchase or lease agreement 
                      for the covered device.
                          ``(vi) A transfer of anything of value to a 
                      covered recipient when the covered recipient is a 
                      patient and not acting in the professional 
                      capacity of a covered recipient.
                          ``(vii) Discounts (including rebates).
                          ``(viii) In-kind items used for the provision 
                      of charity care.
                          ``(ix) A dividend or other profit distribution 
                      from, or ownership or investment interest in, a 
                      publicly traded security and mutual fund (as 
                      described in section 1877(c)).
                          ``(x) In the case of an applicable 
                      manufacturer who offers a self-insured plan, 
                      payments for the provision of health care to 
                      employees under the plan.
                          ``(xi) In the case of a covered recipient who 
                      is a licensed non-medical professional, a transfer 
                      of anything of value to the covered recipient if 
                      the transfer is payment solely for the non-medical 
                      professional services of such licensed non-medical 
                      professional.
                          ``(xii) In the case of a covered recipient who 
                      is a physician, a transfer of anything of value to 
                      the covered recipient if the transfer is payment 
                      solely for the services of the covered recipient 
                      with respect to a civil or criminal action or an 
                      administrative proceeding.
            ``(11) Physician.--The term `physician' has the meaning 
        given that term in section 1861(r).''.

[[Page 124 STAT. 697]]

SEC. 6003. DISCLOSURE REQUIREMENTS FOR IN-OFFICE ANCILLARY SERVICES 
            EXCEPTION TO THE PROHIBITION ON PHYSICIAN SELF-REFERRAL FOR 
            CERTAIN IMAGING SERVICES.

    (a) In General.--Section 1877(b)(2) of the Social Security Act (42 
U.S.C. 1395nn(b)(2)) is amended by adding at the end the following new 
sentence: ``Such requirements shall, with respect to magnetic resonance 
imaging, computed tomography, positron emission tomography, and any 
other designated health services specified under subsection (h)(6)(D) 
that the Secretary determines appropriate, include a requirement that 
the referring physician inform the individual in writing at the time of 
the referral that the individual may obtain the services for which the 
individual is being referred from a person other than a person described 
in subparagraph (A)(i) and provide such individual with a written list 
of suppliers (as defined in section 1861(d)) who furnish such services 
in the area in which such individual resides.''.
    (b) Effective Date. <<NOTE: 42 USC 1395nn note.>> --The amendment 
made by this section shall apply to services furnished on or after 
January 1, 2010.

SEC. 6004. PRESCRIPTION DRUG SAMPLE TRANSPARENCY.

    Part A of title XI of the Social Security Act (42 U.S.C. 1301 et 
seq.), as amended by section 6002, is amended by inserting after section 
1128G the following new section:

``SEC. 1128H. <<NOTE: 42 USC 1320a-7i.>> REPORTING OF INFORMATION 
            RELATING TO DRUG SAMPLES.

    ``(a) In General.--Not later than April 1 of each year (beginning 
with 2012), each manufacturer and authorized distributor of record of an 
applicable drug shall submit to the Secretary (in a form and manner 
specified by the Secretary) the following information with respect to 
the preceding year:
            ``(1) In the case of a manufacturer or authorized 
        distributor of record which makes distributions by mail or 
        common carrier under subsection (d)(2) of section 503 of the 
        Federal Food, Drug, and Cosmetic Act (21 U.S.C. 353), the 
        identity and quantity of drug samples requested and the identity 
        and quantity of drug samples distributed under such subsection 
        during that year, aggregated by--
                    ``(A) the name, address, professional designation, 
                and signature of the practitioner making the request 
                under subparagraph (A)(i) of such subsection, or of any 
                individual who makes or signs for the request on behalf 
                of the practitioner; and
                    ``(B) any other category of information determined 
                appropriate by the Secretary.
            ``(2) In the case of a manufacturer or authorized 
        distributor of record which makes distributions by means other 
        than mail or common carrier under subsection (d)(3) of such 
        section 503, the identity and quantity of drug samples requested 
        and the identity and quantity of drug samples distributed under 
        such subsection during that year, aggregated by--
                    ``(A) the name, address, professional designation, 
                and signature of the practitioner making the request 
                under subparagraph (A)(i) of such subsection, or of any 
                individual who makes or signs for the request on behalf 
                of the practitioner; and

[[Page 124 STAT. 698]]

                    ``(B) any other category of information determined 
                appropriate by the Secretary.

    ``(b) Definitions.--In this section:
            ``(1) Applicable drug.--The term `applicable drug' means a 
        drug--
                    ``(A) which is subject to subsection (b) of such 
                section 503; and
                    ``(B) for which payment is available under title 
                XVIII or a State plan under title XIX or XXI (or a 
                waiver of such a plan).
            ``(2) Authorized distributor of record.--The term 
        `authorized distributor of record' has the meaning given that 
        term in subsection (e)(3)(A) of such section.
            ``(3) Manufacturer.--The term `manufacturer' has the meaning 
        given that term for purposes of subsection (d) of such 
        section.''.

SEC. 6005. <<NOTE: 42 USC 1320b-23.>> PHARMACY BENEFIT MANAGERS 
            TRANSPARENCY REQUIREMENTS.

    Part A of title XI of the Social Security Act (42 U.S.C. 1301 et 
seq.) is amended by inserting after section 1150 the following new 
section:

``SEC. 1150A. PHARMACY BENEFIT MANAGERS TRANSPARENCY REQUIREMENTS.

    ``(a) Provision of Information.--A health benefits plan or any 
entity that provides pharmacy benefits management services on behalf of 
a health benefits plan (in this section referred to as a `PBM') that 
manages prescription drug coverage under a contract with--
            ``(1) a PDP sponsor of a prescription drug plan or an MA 
        organization offering an MA-PD plan under part D of title XVIII; 
        or
            ``(2) a qualified health benefits plan offered through an 
        exchange established by a State under section 1311 of the 
        Patient Protection and Affordable Care Act,

shall provide the information described in subsection (b) to the 
Secretary and, in the case of a PBM, to the plan with which the PBM is 
under contract with, at such times, and in such form and manner, as the 
Secretary shall specify.
    ``(b) Information Described.--The information described in this 
subsection is the following with respect to services provided by a 
health benefits plan or PBM for a contract year:
            ``(1) The percentage of all prescriptions that were provided 
        through retail pharmacies compared to mail order pharmacies, and 
        the percentage of prescriptions for which a generic drug was 
        available and dispensed (generic dispensing rate), by pharmacy 
        type (which includes an independent pharmacy, chain pharmacy, 
        supermarket pharmacy, or mass merchandiser pharmacy that is 
        licensed as a pharmacy by the State and that dispenses 
        medication to the general public), that is paid by the health 
        benefits plan or PBM under the contract.
            ``(2) The aggregate amount, and the type of rebates, 
        discounts, or price concessions (excluding bona fide service 
        fees, which include but are 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

[[Page 124 STAT. 699]]

        and patient education programs)) that the PBM negotiates that 
        are attributable to patient utilization under the plan, and the 
        aggregate amount of the rebates, discounts, or price concessions 
        that are passed through to the plan sponsor, and the total 
        number of prescriptions that were dispensed.
            ``(3) The aggregate amount of the difference between the 
        amount the health benefits plan pays the PBM and the amount that 
        the PBM pays retail pharmacies, and mail order pharmacies, and 
        the total number of prescriptions that were dispensed.

    ``(c) Confidentiality.--Information disclosed by a health benefits 
plan or PBM under this section is confidential and shall not be 
disclosed by the Secretary or by a plan receiving the information, 
except that the Secretary may disclose the information in a form which 
does not disclose the identity of a specific PBM, plan, or prices 
charged for drugs, for the following purposes:
            ``(1) As the Secretary determines to be necessary to carry 
        out this section or part D of title XVIII.
            ``(2) To permit the Comptroller General to review the 
        information provided.
            ``(3) To permit the Director of the Congressional Budget 
        Office to review the information provided.
            ``(4) To States to carry out section 1311 of the Patient 
        Protection and Affordable Care Act.

    ``(d) Penalties. <<NOTE: Applicability.>> --The provisions of 
subsection (b)(3)(C) of section 1927 shall apply to a health benefits 
plan or PBM that fails to provide information required under subsection 
(a) on a timely basis or that knowingly provides false information in 
the same manner as such provisions apply to a manufacturer with an 
agreement under that section.''.

          Subtitle B--Nursing Home Transparency and Improvement

              PART I--IMPROVING TRANSPARENCY OF INFORMATION

SEC. 6101. REQUIRED DISCLOSURE OF OWNERSHIP AND ADDITIONAL DISCLOSABLE 
            PARTIES INFORMATION.

    (a) In General.--Section 1124 of the Social Security Act (42 U.S.C. 
1320a-3) is amended by adding at the end the following new subsection:
    ``(c) Required Disclosure of Ownership and Additional Disclosable 
Parties Information.--
            ``(1) Disclosure.--A facility shall have the information 
        described in paragraph (2) available--
                    ``(A) <<NOTE: Time period.>> during the period 
                beginning on the date of the enactment of this 
                subsection and ending on the date such information is 
                made available to the public under section 6101(b) of 
                the Patient Protection and Affordable Care Act for 
                submission to the Secretary, the Inspector General of 
                the Department of Health and Human Services, the State 
                in which the facility is located, and the State long-
                term care ombudsman in the case where the Secretary, the

[[Page 124 STAT. 700]]

                Inspector General, the State, or the State long-term 
                care ombudsman requests such information; and
                    ``(B) beginning on the effective date of the final 
                regulations promulgated under paragraph (3)(A), for 
                reporting such information in accordance with such final 
                regulations.
        Nothing in subparagraph (A) shall be construed as authorizing a 
        facility to dispose of or delete information described in such 
        subparagraph after the effective date of the final regulations 
        promulgated under paragraph (3)(A).
            ``(2) Information described.--
                    ``(A) In general.--The following information is 
                described in this paragraph:
                          ``(i) The information described in subsections 
                      (a) and (b), subject to subparagraph (C).
                          ``(ii) The identity of and information on--
                                    ``(I) each member of the governing 
                                body of the facility, including the 
                                name, title, and period of service of 
                                each such member;
                                    ``(II) each person or entity who is 
                                an officer, director, member, partner, 
                                trustee, or managing employee of the 
                                facility, including the name, title, and 
                                period of service of each such person or 
                                entity; and
                                    ``(III) each person or entity who is 
                                an additional disclosable party of the 
                                facility.
                          ``(iii) The organizational structure of each 
                      additional disclosable party of the facility and a 
                      description of the relationship of each such 
                      additional disclosable party to the facility and 
                      to one another.
                    ``(B) Special rule where information is already 
                reported or submitted.--To the extent that information 
                reported by a facility to the Internal Revenue Service 
                on Form 990, information submitted by a facility to the 
                Securities and Exchange Commission, or information 
                otherwise submitted to the Secretary or any other 
                Federal agency contains the information described in 
                clauses (i), (ii), or (iii) of subparagraph (A), the 
                facility may provide such Form or such information 
                submitted to meet the requirements of paragraph (1).
                    ``(C) Special rule.--In applying subparagraph 
                (A)(i)--
                          ``(i) with respect to subsections (a) and (b), 
                      `ownership or control interest' shall include 
                      direct or indirect interests, including such 
                      interests in intermediate entities; and
                          ``(ii) subsection (a)(3)(A)(ii) shall include 
                      the owner of a whole or part interest in any 
                      mortgage, deed of trust, note, or other obligation 
                      secured, in whole or in part, by the entity or any 
                      of the property or assets thereof, if the interest 
                      is equal to or exceeds 5 percent of the total 
                      property or assets of the entirety.
            ``(3) Reporting.--
                    ``(A) In general. <<NOTE: Regulations. Effective 
                date. Federal Register, publication.>> --Not later than 
                the date that is 2 years after the date of the enactment 
                of this subsection, the Secretary shall promulgate final 
                regulations requiring, effective on the date that is 90 
                days after the date on which such final regulations are 
                published in the Federal Register, a facility to report 
                the information described in

[[Page 124 STAT. 701]]

                paragraph (2) to the Secretary in a standardized format, 
                and such other regulations as are necessary to carry out 
                this subsection. <<NOTE: Certification.>> Such final 
                regulations shall ensure that the facility certifies, as 
                a condition of participation and payment under the 
                program under title XVIII or XIX, that the information 
                reported by the facility in accordance with such final 
                regulations is, to the best of the facility's knowledge, 
                accurate and current.
                    ``(B) Guidance.--The Secretary shall provide 
                guidance and technical assistance to States on how to 
                adopt the standardized format under subparagraph (A).
            ``(4) No effect on existing reporting requirements.--Nothing 
        in this subsection shall reduce, diminish, or alter any 
        reporting requirement for a facility that is in effect as of the 
        date of the enactment of this subsection.
            ``(5) Definitions.--In this subsection:
                    ``(A) Additional disclosable party.--The term 
                `additional disclosable party' means, with respect to a 
                facility, any person or entity who--
                          ``(i) exercises operational, financial, or 
                      managerial control over the facility or a part 
                      thereof, or provides policies or procedures for 
                      any of the operations of the facility, or provides 
                      financial or cash management services to the 
                      facility;
                          ``(ii) leases or subleases real property to 
                      the facility, or owns a whole or part interest 
                      equal to or exceeding 5 percent of the total value 
                      of such real property; or
                          ``(iii) provides management or administrative 
                      services, management or clinical consulting 
                      services, or accounting or financial services to 
                      the facility.
                    ``(B) Facility.--The term `facility' means a 
                disclosing entity which is--
                          ``(i) a skilled nursing facility (as defined 
                      in section 1819(a)); or
                          ``(ii) a nursing facility (as defined in 
                      section 1919(a)).
                    ``(C) Managing employee.--The term `managing 
                employee' means, with respect to a facility, an 
                individual (including a general manager, business 
                manager, administrator, director, or consultant) who 
                directly or indirectly manages, advises, or supervises 
                any element of the practices, finances, or operations of 
                the facility.
                    ``(D) Organizational structure.--The term 
                `organizational structure' means, in the case of--
                          ``(i) a corporation, the officers, directors, 
                      and shareholders of the corporation who have an 
                      ownership interest in the corporation which is 
                      equal to or exceeds 5 percent;
                          ``(ii) a limited liability company, the 
                      members and managers of the limited liability 
                      company (including, as applicable, what percentage 
                      each member and manager has of the ownership 
                      interest in the limited liability company);
                          ``(iii) a general partnership, the partners of 
                      the general partnership;

[[Page 124 STAT. 702]]

                          ``(iv) a limited partnership, the general 
                      partners and any limited partners of the limited 
                      partnership who have an ownership interest in the 
                      limited partnership which is equal to or exceeds 
                      10 percent;
                          ``(v) a trust, the trustees of the trust;
                          ``(vi) an individual, contact information for 
                      the individual; and
                          ``(vii) any other person or entity, such 
                      information as the Secretary determines 
                      appropriate.''.

    (b) Public Availability of 
Information. <<NOTE: Deadline. Procedures. 42 USC 1320a-3 note.>> --Not 
later than the date that is 1 year after the date on which the final 
regulations promulgated under section 1124(c)(3)(A) of the Social 
Security Act, as added by subsection (a), are published in the Federal 
Register, the Secretary of Health and Human Services shall make the 
information reported in accordance with such final regulations available 
to the public in accordance with procedures established by the 
Secretary.

    (c) Conforming Amendments.--
            (1) In general.--
                    (A) Skilled nursing facilities.--Section 1819(d)(1) 
                of the Social Security Act (42 U.S.C. 1395i-3(d)(1)) is 
                amended by striking subparagraph (B) and redesignating 
                subparagraph (C) as subparagraph (B).
                    (B) Nursing facilities.--Section 1919(d)(1) of the 
                Social Security Act (42 U.S.C. 1396r(d)(1)) is amended 
                by striking subparagraph (B) and redesignating 
                subparagraph (C) as subparagraph (B).
            (2) <<NOTE: 42 USC 1395i-3 note.>> Effective date.--The 
        amendments made by paragraph (1) shall take effect on the date 
        on which the Secretary makes the information described in 
        subsection (b)(1) available to the public under such subsection.

SEC. 6102. ACCOUNTABILITY REQUIREMENTS FOR SKILLED NURSING FACILITIES 
            AND NURSING FACILITIES.

    Part A of title XI of the Social Security Act (42 U.S.C. 1301 et 
seq.), as amended by sections 6002 and 6004, is amended by inserting 
after section 1128H the following new section:

``SEC. 1128I. <<NOTE: 42 USC 1320a-7j.>> ACCOUNTABILITY REQUIREMENTS FOR 
            FACILITIES.

    ``(a) Definition of Facility.--In this section, the term `facility' 
means--
            ``(1) a skilled nursing facility (as defined in section 
        1819(a)); or
            ``(2) a nursing facility (as defined in section 1919(a)).

    ``(b) Effective Compliance and Ethics Programs.--
            ``(1) Requirement. <<NOTE: Effective date.>> --On or after 
        the date that is 36 months after the date of the enactment of 
        this section, a facility shall, with respect to the entity that 
        operates the facility (in this subparagraph referred to as the 
        `operating organization' or `organization'), have in operation a 
        compliance and ethics program that is effective in preventing 
        and detecting criminal, civil, and administrative violations 
        under this Act and in promoting quality of care consistent with 
        regulations developed under paragraph (2).
            ``(2) <<NOTE: Deadlines.>> Development of regulations.--
                    ``(A) In general.--Not later than the date that is 2 
                years after such date of the enactment, the Secretary,

[[Page 124 STAT. 703]]

                working jointly with the Inspector General of the 
                Department of Health and Human Services, shall 
                promulgate regulations for an effective compliance and 
                ethics program for operating organizations, which may 
                include a model compliance program.
                    ``(B)  Design of regulations.--Such regulations with 
                respect to specific elements or formality of a program 
                shall, in the case of an organization that operates 5 or 
                more facilities, vary with the size of the organization, 
                such that larger organizations should have a more formal 
                program and include established written policies 
                defining the standards and procedures to be followed by 
                its employees. Such requirements may specifically apply 
                to the corporate level management of multi unit nursing 
                home chains.
                    ``(C) Evaluation.--Not later than 3 years after the 
                date of the promulgation of regulations under this 
                paragraph, the Secretary shall complete an evaluation of 
                the compliance and ethics programs required to be 
                established under this subsection. Such evaluation shall 
                determine if such programs led to changes in deficiency 
                citations, changes in quality performance, or changes in 
                other metrics of patient quality of 
                care. <<NOTE: Reports.>> The Secretary shall submit to 
                Congress a report on such evaluation and shall include 
                in such report such recommendations regarding changes in 
                the requirements for such programs as the Secretary 
                determines appropriate.
            ``(3) Requirements for compliance and ethics 
        programs. <<NOTE: Definition.>> --In this subsection, the term 
        `compliance and ethics program' means, with respect to a 
        facility, a program of the operating organization that--
                    ``(A) has been reasonably designed, implemented, and 
                enforced so that it generally will be effective in 
                preventing and detecting criminal, civil, and 
                administrative violations under this Act and in 
                promoting quality of care; and
                    ``(B) includes at least the required components 
                specified in paragraph (4).
            ``(4) Required components of program.--The required 
        components of a compliance and ethics program of an operating 
        organization are the following:
                    ``(A) The organization must have established 
                compliance standards and procedures to be followed by 
                its employees and other agents that are reasonably 
                capable of reducing the prospect of criminal, civil, and 
                administrative violations under this Act.
                    ``(B) Specific individuals within high-level 
                personnel of the organization must have been assigned 
                overall responsibility to oversee compliance with such 
                standards and procedures and have sufficient resources 
                and authority to assure such compliance.
                    ``(C) The organization must have used due care not 
                to delegate substantial discretionary authority to 
                individuals whom the organization knew, or should have 
                known through the exercise of due diligence, had a 
                propensity to engage in criminal, civil, and 
                administrative violations under this Act.
                    ``(D) The organization must have taken steps to 
                communicate effectively its standards and procedures to 
                all

[[Page 124 STAT. 704]]

                employees and other agents, such as by requiring 
                participation in training programs or by disseminating 
                publications that explain in a practical manner what is 
                required.
                    ``(E) The organization must have taken reasonable 
                steps to achieve compliance with its standards, such as 
                by utilizing monitoring and auditing systems reasonably 
                designed to detect criminal, civil, and administrative 
                violations under this Act by its employees and other 
                agents and by having in place and publicizing a 
                reporting system whereby employees and other agents 
                could report violations by others within the 
                organization without fear of retribution.
                    ``(F) The standards must have been consistently 
                enforced through appropriate disciplinary mechanisms, 
                including, as appropriate, discipline of individuals 
                responsible for the failure to detect an offense.
                    ``(G) After an offense has been detected, the 
                organization must have taken all reasonable steps to 
                respond appropriately to the offense and to prevent 
                further similar offenses, including any necessary 
                modification to its program to prevent and detect 
                criminal, civil, and administrative violations under 
                this Act.
                    ``(H) The organization must periodically undertake 
                reassessment of its compliance program to identify 
                changes necessary to reflect changes within the 
                organization and its facilities.

    ``(c) Quality Assurance and Performance Improvement Program.--
            ``(1) In general. <<NOTE: Deadlines.>> --Not later than 
        December 31, 2011, the Secretary shall establish and implement a 
        quality assurance and performance improvement program (in this 
        subparagraph referred to as the `QAPI program') for facilities, 
        including multi unit chains of 
        facilities. <<NOTE: Standards.>> Under the QAPI program, the 
        Secretary shall establish standards relating to quality 
        assurance and performance improvement with respect to facilities 
        and provide technical assistance to facilities on the 
        development of best practices in order to meet such 
        standards. <<NOTE: Plan.>> Not later than 1 year after the date 
        on which the regulations are promulgated under paragraph (2), a 
        facility must submit to the Secretary a plan for the facility to 
        meet such standards and implement such best practices, including 
        how to coordinate the implementation of such plan with quality 
        assessment and assurance activities conducted under sections 
        1819(b)(1)(B) and 1919(b)(1)(B), as applicable.
            ``(2) Regulations.--The Secretary shall promulgate 
        regulations to carry out this subsection.''.

SEC. 6103. NURSING HOME COMPARE MEDICARE WEBSITE.

    (a) Skilled Nursing Facilities.--
            (1) In general.--Section 1819 of the Social Security Act (42 
        U.S.C. 1395i-3) is amended--
                    (A) by redesignating subsection (i) as subsection 
                (j); and
                    (B) by inserting after subsection (h) the following 
                new subsection:

    ``(i) Nursing Home Compare Website.--
            ``(1) Inclusion of additional information.--

[[Page 124 STAT. 705]]

                    ``(A) In general.--The Secretary shall ensure that 
                the Department of Health and Human Services includes, as 
                part of the information provided for comparison of 
                nursing homes on the official Internet website of the 
                Federal Government for Medicare beneficiaries (commonly 
                referred to as the `Nursing Home Compare' Medicare 
                website) (or a successor website), the following 
                information in a manner that is prominent, updated on a 
                timely basis, easily accessible, readily understandable 
                to consumers of long-term care services, and searchable:
                          ``(i) Staffing data for each facility 
                      (including resident census data and data on the 
                      hours of care provided per resident per day) based 
                      on data submitted under section 1128I(g), 
                      including information on staffing turnover and 
                      tenure, in a format that is clearly understandable 
                      to consumers of long-term care services and allows 
                      such consumers to compare differences in staffing 
                      between facilities and State and national averages 
                      for the facilities. Such format shall include--
                                    ``(I) concise explanations of how to 
                                interpret the data (such as a plain 
                                English explanation of data reflecting 
                                `nursing home staff hours per resident 
                                day');
                                    ``(II) differences in types of staff 
                                (such as training associated with 
                                different categories of staff);
                                    ``(III) the relationship between 
                                nurse staffing levels and quality of 
                                care; and
                                    ``(IV) an explanation that 
                                appropriate staffing levels vary based 
                                on patient case mix.
                          ``(ii) Links to State Internet websites with 
                      information regarding State survey and 
                      certification programs, links to Form 2567 State 
                      inspection reports (or a successor form) on such 
                      websites, information to guide consumers in how to 
                      interpret and understand such reports, and the 
                      facility plan of correction or other response to 
                      such report. Any such links shall be posted on a 
                      timely basis.
                          ``(iii) The standardized complaint form 
                      developed under section 1128I(f), including 
                      explanatory material on what complaint forms are, 
                      how they are used, and how to file a complaint 
                      with the State survey and certification program 
                      and the State long-term care ombudsman program.
                          ``(iv) Summary information on the number, 
                      type, severity, and outcome of substantiated 
                      complaints.
                          ``(v) The number of adjudicated instances of 
                      criminal violations by a facility or the employees 
                      of a facility--
                                    ``(I) that were committed inside the 
                                facility;
                                    ``(II) with respect to such 
                                instances of violations or crimes 
                                committed inside of the facility that 
                                were the violations or crimes of abuse, 
                                neglect, and exploitation, criminal 
                                sexual abuse, or other violations or 
                                crimes that resulted in serious bodily 
                                injury; and

[[Page 124 STAT. 706]]

                                    ``(III) the number of civil monetary 
                                penalties levied against the facility, 
                                employees, contractors, and other 
                                agents.
                    ``(B) Deadline for provision of information.--
                          ``(i) In general.--Except as provided in 
                      clause (ii), the Secretary shall ensure that the 
                      information described in subparagraph (A) is 
                      included on such website (or a successor website) 
                      not later than 1 year after the date of the 
                      enactment of this subsection.
                          ``(ii) Exception.--The Secretary shall ensure 
                      that the information described in subparagraph 
                      (A)(i) is included on such website (or a successor 
                      website) not later than the date on which the 
                      requirements under section 1128I(g) are 
                      implemented.
            ``(2) Review and modification of website.--
                    ``(A) In general. <<NOTE: Procedures.>> --The 
                Secretary shall establish a process--
                          ``(i) to review the accuracy, clarity of 
                      presentation, timeliness, and comprehensiveness of 
                      information reported on such website as of the day 
                      before the date of the enactment of this 
                      subsection; and
                          ``(ii) <<NOTE: Deadline.>> not later than 1 
                      year after the date of the enactment of this 
                      subsection, to modify or revamp such website in 
                      accordance with the review conducted under clause 
                      (i).
                    ``(B) Consultation.--In conducting the review under 
                subparagraph (A)(i), the Secretary shall consult with--
                          ``(i) State long-term care ombudsman programs;
                          ``(ii) consumer advocacy groups;
                          ``(iii) provider stakeholder groups; and
                          ``(iv) any other representatives of programs 
                      or groups the Secretary determines appropriate.''.
            (2) Timeliness of submission of survey and certification 
        information.--
                    (A) In general.--Section 1819(g)(5) of the Social 
                Security Act (42 U.S.C. 1395i-3(g)(5)) is amended by 
                adding at the end the following new subparagraph:
                    ``(E) Submission of survey and certification 
                information to the secretary.--In order to improve the 
                timeliness of information made available to the public 
                under subparagraph (A) and provided on the Nursing Home 
                Compare Medicare website under subsection (i), each 
                State shall submit information respecting any survey or 
                certification made respecting a skilled nursing facility 
                (including any enforcement actions taken by the State) 
                to the Secretary not later than the date on which the 
                State sends such information to the facility. The 
                Secretary shall use the information submitted under the 
                preceding sentence to update the information provided on 
                the Nursing Home Compare Medicare website as 
                expeditiously as practicable but not less frequently 
                than quarterly.''.
                    (B) <<NOTE: 42 USC 1395i-3 note.>> Effective date.--
                The amendment made by this paragraph shall take effect 1 
                year after the date of the enactment of this Act.
            (3) Special focus facility program.--Section 1819(f) of the 
        Social Security Act (42 U.S.C. 1395i-3(f)) is amended by adding 
        at the end the following new paragraph:

[[Page 124 STAT. 707]]

            ``(8) Special focus facility program.--
                    ``(A) In general.--The Secretary shall conduct a 
                special focus facility program for enforcement of 
                requirements for skilled nursing facilities that the 
                Secretary has identified as having substantially failed 
                to meet applicable requirement of this Act.
                    ``(B) Periodic surveys.--Under such program the 
                Secretary shall conduct surveys of each facility in the 
                program not less than once every 6 months.''.

    (b) Nursing Facilities.--
            (1) In general.--Section 1919 of the Social Security Act (42 
        U.S.C. 1396r) is amended--
                    (A) by redesignating subsection (i) as subsection 
                (j); and
                    (B) by inserting after subsection (h) the following 
                new subsection:

    ``(i) Nursing Home Compare Website.--
            ``(1) Inclusion of additional information.--
                    ``(A) In general.--The Secretary shall ensure that 
                the Department of Health and Human Services includes, as 
                part of the information provided for comparison of 
                nursing homes on the official Internet website of the 
                Federal Government for Medicare beneficiaries (commonly 
                referred to as the `Nursing Home Compare' Medicare 
                website) (or a successor website), the following 
                information in a manner that is prominent, updated on a 
                timely basis, easily accessible, readily understandable 
                to consumers of long-term care services, and searchable:
                          ``(i) Staffing data for each facility 
                      (including resident census data and data on the 
                      hours of care provided per resident per day) based 
                      on data submitted under section 1128I(g), 
                      including information on staffing turnover and 
                      tenure, in a format that is clearly understandable 
                      to consumers of long-term care services and allows 
                      such consumers to compare differences in staffing 
                      between facilities and State and national averages 
                      for the facilities. Such format shall include--
                                    ``(I) concise explanations of how to 
                                interpret the data (such as plain 
                                English explanation of data reflecting 
                                `nursing home staff hours per resident 
                                day');
                                    ``(II) differences in types of staff 
                                (such as training associated with 
                                different categories of staff);
                                    ``(III) the relationship between 
                                nurse staffing levels and quality of 
                                care; and
                                    ``(IV) an explanation that 
                                appropriate staffing levels vary based 
                                on patient case mix.
                          ``(ii) Links to State Internet websites with 
                      information regarding State survey and 
                      certification programs, links to Form 2567 State 
                      inspection reports (or a successor form) on such 
                      websites, information to guide consumers in how to 
                      interpret and understand such reports, and the 
                      facility plan of correction or other response to 
                      such report. Any such links shall be posted on a 
                      timely basis.

[[Page 124 STAT. 708]]

                          ``(iii) The standardized complaint form 
                      developed under section 1128I(f), including 
                      explanatory material on what complaint forms are, 
                      how they are used, and how to file a complaint 
                      with the State survey and certification program 
                      and the State long-term care ombudsman program.
                          ``(iv) Summary information on the number, 
                      type, severity, and outcome of substantiated 
                      complaints.
                          ``(v) The number of adjudicated instances of 
                      criminal violations by a facility or the employees 
                      of a facility--
                                    ``(I) that were committed inside of 
                                the facility; and
                                    ``(II) with respect to such 
                                instances of violations or crimes 
                                committed outside of the facility, that 
                                were violations or crimes that resulted 
                                in the serious bodily injury of an 
                                elder.
                    ``(B) Deadline for provision of information.--
                          ``(i) In general.--Except as provided in 
                      clause (ii), the Secretary shall ensure that the 
                      information described in subparagraph (A) is 
                      included on such website (or a successor website) 
                      not later than 1 year after the date of the 
                      enactment of this subsection.
                          ``(ii) Exception.--The Secretary shall ensure 
                      that the information described in subparagraph 
                      (A)(i) is included on such website (or a successor 
                      website) not later than the date on which the 
                      requirements under section 1128I(g) are 
                      implemented.
            ``(2) Review and modification of website.--
                    ``(A) In general. <<NOTE: Procedures.>> --The 
                Secretary shall establish a process--
                          ``(i) to review the accuracy, clarity of 
                      presentation, timeliness, and comprehensiveness of 
                      information reported on such website as of the day 
                      before the date of the enactment of this 
                      subsection; and
                          ``(ii) <<NOTE: Deadline.>> not later than 1 
                      year after the date of the enactment of this 
                      subsection, to modify or revamp such website in 
                      accordance with the review conducted under clause 
                      (i).
                    ``(B) Consultation.--In conducting the review under 
                subparagraph (A)(i), the Secretary shall consult with--
                          ``(i) State long-term care ombudsman programs;
                          ``(ii) consumer advocacy groups;
                          ``(iii) provider stakeholder groups;
                          ``(iv) skilled nursing facility employees and 
                      their representatives; and
                          ``(v) any other representatives of programs or 
                      groups the Secretary determines appropriate.''.
            (2) Timeliness of submission of survey and certification 
        information.--
                    (A) In general.--Section 1919(g)(5) of the Social 
                Security Act (42 U.S.C. 1396r(g)(5)) is amended by 
                adding at the end the following new subparagraph:
                    ``(E) <<NOTE: Deadline.>> Submission of survey and 
                certification information to the secretary.--In order to 
                improve the timeliness of information made available to 
                the public under subparagraph (A) and provided on the 
                Nursing Home

[[Page 124 STAT. 709]]

                Compare Medicare website under subsection (i), each 
                State shall submit information respecting any survey or 
                certification made respecting a nursing facility 
                (including any enforcement actions taken by the State) 
                to the Secretary not later than the date on which the 
                State sends such information to the facility. The 
                Secretary shall use the information submitted under the 
                preceding sentence to update the information provided on 
                the Nursing Home Compare Medicare website as 
                expeditiously as practicable but not less frequently 
                than quarterly.''.
                    (B) Effective date. <<NOTE: 42 USC 1396r note.>> --
                The amendment made by this paragraph shall take effect 1 
                year after the date of the enactment of this Act.
            (3) Special focus facility program.--Section 1919(f) of the 
        Social Security Act (42 U.S.C. 1396r(f)) is amended by adding at 
        the end of the following new paragraph:
            ``(10) Special focus facility program.--
                    ``(A) In general.--The Secretary shall conduct a 
                special focus facility program for enforcement of 
                requirements for nursing facilities that the Secretary 
                has identified as having substantially failed to meet 
                applicable requirements of this Act.
                    ``(B) Periodic surveys.--Under such program the 
                Secretary shall conduct surveys of each facility in the 
                program not less often than once every 6 months.''.

    (c) Availability of Reports on Surveys, Certifications, and 
Complaint Investigations.--
            (1) Skilled nursing facilities.--Section 1819(d)(1) of the 
        Social Security Act (42 U.S.C. 1395i-3(d)(1)), as amended by 
        section 6101, is amended by adding at the end the following new 
        subparagraph:
                    ``(C) Availability of survey, certification, and 
                complaint investigation reports.--A skilled nursing 
                facility must--
                          ``(i) have reports with respect to any 
                      surveys, certifications, and complaint 
                      investigations made respecting the facility during 
                      the 3 preceding years available for any individual 
                      to review upon request; and
                          ``(ii) <<NOTE: Public information.>> post 
                      notice of the availability of such reports in 
                      areas of the facility that are prominent and 
                      accessible to the public.
                The facility shall not make available under clause (i) 
                identifying information about complainants or 
                residents.''.
            (2) Nursing facilities.--Section 1919(d)(1) of the Social 
        Security Act (42 U.S.C. 1396r(d)(1)), as amended by section 
        6101, is amended by adding at the end the following new 
        subparagraph:
                    ``(V) Availability of survey, certification, and 
                complaint investigation reports.--A nursing facility 
                must--
                          ``(i) have reports with respect to any 
                      surveys, certifications, and complaint 
                      investigations made respecting the facility during 
                      the 3 preceding years available for any individual 
                      to review upon request; and

[[Page 124 STAT. 710]]

                          ``(ii) <<NOTE: Public information.>> post 
                      notice of the availability of such reports in 
                      areas of the facility that are prominent and 
                      accessible to the public.
                The facility shall not make available under clause (i) 
                identifying information about complainants or 
                residents.''.
            (3) Effective date. <<NOTE: 42 USC 1395i-3 note.>> --The 
        amendments made by this subsection shall take effect 1 year 
        after the date of the enactment of this Act.

    (d) Guidance to States on Form 2567 State Inspection Reports and 
Complaint Investigation Reports.--
            (1) Guidance. <<NOTE: 42 USC 1395i-3 note. Web posting.>> --
        The Secretary of Health and Human Services (in this subtitle 
        referred to as the ``Secretary'') shall provide guidance to 
        States on how States can establish electronic links to Form 2567 
        State inspection reports (or a successor form), complaint 
        investigation reports, and a facility's plan of correction or 
        other response to such Form 2567 State inspection reports (or a 
        successor form) on the Internet website of the State that 
        provides information on skilled nursing facilities and nursing 
        facilities and the Secretary shall, if possible, include such 
        information on Nursing Home Compare.
            (2) Requirement.--Section 1902(a)(9) of the Social Security 
        Act (42 U.S.C. 1396a(a)(9)) is amended--
                    (A) by striking ``and'' at the end of subparagraph 
                (B);
                    (B) by striking the semicolon at the end of 
                subparagraph (C) and inserting ``, and''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(D) that the State maintain a consumer-oriented 
                website providing useful information to consumers 
                regarding all skilled nursing facilities and all nursing 
                facilities in the State, including for each facility, 
                Form 2567 State inspection reports (or a successor 
                form), complaint investigation reports, the facility's 
                plan of correction, and such other information that the 
                State or the Secretary considers useful in assisting the 
                public to assess the quality of long term care options 
                and the quality of care provided by individual 
                facilities;''.
            (3) <<NOTE: 42 USC 1395i-3 note.>> Definitions.--In this 
        subsection:
                    (A) Nursing facility.--The term ``nursing facility'' 
                has the meaning given such term in section 1919(a) of 
                the Social Security Act (42 U.S.C. 1396r(a)).
                    (B) Secretary.--The term ``Secretary'' means the 
                Secretary of Health and Human Services.
                    (C) Skilled nursing facility.--The term ``skilled 
                nursing facility'' has the meaning given such term in 
                section 1819(a) of the Social Security Act (42 U.S.C. 
                1395i-3(a)).

    (e) <<NOTE: 42 USC 1395i-3 note. Deadline.>> Development of Consumer 
Rights Information Page on Nursing Home Compare Website.--Not later than 
1 year after the date of enactment of this Act, the Secretary shall 
ensure that the Department of Health and Human Services, as part of the 
information provided for comparison of nursing facilities on the Nursing 
Home Compare Medicare website develops and includes a consumer rights 
information page that contains links to descriptions of, and information 
with respect to, the following:
            (1) The documentation on nursing facilities that is 
        available to the public.

[[Page 124 STAT. 711]]

            (2) General information and tips on choosing a nursing 
        facility that meets the needs of the individual.
            (3) General information on consumer rights with respect to 
        nursing facilities.
            (4) The nursing facility survey process (on a national and 
        State-specific basis).
            (5) On a State-specific basis, the services available 
        through the State long-term care ombudsman for such State.

SEC. 6104. REPORTING OF EXPENDITURES.

    Section 1888 of the Social Security Act (42 U.S.C. 1395yy) is 
amended by adding at the end the following new subsection:
    ``(f) Reporting of Direct Care Expenditures.--
            ``(1) In general.--For cost reports submitted under this 
        title for cost reporting periods beginning on or after the date 
        that is 2 years after the date of the enactment of this 
        subsection, skilled nursing facilities shall separately report 
        expenditures for wages and benefits for direct care staff 
        (breaking out (at a minimum) registered nurses, licensed 
        professional nurses, certified nurse assistants, and other 
        medical and therapy staff).
            ``(2) Modification of form.--The Secretary, in consultation 
        with private sector accountants experienced with Medicare and 
        Medicaid nursing facility home cost reports, shall redesign such 
        reports to meet the requirement of paragraph (1) not later than 
        1 year after the date of the enactment of this subsection.
            ``(3) Categorization by functional accounts.--Not later than 
        30 months after the date of the enactment of this subsection, 
        the Secretary, working in consultation with the Medicare Payment 
        Advisory Commission, the Medicaid and CHIP Payment and Access 
        Commission, the Inspector General of the Department of Health 
        and Human Services, and other expert parties the Secretary 
        determines appropriate, shall take the expenditures listed on 
        cost reports, as modified under paragraph (1), submitted by 
        skilled nursing facilities and categorize such expenditures, 
        regardless of any source of payment for such expenditures, for 
        each skilled nursing facility into the following functional 
        accounts on an annual basis:
                    ``(A) Spending on direct care services (including 
                nursing, therapy, and medical services).
                    ``(B) Spending on indirect care (including 
                housekeeping and dietary services).
                    ``(C) Capital assets (including building and land 
                costs).
                    ``(D) Administrative services costs.
            ``(4) Availability of information 
        submitted. <<NOTE: Procedures.>> --The Secretary shall establish 
        procedures to make information on expenditures submitted under 
        this subsection readily available to interested parties upon 
        request, subject to such requirements as the Secretary may 
        specify under the procedures established under this 
        paragraph.''.

SEC. 6105. STANDARDIZED COMPLAINT FORM.

    (a) In General.--Section 1128I of the Social Security Act, as added 
and amended by this Act, is amended by adding at the end the following 
new subsection:
    ``(f) <<NOTE: 42 USC 1320a-7j.>>  Standardized Complaint Form.--
            ``(1) Development by the secretary.--The Secretary shall 
        develop a standardized complaint form for use by a resident

[[Page 124 STAT. 712]]

        (or a person acting on the resident's behalf) in filing a 
        complaint with a State survey and certification agency and a 
        State long-term care ombudsman program with respect to a 
        facility.
            ``(2) Complaint forms and resolution processes.--
                    ``(A) Complaint forms.--The State must make the 
                standardized complaint form developed under paragraph 
                (1) available upon request to--
                          ``(i) a resident of a facility; and
                          ``(ii) any person acting on the resident's 
                      behalf.
                    ``(B) Complaint resolution process.--The State must 
                establish a complaint resolution process in order to 
                ensure that the legal representative of a resident of a 
                facility or other responsible party is not denied access 
                to such resident or otherwise retaliated against if they 
                have complained about the quality of care provided by 
                the facility or other issues relating to the facility. 
                Such complaint resolution process shall include--
                          ``(i) procedures to assure accurate tracking 
                      of complaints received, including notification to 
                      the complainant that a complaint has been 
                      received;
                          ``(ii) procedures to determine the likely 
                      severity of a complaint and for the investigation 
                      of the complaint; and
                          ``(iii) deadlines for responding to a 
                      complaint and for notifying the complainant of the 
                      outcome of the investigation.
            ``(3) Rule of construction.--Nothing in this subsection 
        shall be construed as preventing a resident of a facility (or a 
        person acting on the resident's behalf) from submitting a 
        complaint in a manner or format other than by using the 
        standardized complaint form developed under paragraph (1) 
        (including submitting a complaint orally).''.

    (b) <<NOTE: 42 USC 1320a-7j note.>> Effective Date.--The amendment 
made by this section shall take effect 1 year after the date of the 
enactment of this Act.

SEC. 6106. ENSURING STAFFING ACCOUNTABILITY.

    Section 1128I of the Social Security Act, as added and amended by 
this Act, <<NOTE: 42 USC 1320a-7j.>> is amended by adding at the end the 
following new subsection:

    ``(g) Submission of Staffing Information Based on Payroll Data in a 
Uniform Format. <<NOTE: Deadline.>> --Beginning not later than 2 years 
after the date of the enactment of this subsection, and after consulting 
with State long-term care ombudsman programs, consumer advocacy groups, 
provider stakeholder groups, employees and their representatives, and 
other parties the Secretary deems appropriate, the Secretary shall 
require a facility to electronically submit to the Secretary direct care 
staffing information (including information with respect to agency and 
contract staff) based on payroll and other verifiable and auditable data 
in a uniform format (according to specifications established by the 
Secretary in consultation with such programs, groups, and parties). Such 
specifications shall require that the information submitted under the 
preceding sentence--
            ``(1) specify the category of work a certified employee 
        performs (such as whether the employee is a registered nurse,

[[Page 124 STAT. 713]]

        licensed practical nurse, licensed vocational nurse, certified 
        nursing assistant, therapist, or other medical personnel);
            ``(2) include resident census data and information on 
        resident case mix;
            ``(3) include a regular reporting schedule; and
            ``(4) include information on employee turnover and tenure 
        and on the hours of care provided by each category of certified 
        employees referenced in paragraph (1) per resident per day.

Nothing in this subsection shall be construed as preventing the 
Secretary from requiring submission of such information with respect to 
specific categories, such as nursing staff, before other categories of 
certified employees. Information under this subsection with respect to 
agency and contract staff shall be kept separate from information on 
employee staffing.''.

SEC. 6107. GAO STUDY AND REPORT ON FIVE-STAR QUALITY RATING SYSTEM.

    (a) Study.--The Comptroller General of the United States (in this 
section referred to as the ``Comptroller General'') shall conduct a 
study on the Five-Star Quality Rating System for nursing homes of the 
Centers for Medicare & Medicaid Services. Such study shall include an 
analysis of--
            (1) how such system is being implemented;
            (2) any problems associated with such system or its 
        implementation; and
            (3) how such system could be improved.

    (b) Report.--Not later than 2 years after the date of enactment of 
this Act, the Comptroller General shall submit to Congress a report 
containing the results of the study conducted under subsection (a), 
together with recommendations for such legislation and administrative 
action as the Comptroller General determines appropriate.

                     PART II--TARGETING ENFORCEMENT

SEC. 6111. CIVIL MONEY PENALTIES.

    (a) Skilled Nursing Facilities.--
            (1) In general.--Section 1819(h)(2)(B)(ii) of the Social 
        Security Act (42 U.S.C. 1395i-3(h)(2)(B)(ii)) is amended--
                    (A) by striking ``Penalties.--The Secretary'' and 
                inserting ``penalties.--
                                    ``(I) In general.--Subject to 
                                subclause (II), the Secretary''; and
                    (B) by adding at the end the following new 
                subclauses:
                                    ``(II) Reduction of civil money 
                                penalties in certain 
                                circumstances. <<NOTE: Deadline.>> --
                                Subject to subclause (III), in the case 
                                where a facility self-reports and 
                                promptly corrects a deficiency for which 
                                a penalty was imposed under this clause 
                                not later than 10 calendar days after 
                                the date of such imposition, the 
                                Secretary may reduce the amount of the 
                                penalty imposed by not more than 50 
                                percent.
                                    ``(III) Prohibitions on reduction 
                                for certain deficiencies.--
                                            ``(aa) Repeat 
                                        deficiencies.--The Secretary may 
                                        not reduce the amount of a 
                                        penalty under subclause (II) if 
                                        the Secretary had

[[Page 124 STAT. 714]]

                                        reduced a penalty imposed on the 
                                        facility in the preceding year 
                                        under such subclause with 
                                        respect to a repeat deficiency.
                                            ``(bb) Certain other 
                                        deficiencies.--The Secretary may 
                                        not reduce the amount of a 
                                        penalty under subclause (II) if 
                                        the penalty is imposed on the 
                                        facility for a deficiency that 
                                        is found to result in a pattern 
                                        of harm or widespread harm, 
                                        immediately jeopardizes the 
                                        health or safety of a resident 
                                        or residents of the facility, or 
                                        results in the death of a 
                                        resident of the facility.
                                    ``(IV) Collection of civil money 
                                penalties. <<NOTE: Regulations.>> --In 
                                the case of a civil money penalty 
                                imposed under this clause, the Secretary 
                                shall issue regulations that--
                                            
                                        ``(aa) <<NOTE: Deadline.>> subjec
                                        t to item (cc), not later than 
                                        30 days after the imposition of 
                                        the penalty, provide for the 
                                        facility to have the opportunity 
                                        to participate in an independent 
                                        informal dispute resolution 
                                        process which generates a 
                                        written record prior to the 
                                        collection of such penalty;
                                            ``(bb) <<NOTE: Time 
                                        period.>> in the case where the 
                                        penalty is imposed for each day 
                                        of noncompliance, provide that a 
                                        penalty may not be imposed for 
                                        any day during the period 
                                        beginning on the initial day of 
                                        the imposition of the penalty 
                                        and ending on the day on which 
                                        the informal dispute resolution 
                                        process under item (aa) is 
                                        completed;
                                            ``(cc) may provide for the 
                                        collection of such civil money 
                                        penalty and the placement of 
                                        such amounts collected in an 
                                        escrow account under the 
                                        direction of the Secretary on 
                                        the earlier of the date on which 
                                        the informal dispute resolution 
                                        process under item (aa) is 
                                        completed or the date that is 90 
                                        days after the date of the 
                                        imposition of the penalty;
                                            ``(dd) may provide that such 
                                        amounts collected are kept in 
                                        such account pending the 
                                        resolution of any subsequent 
                                        appeals;
                                            ``(ee) in the case where the 
                                        facility successfully appeals 
                                        the penalty, may provide for the 
                                        return of such amounts collected 
                                        (plus interest) to the facility; 
                                        and
                                            ``(ff) in the case where all 
                                        such appeals are unsuccessful, 
                                        may provide that some portion of 
                                        such amounts collected may be 
                                        used to support activities that 
                                        benefit residents, including 
                                        assistance to support and 
                                        protect residents of a facility 
                                        that closes (voluntarily or 
                                        involuntarily) or is decertified 
                                        (including offsetting costs of 
                                        relocating residents to home and 
                                        community-based settings or 
                                        another facility), projects that 
                                        support resident and

[[Page 124 STAT. 715]]

                                        family councils and other 
                                        consumer involvement in assuring 
                                        quality care in facilities, and 
                                        facility improvement initiatives 
                                        approved by the Secretary 
                                        (including joint training of 
                                        facility staff and surveyors, 
                                        technical assistance for 
                                        facilities implementing quality 
                                        assurance programs, the 
                                        appointment of temporary 
                                        management firms, and other 
                                        activities approved by the 
                                        Secretary).''.
            (2) Conforming amendment.--The second sentence of section 
        1819(h)(5) of the Social Security Act (42 U.S.C. 1395i-3(h)(5)) 
        is amended by inserting ``(ii)(IV),'' after ``(i),''.

    (b) Nursing Facilities.--
            (1) In general.--Section 1919(h)(3)(C)(ii) of the Social 
        Security Act (42 U.S.C. 1396r(h)(3)(C)) is amended--
                    (A) by striking ``Penalties.--The Secretary'' and 
                inserting ``penalties.--
                                    ``(I) In general.--Subject to 
                                subclause (II), the Secretary''; and
                    (B) by adding at the end the following new 
                subclauses:
                                    ``(II) Reduction of civil money 
                                penalties in certain 
                                circumstances. <<NOTE: Deadline.>> --
                                Subject to subclause (III), in the case 
                                where a facility self-reports and 
                                promptly corrects a deficiency for which 
                                a penalty was imposed under this clause 
                                not later than 10 calendar days after 
                                the date of such imposition, the 
                                Secretary may reduce the amount of the 
                                penalty imposed by not more than 50 
                                percent.
                                    ``(III) Prohibitions on reduction 
                                for certain deficiencies.--
                                            ``(aa) Repeat 
                                        deficiencies.--The Secretary may 
                                        not reduce the amount of a 
                                        penalty under subclause (II) if 
                                        the Secretary had reduced a 
                                        penalty imposed on the facility 
                                        in the preceding year under such 
                                        subclause with respect to a 
                                        repeat deficiency.
                                            ``(bb) Certain other 
                                        deficiencies.--The Secretary may 
                                        not reduce the amount of a 
                                        penalty under subclause (II) if 
                                        the penalty is imposed on the 
                                        facility for a deficiency that 
                                        is found to result in a pattern 
                                        of harm or widespread harm, 
                                        immediately jeopardizes the 
                                        health or safety of a resident 
                                        or residents of the facility, or 
                                        results in the death of a 
                                        resident of the facility.
                                    ``(IV) Collection of civil money 
                                penalties. <<NOTE: Regulations.>> --In 
                                the case of a civil money penalty 
                                imposed under this clause, the Secretary 
                                shall issue regulations that--
                                            
                                        ``(aa) <<NOTE: Deadline.>> subjec
                                        t to item (cc), not later than 
                                        30 days after the imposition of 
                                        the penalty, provide for the 
                                        facility to have the opportunity 
                                        to participate in an independent 
                                        informal dispute resolution 
                                        process which generates a 
                                        written record prior to the 
                                        collection of such penalty;

[[Page 124 STAT. 716]]

                                            ``(bb) <<NOTE: Time 
                                        period.>> in the case where the 
                                        penalty is imposed for each day 
                                        of noncompliance, provide that a 
                                        penalty may not be imposed for 
                                        any day during the period 
                                        beginning on the initial day of 
                                        the imposition of the penalty 
                                        and ending on the day on which 
                                        the informal dispute resolution 
                                        process under item (aa) is 
                                        completed;
                                            ``(cc) may provide for the 
                                        collection of such civil money 
                                        penalty and the placement of 
                                        such amounts collected in an 
                                        escrow account under the 
                                        direction of the Secretary on 
                                        the earlier of the date on which 
                                        the informal dispute resolution 
                                        process under item (aa) is 
                                        completed or the date that is 90 
                                        days after the date of the 
                                        imposition of the penalty;
                                            ``(dd) may provide that such 
                                        amounts collected are kept in 
                                        such account pending the 
                                        resolution of any subsequent 
                                        appeals;
                                            ``(ee) in the case where the 
                                        facility successfully appeals 
                                        the penalty, may provide for the 
                                        return of such amounts collected 
                                        (plus interest) to the facility; 
                                        and
                                            ``(ff) in the case where all 
                                        such appeals are unsuccessful, 
                                        may provide that some portion of 
                                        such amounts collected may be 
                                        used to support activities that 
                                        benefit residents, including 
                                        assistance to support and 
                                        protect residents of a facility 
                                        that closes (voluntarily or 
                                        involuntarily) or is decertified 
                                        (including offsetting costs of 
                                        relocating residents to home and 
                                        community-based settings or 
                                        another facility), projects that 
                                        support resident and family 
                                        councils and other consumer 
                                        involvement in assuring quality 
                                        care in facilities, and facility 
                                        improvement initiatives approved 
                                        by the Secretary (including 
                                        joint training of facility staff 
                                        and surveyors, technical 
                                        assistance for facilities 
                                        implementing quality assurance 
                                        programs, the appointment of 
                                        temporary management firms, and 
                                        other activities approved by the 
                                        Secretary).''.
            (2) Conforming amendment.--Section 1919(h)(5)(8) of the 
        Social Security Act (42 U.S.C. 1396r(h)(5)(8)) is amended by 
        inserting ``(ii)(IV),'' after ``(i),''.

    (c) <<NOTE: 42 USC 1395i-3 note.>> Effective Date.--The amendments 
made by this section shall take effect 1 year after the date of the 
enactment of this Act.

SEC. 6112. <<NOTE: 42 USC 1320a-7j note.>> NATIONAL INDEPENDENT MONITOR 
            DEMONSTRATION PROJECT.

    (a) Establishment.--
            (1) In general.--The Secretary, in consultation with the 
        Inspector General of the Department of Health and Human 
        Services, shall conduct a demonstration project to develop, 
        test, and implement an independent monitor program to oversee

[[Page 124 STAT. 717]]

        interstate and large intrastate chains of skilled nursing 
        facilities and nursing facilities.
            (2) Selection.--The Secretary shall select chains of skilled 
        nursing facilities and nursing facilities described in paragraph 
        (1) to participate in the demonstration project under this 
        section from among those chains that submit an application to 
        the Secretary at such time, in such manner, and containing such 
        information as the Secretary may require.
            (3) Duration.--The Secretary shall conduct the demonstration 
        project under this section for a 2-year period.
            (4) Implementation. <<NOTE: Deadline.>> --The Secretary 
        shall implement the demonstration project under this section not 
        later than 1 year after the date of the enactment of this Act.

    (b) Requirements. <<NOTE: Evaluation.>> --The Secretary shall 
evaluate chains selected to participate in the demonstration project 
under this section based on criteria selected by the Secretary, 
including where evidence suggests that a number of the facilities of the 
chain are experiencing serious safety and quality of care problems. Such 
criteria may include the evaluation of a chain that includes a number of 
facilities participating in the ``Special Focus Facility'' program (or a 
successor program) or multiple facilities with a record of repeated 
serious safety and quality of care deficiencies.

    (c) Responsibilities. <<NOTE: Contracts.>> --An independent monitor 
that enters into a contract with the Secretary to participate in the 
conduct of the demonstration project under this section shall--
            (1) <<NOTE: Review.>> conduct periodic reviews and prepare 
        root-cause quality and deficiency analyses of a chain to assess 
        if facilities of the chain are in compliance with State and 
        Federal laws and regulations applicable to the facilities;
            (2) conduct sustained oversight of the efforts of the chain, 
        whether publicly or privately held, to achieve compliance by 
        facilities of the chain with State and Federal laws and 
        regulations applicable to the facilities;
            (3) analyze the management structure, distribution of 
        expenditures, and nurse staffing levels of facilities of the 
        chain in relation to resident census, staff turnover rates, and 
        tenure;
            (4) <<NOTE: Reports.>> report findings and recommendations 
        with respect to such reviews, analyses, and oversight to the 
        chain and facilities of the chain, to the Secretary, and to 
        relevant States; and
            (5) <<NOTE: Publication.>> publish the results of such 
        reviews, analyses, and oversight.

    (d) Implementation of Recommendations.--
            (1) Receipt of finding by chain. <<NOTE: Deadline.>> --Not 
        later than 10 days after receipt of a finding of an independent 
        monitor under subsection (c)(4), <<NOTE: Reports.>> a chain 
        participating in the demonstration project shall submit to the 
        independent monitor a report--
                    (A) outlining corrective actions the chain will take 
                to implement the recommendations in such report; or
                    (B) indicating that the chain will not implement 
                such recommendations, and why it will not do so.
            (2) Receipt of report by independent monitor.--Not later 
        than 10 days after receipt of a report submitted by a chain 
        under paragraph (1), an independent monitor shall finalize its 
        recommendations and submit a report to the chain and facilities 
        of the chain, the Secretary, and the State or States, as 
        appropriate, containing such final recommendations.

[[Page 124 STAT. 718]]

    (e) Cost of Appointment.--A chain shall be responsible for a portion 
of the costs associated with the appointment of independent monitors 
under the demonstration project under this 
section. <<NOTE: Payment. Procedures.>> The chain shall pay such portion 
to the Secretary (in an amount and in accordance with procedures 
established by the Secretary).

    (f) Waiver Authority.--The Secretary may waive such requirements of 
titles XVIII and XIX of the Social Security Act (42 U.S.C. 1395 et seq.; 
1396 et seq.) as may be necessary for the purpose of carrying out the 
demonstration project under this section.
    (g) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out this section.
    (h) Definitions.--In this section:
            (1) Additional disclosable party.--The term ``additional 
        disclosable party'' has the meaning given such term in section 
        1124(c)(5)(A) of the Social Security Act, as added by section 
        4201(a).
            (2) Facility.--The term ``facility'' means a skilled nursing 
        facility or a nursing facility.
            (3) Nursing facility.--The term ``nursing facility'' has the 
        meaning given such term in section 1919(a) of the Social 
        Security Act (42 U.S.C. 1396r(a)).
            (4) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services, acting through the Assistant 
        Secretary for Planning and Evaluation.
            (5) Skilled nursing facility.--The term ``skilled nursing 
        facility'' has the meaning given such term in section 1819(a) of 
        the Social Security Act (42 U.S.C. 1395(a)).

    (i) Evaluation and Report.--
            (1) Evaluation.--The Secretary, in consultation with the 
        Inspector General of the Department of Health and Human 
        Services, shall evaluate the demonstration project conducted 
        under this section.
            (2) Report.--Not later than 180 days after the completion of 
        the demonstration project under this section, the Secretary 
        shall submit to Congress a report containing the results of the 
        evaluation conducted under paragraph (1), together with 
        recommendations--
                    (A) as to whether the independent monitor program 
                should be established on a permanent basis;
                    (B) if the Secretary recommends that such program be 
                so established, on appropriate procedures and mechanisms 
                for such establishment; and
                    (C) for such legislation and administrative action 
                as the Secretary determines appropriate.

SEC. 6113. NOTIFICATION OF FACILITY CLOSURE.

    (a) In General.--Section 1128I of the Social Security Act, as added 
and amended by this Act, <<NOTE: 42 USC 1320a-7j.>> is amended by adding 
at the end the following new subsection:

    ``(h) Notification of Facility Closure.--
            ``(1) In general.--Any individual who is the administrator 
        of a facility must--

[[Page 124 STAT. 719]]

                    ``(A) <<NOTE: Notification. Deadlines.>> submit to 
                the Secretary, the State long-term care ombudsman, 
                residents of the facility, and the legal representatives 
                of such residents or other responsible parties, written 
                notification of an impending closure--
                          ``(i) subject to clause (ii), not later than 
                      the date that is 60 days prior to the date of such 
                      closure; and
                          ``(ii) in the case of a facility where the 
                      Secretary terminates the facility's participation 
                      under this title, not later than the date that the 
                      Secretary determines appropriate;
                    ``(B) ensure that the facility does not admit any 
                new residents on or after the date on which such written 
                notification is submitted; and
                    ``(C) <<NOTE: Plans.>> include in the notice a plan 
                for the transfer and adequate relocation of the 
                residents of the facility by a specified date prior to 
                closure that has been approved by the State, including 
                assurances that the residents will be transferred to the 
                most appropriate facility or other setting in terms of 
                quality, services, and location, taking into 
                consideration the needs, choice, and best interests of 
                each resident.
            ``(2) Relocation.--
                    ``(A) In general.--The State shall ensure that, 
                before a facility closes, all residents of the facility 
                have been successfully relocated to another facility or 
                an alternative home and community-based setting.
                    ``(B) Continuation of payments until residents 
                relocated.-- <<NOTE: Time period.>> The Secretary may, 
                as the Secretary determines appropriate, continue to 
                make payments under this title with respect to residents 
                of a facility that has submitted a notification under 
                paragraph (1) during the period beginning on the date 
                such notification is submitted and ending on the date on 
                which the resident is successfully relocated.
            ``(3) Sanctions.--Any individual who is the administrator of 
        a facility that fails to comply with the requirements of 
        paragraph (1)--
                    ``(A) shall be subject to a civil monetary penalty 
                of up to $100,000;
                    ``(B) may be subject to exclusion from participation 
                in any Federal health care program (as defined in 
                section 1128B(f)); and
                    ``(C) shall be subject to any other penalties that 
                may be prescribed by law.
            ``(4) Procedure.-- <<NOTE: Applicability.>> The provisions 
        of section 1128A (other than subsections (a) and (b) and the 
        second sentence of subsection (f)) shall apply to a civil money 
        penalty or exclusion under paragraph (3) in the same manner as 
        such provisions apply to a penalty or proceeding under section 
        1128A(a).''.

    (b) Conforming Amendments.--Section 1819(h)(4) of the Social 
Security Act (42 U.S.C. 1395i-3(h)(4)) is amended--
            (1) in the first sentence, by striking ``the Secretary shall 
        terminate'' and inserting ``the Secretary, subject to section 
        1128I(h), shall terminate''; and
            (2) in the second sentence, by striking ``subsection 
        (c)(2)'' and inserting ``subsection (c)(2) and section 
        1128I(h)''.

[[Page 124 STAT. 720]]

    (c) <<NOTE: 42 USC 1320a-7j note.>> Effective Date.--The amendments 
made by this section shall take effect 1 year after the date of the 
enactment of this Act.

SEC. 6114. <<NOTE: 42 USC 1395i-3 note.>> NATIONAL DEMONSTRATION 
            PROJECTS ON CULTURE CHANGE AND USE OF INFORMATION TECHNOLOGY 
            IN NURSING HOMES.

    (a) In General.--The Secretary shall conduct 2 demonstration 
projects, 1 for the development of best practices in skilled nursing 
facilities and nursing facilities that are involved in the culture 
change movement (including the development of resources for facilities 
to find and access funding in order to undertake culture change) and 1 
for the development of best practices in skilled nursing facilities and 
nursing facilities for the use of information technology to improve 
resident care.
    (b) Conduct of Demonstration Projects.--
            (1) Grant award.--Under each demonstration project conducted 
        under this section, the Secretary shall award 1 or more grants 
        to facility-based settings for the development of best practices 
        described in subsection (a) with respect to the demonstration 
        project involved. Such award shall be made on a competitive 
        basis and may be allocated in 1 lump-sum payment.
            (2) Consideration of special needs of residents.--Each 
        demonstration project conducted under this section shall take 
        into consideration the special needs of residents of skilled 
        nursing facilities and nursing facilities who have cognitive 
        impairment, including dementia.

    (c) Duration and Implementation.--
            (1) Duration.--The demonstration projects shall each be 
        conducted for a period not to exceed 3 years.
            (2) Implementation.-- <<NOTE: Deadline.>> The demonstration 
        projects shall each be implemented not later than 1 year after 
        the date of the enactment of this Act.

    (d) Definitions.--In this section:
            (1) Nursing facility.--The term ``nursing facility'' has the 
        meaning given such term in section 1919(a) of the Social 
        Security Act (42 U.S.C. 1396r(a)).
            (2) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (3) Skilled nursing facility.--The term ``skilled nursing 
        facility'' has the meaning given such term in section 1819(a) of 
        the Social Security Act (42 U.S.C. 1395(a)).

    (e) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out this section.
    (f) Report.-- <<NOTE: Recommenda- tions.>> Not later than 9 months 
after the completion of the demonstration project, the Secretary shall 
submit to Congress a report on such project, together with 
recommendations for such legislation and administrative action as the 
Secretary determines appropriate.

                   PART III--IMPROVING STAFF TRAINING

SEC. 6121. DEMENTIA AND ABUSE PREVENTION TRAINING.

    (a) Skilled Nursing Facilities.--
            (1) In general.--Section 1819(f)(2)(A)(i)(I) of the Social 
        Security Act (42 U.S.C. 1395i-3(f)(2)(A)(i)(I)) is amended by

[[Page 124 STAT. 721]]

        inserting ``(including, in the case of initial training and, if 
        the Secretary determines appropriate, in the case of ongoing 
        training, dementia management training, and patient abuse 
        prevention training'' before ``, (II)''.
            (2) Clarification of definition of nurse aide.--Section 
        1819(b)(5)(F) of the Social Security Act (42 U.S.C. 1395i-
        3(b)(5)(F)) is amended by adding at the end the following flush 
        sentence:
                ``Such term includes an individual who provides such 
                services through an agency or under a contract with the 
                facility.''.

    (b) Nursing Facilities.--
            (1) In general.--Section 1919(f)(2)(A)(i)(I) of the Social 
        Security Act (42 U.S.C. 1396r(f)(2)(A)(i)(I)) is amended by 
        inserting ``(including, in the case of initial training and, if 
        the Secretary determines appropriate, in the case of ongoing 
        training, dementia management training, and patient abuse 
        prevention training'' before ``, (II)''.
            (2) Clarification of definition of nurse aide.--Section 
        1919(b)(5)(F) of the Social Security Act (42 U.S.C. 
        1396r(b)(5)(F)) is amended by adding at the end the following 
        flush sentence:
                ``Such term includes an individual who provides such 
                services through an agency or under a contract with the 
                facility.''.

    (c) <<NOTE: 42 USC 1395i-3 note.>> Effective Date.--The amendments 
made by this section shall take effect 1 year after the date of the 
enactment of this Act.

Subtitle C--Nationwide Program for National and State Background Checks 
  on Direct Patient Access Employees of Long-term Care Facilities and 
                                Providers

SEC. 6201. <<NOTE: 42 USC 1320a-7l.>> NATIONWIDE PROGRAM FOR NATIONAL 
            AND STATE BACKGROUND CHECKS ON DIRECT PATIENT ACCESS 
            EMPLOYEES OF LONG-TERM CARE FACILITIES AND PROVIDERS.

    (a) In General.--The Secretary of Health and Human Services (in this 
section referred to as the ``Secretary''), shall establish a program to 
identify efficient, effective, and economical procedures for long term 
care facilities or providers to conduct background checks on prospective 
direct patient access employees on a nationwide basis (in this 
subsection, such program shall be referred to as the ``nationwide 
program''). Except for the following modifications, the Secretary shall 
carry out the nationwide program under similar terms and conditions as 
the pilot program under section 307 of the Medicare Prescription Drug, 
Improvement, and Modernization Act of 2003 (Public Law 108-173; 117 
Stat. 2257), including the prohibition on hiring abusive workers and the 
authorization of the imposition of penalties by a participating State 
under subsection (b)(3)(A) and (b)(6), respectively, of such section 
307:
            (1) Agreements.--

[[Page 124 STAT. 722]]

                    (A) Newly participating states.--The Secretary shall 
                enter into agreements with each State--
                          (i) that the Secretary has not entered into an 
                      agreement with under subsection (c)(1) of such 
                      section 307;
                          (ii) that agrees to conduct background checks 
                      under the nationwide program on a Statewide basis; 
                      and
                          (iii) that submits an application to the 
                      Secretary containing such information and at such 
                      time as the Secretary may specify.
                    (B) Certain previously participating states.--The 
                Secretary shall enter into agreements with each State--
                          (i) that the Secretary has entered into an 
                      agreement with under such subsection (c)(1), but 
                      only in the case where such agreement did not 
                      require the State to conduct background checks 
                      under the program established under subsection (a) 
                      of such section 307 on a Statewide basis;
                          (ii) that agrees to conduct background checks 
                      under the nationwide program on a Statewide basis; 
                      and
                          (iii) that submits an application to the 
                      Secretary containing such information and at such 
                      time as the Secretary may specify.
            (2) Nonapplication of selection criteria.--The selection 
        criteria required under subsection (c)(3)(B) of such section 307 
        shall not apply.
            (3) Required fingerprint check as part of criminal history 
        background check.--The procedures established under subsection 
        (b)(1) of such section 307 shall--
                    (A) require that the long-term care facility or 
                provider (or the designated agent of the long-term care 
                facility or provider) obtain State and national criminal 
                history background checks on the prospective employee 
                through such means as the Secretary determines 
                appropriate, efficient, and effective that utilize a 
                search of State-based abuse and neglect registries and 
                databases, including the abuse and neglect registries of 
                another State in the case where a prospective employee 
                previously resided in that State, State criminal history 
                records, the records of any proceedings in the State 
                that may contain disqualifying information about 
                prospective employees (such as proceedings conducted by 
                State professional licensing and disciplinary boards and 
                State Medicaid Fraud Control Units), and Federal 
                criminal history records, including a fingerprint check 
                using the Integrated Automated Fingerprint 
                Identification System of the Federal Bureau of 
                Investigation;
                    (B) require States to describe and test methods that 
                reduce duplicative fingerprinting, including providing 
                for the development of ``rap back'' capability by the 
                State such that, if a direct patient access employee of 
                a long-term care facility or provider is convicted of a 
                crime following the initial criminal history background 
                check conducted

[[Page 124 STAT. 723]]

                with respect to such employee, and the employee's 
                fingerprints match the prints on file with the State law 
                enforcement department, the department will immediately 
                inform the State and the State will immediately inform 
                the long-term care facility or provider which employs 
                the direct patient access employee of such conviction; 
                and
                    (C) require that criminal history background checks 
                conducted under the nationwide program remain valid for 
                a period of time specified by the Secretary.
            (4) State requirements.--An agreement entered into under 
        paragraph (1) shall require that a participating State--
                    (A) be responsible for monitoring compliance with 
                the requirements of the nationwide program;
                    (B) <<NOTE: Procedures.>> have procedures in place 
                to--
                          (i) conduct screening and criminal history 
                      background checks under the nationwide program in 
                      accordance with the requirements of this section;
                          (ii) monitor compliance by long-term care 
                      facilities and providers with the procedures and 
                      requirements of the nationwide program;
                          (iii) as appropriate, provide for a 
                      provisional period of employment by a long-term 
                      care facility or provider of a direct patient 
                      access employee, not to exceed 60 days, pending 
                      completion of the required criminal history 
                      background check and, in the case where the 
                      employee has appealed the results of such 
                      background check, pending completion of the 
                      appeals process, during which the employee shall 
                      be subject to direct on-site supervision (in 
                      accordance with procedures established by the 
                      State to ensure that a long-term care facility or 
                      provider furnishes such direct on-site 
                      supervision);
                          (iv) provide an independent process by which a 
                      provisional employee or an employee may appeal or 
                      dispute the accuracy of the information obtained 
                      in a background check performed under the 
                      nationwide program, including the specification of 
                      criteria for appeals for direct patient access 
                      employees found to have disqualifying information 
                      which shall include consideration of the passage 
                      of time, extenuating circumstances, demonstration 
                      of rehabilitation, and relevancy of the particular 
                      disqualifying information with respect to the 
                      current employment of the individual;
                          (v) provide for the designation of a single 
                      State agency as responsible for--
                                    (I) overseeing the coordination of 
                                any State and national criminal history 
                                background checks requested by a long-
                                term care facility or provider (or the 
                                designated agent of the long-term care 
                                facility or provider) utilizing a search 
                                of State and Federal criminal history 
                                records, including a fingerprint check 
                                of such records;
                                    (II) overseeing the design of 
                                appropriate privacy and security 
                                safeguards for use in the review of the 
                                results of any State or national 
                                criminal history background checks 
                                conducted regarding a

[[Page 124 STAT. 724]]

                                prospective direct patient access 
                                employee to determine whether the 
                                employee has any conviction for a 
                                relevant crime;
                                    (III) immediately reporting to the 
                                long-term care facility or provider that 
                                requested the criminal history 
                                background check the results of such 
                                review; and
                                    (IV) in the case of an employee with 
                                a conviction for a relevant crime that 
                                is subject to reporting under section 
                                1128E of the Social Security Act (42 
                                U.S.C. 1320a-7e), reporting the 
                                existence of such conviction to the 
                                database established under that section;
                          (vi) determine which individuals are direct 
                      patient access employees (as defined in paragraph 
                      (6)(B)) for purposes of the nationwide program;
                          (vii) as appropriate, specify offenses, 
                      including convictions for violent crimes, for 
                      purposes of the nationwide program; and
                          (viii) describe and test methods that reduce 
                      duplicative fingerprinting, including providing 
                      for the development of ``rap back'' capability 
                      such that, if a direct patient access employee of 
                      a long-term care facility or provider is convicted 
                      of a crime following the initial criminal history 
                      background check conducted with respect to such 
                      employee, and the employee's fingerprints match 
                      the prints on file with the State law enforcement 
                      department--
                                    (I) the department will immediately 
                                inform the State agency designated under 
                                clause (v) and such agency will 
                                immediately inform the facility or 
                                provider which employs the direct 
                                patient access employee of such 
                                conviction; and
                                    (II) the State will provide, or will 
                                require the facility to provide, to the 
                                employee a copy of the results of the 
                                criminal history background check 
                                conducted with respect to the employee 
                                at no charge in the case where the 
                                individual requests such a copy.
            (5) Payments.--
                    (A) Newly participating states.--
                          (i) In general.--As part of the application 
                      submitted by a State under paragraph (1)(A)(iii), 
                      the State shall guarantee, with respect to the 
                      costs to be incurred by the State in carrying out 
                      the nationwide program, that the State will make 
                      available (directly or through donations from 
                      public or private entities) a particular amount of 
                      non-Federal contributions, as a condition of 
                      receiving the Federal match under clause (ii).
                          (ii) Federal match.--The payment amount to 
                      each State that the Secretary enters into an 
                      agreement with under paragraph (1)(A) shall be 3 
                      times the amount that the State guarantees to make 
                      available under clause (i), except that in no case 
                      may the payment amount exceed $3,000,000.
                    (B) Previously participating states.--

[[Page 124 STAT. 725]]

                          (i) In general.--As part of the application 
                      submitted by a State under paragraph (1)(B)(iii), 
                      the State shall guarantee, with respect to the 
                      costs to be incurred by the State in carrying out 
                      the nationwide program, that the State will make 
                      available (directly or through donations from 
                      public or private entities) a particular amount of 
                      non-Federal contributions, as a condition of 
                      receiving the Federal match under clause (ii).
                          (ii) Federal match.--The payment amount to 
                      each State that the Secretary enters into an 
                      agreement with under paragraph (1)(B) shall be 3 
                      times the amount that the State guarantees to make 
                      available under clause (i), except that in no case 
                      may the payment amount exceed $1,500,000.
            (6) Definitions.--Under the nationwide program:
                    (A) Conviction for a relevant crime.--The term 
                ``conviction for a relevant crime'' means any Federal or 
                State criminal conviction for--
                          (i) any offense described in section 1128(a) 
                      of the Social Security Act (42 U.S.C. 1320a-7); or
                          (ii) such other types of offenses as a 
                      participating State may specify for purposes of 
                      conducting the program in such State.
                    (B) Disqualifying information.--The term 
                ``disqualifying information'' means a conviction for a 
                relevant crime or a finding of patient or resident 
                abuse.
                    (C) Finding of patient or resident abuse.--The term 
                ``finding of patient or resident abuse'' means any 
                substantiated finding by a State agency under section 
                1819(g)(1)(C) or 1919(g)(1)(C) of the Social Security 
                Act (42 U.S.C. 1395i-3(g)(1)(C), 1396r(g)(1)(C)) or a 
                Federal agency that a direct patient access employee has 
                committed--
                          (i) an act of patient or resident abuse or 
                      neglect or a misappropriation of patient or 
                      resident property; or
                          (ii) such other types of acts as a 
                      participating State may specify for purposes of 
                      conducting the program in such State.
                    (D) Direct patient access employee.--The term 
                ``direct patient access employee'' means any individual 
                who has access to a patient or resident of a long-term 
                care facility or provider through employment or through 
                a contract with such facility or provider and has duties 
                that involve (or may involve) one-on-one contact with a 
                patient or resident of the facility or provider, as 
                determined by the State for purposes of the nationwide 
                program. Such term does not include a volunteer unless 
                the volunteer has duties that are equivalent to the 
                duties of a direct patient access employee and those 
                duties involve (or may involve) one-on-one contact with 
                a patient or resident of the long-term care facility or 
                provider.
                    (E) Long-term care facility or provider.--The term 
                ``long-term care facility or provider'' means the 
                following facilities or providers which receive payment 
                for services under title XVIII or XIX of the Social 
                Security Act:

[[Page 124 STAT. 726]]

                          (i) A skilled nursing facility (as defined in 
                      section 1819(a) of the Social Security Act (42 
                      U.S.C. 1395i-3(a))).
                          (ii) A nursing facility (as defined in section 
                      1919(a) of such Act (42 U.S.C. 1396r(a))).
                          (iii) A home health agency.
                          (iv) A provider of hospice care (as defined in 
                      section 1861(dd)(1) of such Act (42 U.S.C. 
                      1395x(dd)(1))).
                          (v) A long-term care hospital (as described in 
                      section 1886(d)(1)(B)(iv) of such Act (42 U.S.C. 
                      1395ww(d)(1)(B)(iv))).
                          (vi) A provider of personal care services.
                          (vii) A provider of adult day care.
                          (viii) A residential care provider that 
                      arranges for, or directly provides, long-term care 
                      services, including an assisted living facility 
                      that provides a level of care established by the 
                      Secretary.
                          (ix) An intermediate care facility for the 
                      mentally retarded (as defined in section 1905(d) 
                      of such Act (42 U.S.C. 1396d(d))).
                          (x) Any other facility or provider of long-
                      term care services under such titles as the 
                      participating State determines appropriate.
            (7) Evaluation and report.--
                    (A) Evaluation.--
                          (i) In general.--The Inspector General of the 
                      Department of Health and Human Services shall 
                      conduct an evaluation of the nationwide program.
                          (ii) Inclusion of specific topics.--The 
                      evaluation conducted under clause (i) shall 
                      include the following:
                                    (I) A review of the various 
                                procedures implemented by participating 
                                States for long-term care facilities or 
                                providers, including staffing agencies, 
                                to conduct background checks of direct 
                                patient access employees under the 
                                nationwide program and identification of 
                                the most appropriate, efficient, and 
                                effective procedures for conducting such 
                                background checks.
                                    (II) An assessment of the costs of 
                                conducting such background checks 
                                (including start up and administrative 
                                costs).
                                    (III) A determination of the extent 
                                to which conducting such background 
                                checks leads to any unintended 
                                consequences, including a reduction in 
                                the available workforce for long-term 
                                care facilities or providers.
                                    (IV) An assessment of the impact of 
                                the nationwide program on reducing the 
                                number of incidents of neglect, abuse, 
                                and misappropriation of resident 
                                property to the extent practicable.
                                    (V) An evaluation of other aspects 
                                of the nationwide program, as determined 
                                appropriate by the Secretary.
                    (B) Report.--Not later than 180 days after the 
                completion of the nationwide program, the Inspector 
                General of the Department of Health and Human Services 
                shall

[[Page 124 STAT. 727]]

                submit a report to Congress containing the results of 
                the evaluation conducted under subparagraph (A).

    (b) Funding.--
            (1) Notification.--The Secretary of Health and Human 
        Services shall notify the Secretary of the Treasury of the 
        amount necessary to carry out the nationwide program under this 
        section for the period of fiscal years 2010 through 2012, except 
        that in no case shall such amount exceed $160,000,000.
            (2) Transfer of funds.--
                    (A) In general.--Out of any funds in the Treasury 
                not otherwise appropriated, the Secretary of the 
                Treasury shall provide for the transfer to the Secretary 
                of Health and Human Services of the amount specified as 
                necessary to carry out the nationwide program under 
                paragraph (1). Such amount shall remain available until 
                expended.
                    (B) Reservation of funds for conduct of 
                evaluation.--The Secretary may reserve not more than 
                $3,000,000 of the amount transferred under subparagraph 
                (A) to provide for the conduct of the evaluation under 
                subsection (a)(7)(A).

             Subtitle D--Patient-Centered Outcomes Research

SEC. 6301. PATIENT-CENTERED OUTCOMES RESEARCH.

    (a) In General.--Title XI of the Social Security Act (42 U.S.C. 1301 
et seq.) is amended by adding at the end the following new part:

          ``Part D--Comparative Clinical Effectiveness Research


              ``comparative clinical effectiveness research


    ``Sec. 1181.  <<NOTE: 42 USC 1320e.>> (a) Definitions.--In this 
section:
            ``(1) Board.--The term `Board' means the Board of Governors 
        established under subsection (f).
            ``(2) Comparative clinical effectiveness research; 
        research.--
                    ``(A) In general.--The terms `comparative clinical 
                effectiveness research' and `research' mean research 
                evaluating and comparing health outcomes and the 
                clinical effectiveness, risks, and benefits of 2 or more 
                medical treatments, services, and items described in 
                subparagraph (B).
                    ``(B) Medical treatments, services, and items 
                described.--The medical treatments, services, and items 
                described in this subparagraph are health care 
                interventions, protocols for treatment, care management, 
                and delivery, procedures, medical devices, diagnostic 
                tools, pharmaceuticals (including drugs and 
                biologicals), integrative health practices, and any 
                other strategies or items being used in the treatment, 
                management, and diagnosis of, or prevention of illness 
                or injury in, individuals.
            ``(3) Conflict of interest.--The term `conflict of interest' 
        means an association, including a financial or personal 
        association, that have the potential to bias or have the 
        appearance

[[Page 124 STAT. 728]]

        of biasing an individual's decisions in matters related to the 
        Institute or the conduct of activities under this section.
            ``(4) Real conflict of interest.--The term `real conflict of 
        interest' means any instance where a member of the Board, the 
        methodology committee established under subsection (d)(6), or an 
        advisory panel appointed under subsection (d)(4), or a close 
        relative of such member, has received or could receive either of 
        the following:
                    ``(A) A direct financial benefit of any amount 
                deriving from the result or findings of a study 
                conducted under this section.
                    ``(B) A financial benefit from individuals or 
                companies that own or manufacture medical treatments, 
                services, or items to be studied under this section that 
                in the aggregate exceeds $10,000 per year. For purposes 
                of the preceding sentence, a financial benefit includes 
                honoraria, fees, stock, or other financial benefit and 
                the current value of the member or close relative's 
                already existing stock holdings, in addition to any 
                direct financial benefit deriving from the results or 
                findings of a study conducted under this section.

    ``(b) Patient-Centered Outcomes Research Institute.--
            ``(1) Establishment.--There is authorized to be established 
        a nonprofit corporation, to be known as the `Patient-Centered 
        Outcomes Research Institute' (referred to in this section as the 
        `Institute') which is neither an agency nor establishment of the 
        United States Government.
            ``(2) <<NOTE: District of Columbia.>> Application of 
        provisions.--The Institute shall be subject to the provisions of 
        this section, and, to the extent consistent with this section, 
        to the District of Columbia Nonprofit Corporation Act.
            ``(3) Funding of comparative clinical effectiveness 
        research.--For fiscal year 2010 and each subsequent fiscal year, 
        amounts in the Patient-Centered Outcomes Research Trust Fund 
        (referred to in this section as the `PCORTF') under section 9511 
        of the Internal Revenue Code of 1986 shall be available, without 
        further appropriation, to the Institute to carry out this 
        section.

    ``(c) Purpose.--The purpose of the Institute is to assist patients, 
clinicians, purchasers, and policy-makers in making informed health 
decisions by advancing the quality and relevance of evidence concerning 
the manner in which diseases, disorders, and other health conditions can 
effectively and appropriately be prevented, diagnosed, treated, 
monitored, and managed through research and evidence synthesis that 
considers variations in patient subpopulations, and the dissemination of 
research findings with respect to the relative health outcomes, clinical 
effectiveness, and appropriateness of the medical treatments, services, 
and items described in subsection (a)(2)(B).
    ``(d) Duties.--
            ``(1) Identifying research priorities and establishing 
        research project agenda.--
                    ``(A) Identifying research priorities.--The 
                Institute shall identify national priorities for 
                research, taking into account factors of disease 
                incidence, prevalence, and burden in the United States 
                (with emphasis on chronic conditions), gaps in evidence 
                in terms of clinical outcomes, practice

[[Page 124 STAT. 729]]

                variations and health disparities in terms of delivery 
                and outcomes of care, the potential for new evidence to 
                improve patient health, well-being, and the quality of 
                care, the effect on national expenditures associated 
                with a health care treatment, strategy, or health 
                conditions, as well as patient needs, outcomes, and 
                preferences, the relevance to patients and clinicians in 
                making informed health decisions, and priorities in the 
                National Strategy for quality care established under 
                section 399H of the Public Health Service Act that are 
                consistent with this section.
                    ``(B) Establishing research project agenda.--The 
                Institute shall establish and update a research project 
                agenda for research to address the priorities identified 
                under subparagraph (A), taking into consideration the 
                types of research that might address each priority and 
                the relative value (determined based on the cost of 
                conducting research compared to the potential usefulness 
                of the information produced by research) associated with 
                the different types of research, and such other factors 
                as the Institute determines appropriate.
            ``(2) Carrying out research project agenda.--
                    ``(A) Research.--The Institute shall carry out the 
                research project agenda established under paragraph 
                (1)(B) in accordance with the methodological standards 
                adopted under paragraph (9) using methods, including the 
                following:
                          ``(i) Systematic reviews and assessments of 
                      existing and future research and evidence 
                      including original research conducted subsequent 
                      to the date of the enactment of this section.
                          ``(ii) Primary research, such as randomized 
                      clinical trials, molecularly informed trials, and 
                      observational studies.
                          ``(iii) Any other methodologies recommended by 
                      the methodology committee established under 
                      paragraph (6) that are adopted by the Board under 
                      paragraph (9).
                    ``(B) Contracts for the management of funding and 
                conduct of research.--
                          ``(i) Contracts.--
                                    ``(I) In general.--In accordance 
                                with the research project agenda 
                                established under paragraph (1)(B), the 
                                Institute shall enter into contracts for 
                                the management of funding and conduct of 
                                research in accordance with the 
                                following:
                                            ``(aa) Appropriate agencies 
                                        and instrumentalities of the 
                                        Federal Government.
                                            ``(bb) Appropriate academic 
                                        research, private sector 
                                        research, or study-conducting 
                                        entities.
                                    ``(II) Preference.--In entering into 
                                contracts under subclause (I), the 
                                Institute shall give preference to the 
                                Agency for Healthcare Research and 
                                Quality and the National Institutes of 
                                Health, but only if the research to be 
                                conducted or managed under such contract 
                                is authorized by the governing statutes 
                                of such Agency or Institutes.

[[Page 124 STAT. 730]]

                          ``(ii) Conditions for contracts.--A contract 
                      entered into under this subparagraph shall require 
                      that the agency, instrumentality, or other 
                      entity--
                                    ``(I) abide by the transparency and 
                                conflicts of interest requirements under 
                                subsection (h) that apply to the 
                                Institute with respect to the research 
                                managed or conducted under such 
                                contract;
                                    ``(II) comply with the 
                                methodological standards adopted under 
                                paragraph (9) with respect to such 
                                research;
                                    ``(III) consult with the expert 
                                advisory panels for clinical trials and 
                                rare disease appointed under clauses 
                                (ii) and (iii), respectively, of 
                                paragraph (4)(A);
                                    ``(IV) subject to clause (iv), 
                                permit a researcher who conducts 
                                original research under the contract for 
                                the agency, instrumentality, or other 
                                entity to have such research published 
                                in a peer-reviewed journal or other 
                                publication;
                                    ``(V) have appropriate processes in 
                                place to manage data privacy and meet 
                                ethical standards for the research;
                                    ``(VI) comply with the requirements 
                                of the Institute for making the 
                                information available to the public 
                                under paragraph (8); and
                                    ``(VII) comply with other terms and 
                                conditions determined necessary by the 
                                Institute to carry out the research 
                                agenda adopted under paragraph (2).
                          ``(iii) Coverage of copayments or 
                      coinsurance.--A contract entered into under this 
                      subparagraph may allow for the coverage of 
                      copayments or coinsurance, or allow for other 
                      appropriate measures, to the extent that such 
                      coverage or other measures are necessary to 
                      preserve the validity of a research project, such 
                      as in the case where the research project must be 
                      blinded.
                          ``(iv) Requirements for publication of 
                      research.--Any research published under clause 
                      (ii)(IV) shall be within the bounds of and 
                      entirely consistent with the evidence and findings 
                      produced under the contract with the Institute 
                      under this subparagraph. If the Institute 
                      determines that those requirements are not met, 
                      the Institute shall not enter into another 
                      contract with the agency, instrumentality, or 
                      entity which managed or conducted such research 
                      for a period determined appropriate by the 
                      Institute (but not less than 5 years).
                    ``(C) Review and update of evidence.--The Institute 
                shall review and update evidence on a periodic basis as 
                appropriate.
                    ``(D) Taking into account potential differences.--
                Research shall be designed, as appropriate, to take into 
                account the potential for differences in the 
                effectiveness of health care treatments, services, and 
                items as used with various subpopulations, such as 
                racial and ethnic minorities, women, age, and groups of 
                individuals with different comorbidities, genetic and 
                molecular sub-types,

[[Page 124 STAT. 731]]

                or quality of life preferences and include members of 
                such subpopulations as subjects in the research as 
                feasible and appropriate.
                    ``(E) Differences in treatment modalities.--Research 
                shall be designed, as appropriate, to take into account 
                different characteristics of treatment modalities that 
                may affect research outcomes, such as the phase of the 
                treatment modality in the innovation cycle and the 
                impact of the skill of the operator of the treatment 
                modality.
            ``(3) Data collection.--
                    ``(A) In general.--The Secretary shall, with 
                appropriate safeguards for privacy, make available to 
                the Institute such data collected by the Centers for 
                Medicare & Medicaid Services under the programs under 
                titles XVIII, XIX, and XXI, as well as provide access to 
                the data networks developed under section 937(f) of the 
                Public Health Service Act, as the Institute and its 
                contractors may require to carry out this section. The 
                Institute may also request and obtain data from Federal, 
                State, or private entities, including data from clinical 
                databases and registries.
                    ``(B) Use of data.--The Institute shall only use 
                data provided to the Institute under subparagraph (A) in 
                accordance with laws and regulations governing the 
                release and use of such data, including applicable 
                confidentiality and privacy standards.
            ``(4) Appointing expert advisory panels.--
                    ``(A) Appointment.--
                          ``(i) In general.--The Institute may appoint 
                      permanent or ad hoc expert advisory panels as 
                      determined appropriate to assist in identifying 
                      research priorities and establishing the research 
                      project agenda under paragraph (1) and for other 
                      purposes.
                          ``(ii) Expert advisory panels for clinical 
                      trials.--The Institute shall appoint expert 
                      advisory panels in carrying out randomized 
                      clinical trials under the research project agenda 
                      under paragraph (2)(A)(ii). Such expert advisory 
                      panels shall advise the Institute and the agency, 
                      instrumentality, or entity conducting the research 
                      on the research question involved and the research 
                      design or protocol, including important patient 
                      subgroups and other parameters of the research. 
                      Such panels shall be available as a resource for 
                      technical questions that may arise during the 
                      conduct of such research.
                          ``(iii) Expert advisory panel for rare 
                      disease.--In the case of a research study for rare 
                      disease, the Institute shall appoint an expert 
                      advisory panel for purposes of assisting in the 
                      design of the research study and determining the 
                      relative value and feasibility of conducting the 
                      research study.
                    ``(B) Composition.--An expert advisory panel 
                appointed under subparagraph (A) shall include 
                representatives of practicing and research clinicians, 
                patients, and experts in scientific and health services 
                research, health services delivery, and evidence-based 
                medicine who have experience in the relevant topic, and 
                as appropriate, experts

[[Page 124 STAT. 732]]

                in integrative health and primary prevention strategies. 
                The Institute may include a technical expert of each 
                manufacturer or each medical technology that is included 
                under the relevant topic, project, or category for which 
                the panel is established.
            ``(5) Supporting patient and consumer representatives.--The 
        Institute shall provide support and resources to help patient 
        and consumer representatives effectively participate on the 
        Board and expert advisory panels appointed by the Institute 
        under paragraph (4).
            ``(6) Establishing methodology committee.--
                    ``(A) In general.--The Institute shall establish a 
                standing methodology committee to carry out the 
                functions described in subparagraph (C).
                    ``(B) Appointment and composition.--The methodology 
                committee established under subparagraph (A) shall be 
                composed of not more than 15 members appointed by the 
                Comptroller General of the United States. Members 
                appointed to the methodology committee shall be experts 
                in their scientific field, such as health services 
                research, clinical research, comparative clinical 
                effectiveness research, biostatistics, genomics, and 
                research methodologies. Stakeholders with such expertise 
                may be appointed to the methodology committee. In 
                addition to the members appointed under the first 
                sentence, the Directors of the National Institutes of 
                Health and the Agency for Healthcare Research and 
                Quality (or their designees) shall each be included as 
                members of the methodology committee.
                    ``(C) Functions.-- <<NOTE: Deadline.>> Subject to 
                subparagraph (D), the methodology committee shall work 
                to develop and improve the science and methods of 
                comparative clinical effectiveness research by, not 
                later than 18 months after the establishment of the 
                Institute, directly or through subcontract, developing 
                and periodically updating the following:
                          ``(i) Methodological standards for research. 
                      Such methodological standards shall provide 
                      specific criteria for internal validity, 
                      generalizability, feasibility, and timeliness of 
                      research and for health outcomes measures, risk 
                      adjustment, and other relevant aspects of research 
                      and assessment with respect to the design of 
                      research. Any methodological standards developed 
                      and updated under this subclause shall be 
                      scientifically based and include methods by which 
                      new information, data, or advances in technology 
                      are considered and incorporated into ongoing 
                      research projects by the Institute, as 
                      appropriate. The process for developing and 
                      updating such standards shall include input from 
                      relevant experts, stakeholders, and 
                      decisionmakers, and shall provide opportunities 
                      for public comment. Such standards shall also 
                      include methods by which patient subpopulations 
                      can be accounted for and evaluated in different 
                      types of research. As appropriate, such standards 
                      shall build on existing work on methodological 
                      standards for defined categories of health 
                      interventions and for each of the major categories 
                      of

[[Page 124 STAT. 733]]

                      comparative clinical effectiveness research 
                      methods (determined as of the date of enactment of 
                      the Patient Protection and Affordable Care Act).
                          ``(ii) A translation table that is designed to 
                      provide guidance and act as a reference for the 
                      Board to determine research methods that are most 
                      likely to address each specific research question.
                    ``(D) Consultation and conduct of examinations.--The 
                methodology committee may consult and contract with the 
                Institute of Medicine of the National Academies and 
                academic, nonprofit, or other private and governmental 
                entities with relevant expertise to carry out activities 
                described in subparagraph (C) and may consult with 
                relevant stakeholders to carry out such activities.
                    ``(E) Reports.--The methodology committee shall 
                submit reports to the Board on the committee's 
                performance of the functions described in subparagraph 
                (C). <<NOTE: Recommenda- tions.>> Reports shall contain 
                recommendations for the Institute to adopt 
                methodological standards developed and updated by the 
                methodology committee as well as other actions deemed 
                necessary to comply with such methodological standards.
            ``(7) Providing for a peer-review process for primary 
        research.--
                    ``(A) In general.--The Institute shall ensure that 
                there is a process for peer review of primary research 
                described in subparagraph (A)(ii) of paragraph (2) that 
                is conducted under such paragraph. Under such process--
                          ``(i) evidence from such primary research 
                      shall be reviewed to assess scientific integrity 
                      and adherence to methodological standards adopted 
                      under paragraph (9); and
                          ``(ii) <<NOTE: Lists. Public information.>> a 
                      list of the names of individuals contributing to 
                      any peer-review process during the preceding year 
                      or years shall be made public and included in 
                      annual reports in accordance with paragraph 
                      (10)(D).
                    ``(B) Composition.--Such peer-review process shall 
                be designed in a manner so as to avoid bias and 
                conflicts of interest on the part of the reviewers and 
                shall be composed of experts in the scientific field 
                relevant to the research under review.
                    ``(C) Use of existing processes.--
                          ``(i) Processes of another entity.--In the 
                      case where the Institute enters into a contract or 
                      other agreement with another entity for the 
                      conduct or management of research under this 
                      section, the Institute may utilize the peer-review 
                      process of such entity if such process meets the 
                      requirements under subparagraphs (A) and (B).
                          ``(ii) Processes of appropriate medical 
                      journals.--The Institute may utilize the peer-
                      review process of appropriate medical journals if 
                      such process meets the requirements under 
                      subparagraphs (A) and (B).
            ``(8) Release of research findings.--
                    ``(A) In general.-- <<NOTE: Deadline.>> The 
                Institute shall, not later than 90 days after the 
                conduct or receipt of research findings under this part, 
                make such research findings available

[[Page 124 STAT. 734]]

                to clinicians, patients, and the general public. The 
                Institute shall ensure that the research findings--
                          ``(i) convey the findings of research in a 
                      manner that is comprehensible and useful to 
                      patients and providers in making health care 
                      decisions;
                          ``(ii) fully convey findings and discuss 
                      considerations specific to certain subpopulations, 
                      risk factors, and comorbidities, as appropriate;
                          ``(iii) include limitations of the research 
                      and what further research may be needed as 
                      appropriate;
                          ``(iv) not be construed as mandates for 
                      practice guidelines, coverage recommendations, 
                      payment, or policy recommendations; and
                          ``(v) not include any data which would violate 
                      the privacy of research participants or any 
                      confidentiality agreements made with respect to 
                      the use of data under this section.
                    ``(B) Definition of research findings.--In this 
                paragraph, the term `research findings' means the 
                results of a study or assessment.
            ``(9) Adoption.--Subject to subsection (h)(1), the Institute 
        shall adopt the national priorities identified under paragraph 
        (1)(A), the research project agenda established under paragraph 
        (1)(B), the methodological standards developed and updated by 
        the methodology committee under paragraph (6)(C)(i), and any 
        peer-review process provided under paragraph (7) by majority 
        vote. In the case where the Institute does not adopt such 
        processes in accordance with the preceding sentence, the 
        processes shall be referred to the appropriate staff or entity 
        within the Institute (or, in the case of the methodological 
        standards, the methodology committee) for further review.
            ``(10) <<NOTE: Public information.>> Annual reports.--The 
        Institute shall submit an annual report to Congress and the 
        President, and shall make the annual report available to the 
        public. Such report shall contain--
                    ``(A) a description of the activities conducted 
                under this section, research priorities identified under 
                paragraph (1)(A) and methodological standards developed 
                and updated by the methodology committee under paragraph 
                (6)(C)(i) that are adopted under paragraph (9) during 
                the preceding year;
                    ``(B) the research project agenda and budget of the 
                Institute for the following year;
                    ``(C) any administrative activities conducted by the 
                Institute during the preceding year;
                    ``(D) the names of individuals contributing to any 
                peer-review process under paragraph (7), without 
                identifying them with a particular research project; and
                    ``(E) any other relevant information (including 
                information on the membership of the Board, expert 
                advisory panels, methodology committee, and the 
                executive staff of the Institute, any conflicts of 
                interest with respect to these individuals, and any 
                bylaws adopted by the Board during the preceding year).

    ``(e) Administration.--
            ``(1) In general.--Subject to paragraph (2), the Board shall 
        carry out the duties of the Institute.

[[Page 124 STAT. 735]]

            ``(2) Nondelegable duties.--The activities described in 
        subsections (d)(1) and (d)(9) are nondelegable.

    ``(f) Board of Governors.--
            ``(1) <<NOTE: Establishment.>> In general.--The Institute 
        shall have a Board of Governors, which shall consist of the 
        following members:
                    ``(A) The Director of Agency for Healthcare Research 
                and Quality (or the Director's designee).
                    ``(B) The Director of the National Institutes of 
                Health (or the Director's designee).
                    ``(C) <<NOTE: Deadline.>> Seventeen members 
                appointed, not later than 6 months after the date of 
                enactment of this section, by the Comptroller General of 
                the United States as follows:
                          ``(i) 3 members representing patients and 
                      health care consumers.
                          ``(ii) 5 members representing physicians and 
                      providers, including at least 1 surgeon, nurse, 
                      State-licensed integrative health care 
                      practitioner, and representative of a hospital.
                          ``(iii) 3 members representing private payers, 
                      of whom at least 1 member shall represent health 
                      insurance issuers and at least 1 member shall 
                      represent employers who self-insure employee 
                      benefits.
                          ``(iv) 3 members representing pharmaceutical, 
                      device, and diagnostic manufacturers or 
                      developers.
                          ``(v) 1 member representing quality 
                      improvement or independent health service 
                      researchers.
                          ``(vi) 2 members representing the Federal 
                      Government or the States, including at least 1 
                      member representing a Federal health program or 
                      agency.
            ``(2) Qualifications.--The Board shall represent a broad 
        range of perspectives and collectively have scientific expertise 
        in clinical health sciences research, including epidemiology, 
        decisions sciences, health economics, and statistics. In 
        appointing the Board, the Comptroller General of the United 
        States shall consider and disclose any conflicts of interest in 
        accordance with subsection (h)(4)(B). Members of the Board shall 
        be recused from relevant Institute activities in the case where 
        the member (or an immediate family member of such member) has a 
        real conflict of interest directly related to the research 
        project or the matter that could affect or be affected by such 
        participation.
            ``(3) Terms; vacancies.--A member of the Board shall be 
        appointed for a term of 6 years, except with respect to the 
        members first appointed, whose terms of appointment shall be 
        staggered evenly over 2-year increments. No individual shall be 
        appointed to the Board for more than 2 terms. Vacancies shall be 
        filled in the same manner as the original appointment was made.
            ``(4) Chairperson and vice-chairperson.-- 
        <<NOTE: Designation.>> The Comptroller General of the United 
        States shall designate a Chairperson and Vice Chairperson of the 
        Board from among the members of the Board. Such members shall 
        serve as Chairperson or Vice Chairperson for a period of 3 
        years.
            ``(5) Compensation.--Each member of the Board who is not an 
        officer or employee of the Federal Government shall be entitled 
        to compensation (equivalent to the rate provided for level IV of 
        the Executive Schedule under section 5315 of

[[Page 124 STAT. 736]]

        title 5, United States Code) and expenses incurred while 
        performing the duties of the Board. An officer or employee of 
        the Federal government who is a member of the Board shall be 
        exempt from compensation.
            ``(6) Director and staff; experts and consultants.--The 
        Board may employ and fix the compensation of an Executive 
        Director and such other personnel as may be necessary to carry 
        out the duties of the Institute and may seek such assistance and 
        support of, or contract with, experts and consultants that may 
        be necessary for the performance of the duties of the Institute.
            ``(7) Meetings and hearings.--The Board shall meet and hold 
        hearings at the call of the Chairperson or a majority of its 
        members. Meetings not solely concerning matters of personnel 
        shall be advertised at least 7 days in advance and open to the 
        public. A majority of the Board members shall constitute a 
        quorum, but a lesser number of members may meet and hold 
        hearings.

    ``(g) Financial and Governmental Oversight.--
            ``(1) Contract for audit.--The Institute shall provide for 
        the conduct of financial audits of the Institute on an annual 
        basis by a private entity with expertise in conducting financial 
        audits.
            ``(2) Review and annual reports.--
                    ``(A) Review.--The Comptroller General of the United 
                States shall review the following:
                          ``(i) Not less frequently than on an annual 
                      basis, the financial audits conducted under 
                      paragraph (1).
                          ``(ii) Not less frequently than every 5 years, 
                      the processes established by the Institute, 
                      including the research priorities and the conduct 
                      of research projects, in order to determine 
                      whether information produced by such research 
                      projects is objective and credible, is produced in 
                      a manner consistent with the requirements under 
                      this section, and is developed through a 
                      transparent process.
                          ``(iii) Not less frequently than every 5 
                      years, the dissemination and training activities 
                      and data networks established under section 937 of 
                      the Public Health Service Act, including the 
                      methods and products used to disseminate research, 
                      the types of training conducted and supported, and 
                      the types and functions of the data networks 
                      established, in order to determine whether the 
                      activities and data are produced in a manner 
                      consistent with the requirements under such 
                      section.
                          ``(iv) Not less frequently than every 5 years, 
                      the overall effectiveness of activities conducted 
                      under this section and the dissemination, 
                      training, and capacity building activities 
                      conducted under section 937 of the Public Health 
                      Service Act. Such review shall include an analysis 
                      of the extent to which research findings are used 
                      by health care decision-makers, the effect of the 
                      dissemination of such findings on reducing 
                      practice variation and disparities in health care, 
                      and the effect of the research conducted and 
                      disseminated on

[[Page 124 STAT. 737]]

                      innovation and the health care economy of the 
                      United States.
                          ``(v) Not later than 8 years after the date of 
                      enactment of this section, the adequacy and use of 
                      the funding for the Institute and the activities 
                      conducted under section 937 of the Public Health 
                      Service Act, including a determination as to 
                      whether, based on the utilization of research 
                      findings by public and private payers, funding 
                      sources for the Patient-Centered Outcomes Research 
                      Trust Fund under section 9511 of the Internal 
                      Revenue Code of 1986 are appropriate and whether 
                      such sources of funding should be continued or 
                      adjusted.
                    ``(B) Annual reports.-- <<NOTE: Recommenda- 
                tions.>> Not later than April 1 of each year, the 
                Comptroller General of the United States shall submit to 
                Congress a report containing the results of the review 
                conducted under subparagraph (A) with respect to the 
                preceding year (or years, if applicable), together with 
                recommendations for such legislation and administrative 
                action as the Comptroller General determines 
                appropriate.

    ``(h) Ensuring Transparency, Credibility, and Access.-- 
<<NOTE: Procedures.>> The Institute shall establish procedures to ensure 
that the following requirements for ensuring transparency, credibility, 
and access are met:
            ``(1) Public comment periods.--The Institute shall provide 
        for a public comment period of not less than 45 days and not 
        more than 60 days prior to the adoption under subsection (d)(9) 
        of the national priorities identified under subsection 
        (d)(1)(A), the research project agenda established under 
        subsection (d)(1)(B), the methodological standards developed and 
        updated by the methodology committee under subsection 
        (d)(6)(C)(i), and the peer-review process provided under 
        paragraph (7), and after the release of draft findings with 
        respect to systematic reviews of existing research and evidence.
            ``(2) Additional forums.--The Institute shall support forums 
        to increase public awareness and obtain and incorporate public 
        input and feedback through media (such as an Internet website) 
        on research priorities, research findings, and other duties, 
        activities, or processes the Institute determines appropriate.
            ``(3) Public availability.-- <<NOTE: Web posting.>> The 
        Institute shall make available to the public and disclose 
        through the official public Internet website of the Institute 
        the following:
                    ``(A) Information contained in research findings as 
                specified in subsection (d)(9).
                    ``(B) The process and methods for the conduct of 
                research, including the identity of the entity and the 
                investigators conducing such research and any conflicts 
                of interests of such parties, any direct or indirect 
                links the entity has to industry, and research 
                protocols, including measures taken, methods of research 
                and analysis, research results, and such other 
                information the Institute determines appropriate) 
                concurrent with the release of research findings.
                    ``(C) <<NOTE: Notice.>> Notice of public comment 
                periods under paragraph (1), including deadlines for 
                public comments.

[[Page 124 STAT. 738]]

                    ``(D) Subsequent comments received during each of 
                the public comment periods.
                    ``(E) In accordance with applicable laws and 
                processes and as the Institute determines appropriate, 
                proceedings of the Institute.
            ``(4) Disclosure of conflicts of interest.--
                    ``(A) In general.--A conflict of interest shall be 
                disclosed in the following manner:
                          ``(i) By the Institute in appointing members 
                      to an expert advisory panel under subsection 
                      (d)(4), in selecting individuals to contribute to 
                      any peer-review process under subsection (d)(7), 
                      and for employment as executive staff of the 
                      Institute.
                          ``(ii) By the Comptroller General in 
                      appointing members of the methodology committee 
                      under subsection (d)(6);
                          ``(iii) By the Institute in the annual report 
                      under subsection (d)(10), except that, in the case 
                      of individuals contributing to any such peer 
                      review process, such description shall be in a 
                      manner such that those individuals cannot be 
                      identified with a particular research project.
                    ``(B) Manner of disclosure.-- <<NOTE: Web 
                posting.>> Conflicts of interest shall be disclosed as 
                described in subparagraph (A) as soon as practicable on 
                the Internet web site of the Institute and of the 
                Government Accountability Office. The information 
                disclosed under the preceding sentence shall include the 
                type, nature, and magnitude of the interests of the 
                individual involved, except to the extent that the 
                individual recuses himself or herself from participating 
                in the consideration of or any other activity with 
                respect to the study as to which the potential conflict 
                exists.

    ``(i) Rules.--The Institute, its Board or staff, shall be prohibited 
from accepting gifts, bequeaths, or donations of services or property. 
In addition, the Institute shall be prohibited from establishing a 
corporation or generating revenues from activities other than as 
provided under this section.
    ``(j) Rules of Construction.--
            ``(1) Coverage.--Nothing in this section shall be 
        construed--
                    ``(A) to permit the Institute to mandate coverage, 
                reimbursement, or other policies for any public or 
                private payer; or
                    ``(B) as preventing the Secretary from covering the 
                routine costs of clinical care received by an individual 
                entitled to, or enrolled for, benefits under title 
                XVIII, XIX, or XXI in the case where such individual is 
                participating in a clinical trial and such costs would 
                otherwise be covered under such title with respect to 
                the beneficiary.''.

    (b) Dissemination and Building Capacity for Research.--Title IX of 
the Public Health Service Act (42 U.S.C. 299 et seq.), as amended by 
section 3606, is further amended by inserting after section 936 the 
following:

``SEC. 937. <<NOTE: 42 USC 299b-37.>> DISSEMINATION AND BUILDING 
            CAPACITY FOR RESEARCH.

    ``(a) In General.--

[[Page 124 STAT. 739]]

            ``(1) Dissemination.--The Office of Communication and 
        Knowledge Transfer (referred to in this section as the `Office') 
        at the Agency for Healthcare Research and Quality (or any other 
        relevant office designated by Agency for Healthcare Research and 
        Quality), in consultation with the National Institutes of 
        Health, shall broadly disseminate the research findings that are 
        published by the Patient Centered Outcomes Research Institute 
        established under section 1181(b) of the Social Security Act 
        (referred to in this section as the `Institute') and other 
        government-funded research relevant to comparative clinical 
        effectiveness research. The Office shall create informational 
        tools that organize and disseminate research findings for 
        physicians, health care providers, patients, payers, and policy 
        makers. <<NOTE: Public information.>> The Office shall also 
        develop a publicly available resource database that collects and 
        contains government-funded evidence and research from public, 
        private, not-for profit, and academic sources.
            ``(2) Requirements.--The Office shall provide for the 
        dissemination of the Institute's research findings and 
        government-funded research relevant to comparative clinical 
        effectiveness research to physicians, health care providers, 
        patients, vendors of health information technology focused on 
        clinical decision support, appropriate professional 
        associations, and Federal and private health plans. Materials, 
        forums, and media used to disseminate the findings, 
        informational tools, and resource databases shall--
                    ``(A) include a description of considerations for 
                specific subpopulations, the research methodology, and 
                the limitations of the research, and the names of the 
                entities, agencies, instrumentalities, and individuals 
                who conducted any research which was published by the 
                Institute; and
                    ``(B) not be construed as mandates, guidelines, or 
                recommendations for payment, coverage, or treatment.

    ``(b) Incorporation of Research Findings.--The Office, in 
consultation with relevant medical and clinical associations, shall 
assist users of health information technology focused on clinical 
decision support to promote the timely incorporation of research 
findings disseminated under subsection (a) into clinical practices and 
to promote the ease of use of such incorporation.
    ``(c) Feedback.--The Office shall establish a process to receive 
feedback from physicians, health care providers, patients, and vendors 
of health information technology focused on clinical decision support, 
appropriate professional associations, and Federal and private health 
plans about the value of the information disseminated and the assistance 
provided under this section.
    ``(d) Rule of Construction.--Nothing in this section shall preclude 
the Institute from making its research findings publicly available as 
required under section 1181(d)(8) of the Social Security Act.
    ``(e) Training of Researchers.--The Agency for Health Care Research 
and Quality, in consultation with the National Institutes of Health, 
shall build capacity for comparative clinical effectiveness research by 
establishing a grant program that provides for the training of 
researchers in the methods used to conduct such research, including 
systematic reviews of existing research and primary research such as 
clinical trials. At a minimum, such

[[Page 124 STAT. 740]]

training shall be in methods that meet the methodological standards 
adopted under section 1181(d)(9) of the Social Security Act.
    ``(f) Building Data for Research.--The Secretary shall provide for 
the coordination of relevant Federal health programs to build data 
capacity for comparative clinical effectiveness research, including the 
development and use of clinical registries and health outcomes research 
data networks, in order to develop and maintain a comprehensive, 
interoperable data network to collect, link, and analyze data on 
outcomes and effectiveness from multiple sources, including electronic 
health records.
    ``(g) Authority To Contract With the Institute.--Agencies and 
instrumentalities of the Federal Government may enter into agreements 
with the Institute, and accept and retain funds, for the conduct and 
support of research described in this part, provided that the research 
to be conducted or supported under such agreements is authorized under 
the governing statutes of such agencies and instrumentalities.''.
    (c) In General.--Part D of title XI of the Social Security Act, as 
added by subsection (a), is amended by adding at the end the following 
new section:


  ``limitations on certain uses of comparative clinical effectiveness 
                                research


    ``Sec. 1182.  <<NOTE: 42 USC 1320e-1.>> (a) The Secretary may only 
use evidence and findings from research conducted under section 1181 to 
make a determination regarding coverage under title XVIII if such use is 
through an iterative and transparent process which includes public 
comment and considers the effect on subpopulations.

    ``(b) Nothing in section 1181 shall be construed as--
            ``(1) superceding or modifying the coverage of items or 
        services under title XVIII that the Secretary determines are 
        reasonable and necessary under section 1862(l)(1); or
            ``(2) authorizing the Secretary to deny coverage of items or 
        services under such title solely on the basis of comparative 
        clinical effectiveness research.

    ``(c)(1) The Secretary shall not use evidence or findings from 
comparative clinical effectiveness research conducted under section 1181 
in determining coverage, reimbursement, or incentive programs under 
title XVIII in a manner that treats extending the life of an elderly, 
disabled, or terminally ill individual as of lower value than extending 
the life of an individual who is younger, nondisabled, or not terminally 
ill.
    ``(2) Paragraph (1) shall not be construed as preventing the 
Secretary from using evidence or findings from such comparative clinical 
effectiveness research in determining coverage, reimbursement, or 
incentive programs under title XVIII based upon a comparison of the 
difference in the effectiveness of alternative treatments in extending 
an individual's life due to the individual's age, disability, or 
terminal illness.
    ``(d)(1) The Secretary shall not use evidence or findings from 
comparative clinical effectiveness research conducted under section 1181 
in determining coverage, reimbursement, or incentive programs under 
title XVIII in a manner that precludes, or with the intent to 
discourage, an individual from choosing a health care treatment based on 
how the individual values the tradeoff between extending the length of 
their life and the risk of disability.
    ``(2)(A) Paragraph (1) shall not be construed to--

[[Page 124 STAT. 741]]

            ``(i) limit the application of differential copayments under 
        title XVIII based on factors such as cost or type of service; or
            ``(ii) prevent the Secretary from using evidence or findings 
        from such comparative clinical effectiveness research in 
        determining coverage, reimbursement, or incentive programs under 
        such title based upon a comparison of the difference in the 
        effectiveness of alternative health care treatments in extending 
        an individual's life due to that individual's age, disability, 
        or terminal illness.

    ``(3) Nothing in the provisions of, or amendments made by the 
Patient Protection and Affordable Care Act, shall be construed to limit 
comparative clinical effectiveness research or any other research, 
evaluation, or dissemination of information concerning the likelihood 
that a health care treatment will result in disability.
    ``(e) The Patient-Centered Outcomes Research Institute established 
under section 1181(b)(1) shall not develop or employ a dollars-per-
quality adjusted life year (or similar measure that discounts the value 
of a life because of an individual's disability) as a threshold to 
establish what type of health care is cost effective or recommended. The 
Secretary shall not utilize such an adjusted life year (or such a 
similar measure) as a threshold to determine coverage, reimbursement, or 
incentive programs under title XVIII.''.
    (d) In General.--Part D of title XI of the Social Security Act, as 
added by subsection (a) and amended by subsection (c), is amended by 
adding at the end the following new section:


 ``trust fund transfers to patient-centered outcomes research trust fund


    ``Sec. 1183.  <<NOTE: 42 USC 1320e-2.>> (a) In General.--The 
Secretary shall provide for the transfer, from the Federal Hospital 
Insurance Trust Fund under section 1817 and the Federal Supplementary 
Medical Insurance Trust Fund under section 1841, in proportion (as 
estimated by the Secretary) to the total expenditures during such fiscal 
year that are made under title XVIII from the respective trust fund, to 
the Patient-Centered Outcomes Research Trust Fund (referred to in this 
section as the `PCORTF') under section 9511 of the Internal Revenue Code 
of 1986, of the following:
            ``(1) For fiscal year 2013, an amount equal to $1 multiplied 
        by the average number of individuals entitled to benefits under 
        part A, or enrolled under part B, of title XVIII during such 
        fiscal year.
            ``(2) For each of fiscal years 2014, 2015, 2016, 2017, 2018, 
        and 2019, an amount equal to $2 multiplied by the average number 
        of individuals entitled to benefits under part A, or enrolled 
        under part B, of title XVIII during such fiscal year.

    ``(b) Adjustments for Increases in Health Care Spending.--In the 
case of any fiscal year beginning after September 30, 2014, the dollar 
amount in effect under subsection (a)(2) for such fiscal year shall be 
equal to the sum of such dollar amount for the previous fiscal year 
(determined after the application of this subsection), plus an amount 
equal to the product of--
            ``(1) such dollar amount for the previous fiscal year, 
        multiplied by
            ``(2) the percentage increase in the projected per capita 
        amount of National Health Expenditures, as most recently 
        published by the Secretary before the beginning of the fiscal 
        year.''.

[[Page 124 STAT. 742]]

    (e) Patient-Centered Outcomes Research Trust Fund; Financing for 
Trust Fund.--
            (1) Establishment of trust fund.--
                    (A) In general.--Subchapter A of chapter 98 of the 
                Internal Revenue Code of 1986 (relating to establishment 
                of trust funds) is amended by adding at the end the 
                following new section:

``SEC. 9511. <<NOTE: 26 USC 9511.>> PATIENT-CENTERED OUTCOMES RESEARCH 
            TRUST FUND.

    ``(a) Creation of Trust Fund.--There is established in the Treasury 
of the United States a trust fund to be known as the `Patient-Centered 
Outcomes Research Trust Fund' (hereafter in this section referred to as 
the `PCORTF'), consisting of such amounts as may be appropriated or 
credited to such Trust Fund as provided in this section and section 
9602(b).
    ``(b) Transfers to Fund.--
            ``(1) Appropriation.--There are hereby appropriated to the 
        Trust Fund the following:
                    ``(A) For fiscal year 2010, $10,000,000.
                    ``(B) For fiscal year 2011, $50,000,000.
                    ``(C) For fiscal year 2012, $150,000,000.
                    ``(D) For fiscal year 2013--
                          ``(i) an amount equivalent to the net revenues 
                      received in the Treasury from the fees imposed 
                      under subchapter B of chapter 34 (relating to fees 
                      on health insurance and self-insured plans) for 
                      such fiscal year; and
                          ``(ii) $150,000,000.
                    ``(E) For each of fiscal years 2014, 2015, 2016, 
                2017, 2018, and 2019--
                          ``(i) an amount equivalent to the net revenues 
                      received in the Treasury from the fees imposed 
                      under subchapter B of chapter 34 (relating to fees 
                      on health insurance and self-insured plans) for 
                      such fiscal year; and
                          ``(ii) $150,000,000.
                The amounts appropriated under subparagraphs (A), (B), 
                (C), (D)(ii), and (E)(ii) shall be transferred from the 
                general fund of the Treasury, from funds not otherwise 
                appropriated.
            ``(2) Trust fund transfers.--In addition to the amounts 
        appropriated under paragraph (1), there shall be credited to the 
        PCORTF the amounts transferred under section 1183 of the Social 
        Security Act.
            ``(3) Limitation on transfers to pcortf.--No amount may be 
        appropriated or transferred to the PCORTF on and after the date 
        of any expenditure from the PCORTF which is not an expenditure 
        permitted under this section. The determination of whether an 
        expenditure is so permitted shall be made without regard to--
                    ``(A) any provision of law which is not contained or 
                referenced in this chapter or in a revenue Act, and
                    ``(B) whether such provision of law is a 
                subsequently enacted provision or directly or indirectly 
                seeks to waive the application of this paragraph.

    ``(c) Trustee.--The Secretary of the Treasury shall be a trustee of 
the PCORTF.

[[Page 124 STAT. 743]]

    ``(d) Expenditures From Fund.--
            ``(1) Amounts available to the patient-centered outcomes 
        research institute.--Subject to paragraph (2), amounts in the 
        PCORTF are available, without further appropriation, to the 
        Patient-Centered Outcomes Research Institute established under 
        section 1181(b) of the Social Security Act for carrying out part 
        D of title XI of the Social Security Act (as in effect on the 
        date of enactment of such Act).
            ``(2) Transfer of funds.--
                    ``(A) In general.--The trustee of the PCORTF shall 
                provide for the transfer from the PCORTF of 20 percent 
                of the amounts appropriated or credited to the PCORTF 
                for each of fiscal years 2011 through 2019 to the 
                Secretary of Health and Human Services to carry out 
                section 937 of the Public Health Service Act.
                    ``(B) Availability.--Amounts transferred under 
                subparagraph (A) shall remain available until expended.
                    ``(C) Requirements.--Of the amounts transferred 
                under subparagraph (A) with respect to a fiscal year, 
                the Secretary of Health and Human Services shall 
                distribute--
                          ``(i) 80 percent to the Office of 
                      Communication and Knowledge Transfer of the Agency 
                      for Healthcare Research and Quality (or any other 
                      relevant office designated by Agency for 
                      Healthcare Research and Quality) to carry out the 
                      activities described in section 937 of the Public 
                      Health Service Act; and
                          ``(ii) 20 percent to the Secretary to carry 
                      out the activities described in such section 937.

    ``(e) Net Revenues.-- <<NOTE: Definition.>> For purposes of this 
section, the term `net revenues' means the amount estimated by the 
Secretary of the Treasury based on the excess of--
            ``(1) the fees received in the Treasury under subchapter B 
        of chapter 34, over
            ``(2) the decrease in the tax imposed by chapter 1 resulting 
        from the fees imposed by such subchapter.

    ``(f) Termination.--No amounts shall be available for expenditure 
from the PCORTF after September 30, 2019, and any amounts in such Trust 
Fund after such date shall be transferred to the general fund of the 
Treasury.''.
                    (B) Clerical amendment.--The table of sections for 
                subchapter A of chapter 98 of such Code is amended by 
                adding at the end the following new item:

``Sec. 9511. Patient-centered outcomes research trust fund.''.

            (2) Financing for fund from fees on insured and self-insured 
        health plans.--
                    (A) General rule.--Chapter 34 of the Internal 
                Revenue Code of 1986 is amended by adding at the end the 
                following new subchapter:

          ``Subchapter B--Insured and Self-Insured Health Plans

``Sec. 4375. Health insurance.
``Sec. 4376. Self-insured health plans.
``Sec. 4377. Definitions and special rules.

``SEC. 4375. <<NOTE: 26 USC 4375.>> HEALTH INSURANCE.

    ``(a) Imposition of Fee.--There is hereby imposed on each specified 
health insurance policy for each policy year ending after

[[Page 124 STAT. 744]]

September 30, 2012, a fee equal to the product of $2 ($1 in the case of 
policy years ending during fiscal year 2013) multiplied by the average 
number of lives covered under the policy.
    ``(b) Liability for Fee.--The fee imposed by subsection (a) shall be 
paid by the issuer of the policy.
    ``(c) Specified Health Insurance Policy.--For purposes of this 
section:
            ``(1) In general.-- <<NOTE: Definition.>> Except as 
        otherwise provided in this section, the term `specified health 
        insurance policy' means any accident or health insurance policy 
        (including a policy under a group health plan) issued with 
        respect to individuals residing in the United States.
            ``(2) Exemption for certain policies.--The term `specified 
        health insurance policy' does not include any insurance if 
        substantially all of its coverage is of excepted benefits 
        described in section 9832(c).
            ``(3) Treatment of prepaid health coverage arrangements.--
                    ``(A) In general.--In the case of any arrangement 
                described in subparagraph (B), such arrangement shall be 
                treated as a specified health insurance policy, and the 
                person referred to in such subparagraph shall be treated 
                as the issuer.
                    ``(B) Description of arrangements.--An arrangement 
                is described in this subparagraph if under such 
                arrangement fixed payments or premiums are received as 
                consideration for any person's agreement to provide or 
                arrange for the provision of accident or health coverage 
                to residents of the United States, regardless of how 
                such coverage is provided or arranged to be provided.

    ``(d) Adjustments for Increases in Health Care Spending.--In the 
case of any policy year ending in any fiscal year beginning after 
September 30, 2014, the dollar amount in effect under subsection (a) for 
such policy year shall be equal to the sum of such dollar amount for 
policy years ending in the previous fiscal year (determined after the 
application of this subsection), plus an amount equal to the product 
of--
            ``(1) such dollar amount for policy years ending in the 
        previous fiscal year, multiplied by
            ``(2) the percentage increase in the projected per capita 
        amount of National Health Expenditures, as most recently 
        published by the Secretary before the beginning of the fiscal 
        year.

    ``(e) Termination.--This section shall not apply to policy years 
ending after September 30, 2019.

``SEC. 4376. <<NOTE: 26 USC 4376.>> SELF-INSURED HEALTH PLANS.

    ``(a) Imposition of Fee.--In the case of any applicable self-insured 
health plan for each plan year ending after September 30, 2012, there is 
hereby imposed a fee equal to $2 ($1 in the case of plan years ending 
during fiscal year 2013) multiplied by the average number of lives 
covered under the plan.
    ``(b) Liability for Fee.--
            ``(1) In general.--The fee imposed by subsection (a) shall 
        be paid by the plan sponsor.
            ``(2) Plan sponsor.-- <<NOTE: Definition.>> For purposes of 
        paragraph (1) the term `plan sponsor' means--

[[Page 124 STAT. 745]]

                    ``(A) the employer in the case of a plan established 
                or maintained by a single employer,
                    ``(B) the employee organization in the case of a 
                plan established or maintained by an employee 
                organization,
                    ``(C) in the case of--
                          ``(i) a plan established or maintained by 2 or 
                      more employers or jointly by 1 or more employers 
                      and 1 or more employee organizations,
                          ``(ii) a multiple employer welfare 
                      arrangement, or
                          ``(iii) a voluntary employees' beneficiary 
                      association described in section 501(c)(9), the 
                      association, committee, joint board of trustees, 
                      or other similar group of representatives of the 
                      parties who establish or maintain the plan, or
                    ``(D) the cooperative or association described in 
                subsection (c)(2)(F) in the case of a plan established 
                or maintained by such a cooperative or association.

    ``(c) Applicable Self-insured Health Plan.-- 
<<NOTE: Definition.>> For purposes of this section, the term `applicable 
self-insured health plan' means any plan for providing accident or 
health coverage if--
            ``(1) any portion of such coverage is provided other than 
        through an insurance policy, and
            ``(2) such plan is established or maintained--
                    ``(A) by 1 or more employers for the benefit of 
                their employees or former employees,
                    ``(B) by 1 or more employee organizations for the 
                benefit of their members or former members,
                    ``(C) jointly by 1 or more employers and 1 or more 
                employee organizations for the benefit of employees or 
                former employees,
                    ``(D) by a voluntary employees' beneficiary 
                association described in section 501(c)(9),
                    ``(E) by any organization described in section 
                501(c)(6), or
                    ``(F) in the case of a plan not described in the 
                preceding subparagraphs, by a multiple employer welfare 
                arrangement (as defined in section 3(40) of Employee 
                Retirement Income Security Act of 1974), a rural 
                electric cooperative (as defined in section 3(40)(B)(iv) 
                of such Act), or a rural telephone cooperative 
                association (as defined in section 3(40)(B)(v) of such 
                Act).

    ``(d) Adjustments for Increases in Health Care Spending.--In the 
case of any plan year ending in any fiscal year beginning after 
September 30, 2014, the dollar amount in effect under subsection (a) for 
such plan year shall be equal to the sum of such dollar amount for plan 
years ending in the previous fiscal year (determined after the 
application of this subsection), plus an amount equal to the product 
of--
            ``(1) such dollar amount for plan years ending in the 
        previous fiscal year, multiplied by
            ``(2) the percentage increase in the projected per capita 
        amount of National Health Expenditures, as most recently 
        published by the Secretary before the beginning of the fiscal 
        year.

    ``(e) Termination.--This section shall not apply to plan years 
ending after September 30, 2019.

[[Page 124 STAT. 746]]

``SEC. 4377. <<NOTE: 26 USC 4377.>> DEFINITIONS AND SPECIAL RULES.

    ``(a) Definitions.--For purposes of this subchapter--
            ``(1) Accident and health coverage.--The term `accident and 
        health coverage' means any coverage which, if provided by an 
        insurance policy, would cause such policy to be a specified 
        health insurance policy (as defined in section 4375(c)).
            ``(2) Insurance policy.--The term `insurance policy' means 
        any policy or other instrument whereby a contract of insurance 
        is issued, renewed, or extended.
            ``(3) United states.--The term `United States' includes any 
        possession of the United States.

    ``(b) Treatment of Governmental Entities.--
            ``(1) In general.--For purposes of this subchapter--
                    ``(A) the term `person' includes any governmental 
                entity, and
                    ``(B) notwithstanding any other law or rule of law, 
                governmental entities shall not be exempt from the fees 
                imposed by this subchapter except as provided in 
                paragraph (2).
            ``(2) Treatment of exempt governmental programs.--In the 
        case of an exempt governmental program, no fee shall be imposed 
        under section 4375 or section 4376 on any covered life under 
        such program.
            ``(3) Exempt governmental program defined.--For purposes of 
        this subchapter, the term `exempt governmental program' means--
                    ``(A) any insurance program established under title 
                XVIII of the Social Security Act,
                    ``(B) the medical assistance program established by 
                title XIX or XXI of the Social Security Act,
                    ``(C) any program established by Federal law for 
                providing medical care (other than through insurance 
                policies) to individuals (or the spouses and dependents 
                thereof) by reason of such individuals being members of 
                the Armed Forces of the United States or veterans, and
                    ``(D) any program established by Federal law for 
                providing medical care (other than through insurance 
                policies) to members of Indian tribes (as defined in 
                section 4(d) of the Indian Health Care Improvement Act).

    ``(c) Treatment as Tax.--For purposes of subtitle F, the fees 
imposed by this subchapter shall be treated as if they were taxes.
    ``(d) No Cover Over to Possessions.--Notwithstanding any other 
provision of law, no amount collected under this subchapter shall be 
covered over to any possession of the United States.''.
                    (B) Clerical amendments.--
                          (i) Chapter 34 of such Code is amended by 
                      striking the chapter heading and inserting the 
                      following:

[[Page 124 STAT. 747]]

            ``CHAPTER 34--TAXES ON CERTAIN INSURANCE POLICIES

           ``subchapter a. policies issued by foreign insurers

          ``subchapter b. insured and self-insured health plans

         ``Subchapter A--Policies Issued By Foreign Insurers''.

                          (ii) The table of chapters for subtitle D of 
                      such Code is amended by striking the item relating 
                      to chapter 34 and inserting the following new 
                      item:

          ``Chapter 34--Taxes on Certain Insurance Policies''.

    (f) Tax-exempt Status of the Patient-centered Outcomes Research 
Institute.--Subsection 501(l) of the Internal Revenue Code of 
1986 <<NOTE: 26 USC 501.>> is amended by adding at the end the following 
new paragraph:
            ``(4) The Patient-Centered Outcomes Research Institute 
        established under section 1181(b) of the Social Security Act.''.

SEC. 6302. <<NOTE: 42 USC 2996-8 note.>> FEDERAL COORDINATING COUNCIL 
            FOR COMPARATIVE EFFECTIVENESS RESEARCH.

     <<NOTE: Termination date.>> Notwithstanding any other provision of 
law, the Federal Coordinating Council for Comparative Effectiveness 
Research established under section 804 of Division A of the American 
Recovery and Reinvestment Act of 2009 (42 U.S.C. 299b-8), including the 
requirement under subsection (e)(2) of such section, shall terminate on 
the date of enactment of this Act.

  Subtitle E--Medicare, Medicaid, and CHIP Program Integrity Provisions

SEC. 6401. PROVIDER SCREENING AND OTHER ENROLLMENT REQUIREMENTS UNDER 
            MEDICARE, MEDICAID, AND CHIP.

    (a) Medicare.--Section 1866(j) of the Social Security Act (42 U.S.C. 
1395cc(j)) is amended--
            (1) in paragraph (1)(A), by adding at the end the following: 
        ``Such process shall include screening of providers and 
        suppliers in accordance with paragraph (2), a provisional period 
        of enhanced oversight in accordance with paragraph (3), 
        disclosure requirements in accordance with paragraph (4), the 
        imposition of temporary enrollment moratoria in accordance with 
        paragraph (5), and the establishment of compliance programs in 
        accordance with paragraph (6).'';
            (2) by redesignating paragraph (2) as paragraph (7); and
            (3) by inserting after paragraph (1) the following:
            ``(2) Provider screening.--
                    ``(A) Procedures.-- <<NOTE: Deadline.>> Not later 
                than 180 days after the date of enactment of this 
                paragraph, the Secretary, in consultation with the 
                Inspector General of the Department of Health and Human 
                Services, shall establish procedures under which 
                screening is conducted with respect to providers of 
                medical or other items or services and suppliers under 
                the program under this title, the Medicaid program under 
                title XIX, and the CHIP program under title XXI.

[[Page 124 STAT. 748]]

                    ``(B) Level of screening.-- 
                <<NOTE: Determination.>> The Secretary shall determine 
                the level of screening conducted under this paragraph 
                according to the risk of fraud, waste, and abuse, as 
                determined by the Secretary, with respect to the 
                category of provider of medical or other items or 
                services or supplier. Such screening--
                          ``(i) shall include a licensure check, which 
                      may include such checks across States; and
                          ``(ii) may, as the Secretary determines 
                      appropriate based on the risk of fraud, waste, and 
                      abuse described in the preceding sentence, 
                      include--
                                    ``(I) a criminal background check;
                                    ``(II) fingerprinting;
                                    ``(III) unscheduled and unannounced 
                                site visits, including preenrollment 
                                site visits;
                                    ``(IV) database checks (including 
                                such checks across States); and
                                    ``(V) such other screening as the 
                                Secretary determines appropriate.
                    ``(C) Application fees.--
                          ``(i) Individual providers.--Except as 
                      provided in clause (iii), the Secretary shall 
                      impose a fee on each individual provider of 
                      medical or other items or services or supplier 
                      (such as a physician, physician assistant, nurse 
                      practitioner, or clinical nurse specialist) with 
                      respect to which screening is conducted under this 
                      paragraph in an amount equal to--
                                    ``(I) for 2010, $200; and
                                    ``(II) for 2011 and each subsequent 
                                year, the amount determined under this 
                                clause for the preceding year, adjusted 
                                by the percentage change in the consumer 
                                price index for all urban consumers (all 
                                items; United States city average) for 
                                the 12-month period ending with June of 
                                the previous year.
                          ``(ii) Institutional providers.--Except as 
                      provided in clause (iii), the Secretary shall 
                      impose a fee on each institutional provider of 
                      medical or other items or services or supplier 
                      (such as a hospital or skilled nursing facility) 
                      with respect to which screening is conducted under 
                      this paragraph in an amount equal to--
                                    ``(I) for 2010, $500; and
                                    ``(II) for 2011 and each subsequent 
                                year, the amount determined under this 
                                clause for the preceding year, adjusted 
                                by the percentage change in the consumer 
                                price index for all urban consumers (all 
                                items; United States city average) for 
                                the 12-month period ending with June of 
                                the previous year.
                          ``(iii) Hardship exception; waiver for certain 
                      medicaid providers.-- <<NOTE: Determination.>> The 
                      Secretary may, on a case-by-case basis, exempt a 
                      provider of medical or other items or services or 
                      supplier from the imposition of an application fee 
                      under this subparagraph if the Secretary 
                      determines that the imposition of the application 
                      fee would result in a hardship. The Secretary may

[[Page 124 STAT. 749]]

                      waive the application fee under this subparagraph 
                      for providers enrolled in a State Medicaid program 
                      for whom the State demonstrates that imposition of 
                      the fee would impede beneficiary access to care.
                          ``(iv) Use of funds.--Amounts collected as a 
                      result of the imposition of a fee under this 
                      subparagraph shall be used by the Secretary for 
                      program integrity efforts, including to cover the 
                      costs of conducting screening under this paragraph 
                      and to carry out this subsection and section 
                      1128J.
                    ``(D) Application and enforcement.--
                          ``(i) New providers of services and 
                      suppliers.--The screening under this paragraph 
                      shall apply, in the case of a provider of medical 
                      or other items or services or supplier who is not 
                      enrolled in the program under this title, title 
                      XIX , or title XXI as of the date of enactment of 
                      this paragraph, on or after the date that is 1 
                      year after such date of enactment.
                          ``(ii) Current providers of services and 
                      suppliers.--The screening under this paragraph 
                      shall apply, in the case of a provider of medical 
                      or other items or services or supplier who is 
                      enrolled in the program under this title, title 
                      XIX, or title XXI as of such date of enactment, on 
                      or after the date that is 2 years after such date 
                      of enactment.
                          ``(iii) Revalidation of enrollment.-- 
                      <<NOTE: Effective date.>> Effective beginning on 
                      the date that is 180 days after such date of 
                      enactment, the screening under this paragraph 
                      shall apply with respect to the revalidation of 
                      enrollment of a provider of medical or other items 
                      or services or supplier in the program under this 
                      title, title XIX, or title XXI.
                          ``(iv) Limitation on enrollment and 
                      revalidation of enrollment.--In no case may a 
                      provider of medical or other items or services or 
                      supplier who has not been screened under this 
                      paragraph be initially enrolled or reenrolled in 
                      the program under this title, title XIX, or title 
                      XXI on or after the date that is 3 years after 
                      such date of enactment.
                    ``(E) Expedited rulemaking.--The Secretary may 
                promulgate an interim final rule to carry out this 
                paragraph.
            ``(3) Provisional period of enhanced oversight for new 
        providers of services and suppliers.--
                    ``(A) In general.-- <<NOTE: Procedures.>> The 
                Secretary shall establish procedures to provide for a 
                provisional period of not less than 30 days and not more 
                than 1 year during which new providers of medical or 
                other items or services and suppliers, as the Secretary 
                determines appropriate, including categories of 
                providers or suppliers, would be subject to enhanced 
                oversight, such as prepayment review and payment caps, 
                under the program under this title, the Medicaid program 
                under title XIX. and the CHIP program under title XXI.
                    ``(B) Implementation.--The Secretary may establish 
                by program instruction or otherwise the procedures under 
                this paragraph.

[[Page 124 STAT. 750]]

            ``(4) Increased disclosure requirements.--
                    ``(A) Disclosure.--A provider of medical or other 
                items or services or supplier who submits an application 
                for enrollment or revalidation of enrollment in the 
                program under this title, title XIX, or title XXI on or 
                after the date that is 1 year after the date of 
                enactment of this paragraph shall disclose (in a form 
                and manner and at such time as determined by the 
                Secretary) any current or previous affiliation (directly 
                or indirectly) with a provider of medical or other items 
                or services or supplier that has uncollected debt, has 
                been or is subject to a payment suspension under a 
                Federal health care program (as defined in section 
                1128B(f)), has been excluded from participation under 
                the program under this title, the Medicaid program under 
                title XIX, or the CHIP program under title XXI, or has 
                had its billing privileges denied or revoked.
                    ``(B) Authority to deny enrollment.-- 
                <<NOTE: Determination.>> If the Secretary determines 
                that such previous affiliation poses an undue risk of 
                fraud, waste, or abuse, the Secretary may deny such 
                application. Such a denial shall be subject to appeal in 
                accordance with paragraph (7).
            ``(5) Authority to adjust payments of providers of services 
        and suppliers with the same tax identification number for past-
        due obligations.--
                    ``(A) In general.--Notwithstanding any other 
                provision of this title, in the case of an applicable 
                provider of services or supplier, the Secretary may make 
                any necessary adjustments to payments to the applicable 
                provider of services or supplier under the program under 
                this title in order to satisfy any past-due obligations 
                described in subparagraph (B)(ii) of an obligated 
                provider of services or supplier.
                    ``(B) Definitions.--In this paragraph:
                          ``(i) In general.--The term `applicable 
                      provider of services or supplier' means a provider 
                      of services or supplier that has the same taxpayer 
                      identification number assigned under section 6109 
                      of the Internal Revenue Code of 1986 as is 
                      assigned to the obligated provider of services or 
                      supplier under such section, regardless of whether 
                      the applicable provider of services or supplier is 
                      assigned a different billing number or national 
                      provider identification number under the program 
                      under this title than is assigned to the obligated 
                      provider of services or supplier.
                          ``(ii) Obligated provider of services or 
                      supplier.--The term `obligated provider of 
                      services or supplier' means a provider of services 
                      or supplier that owes a past-due obligation under 
                      the program under this title (as determined by the 
                      Secretary).
            ``(6) Temporary moratorium on enrollment of new providers.--
                    ``(A) In general.-- <<NOTE: Determination.>> The 
                Secretary may impose a temporary moratorium on the 
                enrollment of new providers of services and suppliers, 
                including categories of providers of services and 
                suppliers, in the program under this title, under the 
                Medicaid program under title XIX, or under

[[Page 124 STAT. 751]]

                the CHIP program under title XXI if the Secretary 
                determines such moratorium is necessary to prevent or 
                combat fraud, waste, or abuse under either such program.
                    ``(B) Limitation on review.--There shall be no 
                judicial review under section 1869, section 1878, or 
                otherwise, of a temporary moratorium imposed under 
                subparagraph (A).
            ``(7) Compliance programs.--
                    ``(A) In general.--On or after the date of 
                implementation determined by the Secretary under 
                subparagraph (C), a provider of medical or other items 
                or services or supplier within a particular industry 
                sector or category shall, as a condition of enrollment 
                in the program under this title, title XIX, or title 
                XXI, establish a compliance program that contains the 
                core elements established under subparagraph (B) with 
                respect to that provider or supplier and industry or 
                category.
                    ``(B) Establishment of core elements.--The 
                Secretary, in consultation with the Inspector General of 
                the Department of Health and Human Services, shall 
                establish core elements for a compliance program under 
                subparagraph (A) for providers or suppliers within a 
                particular industry or category.
                    ``(C) Timeline for implementation.-- 
                <<NOTE: Determination.>> The Secretary shall determine 
                the timeline for the establishment of the core elements 
                under subparagraph (B) and the date of the 
                implementation of subparagraph (A) for providers or 
                suppliers within a particular industry or category. The 
                Secretary shall, in determining such date of 
                implementation, consider the extent to which the 
                adoption of compliance programs by a provider of medical 
                or other items or services or supplier is widespread in 
                a particular industry sector or with respect to a 
                particular provider or supplier category.''.

    (b) Medicaid.--
            (1) State plan amendment.--Section 1902(a) of the Social 
        Security Act (42 U.S.C. 1396a(a)), as amended by section 
        4302(b), is amended--
                    (A) in subsection (a)--
                          (i) by striking ``and'' at the end of 
                      paragraph (75);
                          (ii) by striking the period at the end of 
                      paragraph (76) and inserting a semicolon; and
                          (iii) by inserting after paragraph (76) the 
                      following:
            ``(77) provide that the State shall comply with provider and 
        supplier screening, oversight, and reporting requirements in 
        accordance with subsection (ii);''; and
                    (B) by adding at the end the following:

    ``(ii) Provider and Supplier Screening, Oversight, and Reporting 
Requirements.--For purposes of subsection (a)(77), the requirements of 
this subsection are the following:
            ``(1) Screening.--The State complies with the process for 
        screening providers and suppliers under this title, as 
        established by the Secretary under section 1886(j)(2).
            ``(2) Provisional period of enhanced oversight for new 
        providers and suppliers.--The State complies with procedures to 
        provide for a provisional period of enhanced oversight for new 
        providers and suppliers under this title, as established by the 
        Secretary under section 1886(j)(3).

[[Page 124 STAT. 752]]

            ``(3) Disclosure requirements.--The State requires providers 
        and suppliers under the State plan or under a waiver of the plan 
        to comply with the disclosure requirements established by the 
        Secretary under section 1886(j)(4).
            ``(4) Temporary moratorium on enrollment of new providers or 
        suppliers.--
                    ``(A) Temporary moratorium imposed by the 
                secretary.--
                          ``(i) In general.--Subject to clause (ii), the 
                      State complies with any temporary moratorium on 
                      the enrollment of new providers or suppliers 
                      imposed by the Secretary under section 1886(j)(6).
                          ``(ii) Exception.-- <<NOTE: Determination.>> A 
                      State shall not be required to comply with a 
                      temporary moratorium described in clause (i) if 
                      the State determines that the imposition of such 
                      temporary moratorium would adversely impact 
                      beneficiaries' access to medical assistance.
                    ``(B) Moratorium on enrollment of providers and 
                suppliers.-- <<NOTE: Determination.>> At the option of 
                the State, the State imposes, for purposes of entering 
                into participation agreements with providers or 
                suppliers under the State plan or under a waiver of the 
                plan, periods of enrollment moratoria, or numerical caps 
                or other limits, for providers or suppliers identified 
                by the Secretary as being at high-risk for fraud, waste, 
                or abuse as necessary to combat fraud, waste, or abuse, 
                but only if the State determines that the imposition of 
                any such period, cap, or other limits would not 
                adversely impact beneficiaries' access to medical 
                assistance.
            ``(5) Compliance programs.--The State requires providers and 
        suppliers under the State plan or under a waiver of the plan to 
        establish, in accordance with the requirements of section 
        1866(j)(7), a compliance program that contains the core elements 
        established under subparagraph (B) of that section 1866(j)(7) 
        for providers or suppliers within a particular industry or 
        category.
            ``(6) Reporting of adverse provider actions.--The State 
        complies with the national system for reporting criminal and 
        civil convictions, sanctions, negative licensure actions, and 
        other adverse provider actions to the Secretary, through the 
        Administrator of the Centers for Medicare & Medicaid Services, 
        in accordance with regulations of the Secretary.
            ``(7) Enrollment and npi of ordering or referring 
        providers.--The State requires--
                    ``(A) all ordering or referring physicians or other 
                professionals to be enrolled under the State plan or 
                under a waiver of the plan as a participating provider; 
                and
                    ``(B) the national provider identifier of any 
                ordering or referring physician or other professional to 
                be specified on any claim for payment that is based on 
                an order or referral of the physician or other 
                professional.
            ``(8) Other state oversight.--Nothing in this subsection 
        shall be interpreted to preclude or limit the ability of a State 
        to engage in provider and supplier screening or enhanced 
        provider and supplier oversight activities beyond those required 
        by the Secretary.''.
            (2) <<NOTE: 42 USC 1395cc note.>> Disclosure of medicare 
        terminated providers and suppliers to states.--The Administrator 
        of the Centers for

[[Page 124 STAT. 753]]

        Medicare & Medicaid Services shall establish a process for 
        making available to the each State agency with responsibility 
        for administering a State Medicaid plan (or a waiver of such 
        plan) under title XIX of the Social Security Act or a child 
        health plan under title XXI the name, national provider 
        identifier, and other identifying information for any provider 
        of medical or other items or services or supplier under the 
        Medicare program under title XVIII or under the CHIP program 
        under title XXI that is terminated from participation under that 
        program within 30 days of the termination (and, with respect to 
        all such providers or suppliers who are terminated from the 
        Medicare program on the date of enactment of this Act, within 90 
        days of such date).
            (3) Conforming amendment.--Section 1902(a)(23) of the Social 
        Security Act (42 U.S.C. 1396a), is amended by inserting before 
        the semicolon at the end the following: ``or by a provider or 
        supplier to which a moratorium under subsection (ii)(4) is 
        applied during the period of such moratorium''.

    (c) CHIP.--Section 2107(e)(1) of the Social Security Act (42 U.S.C. 
1397gg(e)(1)), as amended by section 2101(d), is amended--
            (1) by redesignating subparagraphs (D) through (M) as 
        subparagraphs (E) through (N), respectively; and
            (2) by inserting after subparagraph (C), the following:
                    ``(D) Subsections (a)(77) and (ii) of section 1902 
                (relating to provider and supplier screening, oversight, 
                and reporting requirements).''.

SEC. 6402. ENHANCED MEDICARE AND MEDICAID PROGRAM INTEGRITY PROVISIONS.

    (a) In General.--Part A of title XI of the Social Security Act (42 
U.S.C. 1301 et seq.), as amended by sections 6002, 6004, and 6102, is 
amended by inserting after section 1128I the following new section:

``SEC. 1128J. <<NOTE: 42 USC 1320a-7k.>> MEDICARE AND MEDICAID PROGRAM 
            INTEGRITY PROVISIONS.

    ``(a) Data Matching.--
            ``(1) Integrated data repository.--
                    ``(A) Inclusion of certain data.--
                          ``(i) In general.--The Integrated Data 
                      Repository of the Centers for Medicare & Medicaid 
                      Services shall include, at a minimum, claims and 
                      payment data from the following:
                                    ``(I) The programs under titles 
                                XVIII and XIX (including parts A, B, C, 
                                and D of title XVIII).
                                    ``(II) The program under title XXI.
                                    ``(III) Health-related programs 
                                administered by the Secretary of 
                                Veterans Affairs.
                                    ``(IV) Health-related programs 
                                administered by the Secretary of 
                                Defense.
                                    ``(V) The program of old-age, 
                                survivors, and disability insurance 
                                benefits established under title II.
                                    ``(VI) The Indian Health Service and 
                                the Contract Health Service program.
                          ``(ii) Priority for inclusion of certain 
                      data.--Inclusion of the data described in 
                      subclause (I) of such clause in the Integrated 
                      Data Repository shall be a

[[Page 124 STAT. 754]]

                      priority. Data described in subclauses (II) 
                      through (VI) of such clause shall be included in 
                      the Integrated Data Repository as appropriate.
                    ``(B) Data sharing and matching.--
                          ``(i) In general.-- <<NOTE: Contracts.>> The 
                      Secretary shall enter into agreements with the 
                      individuals described in clause (ii) under which 
                      such individuals share and match data in the 
                      system of records of the respective agencies of 
                      such individuals with data in the system of 
                      records of the Department of Health and Human 
                      Services for the purpose of identifying potential 
                      fraud, waste, and abuse under the programs under 
                      titles XVIII and XIX.
                          ``(ii) Individuals described.--The following 
                      individuals are described in this clause:
                                    ``(I) The Commissioner of Social 
                                Security.
                                    ``(II) The Secretary of Veterans 
                                Affairs.
                                    ``(III) The Secretary of Defense.
                                    ``(IV) The Director of the Indian 
                                Health Service.
                          ``(iii) Definition of system of records.--For 
                      purposes of this paragraph, the term `system of 
                      records' has the meaning given such term in 
                      section 552a(a)(5) of title 5, United States Code.
            ``(2) Access to claims and payment databases.--For purposes 
        of conducting law enforcement and oversight activities and to 
        the extent consistent with applicable information, privacy, 
        security, and disclosure laws, including the regulations 
        promulgated under the Health Insurance Portability and 
        Accountability Act of 1996 and section 552a of title 5, United 
        States Code, and subject to any information systems security 
        requirements under such laws or otherwise required by the 
        Secretary, the Inspector General of the Department of Health and 
        Human Services and the Attorney General shall have access to 
        claims and payment data of the Department of Health and Human 
        Services and its contractors related to titles XVIII, XIX, and 
        XXI.

    ``(b) OIG Authority To Obtain Information.--
            ``(1) In general.--Notwithstanding and in addition to any 
        other provision of law, the Inspector General of the Department 
        of Health and Human Services may, for purposes of protecting the 
        integrity of the programs under titles XVIII and XIX, obtain 
        information from any individual (including a beneficiary 
        provided all applicable privacy protections are followed) or 
        entity that--
                    ``(A) is a provider of medical or other items or 
                services, supplier, grant recipient, contractor, or 
                subcontractor; or
                    ``(B) directly or indirectly provides, orders, 
                manufactures, distributes, arranges for, prescribes, 
                supplies, or receives medical or other items or services 
                payable by any Federal health care program (as defined 
                in section 1128B(f)) regardless of how the item or 
                service is paid for, or to whom such payment is made.
            ``(2) Inclusion of certain information.--Information which 
        the Inspector General may obtain under paragraph (1) includes 
        any supporting documentation necessary to validate claims for 
        payment or payments under title XVIII or XIX,

[[Page 124 STAT. 755]]

        including a prescribing physician's medical records for an 
        individual who is prescribed an item or service which is covered 
        under part B of title XVIII, a covered part D drug (as defined 
        in section 1860D-2(e)) for which payment is made under an MA-PD 
        plan under part C of such title, or a prescription drug plan 
        under part D of such title, and any records necessary for 
        evaluation of the economy, efficiency, and effectiveness of the 
        programs under titles XVIII and XIX.

    ``(c) Administrative Remedy for Knowing Participation by Beneficiary 
in Health Care Fraud Scheme.--
            ``(1) In general.-- <<NOTE: Penalty.>> In addition to any 
        other applicable remedies, if an applicable individual has 
        knowingly participated in a Federal health care fraud offense or 
        a conspiracy to commit a Federal health care fraud offense, the 
        Secretary shall impose an appropriate administrative penalty 
        commensurate with the offense or conspiracy.
            ``(2) Applicable individual.-- <<NOTE: Definition.>> For 
        purposes of paragraph (1), the term `applicable individual' 
        means an individual--
                    ``(A) entitled to, or enrolled for, benefits under 
                part A of title XVIII or enrolled under part B of such 
                title;
                    ``(B) eligible for medical assistance under a State 
                plan under title XIX or under a waiver of such plan; or
                    ``(C) eligible for child health assistance under a 
                child health plan under title XXI.

    ``(d) Reporting and Returning of Overpayments.--
            ``(1) In general.--If a person has received an overpayment, 
        the person shall--
                    ``(A) report and return the overpayment to the 
                Secretary, the State, an intermediary, a carrier, or a 
                contractor, as appropriate, at the correct address; and
                    ``(B) <<NOTE: Notification.>> notify the Secretary, 
                State, intermediary, carrier, or contractor to whom the 
                overpayment was returned in writing of the reason for 
                the overpayment.
            ``(2) Deadline for reporting and returning overpayments.--An 
        overpayment must be reported and returned under paragraph (1) by 
        the later of--
                    ``(A) the date which is 60 days after the date on 
                which the overpayment was identified; or
                    ``(B) the date any corresponding cost report is due, 
                if applicable.
            ``(3) Enforcement.--Any overpayment retained by a person 
        after the deadline for reporting and returning the overpayment 
        under paragraph (2) is an obligation (as defined in section 
        3729(b)(3) of title 31, United States Code) for purposes of 
        section 3729 of such title.
            ``(4) Definitions.--In this subsection:
                    ``(A) Knowing and knowingly.--The terms `knowing' 
                and `knowingly' have the meaning given those terms in 
                section 3729(b) of title 31, United States Code.
                    ``(B) Overpayment.--The term ``overpayment'' means 
                any funds that a person receives or retains under title 
                XVIII or XIX to which the person, after applicable 
                reconciliation, is not entitled under such title.
                    ``(C) Person.--
                          ``(i) In general.--The term `person' means a 
                      provider of services, supplier, medicaid managed 
                      care organization (as defined in section 
                      1903(m)(1)(A)),

[[Page 124 STAT. 756]]

                      Medicare Advantage organization (as defined in 
                      section 1859(a)(1)), or PDP sponsor (as defined in 
                      section 1860D-41(a)(13)).
                          ``(ii) Exclusion.--Such term does not include 
                      a beneficiary.

    ``(e) Inclusion of National Provider Identifier on All Applications 
and Claims.-- <<NOTE: Regulations. Deadline.>> The Secretary shall 
promulgate a regulation that requires, not later than January 1, 2011, 
all providers of medical or other items or services and suppliers under 
the programs under titles XVIII and XIX that qualify for a national 
provider identifier to include their national provider identifier on all 
applications to enroll in such programs and on all claims for payment 
submitted under such programs.''.

    (b) Access to Data.--
            (1) Medicare part d.--Section 1860D-15(f)(2) of the Social 
        Security Act (42 U.S.C. 1395w-116(f)(2)) <<NOTE: 42 USC 1395w-
        115.>> is amended by striking ``may be used by'' and all that 
        follows through the period at the end and inserting ``may be 
        used--
                    ``(A) by officers, employees, and contractors of the 
                Department of Health and Human Services for the purposes 
                of, and to the extent necessary in--
                          ``(i) carrying out this section; and
                          ``(ii) conducting oversight, evaluation, and 
                      enforcement under this title; and
                    ``(B) by the Attorney General and the Comptroller 
                General of the United States for the purposes of, and to 
                the extent necessary in, carrying out health oversight 
                activities.''.
            (2) Data matching.--Section 552a(a)(8)(B) of title 5, United 
        States Code, is amended--
                    (A) in clause (vii), by striking ``or'' at the end;
                    (B) in clause (viii), by inserting ``or'' after the 
                semicolon; and
                    (C) by adding at the end the following new clause:
                          ``(ix) matches performed by the Secretary of 
                      Health and Human Services or the Inspector General 
                      of the Department of Health and Human Services 
                      with respect to potential fraud, waste, and abuse, 
                      including matches of a system of records with non-
                      Federal records;''.
            (3) Matching agreements with the commissioner of social 
        security.--Section 205(r) of the Social Security Act (42 U.S.C. 
        405(r)) is amended by adding at the end the following new 
        paragraph:
            ``(9)(A) The Commissioner of Social Security shall, upon the 
        request of the Secretary or the Inspector General of the 
        Department of Health and Human Services--
                    ``(i) <<NOTE: Contracts.>> enter into an agreement 
                with the Secretary or such Inspector General for the 
                purpose of matching data in the system of records of the 
                Social Security Administration and the system of records 
                of the Department of Health and Human Services; and
                    ``(ii) include in such agreement safeguards to 
                assure the maintenance of the confidentiality of any 
                information disclosed.

[[Page 124 STAT. 757]]

            ``(B) For purposes of this paragraph, the term `system of 
        records' has the meaning given such term in section 552a(a)(5) 
        of title 5, United States Code.''.

    (c) Withholding of Federal Matching Payments for States That Fail To 
Report Enrollee Encounter Data in the Medicaid Statistical Information 
System.--Section 1903(i) of the Social Security Act (42 U.S.C. 1396b(i)) 
is amended--
            (1) in paragraph (23), by striking ``or'' at the end;
            (2) in paragraph (24), by striking the period at the end and 
        inserting ``; or''; and
            (3) by adding at the end the following new paragraph:.
            ``(25) with respect to any amounts expended for medical 
        assistance for individuals for whom the State does not report 
        enrollee encounter data (as defined by the Secretary) to the 
        Medicaid Statistical Information System (MSIS) in a timely 
        manner (as determined by the Secretary).''.

    (d) Permissive Exclusions and Civil Monetary Penalties.--
            (1) Permissive exclusions.--Section 1128(b) of the Social 
        Security Act (42 U.S.C. 1320a-7(b)) is amended by adding at the 
        end the following new paragraph:
            ``(16) Making false statements or misrepresentation of 
        material facts.--Any individual or entity that knowingly makes 
        or causes to be made any false statement, omission, or 
        misrepresentation of a material fact in any application, 
        agreement, bid, or contract to participate or enroll as a 
        provider of services or supplier under a Federal health care 
        program (as defined in section 1128B(f)), including Medicare 
        Advantage organizations under part C of title XVIII, 
        prescription drug plan sponsors under part D of title XVIII, 
        medicaid managed care organizations under title XIX, and 
        entities that apply to participate as providers of services or 
        suppliers in such managed care organizations and such plans.''.
            (2) Civil monetary penalties.--
                    (A) In general.--Section 1128A(a) of the Social 
                Security Act (42 U.S.C. 1320a-7a(a)) is amended--
                          (i) in paragraph (1)(D), by striking ``was 
                      excluded'' and all that follows through the period 
                      at the end and inserting ``was excluded from the 
                      Federal health care program (as defined in section 
                      1128B(f)) under which the claim was made pursuant 
                      to Federal law.'';
                          (ii) in paragraph (6), by striking ``or'' at 
                      the end;
                          (iii) by inserting after paragraph (7), the 
                      following new paragraphs:
            ``(8) orders or prescribes a medical or other item or 
        service during a period in which the person was excluded from a 
        Federal health care program (as so defined), in the case where 
        the person knows or should know that a claim for such medical or 
        other item or service will be made under such a program;
            ``(9) knowingly makes or causes to be made any false 
        statement, omission, or misrepresentation of a material fact in 
        any application, bid, or contract to participate or enroll as a 
        provider of services or a supplier under a Federal health care 
        program (as so defined), including Medicare Advantage 
        organizations under part C of title XVIII, prescription drug 
        plan sponsors under part D of title XVIII, medicaid managed care 
        organizations under title XIX, and entities that apply to 
        participate

[[Page 124 STAT. 758]]

        as providers of services or suppliers in such managed care 
        organizations and such plans;
            ``(10) knows of an overpayment (as defined in paragraph (4) 
        of section 1128J(d)) and does not report and return the 
        overpayment in accordance with such section;'';
                          (iv) in the first sentence--
                                    (I) by striking the ``or'' after 
                                ``prohibited relationship occurs;''; and
                                    (II) by striking ``act)'' and 
                                inserting ``act; or in cases under 
                                paragraph (9), $50,000 for each false 
                                statement or misrepresentation of a 
                                material fact)''; and
                          (v) in the second sentence, by striking 
                      ``purpose)'' and inserting ``purpose; or in cases 
                      under paragraph (9), an assessment of not more 
                      than 3 times the total amount claimed for each 
                      item or service for which payment was made based 
                      upon the application containing the false 
                      statement or misrepresentation of a material 
                      fact)''.
                    (B) Clarification of treatment of certain charitable 
                and other innocuous programs.--Section 1128A(i)(6) of 
                the Social Security Act (42 U.S.C. 1320a-7a(i)(6)) is 
                amended--
                          (i) in subparagraph (C), by striking ``or'' at 
                      the end;
                          (ii) in subparagraph (D), as redesignated by 
                      section 4331(e) of the Balanced Budget Act of 1997 
                      (Public Law 105-33), by striking the period at the 
                      end and inserting a semicolon;
                          (iii) by redesignating subparagraph (D), as 
                      added by section 4523(c) of such Act, as 
                      subparagraph (E) and striking the period at the 
                      end and inserting ``; or''; and
                          (iv) by adding at the end the following new 
                      subparagraphs:
                    ``(F) <<NOTE: Regulations.>> any other remuneration 
                which promotes access to care and poses a low risk of 
                harm to patients and Federal health care programs (as 
                defined in section 1128B(f) and designated by the 
                Secretary under regulations);
                    ``(G) the offer or transfer of items or services for 
                free or less than fair market value by a person, if--
                          ``(i) the items or services consist of 
                      coupons, rebates, or other rewards from a 
                      retailer;
                          ``(ii) the items or services are offered or 
                      transferred on equal terms available to the 
                      general public, regardless of health insurance 
                      status; and
                          ``(iii) the offer or transfer of the items or 
                      services is not tied to the provision of other 
                      items or services reimbursed in whole or in part 
                      by the program under title XVIII or a State health 
                      care program (as defined in section 1128(h));
                    ``(H) the offer or transfer of items or services for 
                free or less than fair market value by a person, if--
                          ``(i) the items or services are not offered as 
                      part of any advertisement or solicitation;

[[Page 124 STAT. 759]]

                          ``(ii) the items or services are not tied to 
                      the provision of other services reimbursed in 
                      whole or in part by the program under title XVIII 
                      or a State health care program (as so defined);
                          ``(iii) there is a reasonable connection 
                      between the items or services and the medical care 
                      of the individual; and
                          ``(iv) the person provides the items or 
                      services after determining in good faith that the 
                      individual is in financial need; or
                    ``(I) effective on a date specified by the Secretary 
                (but not earlier than January 1, 2011), the waiver by a 
                PDP sponsor of a prescription drug plan under part D of 
                title XVIII or an MA organization offering an MA-PD plan 
                under part C of such title of any copayment for the 
                first fill of a covered part D drug (as defined in 
                section 1860D-2(e)) that is a generic drug for 
                individuals enrolled in the prescription drug plan or 
                MA-PD plan, respectively.''.

    (e) Testimonial Subpoena Authority in Exclusion-only Cases.--Section 
1128(f) of the Social Security Act (42 U.S.C. 1320a-7(f)) is amended by 
adding at the end the following new paragraph:
            ``(4) <<NOTE: Applicability.>> The provisions of subsections 
        (d) and (e) of section 205 shall apply with respect to this 
        section to the same extent as they are applicable with respect 
        to title II. The Secretary may delegate the authority granted by 
        section 205(d) (as made applicable to this section) to the 
        Inspector General of the Department of Health and Human Services 
        for purposes of any investigation under this section.''.

    (f) Health Care Fraud.--
            (1) Kickbacks.--Section 1128B of the Social Security Act (42 
        U.S.C. 1320a-7b) is amended by adding at the end the following 
        new subsection:

    ``(g) In addition to the penalties provided for in this section or 
section 1128A, a claim that includes items or services resulting from a 
violation of this section constitutes a false or fraudulent claim for 
purposes of subchapter III of chapter 37 of title 31, United States 
Code.''.
            (2) Revising the intent requirement.--Section 1128B of the 
        Social Security Act (42 U.S.C. 1320a-7b), as amended by 
        paragraph (1), is amended by adding at the end the following new 
        subsection:

    ``(h) With respect to violations of this section, a person need not 
have actual knowledge of this section or specific intent to commit a 
violation of this section.''.
    (g) Surety Bond Requirements.--
            (1) Durable medical equipment.--Section 1834(a)(16)(B) of 
        the Social Security Act (42 U.S.C. 1395m(a)(16)(B)) is amended 
        by inserting ``that the Secretary determines is commensurate 
        with the volume of the billing of the supplier'' before the 
        period at the end.
            (2) Home health agencies.--Section 1861(o)(7)(C) of the 
        Social Security Act (42 U.S.C. 1395x(o)(7)(C)) is amended by 
        inserting ``that the Secretary determines is commensurate with 
        the volume of the billing of the home health agency'' before the 
        semicolon at the end.
            (3) Requirements for certain other providers of services and 
        suppliers.--Section 1862 of the Social Security Act

[[Page 124 STAT. 760]]

        (42 U.S.C. 1395y) is amended by adding at the end the following 
        new subsection:

    ``(n) Requirement of a Surety Bond for Certain Providers of Services 
and Suppliers.--
            ``(1) In general.--The Secretary may require a provider of 
        services or supplier described in paragraph (2) to provide the 
        Secretary on a continuing basis with a surety bond in a form 
        specified by the Secretary in an amount (not less than $50,000) 
        that the Secretary determines is commensurate with the volume of 
        the billing of the provider of services or supplier. 
        The <<NOTE: Waiver authority.>>  Secretary may waive the 
        requirement of a bond under the preceding sentence in the case 
        of a provider of services or supplier that provides a comparable 
        surety bond under State law.
            ``(2) Provider of services or supplier described.--A 
        provider of services or supplier described in this paragraph is 
        a provider of services or supplier the Secretary determines 
        appropriate based on the level of risk involved with respect to 
        the provider of services or supplier, and consistent with the 
        surety bond requirements under sections 1834(a)(16)(B) and 
        1861(o)(7)(C).''.

    (h) Suspension of Medicare and Medicaid Payments Pending 
Investigation of Credible Allegations of Fraud.--
            (1) Medicare.--Section 1862 of the Social Security Act (42 
        U.S.C. 1395y), as amended by subsection (g)(3), is amended by 
        adding at the end the following new subsection:

    ``(o) Suspension of Payments Pending Investigation of Credible 
Allegations of Fraud.--
            ``(1) In general.-- <<NOTE: Determination.>> The Secretary 
        may suspend payments to a provider of services or supplier under 
        this title pending an investigation of a credible allegation of 
        fraud against the provider of services or supplier, unless the 
        Secretary determines there is good cause not to suspend such 
        payments.
            ``(2) Consultation.--The Secretary shall consult with the 
        Inspector General of the Department of Health and Human Services 
        in determining whether there is a credible allegation of fraud 
        against a provider of services or supplier.
            ``(3) Promulgation of regulations.--The Secretary shall 
        promulgate regulations to carry out this subsection and section 
        1903(i)(2)(C).''.
            (2) Medicaid.--Section 1903(i)(2) of such Act (42 U.S.C. 
        1396b(i)(2)) is amended--
                    (A) in subparagraph (A), by striking ``or'' at the 
                end; and
                    (B) by inserting after subparagraph (B), the 
                following:
                    ``(C) <<NOTE: Determination.>> by any individual or 
                entity to whom the State has failed to suspend payments 
                under the plan during any period when there is pending 
                an investigation of a credible allegation of fraud 
                against the individual or entity, as determined by the 
                State in accordance with regulations promulgated by the 
                Secretary for purposes of section 1862(o) and this 
                subparagraph, unless the State determines in accordance 
                with such regulations there is good cause not to suspend 
                such payments; or''.

    (i) Increased Funding To Fight Fraud and Abuse.--
            (1) In general.--Section 1817(k) of the Social Security Act 
        (42 U.S.C. 1395i(k)) is amended--

[[Page 124 STAT. 761]]

                    (A) by adding at the end the following new 
                paragraph:
            ``(7) Additional funding.--In addition to the funds 
        otherwise appropriated to the Account from the Trust Fund under 
        paragraphs (3) and (4) and for purposes described in paragraphs 
        (3)(C) and (4)(A), there are hereby appropriated an additional 
        $10,000,000 to such Account from such Trust Fund for each of 
        fiscal years 2011 through 2020. The funds appropriated under 
        this paragraph shall be allocated in the same proportion as the 
        total funding appropriated with respect to paragraphs (3)(A) and 
        (4)(A) was allocated with respect to fiscal year 2010, and shall 
        be available without further appropriation until expended.''; 
        and
                    (B) in paragraph (4)(A), by inserting ``until 
                expended'' after ``appropriation''.
            (2) Indexing of amounts appropriated.--
                    (A) Departments of health and human services and 
                justice.--Section 1817(k)(3)(A)(i) of the Social 
                Security Act (42 U.S.C. 1395i(k)(3)(A)(i)) is amended--
                          (i) in subclause (III), by inserting ``and'' 
                      at the end;
                          (ii) in subclause (IV)--
                                    (I) by striking ``for each of fiscal 
                                years 2007, 2008, 2009, and 2010'' and 
                                inserting ``for each fiscal year after 
                                fiscal year 2006''; and
                                    (II) by striking ``; and'' and 
                                inserting a period; and
                          (iii) by striking subclause (V).
                    (B) Office of the inspector general of the 
                department of health and human services.--Section 
                1817(k)(3)(A)(ii) of such Act (42 U.S.C. 
                1395i(k)(3)(A)(ii)) is amended--
                          (i) in subclause (VIII), by inserting ``and'' 
                      at the end;
                          (ii) in subclause (IX)--
                                    (I) by striking ``for each of fiscal 
                                years 2008, 2009, and 2010'' and 
                                inserting ``for each fiscal year after 
                                fiscal year 2007''; and
                                    (II) by striking ``; and'' and 
                                inserting a period; and
                          (iii) by striking subclause (X).
                    (C) Federal bureau of investigation.--Section 
                1817(k)(3)(B) of the Social Security Act (42 U.S.C. 
                1395i(k)(3)(B)) is amended--
                          (i) in clause (vii), by inserting ``and'' at 
                      the end;
                          (ii) in clause (viii)--
                                    (I) by striking ``for each of fiscal 
                                years 2007, 2008, 2009, and 2010'' and 
                                inserting ``for each fiscal year after 
                                fiscal year 2006''; and
                                    (II) by striking ``; and'' and 
                                inserting a period; and
                          (iii) by striking clause (ix).
                    (D) Medicare integrity program.--Section 
                1817(k)(4)(C) of the Social Security Act (42 U.S.C. 
                1395i(k)(4)(C)) is amended by adding at the end the 
                following new clause:
                          ``(ii) For each fiscal year after 2010, by the 
                      percentage increase in the consumer price index 
                      for all urban

[[Page 124 STAT. 762]]

                      consumers (all items; United States city average) 
                      over the previous year.''.

    (j) Medicare Integrity Program and Medicaid Integrity Program.--
            (1) Medicare integrity program.--
                    (A) Requirement to provide performance statistics.--
                Section 1893(c) of the Social Security Act (42 U.S.C. 
                1395ddd(c)) is amended--
                          (i) in paragraph (3), by striking ``and'' at 
                      the end;
                          (ii) by redesignating paragraph (4) as 
                      paragraph (5); and
                          (iii) by inserting after paragraph (3) the 
                      following new paragraph:
            ``(4) the entity agrees to provide the Secretary and the 
        Inspector General of the Department of Health and Human Services 
        with such performance statistics (including the number and 
        amount of overpayments recovered, the number of fraud referrals, 
        and the return on investment of such activities by the entity) 
        as the Secretary or the Inspector General may request; and''.
                    (B) Evaluations and annual report.--Section 1893 of 
                the Social Security Act (42 U.S.C. 1395ddd) is amended 
                by adding at the end the following new subsection:

    ``(i) Evaluations and Annual Report.--
            ``(1) Evaluations.--The Secretary shall conduct evaluations 
        of eligible entities which the Secretary contracts with under 
        the Program not less frequently than every 3 years.
            ``(2) Annual report.--Not later than 180 days after the end 
        of each fiscal year (beginning with fiscal year 2011), the 
        Secretary shall submit a report to Congress which identifies--
                    ``(A) the use of funds, including funds transferred 
                from the Federal Hospital Insurance Trust Fund under 
                section 1817 and the Federal Supplementary Insurance 
                Trust Fund under section 1841, to carry out this 
                section; and
                    ``(B) the effectiveness of the use of such funds.''.
                    (C) Flexibility in pursuing fraud and abuse.--
                Section 1893(a) of the Social Security Act (42 U.S.C. 
                1395ddd(a)) is amended by inserting ``, or otherwise,'' 
                after ``entities''.
            (2) Medicaid integrity program.--
                    (A) Requirement to provide performance statistics.--
                Section 1936(c)(2) of the Social Security Act (42 U.S.C. 
                1396u-6(c)(2)) is amended--
                          (i) by redesignating subparagraph (D) as 
                      subparagraph (E); and
                          (ii) by inserting after subparagraph (C) the 
                      following new subparagraph:
                    ``(D) The entity agrees to provide the Secretary and 
                the Inspector General of the Department of Health and 
                Human Services with such performance statistics 
                (including the number and amount of overpayments 
                recovered, the number of fraud referrals, and the return 
                on investment of such activities by the entity) as the 
                Secretary or the Inspector General may request.''.
                    (B) Evaluations and annual report.--Section 1936(e) 
                of the Social Security Act <<NOTE: 42 USC 1396u-6.>> (42 
                U.S.C. 1396u-7(e)) is amended--

[[Page 124 STAT. 763]]

                          (i) by redesignating paragraph (4) as 
                      paragraph (5); and
                          (ii) by inserting after paragraph (3) the 
                      following new paragraph:
            ``(4) Evaluations.--The Secretary shall conduct evaluations 
        of eligible entities which the Secretary contracts with under 
        the Program not less frequently than every 3 years.''.

    (k) Expanded Application of Hardship Waivers for Exclusions.--
Section 1128(c)(3)(B) of the Social Security Act (42 U.S.C. 1320a-
7(c)(3)(B)) is amended by striking ``individuals entitled to benefits 
under part A of title XVIII or enrolled under part B of such title, or 
both'' and inserting ``beneficiaries (as defined in section 1128A(i)(5)) 
of that program''.

SEC. 6403. ELIMINATION OF DUPLICATION BETWEEN THE HEALTHCARE INTEGRITY 
            AND PROTECTION DATA BANK AND THE NATIONAL PRACTITIONER DATA 
            BANK.

    (a) Information Reported by Federal Agencies and Health Plans.--
Section 1128E of the Social Security Act (42 U.S.C. 1320a-7e) is 
amended--
            (1) by striking subsection (a) and inserting the following:

    ``(a) In General.--The Secretary shall maintain a national health 
care fraud and abuse data collection program under this section for the 
reporting of certain final adverse actions (not including settlements in 
which no findings of liability have been made) against health care 
providers, suppliers, or practitioners as required by subsection (b), 
with access as set forth in subsection (d), and shall furnish the 
information collected under this section to the National Practitioner 
Data Bank established pursuant to the Health Care Quality Improvement 
Act of 1986 (42 U.S.C. 11101 et seq.).'';
            (2) by striking subsection (d) and inserting the following:

    ``(d) Access to Reported Information.--
            ``(1) Availability.--The information collected under this 
        section shall be available from the National Practitioner Data 
        Bank to the agencies, authorities, and officials which are 
        provided under section 1921(b) information reported under 
        section 1921(a).
            ``(2) Fees for disclosure.--The Secretary may establish or 
        approve reasonable fees for the disclosure of information under 
        this section. The amount of such a fee may not exceed the costs 
        of processing the requests for disclosure and of providing such 
        information. Such fees shall be available to the Secretary to 
        cover such costs.'';
            (3) by striking subsection (f) and inserting the following:

    ``(f) Appropriate Coordination.--In implementing this section, the 
Secretary shall provide for the maximum appropriate coordination with 
part B of the Health Care Quality Improvement Act of 1986 (42 U.S.C. 
11131 et seq.) and section 1921.''; and
            (4) in subsection (g)--
                    (A) in paragraph (1)(A)--
                          (i) in clause (iii)--
                                    (I) by striking ``or State'' each 
                                place it appears;
                                    (II) by redesignating subclauses 
                                (II) and (III) as subclauses (III) and 
                                (IV), respectively; and
                                    (III) by inserting after subclause 
                                (I) the following new subclause:

[[Page 124 STAT. 764]]

                                    ``(II) any dismissal or closure of 
                                the proceedings by reason of the 
                                provider, supplier, or practitioner 
                                surrendering their license or leaving 
                                the State or jurisdiction''; and
                          (ii) by striking clause (iv) and inserting the 
                      following:
                          ``(iv) Exclusion from participation in a 
                      Federal health care program (as defined in section 
                      1128B(f)).'';
                    (B) in paragraph (3)--
                          (i) by striking subparagraphs (D) and (E); and
                          (ii) by redesignating subparagraph (F) as 
                      subparagraph (D); and
                    (C) in subparagraph (D) (as so redesignated), by 
                striking ``or State''.

    (b) Information Reported by State Law or Fraud Enforcement 
Agencies.--Section 1921 of the Social Security Act (42 U.S.C. 1396r-2) 
is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1)--
                          (i) by striking ``system.--The State'' and all 
                      that follows through the semicolon and inserting 
                      system.--
                    ``(A) Licensing or certification actions.-- 
                <<NOTE: Reports. Regulations.>> The State must have in 
                effect a system of reporting the following information 
                with respect to formal proceedings (as defined by the 
                Secretary in regulations) concluded against a health 
                care practitioner or entity by a State licensing or 
                certification agency:'';
                          (ii) by redesignating subparagraphs (A) 
                      through (D) as clauses (i) through (iv), 
                      respectively, and indenting appropriately;
                          (iii) in subparagraph (A)(iii) (as so 
                      redesignated)--
                                    (I) by striking ``the license of'' 
                                and inserting ``license or the right to 
                                apply for, or renew, a license by''; and
                                    (II) by inserting 
                                ``nonrenewability,'' after ``voluntary 
                                surrender,''; and
                          (iv) by adding at the end the following new 
                      subparagraph:
                    ``(B) Other final adverse actions.-- 
                <<NOTE: Reports.>> The State must have in effect a 
                system of reporting information with respect to any 
                final adverse action (not including settlements in which 
                no findings of liability have been made) taken against a 
                health care provider, supplier, or practitioner by a 
                State law or fraud enforcement agency.''; and
                    (B) in paragraph (2), by striking ``the authority 
                described in paragraph (1)'' and inserting ``a State 
                licensing or certification agency or State law or fraud 
                enforcement agency'';
            (2) in subsection (b)--
                    (A) by striking paragraph (2) and inserting the 
                following:
            ``(2) to State licensing or certification agencies and 
        Federal agencies responsible for the licensing and certification 
        of health care providers, suppliers, and licensed health care 
        practitioners;'';

[[Page 124 STAT. 765]]

                    (B) in each of paragraphs (4) and (6), by inserting 
                ``, but only with respect to information provided 
                pursuant to subsection (a)(1)(A)'' before the comma at 
                the end;
                    (C) by striking paragraph (5) and inserting the 
                following:
            ``(5) to State law or fraud enforcement agencies,'';
                    (D) by redesignating paragraphs (7) and (8) as 
                paragraphs (8) and (9), respectively; and
                    (E) by inserting after paragraph (6) the following 
                new paragraph:
            ``(7) to health plans (as defined in section 1128C(c));'';
            (3) by redesignating subsection (d) as subsection (h), and 
        by inserting after subsection (c) the following new subsections:

    ``(d) Disclosure and Correction of Information.--
            ``(1) Disclosure.--With respect to information reported 
        pursuant to subsection (a)(1), the Secretary shall--
                    ``(A) provide for disclosure of the information, 
                upon request, to the health care practitioner who, or 
                the entity that, is the subject of the information 
                reported; and
                    ``(B) <<NOTE: Procedures.>> establish procedures for 
                the case where the health care practitioner or entity 
                disputes the accuracy of the information reported.
            ``(2) Corrections.-- <<NOTE: Reports. Regulations.>> Each 
        State licensing or certification agency and State law or fraud 
        enforcement agency shall report corrections of information 
        already reported about any formal proceeding or final adverse 
        action described in subsection (a), in such form and manner as 
        the Secretary prescribes by regulation.

    ``(e) Fees for Disclosure.--The Secretary may establish or approve 
reasonable fees for the disclosure of information under this section. 
The amount of such a fee may not exceed the costs of processing the 
requests for disclosure and of providing such information. Such fees 
shall be available to the Secretary to cover such costs.
    ``(f) Protection From Liability for Reporting.--No person or entity, 
including any agency designated by the Secretary in subsection (b), 
shall be held liable in any civil action with respect to any reporting 
of information as required under this section, without knowledge of the 
falsity of the information contained in the report.
    ``(g) References.--For purposes of this section:
            ``(1) State licensing or certification agency.--The term 
        `State licensing or certification agency' includes any authority 
        of a State (or of a political subdivision thereof) responsible 
        for the licensing of health care practitioners (or any peer 
        review organization or private accreditation entity reviewing 
        the services provided by health care practitioners) or entities.
            ``(2) State law or fraud enforcement agency.--The term 
        `State law or fraud enforcement agency' includes--
                    ``(A) a State law enforcement agency; and
                    ``(B) a State medicaid fraud control unit (as 
                defined in section 1903(q)).
            ``(3) Final adverse action.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                term `final adverse action' includes--

[[Page 124 STAT. 766]]

                          ``(i) civil judgments against a health care 
                      provider, supplier, or practitioner in State court 
                      related to the delivery of a health care item or 
                      service;
                          ``(ii) State criminal convictions related to 
                      the delivery of a health care item or service;
                          ``(iii) exclusion from participation in State 
                      health care programs (as defined in section 
                      1128(h));
                          ``(iv) any licensing or certification action 
                      described in subsection (a)(1)(A) taken against a 
                      supplier by a State licensing or certification 
                      agency; and
                          ``(v) any other adjudicated actions or 
                      decisions that the Secretary shall establish by 
                      regulation.
                    ``(B) Exception.--Such term does not include any 
                action with respect to a malpractice claim.''; and
            (4) in subsection (h), as so redesignated, by striking ``The 
        Secretary'' and all that follows through the period at the end 
        and inserting ``In implementing this section, the Secretary 
        shall provide for the maximum appropriate coordination with part 
        B of the Health Care Quality Improvement Act of 1986 (42 U.S.C. 
        11131 et seq.) and section 1128E.''.

    (c) Conforming Amendment.--Section 1128C(a)(1) of the Social 
Security Act (42 U.S.C. 1320a-7c(a)(1)) is amended--
            (1) in subparagraph (C), by adding ``and'' after the comma 
        at the end;
            (2) in subparagraph (D), by striking ``, and'' and inserting 
        a period; and
            (3) by striking subparagraph (E).

    (d) <<NOTE: 42 USC 1320a-7e note.>> Transition Process; Effective 
Date.--
            (1) In general.--Effective on the date of enactment of this 
        Act, the Secretary of Health and Human Services (in this section 
        referred to as the ``Secretary'') shall implement a transition 
        process under which, by not later than the end of the transition 
        period described in paragraph (5), the Secretary shall cease 
        operating the Healthcare Integrity and Protection Data Bank 
        established under section 1128E of the Social Security Act (as 
        in effect before the effective date specified in paragraph (6)) 
        and shall transfer all data collected in the Healthcare 
        Integrity and Protection Data Bank to the National Practitioner 
        Data Bank established pursuant to the Health Care Quality 
        Improvement Act of 1986 (42 U.S.C. 11101 et 
        seq.). <<NOTE: Procedures.>> During such transition process, the 
        Secretary shall have in effect appropriate procedures to ensure 
        that data collection and access to the Healthcare Integrity and 
        Protection Data Bank and the National Practitioner Data Bank are 
        not disrupted.
            (2) Regulations.--The Secretary shall promulgate regulations 
        to carry out the amendments made by subsections (a) and (b).
            (3) Funding.--
                    (A) Availability of fees.--Fees collected pursuant 
                to section 1128E(d)(2) of the Social Security Act prior 
                to the effective date specified in paragraph (6) for the 
                disclosure of information in the Healthcare Integrity 
                and Protection Data Bank shall be available to the 
                Secretary, without fiscal year limitation, for payment 
                of costs related to the transition process described in 
                paragraph (1). Any such fees remaining after the 
                transition period is complete shall

[[Page 124 STAT. 767]]

                be available to the Secretary, without fiscal year 
                limitation, for payment of the costs of operating the 
                National Practitioner Data Bank.
                    (B) Availability of additional funds.--In addition 
                to the fees described in subparagraph (A), any funds 
                available to the Secretary or to the Inspector General 
                of the Department of Health and Human Services for a 
                purpose related to combating health care fraud, waste, 
                or abuse shall be available to the extent necessary for 
                operating the Healthcare Integrity and Protection Data 
                Bank during the transition period, including systems 
                testing and other activities necessary to ensure that 
                information formerly reported to the Healthcare 
                Integrity and Protection Data Bank will be accessible 
                through the National Practitioner Data Bank after the 
                end of such transition period.
            (4) Special provision for access to the national 
        practitioner data bank by the department of veterans affairs.--
                    (A) In general.-- <<NOTE: Time 
                period.>> Notwithstanding any other provision of law, 
                during the 1-year period that begins on the effective 
                date specified in paragraph (6), the information 
                described in subparagraph (B) shall be available from 
                the National Practitioner Data Bank to the Secretary of 
                Veterans Affairs without charge.
                    (B) Information described.--For purposes of 
                subparagraph (A), the information described in this 
                subparagraph is the information that would, but for the 
                amendments made by this section, have been available to 
                the Secretary of Veterans Affairs from the Healthcare 
                Integrity and Protection Data Bank.
            (5) Transition period defined.--For purposes of this 
        subsection, the term ``transition period'' means the period that 
        begins on the date of enactment of this Act and ends on the 
        later of--
                    (A) the date that is 1 year after such date of 
                enactment; or
                    (B) the effective date of the regulations 
                promulgated under paragraph (2).
            (6) Effective date.--The amendments made by subsections (a), 
        (b), and (c) shall take effect on the first day after the final 
        day of the transition period.

SEC. 6404. MAXIMUM PERIOD FOR SUBMISSION OF MEDICARE CLAIMS REDUCED TO 
            NOT MORE THAN 12 MONTHS.

    (a) Reducing Maximum Period for Submission.--
            (1) Part a.--Section 1814(a) of the Social Security Act (42 
        U.S.C. 1395f(a)(1)) is amended--
                    (A) in paragraph (1), by striking ``period of 3 
                calendar years'' and all that follows through the 
                semicolon and inserting ``period ending 1 calendar year 
                after the date of service;''; and
                    (B) by adding at the end the following new sentence: 
                ``In applying paragraph (1), the Secretary may specify 
                exceptions to the 1 calendar year period specified in 
                such paragraph.''
            (2) Part b.--

[[Page 124 STAT. 768]]

                    (A) Section 1842(b)(3) of such Act (42 U.S.C. 
                1395u(b)(3)(B)) is amended--
                          (i) in subparagraph (B), in the flush language 
                      following clause (ii), by striking ``close of the 
                      calendar year following the year in which such 
                      service is furnished (deeming any service 
                      furnished in the last 3 months of any calendar 
                      year to have been furnished in the succeeding 
                      calendar year)'' and inserting ``period ending 1 
                      calendar year after the date of service''; and
                          (ii) by adding at the end the following new 
                      sentence: ``In applying subparagraph (B), the 
                      Secretary may specify exceptions to the 1 calendar 
                      year period specified in such subparagraph.''
                    (B) Section 1835(a) of such Act (42 U.S.C. 1395n(a)) 
                is amended--
                          (i) in paragraph (1), by striking ``period of 
                      3 calendar years'' and all that follows through 
                      the semicolon and inserting ``period ending 1 
                      calendar year after the date of service;''; and
                          (ii) by adding at the end the following new 
                      sentence: ``In applying paragraph (1), the 
                      Secretary may specify exceptions to the 1 calendar 
                      year period specified in such paragraph.''

    (b) <<NOTE: 42 USC 1395f note.>> Effective Date.--
            (1) In general.--The amendments made by subsection (a) shall 
        apply to services furnished on or after January 1, 2010.
            (2) Services furnished before 2010.-- <<NOTE: Deadline.>> In 
        the case of services furnished before January 1, 2010, a bill or 
        request for payment under section 1814(a)(1), 1842(b)(3)(B), or 
        1835(a) shall be filed not later that December 31, 2010.

SEC. 6405. PHYSICIANS WHO ORDER ITEMS OR SERVICES REQUIRED TO BE 
            MEDICARE ENROLLED PHYSICIANS OR ELIGIBLE PROFESSIONALS.

    (a) DME.--Section 1834(a)(11)(B) of the Social Security Act (42 
U.S.C. 1395m(a)(11)(B)) is amended by striking ``physician'' and 
inserting ``physician enrolled under section 1866(j) or an eligible 
professional under section 1848(k)(3)(B) that is enrolled under section 
1866(j)''.
    (b) Home Health Services.--
            (1) Part a.--Section 1814(a)(2) of such Act <<NOTE: 42 USC 
        1395f.>> (42 U.S.C. 1395(a)(2)) is amended in the matter 
        preceding subparagraph (A) by inserting ``in the case of 
        services described in subparagraph (C), a physician enrolled 
        under section 1866(j) or an eligible professional under section 
        1848(k)(3)(B),'' before ``or, in the case of services''.
            (2) Part b.--Section 1835(a)(2) of such Act (42 U.S.C. 
        1395n(a)(2)) is amended in the matter preceding subparagraph (A) 
        by inserting ``, or in the case of services described in 
        subparagraph (A), a physician enrolled under section 1866(j) or 
        an eligible professional under section 1848(k)(3)(B),'' after 
        ``a physician''.

    (c) <<NOTE: 42 USC 1395f note.>> Application to Other Items or 
Services.--The Secretary may extend the requirement applied by the 
amendments made by subsections (a) and (b) to durable medical equipment 
and home health services (relating to requiring certifications and 
written

[[Page 124 STAT. 769]]

orders to be made by enrolled physicians and health professions) to all 
other categories of items or services under title XVIII of the Social 
Security Act (42 U.S.C. 1395 et seq.), including covered part D drugs as 
defined in section 1860D-2(e) of such Act (42 U.S.C. 1395w-102), that 
are ordered, prescribed, or referred by a physician enrolled under 
section 1866(j) of such Act (42 U.S.C. 1395cc(j)) or an eligible 
professional under section 1848(k)(3)(B) of such Act (42 U.S.C. 1395w-
4(k)(3)(B)).

    (d) <<NOTE: 42 USC 1395f note.>> Effective Date.--The amendments 
made by this section shall apply to written orders and certifications 
made on or after July 1, 2010.

SEC. 6406. REQUIREMENT FOR PHYSICIANS TO PROVIDE DOCUMENTATION ON 
            REFERRALS TO PROGRAMS AT HIGH RISK OF WASTE AND ABUSE.

    (a) Physicians and Other Suppliers.--Section 1842(h) of the Social 
Security Act (42 U.S.C. 1395u(h)) is amended by adding at the end the 
following new paragraph:
    ``(9) The Secretary may revoke enrollment, for a period of not more 
than one year for each act, for a physician or supplier under section 
1866(j) if such physician or supplier fails to maintain and, upon 
request of the Secretary, provide access to documentation relating to 
written orders or requests for payment for durable medical equipment, 
certifications for home health services, or referrals for other items or 
services written or ordered by such physician or supplier under this 
title, as specified by the Secretary.''.
    (b) Providers of Services.--Section 1866(a)(1) of such Act (42 
U.S.C. 1395cc) is further amended--
            (1) in subparagraph (U), by striking at the end ``and'';
            (2) in subparagraph (V), by striking the period at the end 
        and adding ``; and''; and
            (3) by adding at the end the following new subparagraph:
                    ``(W) maintain and, upon request of the Secretary, 
                provide access to documentation relating to written 
                orders or requests for payment for durable medical 
                equipment, certifications for home health services, or 
                referrals for other items or services written or ordered 
                by the provider under this title, as specified by the 
                Secretary.''.

    (c) OIG Permissive Exclusion Authority.--Section 1128(b)(11) of the 
Social Security Act (42 U.S.C. 1320a-7(b)(11)) is amended by inserting 
``, ordering, referring for furnishing, or certifying the need for'' 
after ``furnishing''.
    (d) <<NOTE: 42 USC 1320a-7 note.>> Effective Date.--The amendments 
made by this section shall apply to orders, certifications, and 
referrals made on or after January 1, 2010.

SEC. 6407. FACE TO FACE ENCOUNTER WITH PATIENT REQUIRED BEFORE 
            PHYSICIANS MAY CERTIFY ELIGIBILITY FOR HOME HEALTH SERVICES 
            OR DURABLE MEDICAL EQUIPMENT UNDER MEDICARE.

    (a) Condition of Payment for Home Health Services.--
            (1) Part a.--Section 1814(a)(2)(C) of such Act <<NOTE: 42 
        USC 1395f.>> is amended--
                    (A) by striking ``and such services'' and inserting 
                ``such services''; and
                    (B) by inserting after ``care of a physician'' the 
                following: ``, and, in the case of a certification made 
                by a physician after January 1, 2010, prior to making 
                such

[[Page 124 STAT. 770]]

                certification the physician must document that the 
                physician himself or herself has had a face-to-face 
                encounter (including through use of telehealth, subject 
                to the requirements in section 1834(m), and other than 
                with respect to encounters that are incident to services 
                involved) with the individual within a reasonable 
                timeframe as determined by the Secretary''.
            (2) Part b.--Section 1835(a)(2)(A) of the Social Security 
        Act <<NOTE: 42 USC 1395n.>> is amended--
                    (A) by striking ``and'' before ``(iii)''; and
                    (B) by inserting after ``care of a physician'' the 
                following: ``, and (iv) in the case of a certification 
                after January 1, 2010, prior to making such 
                certification the physician must document that the 
                physician has had a face-to-face encounter (including 
                through use of telehealth and other than with respect to 
                encounters that are incident to services involved) with 
                the individual during the 6-month period preceding such 
                certification, or other reasonable timeframe as 
                determined by the Secretary''.

    (b) Condition of Payment for Durable Medical Equipment.--Section 
1834(a)(11)(B) of the Social Security Act (42 U.S.C. 1395m(a)(11)(B)) is 
amended--
            (1) by striking ``Order.--The Secretary'' and inserting 
        ``Order.--
                          ``(i) In general.--The Secretary''; and
            (2) by adding at the end the following new clause:
                          ``(ii) Requirement for face to face 
                      encounter.--The Secretary shall require that such 
                      an order be written pursuant to the physician 
                      documenting that a physician, a physician 
                      assistant, a nurse practitioner, or a clinical 
                      nurse specialist (as those terms are defined in 
                      section 1861(aa)(5)) has had a face-to-face 
                      encounter (including through use of telehealth 
                      under subsection (m) and other than with respect 
                      to encounters that are incident to services 
                      involved) with the individual involved during the 
                      6-month period preceding such written order, or 
                      other reasonable timeframe as determined by the 
                      Secretary.''.

    (c) <<NOTE: 42 USC 1395f note.>> Application to Other Areas Under 
Medicare.--The Secretary may apply the face-to-face encounter 
requirement described in the amendments made by subsections (a) and (b) 
to other items and services for which payment is provided under title 
XVIII of the Social Security Act based upon a finding that such an 
decision would reduce the risk of waste, fraud, or abuse.

    (d) <<NOTE: 42 USC 1395f note.>> Application to Medicaid.--The 
requirements pursuant to the amendments made by subsections (a) and (b) 
shall apply in the case of physicians making certifications for home 
health services under title XIX of the Social Security Act in the same 
manner and to the same extent as such requirements apply in the case of 
physicians making such certifications under title XVIII of such Act.

SEC. 6408. ENHANCED PENALTIES.

    (a) Civil Monetary Penalties for False Statements or Delaying 
Inspections.--Section 1128A(a) of the Social Security Act (42 U.S.C. 
1320a-7a(a)), as amended by section 5002(d)(2)(A), is amended--

[[Page 124 STAT. 771]]

            (1) in paragraph (6), by striking ``or'' at the end; and
            (2) by inserting after paragraph (7) the following new 
        paragraphs:
            ``(8) knowingly makes, uses, or causes to be made or used, a 
        false record or statement material to a false or fraudulent 
        claim for payment for items and services furnished under a 
        Federal health care program; or
            ``(9) fails to grant timely access, upon reasonable request 
        (as defined by the Secretary in regulations), to the Inspector 
        General of the Department of Health and Human Services, for the 
        purpose of audits, investigations, evaluations, or other 
        statutory functions of the Inspector General of the Department 
        of Health and Human Services;''; and
            (3) in the first sentence--
                    (A) by striking ``or in cases under paragraph (7)'' 
                and inserting ``in cases under paragraph (7)''; and
                    (B) by striking ``act)'' and inserting ``act, in 
                cases under paragraph (8), $50,000 for each false record 
                or statement, or in cases under paragraph (9), $15,000 
                for each day of the failure described in such 
                paragraph)''.

    (b) Medicare Advantage and Part D Plans.--
            (1) Ensuring timely inspections relating to contracts with 
        ma organizations.--Section 1857(d)(2) of such Act (42 U.S.C. 
        1395w-27(d)(2)) is amended--
                    (A) in subparagraph (A), by inserting ``timely'' 
                before ``inspect''; and
                    (B) in subparagraph (B), by inserting ``timely'' 
                before ``audit and inspect''.
            (2) Marketing violations.--Section 1857(g)(1) of the Social 
        Security Act (42 U.S.C. 1395w-27(g)(1)) is amended--
                    (A) in subparagraph (F), by striking ``or'' at the 
                end;
                    (B) by inserting after subparagraph (G) the 
                following new subparagraphs:
                    ``(H) except as provided under subparagraph (C) or 
                (D) of section 1860D-1(b)(1), enrolls an individual in 
                any plan under this part without the prior consent of 
                the individual or the designee of the individual;
                    ``(I) transfers an individual enrolled under this 
                part from one plan to another without the prior consent 
                of the individual or the designee of the individual or 
                solely for the purpose of earning a commission;
                    ``(J) fails to comply with marketing restrictions 
                described in subsections (h) and (j) of section 1851 or 
                applicable implementing regulations or guidance; or
                    ``(K) employs or contracts with any individual or 
                entity who engages in the conduct described in 
                subparagraphs (A) through (J) of this paragraph;''; and
                    (C) by adding at the end the following new sentence: 
                ``The <<NOTE: Determination.>> Secretary may provide, in 
                addition to any other remedies authorized by law, for 
                any of the remedies described in paragraph (2), if the 
                Secretary determines that any employee or agent of such 
                organization, or any provider or supplier who contracts 
                with such organization, has engaged in any conduct 
                described in subparagraphs (A) through (K) of this 
                paragraph.''.
            (3) Provision of false information.--Section 1857(g)(2)(A) 
        of the Social Security Act (42 U.S.C. 1395w-

[[Page 124 STAT. 772]]

        27(g)(2)(A)) is amended by inserting ``except with respect to a 
        determination under subparagraph (E), an assessment of not more 
        than the amount claimed by such plan or plan sponsor based upon 
        the misrepresentation or falsified information involved,'' after 
        ``for each such determination,''.

    (c) Obstruction of Program Audits.--Section 1128(b)(2) of the Social 
Security Act (42 U.S.C. 1320a-7(b)(2)) is amended--
            (1) in the heading, by inserting ``or audit'' after 
        ``investigation''; and
            (2) by striking ``investigation into'' and all that follows 
        through the period and inserting ``investigation or audit 
        related to--''
                          ``(i) any offense described in paragraph (1) 
                      or in subsection (a); or
                          ``(ii) the use of funds received, directly or 
                      indirectly, from any Federal health care program 
                      (as defined in section 1128B(f)).''.

    (d) <<NOTE: 42 USC 1320a-7 note.>> Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to acts committed on 
        or after January 1, 2010.
            (2) Exception.--The amendments made by subsection (b)(1) 
        take effect on the date of enactment of this Act.

SEC. 6409. <<NOTE: 42 USC 1395nn note.>> MEDICARE SELF-REFERRAL 
            DISCLOSURE PROTOCOL.

    (a) Development of Self-Referral Disclosure Protocol.--
            (1) <<NOTE: Deadline.>> In general.--The Secretary of Health 
        and Human Services, in cooperation with the Inspector General of 
        the Department of Health and Human Services, shall establish, 
        not later than 6 months after the date of the enactment of this 
        Act, a protocol to enable health care providers of services and 
        suppliers to disclose an actual or potential violation of 
        section 1877 of the Social Security Act (42 U.S.C. 1395nn) 
        pursuant to a self-referral disclosure protocol (in this section 
        referred to as an ``SRDP''). The SRDP shall include direction to 
        health care providers of services and suppliers on--
                    (A) a specific person, official, or office to whom 
                such disclosures shall be made; and
                    (B) instruction on the implication of the SRDP on 
                corporate integrity agreements and corporate compliance 
                agreements.
            (2) Publication on internet website of srdp information.--
        The Secretary of Health and Human Services shall post 
        information on the public Internet website of the Centers for 
        Medicare & Medicaid Services to inform relevant stakeholders of 
        how to disclose actual or potential violations pursuant to an 
        SRDP.
            (3) Relation to advisory opinions.--The SRDP shall be 
        separate from the advisory opinion process set forth in 
        regulations implementing section 1877(g) of the Social Security 
        Act.

    (b) Reduction in Amounts Owed.--The Secretary of Health and Human 
Services is authorized to reduce the amount due and owing for all 
violations under section 1877 of the Social Security Act to an amount 
less than that specified in subsection (g) of such section. In 
establishing such amount for a violation, the Secretary may consider the 
following factors:

[[Page 124 STAT. 773]]

            (1) The nature and extent of the improper or illegal 
        practice.
            (2) The timeliness of such self-disclosure.
            (3) The cooperation in providing additional information 
        related to the disclosure.
            (4) Such other factors as the Secretary considers 
        appropriate.

    (c) Report.--Not later than 18 months after the date on which the 
SRDP protocol is established under subsection (a)(1), the Secretary 
shall submit to Congress a report on the implementation of this section. 
Such report shall include--
            (1) the number of health care providers of services and 
        suppliers making disclosures pursuant to the SRDP;
            (2) the amounts collected pursuant to the SRDP;
            (3) the types of violations reported under the SRDP; and
            (4) such other information as may be necessary to evaluate 
        the impact of this section.

SEC. 6410. ADJUSTMENTS TO THE MEDICARE DURABLE MEDICAL EQUIPMENT, 
            PROSTHETICS, ORTHOTICS, AND SUPPLIES COMPETITIVE ACQUISITION 
            PROGRAM.

    (a) Expansion of Round 2 of the DME Competitive Bidding Program.--
Section 1847(a)(1) of the Social Security Act (42 U.S.C. 1395w-3(a)(1)) 
is amended--
            (1) in subparagraph (B)(i)(II), by striking ``70'' and 
        inserting ``91''; and
            (2) in subparagraph (D)(ii)--
                    (A) in subclause (I), by striking ``and'' at the 
                end;
                    (B) by redesignating subclause (II) as subclause 
                (III); and
                    (C) by inserting after subclause (I) the following 
                new subclause:
                                    ``(II) the Secretary shall include 
                                the next 21 largest metropolitan 
                                statistical areas by total population 
                                (after those selected under subclause 
                                (I)) for such round; and''.

    (b) Requirement to Either Competitively Bid Areas or Use Competitive 
Bid Prices by 2016.--Section 1834(a)(1)(F) of the Social Security Act 
(42 U.S.C. 1395m(a)(1)(F)) is amended--
            (1) in clause (i), by striking ``and'' at the end;
            (2) in clause (ii)--
                    (A) by inserting ``(and, in the case of covered 
                items furnished on or after January 1, 2016, subject to 
                clause (iii), shall)'' after ``may''; and
                    (B) by striking the period at the end and inserting 
                ``; and''; and
            (3) by adding at the end the following new clause:
                          ``(iii) in the case of covered items furnished 
                      on or after January 1, 2016, the Secretary shall 
                      continue to make such adjustments described in 
                      clause (ii) as, under such competitive acquisition 
                      programs, additional covered items are phased in 
                      or information is updated as contracts under 
                      section 1847 are recompeted in accordance with 
                      section 1847(b)(3)(B).''.

SEC. 6411. EXPANSION OF THE RECOVERY AUDIT CONTRACTOR (RAC) PROGRAM.

    (a) Expansion to Medicaid.--

[[Page 124 STAT. 774]]

            (1) State plan amendment.--Section 1902(a)(42) of the Social 
        Security Act (42 U.S.C. 1396a(a)(42)) is amended--
                    (A) by striking ``that the records'' and inserting 
                ``that--
                    ``(A) the records'';
                    (B) by inserting ``and'' after the semicolon; and
                    (C) by adding at the end the following:
                    ``(B) <<NOTE: Deadline.>> not later than December 
                31, 2010, the State shall--
                          ``(i) establish a program under which the 
                      State contracts (consistent with State law and in 
                      the same manner as the Secretary enters into 
                      contracts with recovery audit contractors under 
                      section 1893(h), subject to such exceptions or 
                      requirements as the Secretary may require for 
                      purposes of this title or a particular State) with 
                      1 or more recovery audit contractors for the 
                      purpose of identifying underpayments and 
                      overpayments and recouping overpayments under the 
                      State plan and under any waiver of the State plan 
                      with respect to all services for which payment is 
                      made to any entity under such plan or waiver; and
                          ``(ii) provide assurances satisfactory to the 
                      Secretary that--
                                    ``(I) under such contracts, payment 
                                shall be made to such a contractor only 
                                from amounts recovered;
                                    ``(II) from such amounts recovered, 
                                payment--
                                            ``(aa) shall be made on a 
                                        contingent basis for collecting 
                                        overpayments; and
                                            ``(bb) may be made in such 
                                        amounts as the State may specify 
                                        for identifying underpayments;
                                    ``(III) the State has an adequate 
                                process for entities to appeal any 
                                adverse determination made by such 
                                contractors; and
                                    ``(IV) such program is carried out 
                                in accordance with such requirements as 
                                the Secretary shall specify, including--
                                            ``(aa) for purposes of 
                                        section 1903(a)(7), that amounts 
                                        expended by the State to carry 
                                        out the program shall be 
                                        considered amounts expended as 
                                        necessary for the proper and 
                                        efficient administration of the 
                                        State plan or a waiver of the 
                                        plan;
                                            ``(bb) that section 1903(d) 
                                        shall apply to amounts recovered 
                                        under the program; and
                                            ``(cc) that the State and 
                                        any such contractors under 
                                        contract with the State shall 
                                        coordinate such recovery audit 
                                        efforts with other contractors 
                                        or entities performing audits of 
                                        entities receiving payments 
                                        under the State plan or waiver 
                                        in the State, including efforts 
                                        with Federal and State law 
                                        enforcement with respect to the 
                                        Department of Justice, including 
                                        the Federal Bureau of 
                                        Investigations, the Inspector 
                                        General of the Department of 
                                        Health and Human Services, and 
                                        the State medicaid fraud control 
                                        unit; and''.

[[Page 124 STAT. 775]]

            (2) <<NOTE: 42 USC 1396a note.>> Coordination; 
        regulations.--
                    (A) In general.--The Secretary of Health and Human 
                Services, acting through the Administrator of the 
                Centers for Medicare & Medicaid Services, shall 
                coordinate the expansion of the Recovery Audit 
                Contractor program to Medicaid with States, particularly 
                with respect to each State that enters into a contract 
                with a recovery audit contractor for purposes of the 
                State's Medicaid program prior to December 31, 2010.
                    (B) Regulations.--The Secretary of Health and Human 
                Services shall promulgate regulations to carry out this 
                subsection and the amendments made by this subsection, 
                including with respect to conditions of Federal 
                financial participation, as specified by the Secretary.

    (b) Expansion to Medicare Parts C and D.--Section 1893(h) of the 
Social Security Act (42 U.S.C. 1395ddd(h)) is amended--
            (1) in paragraph (1), in the matter preceding subparagraph 
        (A), by striking ``part A or B'' and inserting ``this title'';
            (2) in paragraph (2), by striking ``parts A and B'' and 
        inserting ``this title'';
            (3) in paragraph (3), by inserting ``(not later than 
        December 31, 2010, in the case of contracts relating to payments 
        made under part C or D)'' after ``2010'';
            (4) in paragraph (4), in the matter preceding subparagraph 
        (A), by striking ``part A or B'' and inserting ``this title''; 
        and
            (5) by adding at the end the following:
            ``(9) Special rules relating to parts c and d.--The 
        Secretary shall enter into contracts under paragraph (1) to 
        require recovery audit contractors to--
                    ``(A) ensure that each MA plan under part C has an 
                anti-fraud plan in effect and to review the 
                effectiveness of each such anti-fraud plan;
                    ``(B) ensure that each prescription drug plan under 
                part D has an anti-fraud plan in effect and to review 
                the effectiveness of each such anti-fraud plan;
                    ``(C) examine claims for reinsurance payments under 
                section 1860D-15(b) to determine whether prescription 
                drug plans submitting such claims incurred costs in 
                excess of the allowable reinsurance costs permitted 
                under paragraph (2) of that section; and
                    ``(D) review estimates submitted by prescription 
                drug plans by private plans with respect to the 
                enrollment of high cost beneficiaries (as defined by the 
                Secretary) and to compare such estimates with the 
                numbers of such beneficiaries actually enrolled by such 
                plans.''.

    (c) <<NOTE: 42 USC 1396a note.>> Annual Report.--The Secretary of 
Health and Human Services, acting through the Administrator of the 
Centers for Medicare & Medicaid Services, shall submit an annual report 
to Congress concerning the effectiveness of the Recovery Audit 
Contractor program under Medicaid and Medicare and shall include such 
reports recommendations for expanding or improving the program.

[[Page 124 STAT. 776]]

      Subtitle F--Additional Medicaid Program Integrity Provisions

SEC. 6501. TERMINATION OF PROVIDER PARTICIPATION UNDER MEDICAID IF 
            TERMINATED UNDER MEDICARE OR OTHER STATE PLAN.

    Section 1902(a)(39) of the Social Security Act (42 U.S.C. 42 U.S.C. 
1396a(a)) is amended by inserting after ``1128A,'' the following: 
``terminate the participation of any individual or entity in such 
program if (subject to such exceptions as are permitted with respect to 
exclusion under sections 1128(c)(3)(B) and 1128(d)(3)(B)) participation 
of such individual or entity is terminated under title XVIII or any 
other State plan under this title,''.

SEC. 6502. MEDICAID EXCLUSION FROM PARTICIPATION RELATING TO CERTAIN 
            OWNERSHIP, CONTROL, AND MANAGEMENT AFFILIATIONS.

    Section 1902(a) of the Social Security Act (42 U.S.C. 1396a(a)), as 
amended by section 6401(b), is amended by inserting after paragraph (77) 
the following:
            ``(78) provide that the State agency described in paragraph 
        (9) exclude, with respect to a period, any individual or entity 
        from participation in the program under the State plan if such 
        individual or entity owns, controls, or manages an entity that 
        (or if such entity is owned, controlled, or managed by an 
        individual or entity that)--
                    ``(A) has unpaid overpayments (as defined by the 
                Secretary) under this title during such period 
                determined by the Secretary or the State agency to be 
                delinquent;
                    ``(B) is suspended or excluded from participation 
                under or whose participation is terminated under this 
                title during such period; or
                    ``(C) is affiliated with an individual or entity 
                that has been suspended or excluded from participation 
                under this title or whose participation is terminated 
                under this title during such period;''.

SEC. 6503. BILLING AGENTS, CLEARINGHOUSES, OR OTHER ALTERNATE PAYEES 
            REQUIRED TO REGISTER UNDER MEDICAID.

    (a) In General.--Section 1902(a) of the Social Security Act (42 
U.S.C. 42 U.S.C. 1396a(a)), as amended by section 6502(a), is amended by 
inserting after paragraph (78), the following:
            ``(79) provide that any agent, clearinghouse, or other 
        alternate payee (as defined by the Secretary) that submits 
        claims on behalf of a health care provider must register with 
        the State and the Secretary in a form and manner specified by 
        the Secretary;''.

SEC. 6504. REQUIREMENT TO REPORT EXPANDED SET OF DATA ELEMENTS UNDER 
            MMIS TO DETECT FRAUD AND ABUSE.

    (a) <<NOTE: Determination.>> In General.--Section 1903(r)(1)(F) of 
the Social Security Act (42 U.S.C. 1396b(r)(1)(F)) is amended by 
inserting after ``necessary'' the following: ``and including, for data 
submitted to the Secretary on or after January 1, 2010, data elements 
from the

[[Page 124 STAT. 777]]

automated data system that the Secretary determines to be necessary for 
program integrity, program oversight, and administration, at such 
frequency as the Secretary shall determine''.

    (b) Managed Care Organizations.--
            (1) In general.--Section 1903(m)(2)(A)(xi) of the Social 
        Security Act (42 U.S.C. 1396b(m)(2)(A)(xi)) is amended by 
        inserting ``and for the provision of such data to the State at a 
        frequency and level of detail to be specified by the Secretary'' 
        after ``patients''.
            (2) <<NOTE: 42 USC 1396b note.>> Effective date.--The 
        amendment made by paragraph (1) shall apply with respect to 
        contract years beginning on or after January 1, 2010.

SEC. 6505. PROHIBITION ON PAYMENTS TO INSTITUTIONS OR ENTITIES LOCATED 
            OUTSIDE OF THE UNITED STATES.

    Section 1902(a) of the Social Security Act <<NOTE: 42 USC 
1396a.>> (42 U.S.C. 1396b(a)), as amended by section 6503, is amended by 
inserting after paragraph (79) the following new paragraph:
            ``(80) provide that the State shall not provide any payments 
        for items or services provided under the State plan or under a 
        waiver to any financial institution or entity located outside of 
        the United States;''.

SEC. 6506. OVERPAYMENTS.

    (a) Extension of Period for Collection of Overpayments Due to 
Fraud.--
            (1) In general.--Section 1903(d)(2) of the Social Security 
        Act (42 U.S.C. 1396b(d)(2)) is amended--
                    (A) in subparagraph (C)--
                          (i) in the first sentence, by striking ``60 
                      days'' and inserting ``1 year''; and
                          (ii) in the second sentence, by striking ``60 
                      days'' and inserting ``1-year period''; and
                    (B) in subparagraph (D)--
                          (i) in inserting ``(i)'' after ``(D)''; and
                          (ii) by adding at the end the following:

    ``(ii) In any case where the State is unable to recover a debt which 
represents an overpayment (or any portion thereof) made to a person or 
other entity due to fraud within 1 year of discovery because there is 
not a final determination of the amount of the overpayment under an 
administrative or judicial process (as applicable), including as a 
result of a judgment being under appeal, no adjustment shall be made in 
the Federal payment to such State on account of such overpayment (or 
portion thereof) before the date that is 30 days after the date on which 
a final judgment (including, if applicable, a final determination on an 
appeal) is made.''.
            (2) <<NOTE: 42 USC 1396b note.>> Effective date.--The 
        amendments made by this subsection take effect on the date of 
        enactment of this Act and apply to overpayments discovered on or 
        after that date.

    (b) <<NOTE: Regulations. 42 USC 1396b note.>> Corrective Action.--
The Secretary shall promulgate regulations that require States to 
correct Federally identified claims overpayments, of an ongoing or 
recurring nature, with new Medicaid Management Information System (MMIS) 
edits, audits, or other appropriate corrective action.

[[Page 124 STAT. 778]]

SEC. 6507. MANDATORY STATE USE OF NATIONAL CORRECT CODING INITIATIVE.

    Section 1903(r) of the Social Security Act (42 U.S.C. 1396b(r)) is 
amended--
            (1) in paragraph (1)(B)--
                    (A) in clause (ii), by striking ``and'' at the end;
                    (B) in clause (iii), by adding ``and'' after the 
                semi-colon; and
                    (C) by adding at the end the following new clause:
                          ``(iv) <<NOTE: Effective date.>> effective for 
                      claims filed on or after October 1, 2010, 
                      incorporate compatible methodologies of the 
                      National Correct Coding Initiative administered by 
                      the Secretary (or any successor initiative to 
                      promote correct coding and to control improper 
                      coding leading to inappropriate payment) and such 
                      other methodologies of that Initiative (or such 
                      other national correct coding methodologies) as 
                      the Secretary identifies in accordance with 
                      paragraph (4);''; and
            (2) by adding at the end the following new paragraph:

    ``(4) <<NOTE: Deadlines.>> For purposes of paragraph (1)(B)(iv), the 
Secretary shall do the following:
            ``(A) Not later than September 1, 2010:
                    ``(i) Identify those methodologies of the National 
                Correct Coding Initiative administered by the Secretary 
                (or any successor initiative to promote correct coding 
                and to control improper coding leading to inappropriate 
                payment) which are compatible to claims filed under this 
                title.
                    ``(ii) Identify those methodologies of such 
                Initiative (or such other national correct coding 
                methodologies) that should be incorporated into claims 
                filed under this title with respect to items or services 
                for which States provide medical assistance under this 
                title and no national correct coding methodologies have 
                been established under such Initiative with respect to 
                title XVIII.
                    ``(iii) <<NOTE: Notification.>> Notify States of--
                          ``(I) the methodologies identified under 
                      subparagraphs (A) and (B) (and of any other 
                      national correct coding methodologies identified 
                      under subparagraph (B)); and
                          ``(II) how States are to incorporate such 
                      methodologies into claims filed under this title.
            ``(B) Not later than March 1, 2011, submit a report to 
        Congress that includes the notice to States under clause (iii) 
        of subparagraph (A) and an analysis supporting the 
        identification of the methodologies made under clauses (i) and 
        (ii) of subparagraph (A).''.

SEC. 6508. <<NOTE: 42 USC 1396a note.>> GENERAL EFFECTIVE DATE.

    (a) In General.--Except as otherwise provided in this subtitle, this 
subtitle and the amendments made by this subtitle take effect on January 
1, 2011, without regard to whether final regulations to carry out such 
amendments and subtitle have been promulgated by that date.
    (b) <<NOTE: Determination. Plan.>> Delay if State Legislation 
Required.--In the case of a State plan for medical assistance under 
title XIX of the Social Security Act or a child health plan under title 
XXI of such Act which the Secretary of Health and Human Services 
determines

[[Page 124 STAT. 779]]

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 subtitle, the State plan or child health 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.

           Subtitle G--Additional Program Integrity Provisions

SEC. 6601. PROHIBITION ON FALSE STATEMENTS AND REPRESENTATIONS.

    (a) Prohibition.--Part 5 of subtitle B of title I of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1131 et seq.) is 
amended by adding at the end the following:

``SEC. 519. <<NOTE: 29 USC 1149.>> PROHIBITION ON FALSE STATEMENTS AND 
            REPRESENTATIONS.

    ``No person, in connection with a plan or other arrangement that is 
multiple employer welfare arrangement described in section 3(40), shall 
make a false statement or false representation of fact, knowing it to be 
false, in connection with the marketing or sale of such plan or 
arrangement, to any employee, any member of an employee organization, 
any beneficiary, any employer, any employee organization, the Secretary, 
or any State, or the representative or agent of any such person, State, 
or the Secretary, concerning--
            ``(1) the financial condition or solvency of such plan or 
        arrangement;
            ``(2) the benefits provided by such plan or arrangement;
            ``(3) the regulatory status of such plan or other 
        arrangement under any Federal or State law governing collective 
        bargaining, labor management relations, or intern union affairs; 
        or
            ``(4) the regulatory status of such plan or other 
        arrangement regarding exemption from state regulatory authority 
        under this Act.

This section shall not apply to any plan or arrangement that does not 
fall within the meaning of the term `multiple employer welfare 
arrangement' under section 3(40)(A).''.
    (b) Criminal Penalties.--Section 501 of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1131) is amended--
            (1) by inserting ``(a)'' before ``Any person''; and
            (2) by adding at the end the following:

    ``(b) Any person that violates section 519 shall upon conviction be 
imprisoned not more than 10 years or fined under title 18, United States 
Code, or both.''.
    (c) Conforming Amendment.--The table of sections for part 5 of 
subtitle B of title I of the Employee Retirement Income Security Act of 
1974 is amended by adding at the end the following:

``Sec. 519. Prohibition on false statement and representations.''.

[[Page 124 STAT. 780]]

SEC. 6602. CLARIFYING DEFINITION.

    Section 24(a)(2) of title 18, United States Code, is amended by 
inserting ``or section 411, 518, or 511 of the Employee Retirement 
Income Security Act of 1974,'' after ``1954 of this title''.

SEC. 6603. DEVELOPMENT OF MODEL UNIFORM REPORT FORM.

    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. 2794. <<NOTE: 42 USC 300gg-95.>> UNIFORM FRAUD AND ABUSE REFERRAL 
            FORMAT.

    ``The Secretary shall request the National Association of Insurance 
Commissioners to develop a model uniform report form for private health 
insurance issuer seeking to refer suspected fraud and abuse to State 
insurance departments or other responsible State agencies for 
investigation. The Secretary shall request that the National Association 
of Insurance Commissioners develop recommendations for uniform reporting 
standards for such referrals.''.

SEC. 6604. APPLICABILITY OF STATE LAW TO COMBAT FRAUD AND ABUSE.

    (a) In General.--Part 5 of subtitle B of title I of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1131 et seq.), as 
amended by section 6601, is further amended by adding at the end the 
following:

``SEC. 520. <<NOTE: 29 USC 1150.>> APPLICABILITY OF STATE LAW TO COMBAT 
            FRAUD AND ABUSE.

    ``The Secretary may, for the purpose of identifying, preventing, or 
prosecuting fraud and abuse, adopt regulatory standards establishing, or 
issue an order relating to a specific person establishing, that a person 
engaged in the business of providing insurance through a multiple 
employer welfare arrangement described in section 3(40) is subject to 
the laws of the States in which such person operates which regulate 
insurance in such State, notwithstanding section 514(b)(6) of this Act 
or the Liability Risk Retention Act of 1986, and regardless of whether 
the law of the State is otherwise preempted under any of such 
provisions. This section shall not apply to any plan or arrangement that 
does not fall within the meaning of the term `multiple employer welfare 
arrangement' under section 3(40)(A).''.
    (b) Conforming Amendment.--The table of sections for part 5 of 
subtitle B of title I of the Employee Retirement Income Security Act of 
1974, as amended by section 6601, is further amended by adding at the 
end the following:

``Sec. 520. 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.

    (a) In General.--Part 5 of subtitle B of title I of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1131 et seq.), as 
amended by section 6604, is further amended by adding at the end the 
following:

[[Page 124 STAT. 781]]

``SEC. 521. <<NOTE: 29 USC 1151.>> ADMINISTRATIVE SUMMARY CEASE AND 
            DESIST ORDERS AND SUMMARY SEIZURE ORDERS AGAINST MULTIPLE 
            EMPLOYER WELFARE ARRANGEMENTS IN FINANCIALLY HAZARDOUS 
            CONDITION.

    ``(a) In General.--The Secretary may issue a cease and desist (ex 
parte) order under this title if it appears to the Secretary that the 
alleged conduct of a multiple employer welfare arrangement described in 
section 3(40), other than a plan or arrangement described in subsection 
(g), is fraudulent, or creates an immediate danger to the public safety 
or welfare, or is causing or can be reasonably expected to cause 
significant, imminent, and irreparable public injury.
    ``(b) Hearing.--A person that is adversely affected by the issuance 
of a cease and desist order under subsection (a) may request a hearing 
by the Secretary regarding such order. The Secretary may require that a 
proceeding under this section, including all related information and 
evidence, be conducted in a confidential manner.
    ``(c) Burden of Proof.--The burden of proof in any hearing conducted 
under subsection (b) shall be on the party requesting the hearing to 
show cause why the cease and desist order should be set aside.
    ``(d) Determination.--Based upon the evidence presented at a hearing 
under subsection (b), the cease and desist order involved may be 
affirmed, modified, or set aside by the Secretary in whole or in part.
    ``(e) Seizure.--The Secretary may issue a summary seizure order 
under this title if it appears that a multiple employer welfare 
arrangement is in a financially hazardous condition.
    ``(f) Regulations.--The Secretary may promulgate such regulations or 
other guidance as may be necessary or appropriate to carry out this 
section.
    ``(g) Exception.--This section shall not apply to any plan or 
arrangement that does not fall within the meaning of the term `multiple 
employer welfare arrangement' under section 3(40)(A).''.
    (b) Conforming Amendment.--The table of sections for part 5 of 
subtitle B of title I of the Employee Retirement Income Security Act of 
1974, as amended by section 6604, is further amended by adding at the 
end the following:

``Sec. 521. Administrative summary cease and desist orders and summary 
           seizure orders against health plans in financially hazardous 
           condition.''.

SEC. 6606. MEWA PLAN REGISTRATION WITH DEPARTMENT OF LABOR.

    Section 101(g) of the Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1021(g)) is amended--
            (1) by striking ``Secretary may'' and inserting ``Secretary 
        shall''; and
            (2) by inserting ``to register with the Secretary prior to 
        operating in a State and may, by regulation, require such 
        multiple employer welfare arrangements'' after ``not group 
        health plans''.

SEC. 6607. PERMITTING EVIDENTIARY PRIVILEGE AND CONFIDENTIAL 
            COMMUNICATIONS.

    Section 504 of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1134) is amended by adding at the end the following:

[[Page 124 STAT. 782]]

    ``(d) The Secretary may promulgate a regulation that provides an 
evidentiary privilege for, and provides for the confidentiality of 
communications between or among, any of the following entities or their 
agents, consultants, or employees:
            ``(1) A State insurance department.
            ``(2) A State attorney general.
            ``(3) The National Association of Insurance Commissioners.
            ``(4) The Department of Labor.
            ``(5) The Department of the Treasury.
            ``(6) The Department of Justice.
            ``(7) The Department of Health and Human Services.
            ``(8) Any other Federal or State authority that the 
        Secretary determines is appropriate for the purposes of 
        enforcing the provisions of this title.

    ``(e) <<NOTE: Applicability.>> The privilege established under 
subsection (d) shall apply to communications related to any 
investigation, audit, examination, or inquiry conducted or coordinated 
by any of the agencies. A communication that is privileged under 
subsection (d) shall not waive any privilege otherwise available to the 
communicating agency or to any person who provided the information that 
is communicated.''.

Subtitle H <<NOTE: Elder Justice Act of 2009.>> --Elder Justice Act

SEC. 6701. <<NOTE: 42 USC 1305 note.>> SHORT TITLE OF SUBTITLE.

    This subtitle may be cited as the ``Elder Justice Act of 2009''.

SEC. 6702. <<NOTE: 42 USC 1395i-3a note.>> DEFINITIONS.

    Except as otherwise specifically provided, any term that is defined 
in section 2011 of the Social Security Act (as added by section 6703(a)) 
and is used in this subtitle has the meaning given such term by such 
section.

SEC. 6703. ELDER JUSTICE.

    (a) Elder Justice.--
            (1) In general.--Title XX of the Social Security Act (42 
        U.S.C. 1397 et seq.) is amended--
                    (A) in the heading, by inserting ``AND ELDER 
                JUSTICE'' after ``SOCIAL SERVICES'';
                    (B) by inserting before section 2001 the following:

       ``Subtitle A--Block Grants to States for Social Services'';

                and
                    (C) by adding at the end the following:

                       ``Subtitle B--Elder Justice

``SEC. 2011. <<NOTE: 42 USC 1397j.>> DEFINITIONS.

    ``In this subtitle:
            ``(1) Abuse.--The term `abuse' means the knowing infliction 
        of physical or psychological harm or the knowing deprivation of 
        goods or services that are necessary to meet essential needs or 
        to avoid physical or psychological harm.

[[Page 124 STAT. 783]]

            ``(2) Adult protective services.--The term `adult protective 
        services' means such services provided to adults as the 
        Secretary may specify and includes services such as--
                    ``(A) receiving reports of adult abuse, neglect, or 
                exploitation;
                    ``(B) investigating the reports described in 
                subparagraph (A);
                    ``(C) case planning, monitoring, evaluation, and 
                other case work and services; and
                    ``(D) providing, arranging for, or facilitating the 
                provision of medical, social service, economic, legal, 
                housing, law enforcement, or other protective, 
                emergency, or support services.
            ``(3) Caregiver.--The term `caregiver' means an individual 
        who has the responsibility for the care of an elder, either 
        voluntarily, by contract, by receipt of payment for care, or as 
        a result of the operation of law, and means a family member or 
        other individual who provides (on behalf of such individual or 
        of a public or private agency, organization, or institution) 
        compensated or uncompensated care to an elder who needs 
        supportive services in any setting.
            ``(4) Direct care.--The term `direct care' means care by an 
        employee or contractor who provides assistance or long-term care 
        services to a recipient.
            ``(5) Elder.--The term `elder' means an individual age 60 or 
        older.
            ``(6) Elder justice.--The term `elder justice' means--
                    ``(A) from a societal perspective, efforts to--
                          ``(i) prevent, detect, treat, intervene in, 
                      and prosecute elder abuse, neglect, and 
                      exploitation; and
                          ``(ii) protect elders with diminished capacity 
                      while maximizing their autonomy; and
                    ``(B) from an individual perspective, the 
                recognition of an elder's rights, including the right to 
                be free of abuse, neglect, and exploitation.
            ``(7) Eligible entity.--The term `eligible entity' means a 
        State or local government agency, Indian tribe or tribal 
        organization, or any other public or private entity that is 
        engaged in and has expertise in issues relating to elder justice 
        or in a field necessary to promote elder justice efforts.
            ``(8) Exploitation.--The term `exploitation' means the 
        fraudulent or otherwise illegal, unauthorized, or improper act 
        or process of an individual, including a caregiver or fiduciary, 
        that uses the resources of an elder for monetary or personal 
        benefit, profit, or gain, or that results in depriving an elder 
        of rightful access to, or use of, benefits, resources, 
        belongings, or assets.
            ``(9) Fiduciary.--The term `fiduciary'--
                    ``(A) means a person or entity with the legal 
                responsibility--
                          ``(i) to make decisions on behalf of and for 
                      the benefit of another person; and
                          ``(ii) to act in good faith and with fairness; 
                      and
                    ``(B) includes a trustee, a guardian, a conservator, 
                an executor, an agent under a financial power of 
                attorney or health care power of attorney, or a 
                representative payee.

[[Page 124 STAT. 784]]

            ``(10) Grant.--The term `grant' includes a contract, 
        cooperative agreement, or other mechanism for providing 
        financial assistance.
            ``(11) Guardianship.--The term `guardianship' means--
                    ``(A) the process by which a State court determines 
                that an adult individual lacks capacity to make 
                decisions about self-care or property, and appoints 
                another individual or entity known as a guardian, as a 
                conservator, or by a similar term, as a surrogate 
                decisionmaker;
                    ``(B) the manner in which the court-appointed 
                surrogate decisionmaker carries out duties to the 
                individual and the court; or
                    ``(C) the manner in which the court exercises 
                oversight of the surrogate decisionmaker.
            ``(12) Indian tribe.--
                    ``(A) In general.--The term `Indian tribe' has the 
                meaning given such term in section 4 of the Indian Self-
                Determination and Education Assistance Act (25 U.S.C. 
                450b).
                    ``(B) Inclusion of pueblo and rancheria.--The term 
                `Indian tribe' includes any Pueblo or Rancheria.
            ``(13) Law enforcement.--The term `law enforcement' means 
        the full range of potential responders to elder abuse, neglect, 
        and exploitation including--
                    ``(A) police, sheriffs, detectives, public safety 
                officers, and corrections personnel;
                    ``(B) prosecutors;
                    ``(C) medical examiners;
                    ``(D) investigators; and
                    ``(E) coroners.
            ``(14) Long-term care.--
                    ``(A) In general.--The term `long-term care' means 
                supportive and health services specified by the 
                Secretary for individuals who need assistance because 
                the individuals have a loss of capacity for self-care 
                due to illness, disability, or vulnerability.
                    ``(B) Loss of capacity for self-care.--For purposes 
                of subparagraph (A), the term `loss of capacity for 
                self-care' means an inability to engage in 1 or more 
                activities of daily living, including eating, dressing, 
                bathing, management of one's financial affairs, and 
                other activities the Secretary determines appropriate.
            ``(15) Long-term care facility.--The term `long-term care 
        facility' means a residential care provider that arranges for, 
        or directly provides, long-term care.
            ``(16) Neglect.--The term `neglect' means--
                    ``(A) the failure of a caregiver or fiduciary to 
                provide the goods or services that are necessary to 
                maintain the health or safety of an elder; or
                    ``(B) self-neglect.
            ``(17) Nursing facility.--
                    ``(A) In general.--The term `nursing facility' has 
                the meaning given such term under section 1919(a).
                    ``(B) Inclusion of skilled nursing facility.--The 
                term `nursing facility' includes a skilled nursing 
                facility (as defined in section 1819(a)).

[[Page 124 STAT. 785]]

            ``(18) Self-neglect.--The term `self-neglect' means an 
        adult's inability, due to physical or mental impairment or 
        diminished capacity, to perform essential self-care tasks 
        including--
                    ``(A) obtaining essential food, clothing, shelter, 
                and medical care;
                    ``(B) obtaining goods and services necessary to 
                maintain physical health, mental health, or general 
                safety; or
                    ``(C) managing one's own financial affairs.
            ``(19) Serious bodily injury.--
                    ``(A) In general.--The term `serious bodily injury' 
                means an injury--
                          ``(i) involving extreme physical pain;
                          ``(ii) involving substantial risk of death;
                          ``(iii) involving protracted loss or 
                      impairment of the function of a bodily member, 
                      organ, or mental faculty; or
                          ``(iv) requiring medical intervention such as 
                      surgery, hospitalization, or physical 
                      rehabilitation.
                    ``(B) Criminal sexual abuse.--Serious bodily injury 
                shall be considered to have occurred if the conduct 
                causing the injury is conduct described in section 2241 
                (relating to aggravated sexual abuse) or 2242 (relating 
                to sexual abuse) of title 18, United States Code, or any 
                similar offense under State law.
            ``(20) Social.--The term `social', when used with respect to 
        a service, includes adult protective services.
            ``(21) State legal assistance developer.--The term `State 
        legal assistance developer' means an individual described in 
        section 731 of the Older Americans Act of 1965.
            ``(22) State long-term care ombudsman.--The term `State 
        Long-Term Care Ombudsman' means the State Long-Term Care 
        Ombudsman described in section 712(a)(2) of the Older Americans 
        Act of 1965.

``SEC. 2012. <<NOTE: 42 USC 1397j-1.>> GENERAL PROVISIONS.

    ``(a) Protection of Privacy.--In pursuing activities under this 
subtitle, the Secretary shall ensure the protection of individual health 
privacy consistent with the regulations promulgated under section 264(c) 
of the Health Insurance Portability and Accountability Act of 1996 and 
applicable State and local privacy regulations.
    ``(b) Rule of Construction.--Nothing in this subtitle shall be 
construed to interfere with or abridge an elder's right to practice his 
or her religion through reliance on prayer alone for healing when this 
choice--
            ``(1) is contemporaneously expressed, either orally or in 
        writing, with respect to a specific illness or injury which the 
        elder has at the time of the decision by an elder who is 
        competent at the time of the decision;
            ``(2) is previously set forth in a living will, health care 
        proxy, or other advance directive document that is validly 
        executed and applied under State law; or
            ``(3) may be unambiguously deduced from the elder's life 
        history.

[[Page 124 STAT. 786]]

``PART I--NATIONAL COORDINATION OF ELDER JUSTICE ACTIVITIES AND RESEARCH

 ``Subpart A--Elder Justice Coordinating Council and Advisory Board on 
                 Elder Abuse, Neglect, and Exploitation

``SEC. 2021. <<NOTE: 42 USC 1397k.>> ELDER JUSTICE COORDINATING COUNCIL.

    ``(a) Establishment.--There is established within the Office of the 
Secretary an Elder Justice Coordinating Council (in this section 
referred to as the `Council').
    ``(b) Membership.--
            ``(1) In general.--The Council shall be composed of the 
        following members:
                    ``(A) The Secretary (or the Secretary's designee).
                    ``(B) The Attorney General (or the Attorney 
                General's designee).
                    ``(C) The head of each Federal department or agency 
                or other governmental entity identified by the Chair 
                referred to in subsection (d) as having 
                responsibilities, or administering programs, relating to 
                elder abuse, neglect, and exploitation.
            ``(2) Requirement.--Each member of the Council shall be an 
        officer or employee of the Federal Government.

    ``(c) Vacancies.--Any vacancy in the Council shall not affect its 
powers, but shall be filled in the same manner as the original 
appointment was made.
    ``(d) Chair.--The member described in subsection (b)(1)(A) shall be 
Chair of the Council.
    ``(e) Meetings.--The Council shall meet at least 2 times per year, 
as determined by the Chair.
    ``(f) Duties.--
            ``(1) <<NOTE: Recommenda- tions.>> In general.--The Council 
        shall make recommendations to the Secretary for the coordination 
        of activities of the Department of Health and Human Services, 
        the Department of Justice, and other relevant Federal, State, 
        local, and private agencies and entities, relating to elder 
        abuse, neglect, and exploitation and other crimes against 
        elders.
            ``(2) Report.--Not later than the date that is 2 years after 
        the date of enactment of the Elder Justice Act of 2009 and every 
        2 years thereafter, the Council shall submit to the Committee on 
        Finance of the Senate and the Committee on Ways and Means and 
        the Committee on Energy and Commerce of the House of 
        Representatives a report that--
                    ``(A) describes the activities and accomplishments 
                of, and challenges faced by--
                          ``(i) the Council; and
                          ``(ii) the entities represented on the 
                      Council; and
                    ``(B) makes such recommendations for legislation, 
                model laws, or other action as the Council determines to 
                be appropriate.

    ``(g) Powers of the Council.--
            ``(1) Information from federal agencies.--Subject to the 
        requirements of section 2012(a), the Council may secure directly 
        from any Federal department or agency such information as the 
        Council considers necessary to carry out this section. Upon

[[Page 124 STAT. 787]]

        request of the Chair of the Council, the head of such department 
        or agency shall furnish such information to the Council.
            ``(2) Postal services.--The Council may use the United 
        States mails in the same manner and under the same conditions as 
        other departments and agencies of the Federal Government.

    ``(h) Travel Expenses.--The members of the Council shall not receive 
compensation for the performance of services for the Council. The 
members shall be allowed travel expenses, including per diem in lieu of 
subsistence, at rates authorized for employees of agencies under 
subchapter I of chapter 57 of title 5, United States Code, while away 
from their homes or regular places of business in the performance of 
services for the Council. Notwithstanding section 1342 of title 31, 
United States Code, the Secretary may accept the voluntary and 
uncompensated services of the members of the Council.
    ``(i) Detail of Government Employees.--Any Federal Government 
employee may be detailed to the Council without reimbursement, and such 
detail shall be without interruption or loss of civil service status or 
privilege.
    ``(j) Status as Permanent Council.--Section 14 of the Federal 
Advisory Committee Act (5 U.S.C. App.) shall not apply to the Council.
    ``(k) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.

``SEC. 2022. <<NOTE: 42 USC 1397k-1.>> ADVISORY BOARD ON ELDER ABUSE, 
            NEGLECT, AND EXPLOITATION.

    ``(a) Establishment.--There is established a board to be known as 
the `Advisory Board on Elder Abuse, Neglect, and Exploitation' (in this 
section referred to as the `Advisory Board') to create short- and long-
term multidisciplinary strategic plans for the development of the field 
of elder justice and to make recommendations to the Elder Justice 
Coordinating Council established under section 2021.
    ``(b) Composition.--The Advisory Board shall be composed of 27 
members appointed by the Secretary from among members of the general 
public who are individuals with experience and expertise in elder abuse, 
neglect, and exploitation prevention, detection, treatment, 
intervention, or prosecution.
    ``(c) <<NOTE: Notice. Federal Register, publication.>> Solicitation 
of Nominations.--The Secretary shall publish a notice in the Federal 
Register soliciting nominations for the appointment of members of the 
Advisory Board under subsection (b).

    ``(d) Terms.--
            ``(1) In general.--Each member of the Advisory Board shall 
        be appointed for a term of 3 years, except that, of the members 
        first appointed--
                    ``(A) 9 shall be appointed for a term of 3 years;
                    ``(B) 9 shall be appointed for a term of 2 years; 
                and
                    ``(C) 9 shall be appointed for a term of 1 year.
            ``(2) Vacancies.--
                    ``(A) In general.--Any vacancy on the Advisory Board 
                shall not affect its powers, but shall be filled in the 
                same manner as the original appointment was made.
                    ``(B) Filling unexpired term.--An individual chosen 
                to fill a vacancy shall be appointed for the unexpired 
                term of the member replaced.

[[Page 124 STAT. 788]]

            ``(3) Expiration of terms.--The term of any member shall not 
        expire before the date on which the member's successor takes 
        office.

    ``(e) Election of Officers.--The Advisory Board shall elect a Chair 
and Vice Chair from among its members. The Advisory Board shall elect 
its initial Chair and Vice Chair at its initial meeting.
    ``(f) Duties.--
            ``(1) Enhance communication on promoting quality of, and 
        preventing abuse, neglect, and exploitation in, long-term 
        care.--The Advisory Board shall develop collaborative and 
        innovative approaches to improve the quality of, including 
        preventing abuse, neglect, and exploitation in, long-term care.
            ``(2) Collaborative efforts to develop consensus around the 
        management of certain quality-related factors.--
                    ``(A) <<NOTE: Panels.>> In general.--The Advisory 
                Board shall establish multidisciplinary panels to 
                address, and develop consensus on, subjects relating to 
                improving the quality of long-term care. At least 1 such 
                panel shall address, and develop consensus on, methods 
                for managing resident-to-resident abuse in long-term 
                care.
                    ``(B) Activities conducted.--The multidisciplinary 
                panels established under subparagraph (A) shall examine 
                relevant research and data, identify best practices with 
                respect to the subject of the panel, determine the best 
                way to carry out those best practices in a practical and 
                feasible manner, and determine an effective manner of 
                distributing information on such subject.
            ``(3) Report.--Not later than the date that is 18 months 
        after the date of enactment of the Elder Justice Act of 2009, 
        and annually thereafter, the Advisory Board shall prepare and 
        submit to the Elder Justice Coordinating Council, the Committee 
        on Finance of the Senate, and the Committee on Ways and Means 
        and the Committee on Energy and Commerce of the House of 
        Representatives a report containing--
                    ``(A) information on the status of Federal, State, 
                and local public and private elder justice activities;
                    ``(B) recommendations (including recommended 
                priorities) regarding--
                          ``(i) elder justice programs, research, 
                      training, services, practice, enforcement, and 
                      coordination;
                          ``(ii) coordination between entities pursuing 
                      elder justice efforts and those involved in 
                      related areas that may inform or overlap with 
                      elder justice efforts, such as activities to 
                      combat violence against women and child abuse and 
                      neglect; and
                          ``(iii) activities relating to adult fiduciary 
                      systems, including guardianship and other 
                      fiduciary arrangements;
                    ``(C) recommendations for specific modifications 
                needed in Federal and State laws (including regulations) 
                or for programs, research, and training to enhance 
                prevention, detection, and treatment (including 
                diagnosis) of, intervention in (including investigation 
                of), and prosecution of elder abuse, neglect, and 
                exploitation;

[[Page 124 STAT. 789]]

                    ``(D) recommendations on methods for the most 
                effective coordinated national data collection with 
                respect to elder justice, and elder abuse, neglect, and 
                exploitation; and
                    ``(E) recommendations for a multidisciplinary 
                strategic plan to guide the effective and efficient 
                development of the field of elder justice.

    ``(g) Powers of the Advisory Board.--
            ``(1) Information from federal agencies.--Subject to the 
        requirements of section 2012(a), the Advisory Board may secure 
        directly from any Federal department or agency such information 
        as the Advisory Board considers necessary to carry out this 
        section. Upon request of the Chair of the Advisory Board, the 
        head of such department or agency shall furnish such information 
        to the Advisory Board.
            ``(2) Sharing of data and reports.--The Advisory Board may 
        request from any entity pursuing elder justice activities under 
        the Elder Justice Act of 2009 or an amendment made by that Act, 
        any data, reports, or recommendations generated in connection 
        with such activities.
            ``(3) Postal services.--The Advisory Board may use the 
        United States mails in the same manner and under the same 
        conditions as other departments and agencies of the Federal 
        Government.

    ``(h) Travel Expenses.--The members of the Advisory Board shall not 
receive compensation for the performance of services for the Advisory 
Board. The members shall be allowed travel expenses for up to 4 meetings 
per year, including per diem in lieu of subsistence, at rates authorized 
for employees of agencies under subchapter I of chapter 57 of title 5, 
United States Code, while away from their homes or regular places of 
business in the performance of services for the Advisory Board. 
Notwithstanding section 1342 of title 31, United States Code, the 
Secretary may accept the voluntary and uncompensated services of the 
members of the Advisory Board.
    ``(i) Detail of Government Employees.--Any Federal Government 
employee may be detailed to the Advisory Board without reimbursement, 
and such detail shall be without interruption or loss of civil service 
status or privilege.
    ``(j) Status as Permanent Advisory Committee.--Section 14 of the 
Federal Advisory Committee Act (5 U.S.C. App.) shall not apply to the 
advisory board.
    ``(k) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.

``SEC. 2023. <<NOTE: 42 USC 1397k-2.>> RESEARCH PROTECTIONS.

    ``(a) Guidelines.--The Secretary shall promulgate guidelines to 
assist researchers working in the area of elder abuse, neglect, and 
exploitation, with issues relating to human subject protections.
    ``(b) Definition of Legally Authorized Representative for 
Application of Regulations.--For purposes of the application of subpart 
A of part 46 of title 45, Code of Federal Regulations, to research 
conducted under this subpart, the term `legally authorized 
representative' means, unless otherwise provided by law, the individual 
or judicial or other body authorized under the applicable law to consent 
to medical treatment on behalf of another person.

[[Page 124 STAT. 790]]

``SEC. 2024. <<NOTE: 42 USC 1397k-3.>> AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to carry out this 
subpart--
            ``(1) for fiscal year 2011, $6,500,000; and
            ``(2) for each of fiscal years 2012 through 2014, 
        $7,000,000.

  ``Subpart B--Elder Abuse, Neglect, and Exploitation Forensic Centers

``SEC. 2031. <<NOTE: Grants. 42 USC 1397l.>> ESTABLISHMENT AND SUPPORT 
            OF ELDER ABUSE, NEGLECT, AND EXPLOITATION FORENSIC CENTERS.

    ``(a) In General.--The Secretary, in consultation with the Attorney 
General, shall make grants to eligible entities to establish and operate 
stationary and mobile forensic centers, to develop forensic expertise 
regarding, and provide services relating to, elder abuse, neglect, and 
exploitation.
    ``(b) Stationary Forensic Centers.--The Secretary shall make 4 of 
the grants described in subsection (a) to institutions of higher 
education with demonstrated expertise in forensics or commitment to 
preventing or treating elder abuse, neglect, or exploitation, to 
establish and operate stationary forensic centers.
    ``(c) Mobile Centers.--The Secretary shall make 6 of the grants 
described in subsection (a) to appropriate entities to establish and 
operate mobile forensic centers.
    ``(d) Authorized Activities.--
            ``(1) Development of forensic markers and methodologies.--An 
        eligible entity that receives a grant under this section shall 
        use funds made available through the grant to assist in 
        determining whether abuse, neglect, or exploitation occurred and 
        whether a crime was committed and to conduct research to 
        describe and disseminate information on--
                    ``(A) forensic markers that indicate a case in which 
                elder abuse, neglect, or exploitation may have occurred; 
                and
                    ``(B) methodologies for determining, in such a case, 
                when and how health care, emergency service, social and 
                protective services, and legal service providers should 
                intervene and when the providers should report the case 
                to law enforcement authorities.
            ``(2) Development of forensic expertise.--An eligible entity 
        that receives a grant under this section shall use funds made 
        available through the grant to develop forensic expertise 
        regarding elder abuse, neglect, and exploitation in order to 
        provide medical and forensic evaluation, therapeutic 
        intervention, victim support and advocacy, case review, and case 
        tracking.
            ``(3) Collection of evidence.--The Secretary, in 
        coordination with the Attorney General, shall use data made 
        available by grant recipients under this section to develop the 
        capacity of geriatric health care professionals and law 
        enforcement to collect forensic evidence, including collecting 
        forensic evidence relating to a potential determination of elder 
        abuse, neglect, or exploitation.

    ``(e) Application.--To be eligible to receive a grant under this 
section, an entity shall submit an application to the Secretary

[[Page 124 STAT. 791]]

at such time, in such manner, and containing such information as the 
Secretary may require.
    ``(f) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section--
            ``(1) for fiscal year 2011, $4,000,000;
            ``(2) for fiscal year 2012, $6,000,000; and
            ``(3) for each of fiscal years 2013 and 2014, $8,000,000.

              ``PART II--PROGRAMS TO PROMOTE ELDER JUSTICE

``SEC. 2041. <<NOTE: 42 USC 1397m.>> ENHANCEMENT OF LONG-TERM CARE.

    ``(a) Grants and Incentives for Long-Term Care Staffing.--
            ``(1) In general.--The Secretary shall carry out activities, 
        including activities described in paragraphs (2) and (3), to 
        provide incentives for individuals to train for, seek, and 
        maintain employment providing direct care in long-term care.
            ``(2) Specific programs to enhance training, recruitment, 
        and retention of staff.--
                    ``(A) Coordination with secretary of labor to 
                recruit and train long-term care staff.--The Secretary 
                shall coordinate activities under this subsection with 
                the Secretary of Labor in order to provide incentives 
                for individuals to train for and seek employment 
                providing direct care in long-term care.
                    ``(B) <<NOTE: Grants.>> Career ladders and wage or 
                benefit increases to increase staffing in long-term 
                care.--
                          ``(i) In general.--The Secretary shall make 
                      grants to eligible entities to carry out programs 
                      through which the entities--
                                    ``(I) offer, to employees who 
                                provide direct care to residents of an 
                                eligible entity or individuals receiving 
                                community-based long-term care from an 
                                eligible entity, continuing training and 
                                varying levels of certification, based 
                                on observed clinical care practices and 
                                the amount of time the employees spend 
                                providing direct care; and
                                    ``(II) provide, or make arrangements 
                                to provide, bonuses or other increased 
                                compensation or benefits to employees 
                                who achieve certification under such a 
                                program.
                          ``(ii) Application.--To be eligible to receive 
                      a grant under this subparagraph, an eligible 
                      entity shall submit an application to the 
                      Secretary at such time, in such manner, and 
                      containing such information as the Secretary may 
                      require (which may include evidence of 
                      consultation with the State in which the eligible 
                      entity is located with respect to carrying out 
                      activities funded under the grant).
                          ``(iii) Authority to limit number of 
                      applicants.--Nothing in this subparagraph shall be 
                      construed as prohibiting the Secretary from 
                      limiting the number of applicants for a grant 
                      under this subparagraph.
            ``(3) <<NOTE: Grants.>> Specific programs to improve 
        management practices.--

[[Page 124 STAT. 792]]

                    ``(A) In general.--The Secretary shall make grants 
                to eligible entities to enable the entities to provide 
                training and technical assistance.
                    ``(B) Authorized activities.--An eligible entity 
                that receives a grant under subparagraph (A) shall use 
                funds made available through the grant to provide 
                training and technical assistance regarding management 
                practices using methods that are demonstrated to promote 
                retention of individuals who provide direct care, such 
                as--
                          ``(i) the establishment of standard human 
                      resource policies that reward high performance, 
                      including policies that provide for improved wages 
                      and benefits on the basis of job reviews;
                          ``(ii) the establishment of motivational and 
                      thoughtful work organization practices;
                          ``(iii) the creation of a workplace culture 
                      that respects and values caregivers and their 
                      needs;
                          ``(iv) the promotion of a workplace culture 
                      that respects the rights of residents of an 
                      eligible entity or individuals receiving 
                      community-based long-term care from an eligible 
                      entity and results in improved care for the 
                      residents or the individuals; and
                          ``(v) the establishment of other programs that 
                      promote the provision of high quality care, such 
                      as a continuing education program that provides 
                      additional hours of training, including on-the-job 
                      training, for employees who are certified nurse 
                      aides.
                    ``(C) Application.--To be eligible to receive a 
                grant under this paragraph, an eligible entity shall 
                submit an application to the Secretary at such time, in 
                such manner, and containing such information as the 
                Secretary may require (which may include evidence of 
                consultation with the State in which the eligible entity 
                is located with respect to carrying out activities 
                funded under the grant).
                    ``(D) Authority to limit number of applicants.--
                Nothing in this paragraph shall be construed as 
                prohibiting the Secretary from limiting the number of 
                applicants for a grant under this paragraph.
            ``(4) Accountability measures.--The Secretary shall develop 
        accountability measures to ensure that the activities conducted 
        using funds made available under this subsection benefit 
        individuals who provide direct care and increase the stability 
        of the long-term care workforce.
            ``(5) Definitions.--In this subsection:
                    ``(A) Community-based long-term care.--The term 
                `community-based long-term care' has the meaning given 
                such term by the Secretary.
                    ``(B) Eligible entity.--The term `eligible entity' 
                means the following:
                          ``(i) A long-term care facility.
                          ``(ii) A community-based long-term care entity 
                      (as defined by the Secretary).

    ``(b) Certified EHR Technology Grant Program.--
            ``(1) Grants authorized.--The Secretary is authorized to 
        make grants to long-term care facilities for the purpose of 
        assisting such entities in offsetting the costs related to 
        purchasing, leasing, developing, and implementing certified EHR

[[Page 124 STAT. 793]]

        technology (as defined in section 1848(o)(4)) designed to 
        improve patient safety and reduce adverse events and health care 
        complications resulting from medication errors.
            ``(2) Use of grant funds.--Funds provided under grants under 
        this subsection may be used for any of the following:
                    ``(A) Purchasing, leasing, and installing computer 
                software and hardware, including handheld computer 
                technologies.
                    ``(B) Making improvements to existing computer 
                software and hardware.
                    ``(C) Making upgrades and other improvements to 
                existing computer software and hardware to enable e-
                prescribing.
                    ``(D) Providing education and training to eligible 
                long-term care facility staff on the use of such 
                technology to implement the electronic transmission of 
                prescription and patient information.
            ``(3) Application.--
                    ``(A) In general.--To be eligible to receive a grant 
                under this subsection, a long-term care facility shall 
                submit an application to the Secretary at such time, in 
                such manner, and containing such information as the 
                Secretary may require (which may include evidence of 
                consultation with the State in which the long-term care 
                facility is located with respect to carrying out 
                activities funded under the grant).
                    ``(B) Authority to limit number of applicants.--
                Nothing in this subsection shall be construed as 
                prohibiting the Secretary from limiting the number of 
                applicants for a grant under this subsection.
            ``(4) Participation in state health exchanges.--A long-term 
        care facility that receives a grant under this subsection shall, 
        where available, participate in activities conducted by a State 
        or a qualified State-designated entity (as defined in section 
        3013(f) of the Public Health Service Act) under a grant under 
        section 3013 of the Public Health Service Act to coordinate care 
        and for other purposes determined appropriate by the Secretary.
            ``(5) Accountability measures.--The Secretary shall develop 
        accountability measures to ensure that the activities conducted 
        using funds made available under this subsection help improve 
        patient safety and reduce adverse events and health care 
        complications resulting from medication errors.

    ``(c) Adoption of Standards for Transactions Involving Clinical Data 
by Long-Term Care Facilities.--
            ``(1) Standards and compatibility.--The Secretary shall 
        adopt electronic standards for the exchange of clinical data by 
        long-term care facilities, including, where available, standards 
        for messaging and nomenclature. Standards adopted by the 
        Secretary under the preceding sentence shall be compatible with 
        standards established under part C of title XI, standards 
        established under subsections (b)(2)(B)(i) and (e)(4) of section 
        1860D-4, standards adopted under section 3004 of the Public 
        Health Service Act, and general health information technology 
        standards.
            ``(2) Electronic submission of data to the secretary.--

[[Page 124 STAT. 794]]

                    ``(A) <<NOTE: Deadline. Procedures.>> In general.--
                Not later than 10 years after the date of enactment of 
                the Elder Justice Act of 2009, the Secretary shall have 
                procedures in place to accept the optional electronic 
                submission of clinical data by long-term care facilities 
                pursuant to the standards adopted under paragraph (1).
                    ``(B) Rule of construction.--Nothing in this 
                subsection shall be construed to require a long-term 
                care facility to submit clinical data electronically to 
                the Secretary.
            ``(3) Regulations.--The Secretary shall promulgate 
        regulations to carry out this subsection. Such regulations shall 
        require a State, as a condition of the receipt of funds under 
        this part, to conduct such data collection and reporting as the 
        Secretary determines are necessary to satisfy the requirements 
        of this subsection.

    ``(d) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section--
            ``(1) for fiscal year 2011, $20,000,000;
            ``(2) for fiscal year 2012, $17,500,000; and
            ``(3) for each of fiscal years 2013 and 2014, $15,000,000.

``SEC. 2042. <<NOTE: 42 USC 1397m-1.>> ADULT PROTECTIVE SERVICES 
            FUNCTIONS AND GRANT PROGRAMS.

    ``(a) Secretarial Responsibilities.--
            ``(1) In general.--The Secretary shall ensure that the 
        Department of Health and Human Services--
                    ``(A) provides funding authorized by this part to 
                State and local adult protective services offices that 
                investigate reports of the abuse, neglect, and 
                exploitation of elders;
                    ``(B) collects and disseminates data annually 
                relating to the abuse, exploitation, and neglect of 
                elders in coordination with the Department of Justice;
                    ``(C) develops and disseminates information on best 
                practices regarding, and provides training on, carrying 
                out adult protective services;
                    ``(D) conducts research related to the provision of 
                adult protective services; and
                    ``(E) provides technical assistance to States and 
                other entities that provide or fund the provision of 
                adult protective services, including through grants made 
                under subsections (b) and (c).
            ``(2) Authorization of appropriations.--There are authorized 
        to be appropriated to carry out this subsection, $3,000,000 for 
        fiscal year 2011 and $4,000,000 for each of fiscal years 2012 
        through 2014.

    ``(b) Grants To Enhance the Provision of Adult Protective 
Services.--
            ``(1) Establishment.--There is established an adult 
        protective services grant program under which the Secretary 
        shall annually award grants to States in the amounts calculated 
        under paragraph (2) for the purposes of enhancing adult 
        protective services provided by States and local units of 
        government.
            ``(2) Amount of payment.--
                    ``(A) In general.--Subject to the availability of 
                appropriations and subparagraphs (B) and (C), the amount 
                paid to a State for a fiscal year under the program 
                under this

[[Page 124 STAT. 795]]

                subsection shall equal the amount appropriated for that 
                year to carry out this subsection multiplied by the 
                percentage of the total number of elders who reside in 
                the United States who reside in that State.
                    ``(B) Guaranteed minimum payment amount.--
                          ``(i) 50 states.--Subject to clause (ii), if 
                      the amount determined under subparagraph (A) for a 
                      State for a fiscal year is less than 0.75 percent 
                      of the amount appropriated for such year, the 
                      Secretary shall increase such determined amount so 
                      that the total amount paid under this subsection 
                      to the State for the year is equal to 0.75 percent 
                      of the amount so appropriated.
                          ``(ii) 
                      Territories. <<NOTE: Applicability.>> --In the 
                      case of a State other than 1 of the 50 States, 
                      clause (i) shall be applied as if each reference 
                      to `0.75' were a reference to `0.1'.
                    ``(C) Pro rata reductions.--The Secretary shall make 
                such pro rata reductions to the amounts described in 
                subparagraph (A) as are necessary to comply with the 
                requirements of subparagraph (B).
            ``(3) Authorized activities.--
                    ``(A) Adult protective services.--Funds made 
                available pursuant to this subsection may only be used 
                by States and local units of government to provide adult 
                protective services and may not be used for any other 
                purpose.
                    ``(B) Use by agency.--Each State receiving funds 
                pursuant to this subsection shall provide such funds to 
                the agency or unit of State government having legal 
                responsibility for providing adult protective services 
                within the State.
                    ``(C) Supplement not supplant.--Each State or local 
                unit of government shall use funds made available 
                pursuant to this subsection to supplement and not 
                supplant other Federal, State, and local public funds 
                expended to provide adult protective services in the 
                State.
            ``(4) State reports.--Each State receiving funds under this 
        subsection shall submit to the Secretary, at such time and in 
        such manner as the Secretary may require, a report on the number 
        of elders served by the grants awarded under this subsection.
            ``(5) Authorization of appropriations.--There are authorized 
        to be appropriated to carry out this subsection, $100,000,000 
        for each of fiscal years 2011 through 2014.

    ``(c) State Demonstration Programs.--
            ``(1) Establishment.--The Secretary shall award grants to 
        States for the purposes of conducting demonstration programs in 
        accordance with paragraph (2).
            ``(2) Demonstration programs.--Funds made available pursuant 
        to this subsection may be used by States and local units of 
        government to conduct demonstration programs that test--
                    ``(A) training modules developed for the purpose of 
                detecting or preventing elder abuse;
                    ``(B) methods to detect or prevent financial 
                exploitation of elders;
                    ``(C) methods to detect elder abuse;

[[Page 124 STAT. 796]]

                    ``(D) whether training on elder abuse forensics 
                enhances the detection of elder abuse by employees of 
                the State or local unit of government; or
                    ``(E) other matters relating to the detection or 
                prevention of elder abuse.
            ``(3) Application.--To be eligible to receive a grant under 
        this subsection, a State shall submit an application to the 
        Secretary at such time, in such manner, and containing such 
        information as the Secretary may require.
            ``(4) State reports.--Each State that receives funds under 
        this subsection shall submit to the Secretary a report at such 
        time, in such manner, and containing such information as the 
        Secretary may require on the results of the demonstration 
        program conducted by the State using funds made available under 
        this subsection.
            ``(5) Authorization of appropriations.--There are authorized 
        to be appropriated to carry out this subsection, $25,000,000 for 
        each of fiscal years 2011 through 2014.

``SEC. 2043. <<NOTE: 42 USC 1397m-2.>> LONG-TERM CARE OMBUDSMAN PROGRAM 
            GRANTS AND TRAINING.

    ``(a) Grants To Support the Long-Term Care Ombudsman Program.--
            ``(1) In general.--The Secretary shall make grants to 
        eligible entities with relevant expertise and experience in 
        abuse and neglect in long-term care facilities or long-term care 
        ombudsman programs and responsibilities, for the purpose of--
                    ``(A) improving the capacity of State long-term care 
                ombudsman programs to respond to and resolve complaints 
                about abuse and neglect;
                    ``(B) conducting pilot programs with State long-term 
                care ombudsman offices or local ombudsman entities; and
                    ``(C) providing support for such State long-term 
                care ombudsman programs and such pilot programs (such as 
                through the establishment of a national long-term care 
                ombudsman resource center).
            ``(2) Authorization of appropriations.--There are authorized 
        to be appropriated to carry out this subsection--
                    ``(A) for fiscal year 2011, $5,000,000;
                    ``(B) for fiscal year 2012, $7,500,000; and
                    ``(C) for each of fiscal years 2013 and 2014, 
                $10,000,000.

    ``(b) Ombudsman Training Programs.--
            ``(1) In general.--The Secretary shall establish programs to 
        provide and improve ombudsman training with respect to elder 
        abuse, neglect, and exploitation for national organizations and 
        State long-term care ombudsman programs.
            ``(2) Authorization of appropriations.--There are authorized 
        to be appropriated to carry out this subsection, for each of 
        fiscal years 2011 through 2014, $10,000,000.

``SEC. 2044. <<NOTE: 42 USC 1397m-3.>> PROVISION OF INFORMATION 
            REGARDING, AND EVALUATIONS OF, ELDER JUSTICE PROGRAMS.

    ``(a) Provision of Information.--To be eligible to receive a grant 
under this part, an applicant shall agree--
            ``(1) except as provided in paragraph (2), to provide the 
        eligible entity conducting an evaluation under subsection (b) of 
        the activities funded through the grant with such information

[[Page 124 STAT. 797]]

        as the eligible entity may require in order to conduct such 
        evaluation; or
            ``(2) in the case of an applicant for a grant under section 
        2041(b), to provide the Secretary with such information as the 
        Secretary may require to conduct an evaluation or audit under 
        subsection (c).

    ``(b) Use of Eligible Entities To Conduct Evaluations.--
            ``(1) Evaluations required.--Except as provided in paragraph 
        (2), the Secretary shall--
                    ``(A) reserve a portion (not less than 2 percent) of 
                the funds appropriated with respect to each program 
                carried out under this part; and
                    ``(B) use the funds reserved under subparagraph (A) 
                to provide assistance to eligible entities to conduct 
                evaluations of the activities funded under each program 
                carried out under this part.
            ``(2) Certified ehr technology grant program not included.--
        The provisions of this subsection shall not apply to the 
        certified EHR technology grant program under section 2041(b).
            ``(3) Authorized activities.--A recipient of assistance 
        described in paragraph (1)(B) shall use the funds made available 
        through the assistance to conduct a validated evaluation of the 
        effectiveness of the activities funded under a program carried 
        out under this part.
            ``(4) Applications.--To be eligible to receive assistance 
        under paragraph (1)(B), an entity shall submit an application to 
        the Secretary at such time, in such manner, and containing such 
        information as the Secretary may require, including a proposal 
        for the evaluation.
            ``(5) Reports.--Not later than a date specified by the 
        Secretary, an eligible entity receiving assistance under 
        paragraph (1)(B) shall submit to the Secretary, the Committee on 
        Ways and Means and the Committee on Energy and Commerce of the 
        House of Representatives, and the Committee on Finance of the 
        Senate a report containing the results of the evaluation 
        conducted using such assistance together with such 
        recommendations as the entity determines to be appropriate.

    ``(c) Evaluations and Audits of Certified EHR Technology Grant 
Program by the Secretary.--
            ``(1) Evaluations.--The Secretary shall conduct an 
        evaluation of the activities funded under the certified EHR 
        technology grant program under section 2041(b). Such evaluation 
        shall include an evaluation of whether the funding provided 
        under the grant is expended only for the purposes for which it 
        is made.
            ``(2) Audits.--The Secretary shall conduct appropriate 
        audits of grants made under section 2041(b).

``SEC. 2045. <<NOTE: 42 USC 1397m-4.>> REPORT.

    ``Not later than October 1, 2014, the Secretary shall submit to the 
Elder Justice Coordinating Council established under section 2021, the 
Committee on Ways and Means and the Committee on Energy and Commerce of 
the House of Representatives, and the Committee on Finance of the Senate 
a report--

[[Page 124 STAT. 798]]

            ``(1) compiling, summarizing, and analyzing the information 
        contained in the State reports submitted under subsections 
        (b)(4) and (c)(4) of section 2042; and
            ``(2) containing such recommendations for legislative or 
        administrative action as the Secretary determines to be 
        appropriate.

``SEC. 2046. <<NOTE: 42 USC 1397m-5.>> RULE OF CONSTRUCTION.

    ``Nothing in this subtitle shall be construed as--
            ``(1) limiting any cause of action or other relief related 
        to obligations under this subtitle that is available under the 
        law of any State, or political subdivision thereof; or
            ``(2) creating a private cause of action for a violation of 
        this subtitle.''.
            (2) Option for state plan under program for temporary 
        assistance for needy families.--
                    (A) In general.--Section 402(a)(1)(B) of the Social 
                Security Act (42 U.S.C. 602(a)(1)(B)) is amended by 
                adding at the end the following new clause:
                          ``(v) The document shall indicate whether the 
                      State intends to assist individuals to train for, 
                      seek, and maintain employment--
                                    ``(I) providing direct care in a 
                                long-term care facility (as such terms 
                                are defined under section 2011); or
                                    ``(II) in other occupations related 
                                to elder care determined appropriate by 
                                the State for which the State identifies 
                                an unmet need for service personnel,
                      and, if so, shall include an overview of such 
                      assistance.''.
                    (B) <<NOTE: 42 USC 602 note.>> Effective date.--The 
                amendment made by subparagraph (A) shall take effect on 
                January 1, 2011.

    (b) <<NOTE: 42 USC 1395i-3a.>> Protecting Residents of Long-Term 
Care Facilities.--
            (1) National training institute for surveyors.--
                    (A) In general. <<NOTE: Contracts.>> --The Secretary 
                of Health and Human Services shall enter into a contract 
                with an entity for the purpose of establishing and 
                operating a National Training Institute for Federal and 
                State surveyors. Such Institute shall provide and 
                improve the training of surveyors with respect to 
                investigating allegations of abuse, neglect, and 
                misappropriation of property in programs and long-term 
                care facilities that receive payments under title XVIII 
                or XIX of the Social Security Act.
                    (B) Activities carried out by the institute.--The 
                contract entered into under subparagraph (A) shall 
                require the Institute established and operated under 
                such contract to carry out the following activities:
                          (i) Assess the extent to which State agencies 
                      use specialized surveyors for the investigation of 
                      reported allegations of abuse, neglect, and 
                      misappropriation of property in such programs and 
                      long-term care facilities.
                          (ii) Evaluate how the competencies of 
                      surveyors may be improved to more effectively 
                      investigate reported allegations of such abuse, 
                      neglect, and misappropriation of property, and 
                      provide feedback to Federal and State agencies on 
                      the evaluations conducted.

[[Page 124 STAT. 799]]

                          (iii) Provide a national program of training, 
                      tools, and technical assistance to Federal and 
                      State surveyors on investigating reports of such 
                      abuse, neglect, and misappropriation of property.
                          (iv) Develop and disseminate information on 
                      best practices for the investigation of such 
                      abuse, neglect, and misappropriation of property.
                          (v) Assess the performance of State complaint 
                      intake systems, in order to ensure that the intake 
                      of complaints occurs 24 hours per day, 7 days a 
                      week (including holidays).
                          (vi) To the extent approved by the Secretary 
                      of Health and Human Services, provide a national 
                      24 hours per day, 7 days a week (including 
                      holidays), back-up system to State complaint 
                      intake systems in order to ensure optimum national 
                      responsiveness to complaints of such abuse, 
                      neglect, and misappropriation of property.
                          (vii) Analyze and report annually on the 
                      following:
                                    (I) The total number and sources of 
                                complaints of such abuse, neglect, and 
                                misappropriation of property.
                                    (II) The extent to which such 
                                complaints are referred to law 
                                enforcement agencies.
                                    (III) General results of Federal and 
                                State investigations of such complaints.
                          (viii) Conduct a national study of the cost to 
                      State agencies of conducting complaint 
                      investigations of skilled nursing facilities and 
                      nursing facilities under sections 1819 and 1919, 
                      respectively, of the Social Security Act (42 
                      U.S.C. 1395i-3; 1396r), and making recommendations 
                      to the Secretary of Health and Human Services with 
                      respect to options to increase the efficiency and 
                      cost-effectiveness of such investigations.
                    (C) Authorization.--There are authorized to be 
                appropriated to carry out this paragraph, for the period 
                of fiscal years 2011 through 2014, $12,000,000.
            (2) Grants to state survey agencies.--
                    (A) In general.--The Secretary of Health and Human 
                Services shall make grants to State agencies that 
                perform surveys of skilled nursing facilities or nursing 
                facilities under sections 1819 or 1919, respectively, of 
                the Social Security Act (42 U.S.C. 1395i-3; 1395r).
                    (B) Use of funds.--A grant awarded under 
                subparagraph (A) shall be used for the purpose of 
                designing and implementing complaint investigations 
                systems that--
                          (i) promptly prioritize complaints in order to 
                      ensure a rapid response to the most serious and 
                      urgent complaints;
                          (ii) respond to complaints with optimum 
                      effectiveness and timeliness; and
                          (iii) optimize the collaboration between local 
                      authorities, consumers, and providers, including--
                                    (I) such State agency;
                                    (II) the State Long-Term Care 
                                Ombudsman;
                                    (III) local law enforcement 
                                agencies;
                                    (IV) advocacy and consumer 
                                organizations;

[[Page 124 STAT. 800]]

                                    (V) State aging units;
                                    (VI) Area Agencies on Aging; and
                                    (VII) other appropriate entities.
                    (C) Authorization.--There are authorized to be 
                appropriated to carry out this paragraph, for each of 
                fiscal years 2011 through 2014, $5,000,000.
            (3) Reporting of crimes in federally funded long-term care 
        facilities.--Part A of title XI of the Social Security Act (42 
        U.S.C. 1301 et seq.), as amended by section 6005, is amended by 
        inserting after section 1150A the following new section:


 ``reporting to law enforcement of crimes occurring in federally funded 
                        long-term care facilities


    ``Sec. 1150B.  <<NOTE: 42 USC 1320b-25.>> (a) Determination and 
Notification.--
            ``(1) Determination.--The owner or operator of each long-
        term care facility that receives Federal funds under this Act 
        shall annually determine whether the facility received at least 
        $10,000 in such Federal funds during the preceding year.
            ``(2) Notification.--If the owner or operator determines 
        under paragraph (1) that the facility received at least $10,000 
        in such Federal funds during the preceding year, such owner or 
        operator shall annually notify each covered individual (as 
        defined in paragraph (3)) of that individual's obligation to 
        comply with the reporting requirements described in subsection 
        (b).
            ``(3) Covered individual defined.--In this section, the term 
        `covered individual' means each individual who is an owner, 
        operator, employee, manager, agent, or contractor of a long-term 
        care facility that is the subject of a determination described 
        in paragraph (1).

    ``(b) Reporting Requirements.--
            ``(1) In general.--Each covered individual shall report to 
        the Secretary and 1 or more law enforcement entities for the 
        political subdivision in which the facility is located any 
        reasonable suspicion of a crime (as defined by the law of the 
        applicable political subdivision) against any individual who is 
        a resident of, or is receiving care from, the facility.
            ``(2) Timing.--If the events that cause the suspicion--
                    ``(A) result in serious bodily injury, the 
                individual shall report the suspicion immediately, but 
                not later than 2 hours after forming the suspicion; and
                    ``(B) do not result in serious bodily injury, the 
                individual shall report the suspicion not later than 24 
                hours after forming the suspicion.

    ``(c) Penalties.--
            ``(1) In general.--If a covered individual violates 
        subsection (b)--
                    ``(A) the covered individual shall be subject to a 
                civil money penalty of not more than $200,000; and
                    ``(B) the Secretary may make a determination in the 
                same proceeding to exclude the covered individual from 
                participation in any Federal health care program (as 
                defined in section 1128B(f)).
            ``(2) Increased harm.--If a covered individual violates 
        subsection (b) and the violation exacerbates the harm to the 
        victim of the crime or results in harm to another individual--

[[Page 124 STAT. 801]]

                    ``(A) the covered individual shall be subject to a 
                civil money penalty of not more than $300,000; and
                    ``(B) the Secretary may make a determination in the 
                same proceeding to exclude the covered individual from 
                participation in any Federal health care program (as 
                defined in section 1128B(f)).
            ``(3) Excluded individual.--During any period for which a 
        covered individual is classified as an excluded individual under 
        paragraph (1)(B) or (2)(B), a long-term care facility that 
        employs such individual shall be ineligible to receive Federal 
        funds under this Act.
            ``(4) Extenuating circumstances.--
                    ``(A) In general.--The Secretary may take into 
                account the financial burden on providers with 
                underserved populations in determining any penalty to be 
                imposed under this subsection.
                    ``(B) Underserved population defined.--In this 
                paragraph, the term `underserved population' means the 
                population of an area designated by the Secretary as an 
                area with a shortage of elder justice programs or a 
                population group designated by the Secretary as having a 
                shortage of such programs. Such areas or groups 
                designated by the Secretary may include--
                          ``(i) areas or groups that are geographically 
                      isolated (such as isolated in a rural area);
                          ``(ii) racial and ethnic minority populations; 
                      and
                          ``(iii) populations underserved because of 
                      special needs (such as language barriers, 
                      disabilities, alien status, or age).

    ``(d) Additional Penalties for Retaliation.--
            ``(1) In general.--A long-term care facility may not--
                    ``(A) discharge, demote, suspend, threaten, harass, 
                or deny a promotion or other employment-related benefit 
                to an employee, or in any other manner discriminate 
                against an employee in the terms and conditions of 
                employment because of lawful acts done by the employee; 
                or
                    ``(B) file a complaint or a report against a nurse 
                or other employee with the appropriate State 
                professional disciplinary agency because of lawful acts 
                done by the nurse or employee,
        for making a report, causing a report to be made, or for taking 
        steps in furtherance of making a report pursuant to subsection 
        (b)(1).
            ``(2) Penalties for retaliation.--If a long-term care 
        facility violates subparagraph (A) or (B) of paragraph (1) the 
        facility shall be subject to a civil money penalty of not more 
        than $200,000 or the Secretary may classify the entity as an 
        excluded entity for a period of 2 years pursuant to section 
        1128(b), or both.
            ``(3) Requirement to post notice.--Each long-term care 
        facility shall post conspicuously in an appropriate location a 
        sign (in a form specified by the Secretary) specifying the 
        rights of employees under this section. Such sign shall include 
        a statement that an employee may file a complaint with the 
        Secretary against a long-term care facility that violates the 
        provisions of this subsection and information with respect to 
        the manner of filing such a complaint.

[[Page 124 STAT. 802]]

    ``(e) Procedure. <<NOTE: Applicability.>> --The provisions of 
section 1128A (other than subsections (a) and (b) and the second 
sentence of subsection (f)) shall apply to a civil money penalty or 
exclusion under this section in the same manner as such provisions apply 
to a penalty or proceeding under section 1128A(a).

    ``(f) Definitions.--In this section, the terms `elder justice', 
`long-term care facility', and `law enforcement' have the meanings given 
those terms in section 2011.''.
    (c) National Nurse Aide Registry.--
            (1) Definition of nurse aide.--In this subsection, the term 
        ``nurse aide'' has the meaning given that term in sections 
        1819(b)(5)(F) and 1919(b)(5)(F) of the Social Security Act (42 
        U.S.C. 1395i-3(b)(5)(F); 1396r(b)(5)(F)).
            (2) Study and report.--
                    (A) In general.--The Secretary, in consultation with 
                appropriate government agencies and private sector 
                organizations, shall conduct a study on establishing a 
                national nurse aide registry.
                    (B) Areas evaluated.--The study conducted under this 
                subsection shall include an evaluation of--
                          (i) who should be included in the registry;
                          (ii) how such a registry would comply with 
                      Federal and State privacy laws and regulations;
                          (iii) how data would be collected for the 
                      registry;
                          (iv) what entities and individuals would have 
                      access to the data collected;
                          (v) how the registry would provide appropriate 
                      information regarding violations of Federal and 
                      State law by individuals included in the registry;
                          (vi) how the functions of a national nurse 
                      aide registry would be coordinated with the 
                      nationwide program for national and State 
                      background checks on direct patient access 
                      employees of long-term care facilities and 
                      providers under section 4301; and
                          (vii) how the information included in State 
                      nurse aide registries developed and maintained 
                      under sections 1819(e)(2) and 1919(e)(2) of the 
                      Social Security Act (42 U.S.C. 1395i-3(e)(2); 
                      1396r(e)(2)(2)) would be provided as part of a 
                      national nurse aide registry.
                    (C) Considerations.--In conducting the study and 
                preparing the report required under this subsection, the 
                Secretary shall take into consideration the findings and 
                conclusions of relevant reports and other relevant 
                resources, including the following:
                          (i) The Department of Health and Human 
                      Services Office of Inspector General Report, Nurse 
                      Aide Registries: State Compliance and Practices 
                      (February 2005).
                          (ii) The General Accounting Office (now known 
                      as the Government Accountability Office) Report, 
                      Nursing Homes: More Can Be Done to Protect 
                      Residents from Abuse (March 2002).
                          (iii) The Department of Health and Human 
                      Services Office of the Inspector General Report, 
                      Nurse Aide Registries: Long-Term Care Facility 
                      Compliance and Practices (July 2005).

[[Page 124 STAT. 803]]

                          (iv) The Department of Health and Human 
                      Services Health Resources and Services 
                      Administration Report, Nursing Aides, Home Health 
                      Aides, and Related Health Care Occupations--
                      National and Local Workforce Shortages and 
                      Associated Data Needs (2004) (in particular with 
                      respect to chapter 7 and appendix F).
                          (v) The 2001 Report to CMS from the School of 
                      Rural Public Health, Texas A&M University, 
                      Preventing Abuse and Neglect in Nursing Homes: The 
                      Role of Nurse Aide Registries.
                          (vi) Information included in State nurse aide 
                      registries developed and maintained under sections 
                      1819(e)(2) and 1919(e)(2) of the Social Security 
                      Act (42 U.S.C. 1395i-3(e)(2); 1396r(e)(2)(2)).
                    (D) Report.--Not later than 18 months after the date 
                of enactment of this Act, the Secretary shall submit to 
                the Elder Justice Coordinating Council established under 
                section 2021 of the Social Security Act, as added by 
                section 1805(a), the Committee on Finance of the Senate, 
                and the Committee on Ways and Means and the Committee on 
                Energy and Commerce of the House of Representatives a 
                report containing the findings and recommendations of 
                the study conducted under this paragraph.
                    (E) Funding limitation.--Funding for the study 
                conducted under this subsection shall not exceed 
                $500,000.
            (3) Congressional action.--After receiving the report 
        submitted by the Secretary under paragraph (2)(D), the Committee 
        on Finance of the Senate and the Committee on Ways and Means and 
        the Committee on Energy and Commerce of the House of 
        Representatives shall, as they deem appropriate, take action 
        based on the recommendations contained in the report.
            (4) Authorization of appropriations.--There are authorized 
        to be appropriated such sums as are necessary for the purpose of 
        carrying out this subsection.

    (d) Conforming Amendments.--
            (1) Title xx.--Title XX of the Social Security Act (42 
        U.S.C. 1397 et seq.), as amended by section 6703(a), is 
        amended--
                    (A) in the heading of section 2001, <<NOTE: 42 USC 
                1397.>> by striking ``title'' and inserting 
                ``subtitle''; and
                    (B) in subtitle 1, <<NOTE: 42 USC 1397, 1397a, 
                1397c-1397e, 1397g.>> by striking ``this title'' each 
                place it appears and inserting ``this subtitle''.
            (2) Title iv.--Title IV of the Social Security Act (42 
        U.S.C. 601 et seq.) is amended--
                    (A) in section 404(d) <<NOTE: 42 USC 604.>> --
                          (i) in paragraphs (1)(A), (2)(A), and (3)(B), 
                      by inserting ``subtitle 1 of'' before ``title XX'' 
                      each place it appears;
                          (ii) in the heading of paragraph (2), by 
                      inserting ``subtitle 1 of'' before ``title xx''; 
                      and
                          (iii) in the heading of paragraph (3)(B), by 
                      inserting ``subtitle 1 of'' before ``title xx''; 
                      and
                    (B) in sections 422(b), 471(a)(4), 472(h)(1), and 
                473(b)(2), <<NOTE: 42 USC 622, 671-673.>> by inserting 
                ``subtitle 1 of'' before ``title XX'' each place it 
                appears.

[[Page 124 STAT. 804]]

            (3) Title xi.--Title XI of the Social Security Act (42 
        U.S.C. 1301 et seq.) is amended--
                    (A) in section 1128(h)(3) <<NOTE: 42 USC 1320a-
                7.>> --
                          (i) by inserting ``subtitle 1 of'' before 
                      ``title XX''; and
                          (ii) by striking ``such title'' and inserting 
                      ``such subtitle''; and
                    (B) in section 1128A(i)(1), <<NOTE: 42 USC 1320a-
                7a.>> by inserting ``subtitle 1 of'' before ``title 
                XX''.

      Subtitle I--Sense of the Senate Regarding Medical Malpractice

SEC. 6801. SENSE OF THE SENATE REGARDING MEDICAL MALPRACTICE.

    It is the sense of the Senate that--
            (1) health care reform presents an opportunity to address 
        issues related to medical malpractice and medical liability 
        insurance;
            (2) States should be encouraged to develop and test 
        alternatives to the existing civil litigation system as a way of 
        improving patient safety, reducing medical errors, encouraging 
        the efficient resolution of disputes, increasing the 
        availability of prompt and fair resolution of disputes, and 
        improving access to liability insurance, while preserving an 
        individual's right to seek redress in court; and
            (3) Congress should consider establishing a State 
        demonstration program to evaluate alternatives to the existing 
        civil litigation system with respect to the resolution of 
        medical malpractice claims.

       TITLE VII--IMPROVING ACCESS TO INNOVATIVE MEDICAL THERAPIES

  Subtitle A <<NOTE: Biologics Price Competition and Innovation Act of 
2009.>> --Biologics Price Competition and Innovation

SEC. 7001. <<NOTE: 42 USC 201 note.>> SHORT TITLE.

    (a) In General.--This subtitle may be cited as the ``Biologics Price 
Competition and Innovation Act of 2009''.
    (b) Sense of the Senate.--It is the sense of the Senate that a 
biosimilars pathway balancing innovation and consumer interests should 
be established.

SEC. 7002. APPROVAL PATHWAY FOR BIOSIMILAR BIOLOGICAL PRODUCTS.

    (a) Licensure of Biological Products as Biosimilar or 
Interchangeable.--Section 351 of the Public Health Service Act (42 
U.S.C. 262) is amended--
            (1) in subsection (a)(1)(A), by inserting ``under this 
        subsection or subsection (k)'' after ``biologics license''; and
            (2) by adding at the end the following:

[[Page 124 STAT. 805]]

    ``(k) Licensure of Biological Products as Biosimilar or 
Interchangeable.--
            ``(1) In general.--Any person may submit an application for 
        licensure of a biological product under this subsection.
            ``(2) Content.--
                    ``(A) In general.--
                          ``(i) Required information.--An application 
                      submitted under this subsection shall include 
                      information demonstrating that--
                                    ``(I) the biological product is 
                                biosimilar to a reference product based 
                                upon data derived from--
                                            ``(aa) analytical studies 
                                        that demonstrate that the 
                                        biological product is highly 
                                        similar to the reference product 
                                        notwithstanding minor 
                                        differences in clinically 
                                        inactive components;
                                            ``(bb) animal studies 
                                        (including the assessment of 
                                        toxicity); and
                                            ``(cc) a clinical study or 
                                        studies (including the 
                                        assessment of immunogenicity and 
                                        pharmacokinetics or 
                                        pharmacodynamics) that are 
                                        sufficient to demonstrate 
                                        safety, purity, and potency in 1 
                                        or more appropriate conditions 
                                        of use for which the reference 
                                        product is licensed and intended 
                                        to be used and for which 
                                        licensure is sought for the 
                                        biological product;
                                    ``(II) the biological product and 
                                reference product utilize the same 
                                mechanism or mechanisms of action for 
                                the condition or conditions of use 
                                prescribed, recommended, or suggested in 
                                the proposed labeling, but only to the 
                                extent the mechanism or mechanisms of 
                                action are known for the reference 
                                product;
                                    ``(III) the condition or conditions 
                                of use prescribed, recommended, or 
                                suggested in the labeling proposed for 
                                the biological product have been 
                                previously approved for the reference 
                                product;
                                    ``(IV) the route of administration, 
                                the dosage form, and the strength of the 
                                biological product are the same as those 
                                of the reference product; and
                                    ``(V) the facility in which the 
                                biological product is manufactured, 
                                processed, packed, or held meets 
                                standards designed to assure that the 
                                biological product continues to be safe, 
                                pure, and potent.
                          ``(ii) Determination by secretary.--The 
                      Secretary may determine, in the Secretary's 
                      discretion, that an element described in clause 
                      (i)(I) is unnecessary in an application submitted 
                      under this subsection.
                          ``(iii) Additional information.--An 
                      application submitted under this subsection--
                                    ``(I) <<NOTE: Public 
                                information.>> shall include publicly-
                                available information regarding the 
                                Secretary's previous determination that 
                                the reference product is safe, pure, and 
                                potent; and

[[Page 124 STAT. 806]]

                                    ``(II) may include any additional 
                                information in support of the 
                                application, including publicly-
                                available information with respect to 
                                the reference product or another 
                                biological product.
                    ``(B) Interchangeability.--An application (or a 
                supplement to an application) submitted under this 
                subsection may include information demonstrating that 
                the biological product meets the standards described in 
                paragraph (4).
            ``(3) Evaluation by secretary.--Upon review of an 
        application (or a supplement to an application) submitted under 
        this subsection, the Secretary shall license the biological 
        product under this subsection if--
                    ``(A) <<NOTE: Determination.>> the Secretary 
                determines that the information submitted in the 
                application (or the supplement) is sufficient to show 
                that the biological product--
                          ``(i) is biosimilar to the reference product; 
                      or
                          ``(ii) meets the standards described in 
                      paragraph (4), and therefore is interchangeable 
                      with the reference product; and
                    ``(B) the applicant (or other appropriate person) 
                consents to the inspection of the facility that is the 
                subject of the application, in accordance with 
                subsection (c).
            ``(4) Safety standards for determining interchangeability.--
        Upon review of an application submitted under this subsection or 
        any supplement to such application, the Secretary shall 
        determine the biological product to be interchangeable with the 
        reference product if the Secretary determines that the 
        information submitted in the application (or a supplement to 
        such application) is sufficient to show that--
                    ``(A) the biological product--
                          ``(i) is biosimilar to the reference product; 
                      and
                          ``(ii) can be expected to produce the same 
                      clinical result as the reference product in any 
                      given patient; and
                    ``(B) for a biological product that is administered 
                more than once to an individual, the risk in terms of 
                safety or diminished efficacy of alternating or 
                switching between use of the biological product and the 
                reference product is not greater than the risk of using 
                the reference product without such alternation or 
                switch.
            ``(5) General rules.--
                    ``(A) One reference product per application.--A 
                biological product, in an application submitted under 
                this subsection, may not be evaluated against more than 
                1 reference product.
                    ``(B) Review.--An application submitted under this 
                subsection shall be reviewed by the division within the 
                Food and Drug Administration that is responsible for the 
                review and approval of the application under which the 
                reference product is licensed.
                    ``(C) Risk evaluation and mitigation 
                strategies. <<NOTE: Applicability.>> --The authority of 
                the Secretary with respect to risk evaluation and 
                mitigation strategies under the Federal Food, Drug, and 
                Cosmetic Act shall apply to biological products licensed 
                under this subsection in the same manner as

[[Page 124 STAT. 807]]

                such authority applies to biological products licensed 
                under subsection (a).
            ``(6) Exclusivity for first interchangeable biological 
        product.--Upon review of an application submitted under this 
        subsection relying on the same reference product for which a 
        prior biological product has received a determination of 
        interchangeability for any condition of use, the Secretary shall 
        not make a determination under paragraph (4) that the second or 
        subsequent biological product is interchangeable for any 
        condition of use until the earlier of--
                    ``(A) 1 year after the first commercial marketing of 
                the first interchangeable biosimilar biological product 
                to be approved as interchangeable for that reference 
                product;
                    ``(B) 18 months after--
                          ``(i) a final court decision on all patents in 
                      suit in an action instituted under subsection 
                      (l)(6) against the applicant that submitted the 
                      application for the first approved interchangeable 
                      biosimilar biological product; or
                          ``(ii) the dismissal with or without prejudice 
                      of an action instituted under subsection (l)(6) 
                      against the applicant that submitted the 
                      application for the first approved interchangeable 
                      biosimilar biological product; or
                    ``(C)(i) 42 months after approval of the first 
                interchangeable biosimilar biological product if the 
                applicant that submitted such application has been sued 
                under subsection (l)(6) and such litigation is still 
                ongoing within such 42-month period; or
                    ``(ii) 18 months after approval of the first 
                interchangeable biosimilar biological product if the 
                applicant that submitted such application has not been 
                sued under subsection (l)(6).
        <<NOTE: Definition.>> For purposes of this paragraph, the term 
        `final court decision' means a final decision of a court from 
        which no appeal (other than a petition to the United States 
        Supreme Court for a writ of certiorari) has been or can be 
        taken.
            ``(7) Exclusivity for reference product.--
                    ``(A) Effective date of biosimilar application 
                approval.--Approval of an application under this 
                subsection may not be made effective by the Secretary 
                until the date that is 12 years after the date on which 
                the reference product was first licensed under 
                subsection (a).
                    ``(B) Filing period.--An application under this 
                subsection may not be submitted to the Secretary until 
                the date that is 4 years after the date on which the 
                reference product was first licensed under subsection 
                (a).
                    ``(C) First licensure.--Subparagraphs (A) and (B) 
                shall not apply to a license for or approval of--
                          ``(i) a supplement for the biological product 
                      that is the reference product; or
                          ``(ii) a subsequent application filed by the 
                      same sponsor or manufacturer of the biological 
                      product that is the reference product (or a 
                      licensor, predecessor in interest, or other 
                      related entity) for--
                                    ``(I) a change (not including a 
                                modification to the structure of the 
                                biological product) that results

[[Page 124 STAT. 808]]

                                in a new indication, route of 
                                administration, dosing schedule, dosage 
                                form, delivery system, delivery device, 
                                or strength; or
                                    ``(II) a modification to the 
                                structure of the biological product that 
                                does not result in a change in safety, 
                                purity, or potency.
            ``(8) Guidance documents.--
                    ``(A) In general.--The Secretary may, after 
                opportunity for public comment, issue guidance in 
                accordance, except as provided in subparagraph (B)(i), 
                with section 701(h) of the Federal Food, Drug, and 
                Cosmetic Act with respect to the licensure of a 
                biological product under this subsection. Any such 
                guidance may be general or specific.
                    ``(B) Public comment.--
                          ``(i) In general.--The Secretary shall provide 
                      the public an opportunity to comment on any 
                      proposed guidance issued under subparagraph (A) 
                      before issuing final guidance.
                          ``(ii) Input regarding most valuable 
                      guidance.--The Secretary shall establish a process 
                      through which the public may provide the Secretary 
                      with input regarding priorities for issuing 
                      guidance.
                    ``(C) No requirement for application 
                consideration.--The issuance (or non-issuance) of 
                guidance under subparagraph (A) shall not preclude the 
                review of, or action on, an application submitted under 
                this subsection.
                    ``(D) Requirement for product class-specific 
                guidance.--If the Secretary issues product class-
                specific guidance under subparagraph (A), such guidance 
                shall include a description of--
                           <<NOTE: Criteria.>> ``(i) the criteria that 
                      the Secretary will use to determine whether a 
                      biological product is highly similar to a 
                      reference product in such product class; and
                          ``(ii) the criteria, if available, that the 
                      Secretary will use to determine whether a 
                      biological product meets the standards described 
                      in paragraph (4).
                    ``(E) Certain product classes.--
                          ``(i) Guidance.--The Secretary may indicate in 
                      a guidance document that the science and 
                      experience, as of the date of such guidance, with 
                      respect to a product or product class (not 
                      including any recombinant protein) does not allow 
                      approval of an application for a license as 
                      provided under this subsection for such product or 
                      product class.
                          ``(ii) Modification or reversal.--The 
                      Secretary may issue a subsequent guidance document 
                      under subparagraph (A) to modify or reverse a 
                      guidance document under clause (i).
                          ``(iii) No effect on ability to deny 
                      license.--Clause (i) shall not be construed to 
                      require the Secretary to approve a product with 
                      respect to which the Secretary has not indicated 
                      in a guidance document that the science and 
                      experience, as described in clause (i), does not 
                      allow approval of such an application.

    ``(l) Patents.--
            ``(1) Confidential access to subsection (k) application.--

[[Page 124 STAT. 809]]

                    ``(A) Application of paragraph.--Unless otherwise 
                agreed to by a person that submits an application under 
                subsection (k) (referred to in this subsection as the 
                `subsection (k) applicant') and the sponsor of the 
                application for the reference product (referred to in 
                this subsection as the `reference product sponsor'), the 
                provisions of this paragraph shall apply to the exchange 
                of information described in this subsection.
                    ``(B) In general.--
                          ``(i) Provision of confidential information.--
                      When a subsection (k) applicant submits an 
                      application under subsection (k), such applicant 
                      shall provide to the persons described in clause 
                      (ii), subject to the terms of this paragraph, 
                      confidential access to the information required to 
                      be produced pursuant to paragraph (2) and any 
                      other information that the subsection (k) 
                      applicant determines, in its sole discretion, to 
                      be appropriate (referred to in this subsection as 
                      the `confidential information').
                          ``(ii) Recipients of information.--The persons 
                      described in this clause are the following:
                                    ``(I) Outside counsel.--One or more 
                                attorneys designated by the reference 
                                product sponsor who are employees of an 
                                entity other than the reference product 
                                sponsor (referred to in this paragraph 
                                as the `outside counsel'), provided that 
                                such attorneys do not engage, formally 
                                or informally, in patent prosecution 
                                relevant or related to the reference 
                                product.
                                    ``(II) In-house counsel.--One 
                                attorney that represents the reference 
                                product sponsor who is an employee of 
                                the reference product sponsor, provided 
                                that such attorney does not engage, 
                                formally or informally, in patent 
                                prosecution relevant or related to the 
                                reference product.
                          ``(iii) Patent owner access.--A representative 
                      of the owner of a patent exclusively licensed to a 
                      reference product sponsor with respect to the 
                      reference product and who has retained a right to 
                      assert the patent or participate in litigation 
                      concerning the patent may be provided the 
                      confidential information, provided that the 
                      representative informs the reference product 
                      sponsor and the subsection (k) applicant of his or 
                      her agreement to be subject to the confidentiality 
                      provisions set forth in this paragraph, including 
                      those under clause (ii).
                    ``(C) Limitation on disclosure.--No person that 
                receives confidential information pursuant to 
                subparagraph (B) shall disclose any confidential 
                information to any other person or entity, including the 
                reference product sponsor employees, outside scientific 
                consultants, or other outside counsel retained by the 
                reference product sponsor, without the prior written 
                consent of the subsection (k) applicant, which shall not 
                be unreasonably withheld.
                    ``(D) Use of confidential information.--Confidential 
                information shall be used for the sole and exclusive 
                purpose of determining, with respect to each patent 
                assigned to

[[Page 124 STAT. 810]]

                or exclusively licensed by the reference product 
                sponsor, whether a claim of patent infringement could 
                reasonably be asserted if the subsection (k) applicant 
                engaged in the manufacture, use, offering for sale, 
                sale, or importation into the United States of the 
                biological product that is the subject of the 
                application under subsection (k).
                    ``(E) Ownership of confidential information.--The 
                confidential information disclosed under this paragraph 
                is, and shall remain, the property of the subsection (k) 
                applicant. By providing the confidential information 
                pursuant to this paragraph, the subsection (k) applicant 
                does not provide the reference product sponsor or the 
                outside counsel any interest in or license to use the 
                confidential information, for purposes other than those 
                specified in subparagraph (D).
                    ``(F) Effect of infringement action.--In the event 
                that the reference product sponsor files a patent 
                infringement suit, the use of confidential information 
                shall continue to be governed by the terms of this 
                paragraph until such time as a court enters a protective 
                order regarding the information. Upon entry of such 
                order, the subsection (k) applicant may redesignate 
                confidential information in accordance with the terms of 
                that order. No confidential information shall be 
                included in any publicly-available complaint or other 
                pleading. In the event that the reference product 
                sponsor does not file an infringement action by the date 
                specified in paragraph (6), the reference product 
                sponsor shall return or destroy all confidential 
                information received under this paragraph, provided that 
                if the reference product sponsor opts to destroy such 
                information, it will confirm destruction in writing to 
                the subsection (k) applicant.
                    ``(G) Rule of construction.--Nothing in this 
                paragraph shall be construed--
                          ``(i) as an admission by the subsection (k) 
                      applicant regarding the validity, enforceability, 
                      or infringement of any patent; or
                          ``(ii) as an agreement or admission by the 
                      subsection (k) applicant with respect to the 
                      competency, relevance, or materiality of any 
                      confidential information.
                    ``(H) Effect of violation.--The disclosure of any 
                confidential information in violation of this paragraph 
                shall be deemed to cause the subsection (k) applicant to 
                suffer irreparable harm for which there is no adequate 
                legal remedy and the court shall consider immediate 
                injunctive relief to be an appropriate and necessary 
                remedy for any violation or threatened violation of this 
                paragraph.
            ``(2) Subsection (k) application information.-- 
        <<NOTE: Deadline. Notification.>> Not later than 20 days after 
        the Secretary notifies the subsection (k) applicant that the 
        application has been accepted for review, the subsection (k) 
        applicant--
                    ``(A) shall provide to the reference product sponsor 
                a copy of the application submitted to the Secretary 
                under subsection (k), and such other information that 
                describes the process or processes used to manufacture 
                the biological product that is the subject of such 
                application; and

[[Page 124 STAT. 811]]

                    ``(B) may provide to the reference product sponsor 
                additional information requested by or on behalf of the 
                reference product sponsor.
            ``(3) <<NOTE: Deadlines.>> List and description of 
        patents.--
                    ``(A) List by reference product sponsor.--Not later 
                than 60 days after the receipt of the application and 
                information under paragraph (2), the reference product 
                sponsor shall provide to the subsection (k) applicant--
                          ``(i) a list of patents for which the 
                      reference product sponsor believes a claim of 
                      patent infringement could reasonably be asserted 
                      by the reference product sponsor, or by a patent 
                      owner that has granted an exclusive license to the 
                      reference product sponsor with respect to the 
                      reference product, if a person not licensed by the 
                      reference product sponsor engaged in the making, 
                      using, offering to sell, selling, or importing 
                      into the United States of the biological product 
                      that is the subject of the subsection (k) 
                      application; and
                          ``(ii) an identification of the patents on 
                      such list that the reference product sponsor would 
                      be prepared to license to the subsection (k) 
                      applicant.
                    ``(B) List and description by subsection (k) 
                applicant.--Not later than 60 days after receipt of the 
                list under subparagraph (A), the subsection (k) 
                applicant--
                          ``(i) may provide to the reference product 
                      sponsor a list of patents to which the subsection 
                      (k) applicant believes a claim of patent 
                      infringement could reasonably be asserted by the 
                      reference product sponsor if a person not licensed 
                      by the reference product sponsor engaged in the 
                      making, using, offering to sell, selling, or 
                      importing into the United States of the biological 
                      product that is the subject of the subsection (k) 
                      application;
                          ``(ii) shall provide to the reference product 
                      sponsor, with respect to each patent listed by the 
                      reference product sponsor under subparagraph (A) 
                      or listed by the subsection (k) applicant under 
                      clause (i)--
                                    ``(I) a detailed statement that 
                                describes, on a claim by claim basis, 
                                the factual and legal basis of the 
                                opinion of the subsection (k) applicant 
                                that such patent is invalid, 
                                unenforceable, or will not be infringed 
                                by the commercial marketing of the 
                                biological product that is the subject 
                                of the subsection (k) application; or
                                    ``(II) a statement that the 
                                subsection (k) applicant does not intend 
                                to begin commercial marketing of the 
                                biological product before the date that 
                                such patent expires; and
                          ``(iii) shall provide to the reference product 
                      sponsor a response regarding each patent 
                      identified by the reference product sponsor under 
                      subparagraph (A)(ii).
                    ``(C) Description by reference product sponsor.--Not 
                later than 60 days after receipt of the list and 
                statement under subparagraph (B), the reference product 
                sponsor shall provide to the subsection (k) applicant a 
                detailed statement that describes, with respect to each 
                patent described in subparagraph (B)(ii)(I), on a claim 
                by

[[Page 124 STAT. 812]]

                claim basis, the factual and legal basis of the opinion 
                of the reference product sponsor that such patent will 
                be infringed by the commercial marketing of the 
                biological product that is the subject of the subsection 
                (k) application and a response to the statement 
                concerning validity and enforceability provided under 
                subparagraph (B)(ii)(I).
            ``(4) Patent resolution negotiations.--
                    ``(A) In general.--After receipt by the subsection 
                (k) applicant of the statement under paragraph (3)(C), 
                the reference product sponsor and the subsection (k) 
                applicant shall engage in good faith negotiations to 
                agree on which, if any, patents listed under paragraph 
                (3) by the subsection (k) applicant or the reference 
                product sponsor shall be the subject of an action for 
                patent infringement under paragraph (6).
                    ``(B) Failure to reach agreement. <<NOTE: Time 
                period. Applicability.>> --If, within 15 days of 
                beginning negotiations under subparagraph (A), the 
                subsection (k) applicant and the reference product 
                sponsor fail to agree on a final and complete list of 
                which, if any, patents listed under paragraph (3) by the 
                subsection (k) applicant or the reference product 
                sponsor shall be the subject of an action for patent 
                infringement under paragraph (6), the provisions of 
                paragraph (5) shall apply to the parties.
            ``(5) Patent resolution if no agreement.-- 
        <<NOTE: Notification.>> 
                    ``(A) Number of patents.--The subsection (k) 
                applicant shall notify the reference product sponsor of 
                the number of patents that such applicant will provide 
                to the reference product sponsor under subparagraph 
                (B)(i)(I).
                    ``(B) Exchange of patent lists.--
                          ``(i) In general. <<NOTE: Deadline.>> --On a 
                      date agreed to by the subsection (k) applicant and 
                      the reference product sponsor, but in no case 
                      later than 5 days after the subsection (k) 
                      applicant notifies the reference product sponsor 
                      under subparagraph (A), the subsection (k) 
                      applicant and the reference product sponsor shall 
                      simultaneously exchange--
                                    ``(I) the list of patents that the 
                                subsection (k) applicant believes should 
                                be the subject of an action for patent 
                                infringement under paragraph (6); and
                                    ``(II) the list of patents, in 
                                accordance with clause (ii), that the 
                                reference product sponsor believes 
                                should be the subject of an action for 
                                patent infringement under paragraph (6).
                          ``(ii) Number of patents listed by reference 
                      product sponsor.--
                                    ``(I) In general.--Subject to 
                                subclause (II), the number of patents 
                                listed by the reference product sponsor 
                                under clause (i)(II) may not exceed the 
                                number of patents listed by the 
                                subsection (k) applicant under clause 
                                (i)(I).
                                    ``(II) Exception.--If a subsection 
                                (k) applicant does not list any patent 
                                under clause (i)(I), the reference 
                                product sponsor may list 1 patent under 
                                clause (i)(II).
            ``(6) <<NOTE: Deadlines.>> Immediate patent infringement 
        action.--

[[Page 124 STAT. 813]]

                    ``(A) Action if agreement on patent list.--If the 
                subsection (k) applicant and the reference product 
                sponsor agree on patents as described in paragraph (4), 
                not later than 30 days after such agreement, the 
                reference product sponsor shall bring an action for 
                patent infringement with respect to each such patent.
                    ``(B) Action if no agreement on patent list.--If the 
                provisions of paragraph (5) apply to the parties as 
                described in paragraph (4)(B), not later than 30 days 
                after the exchange of lists under paragraph (5)(B), the 
                reference product sponsor shall bring an action for 
                patent infringement with respect to each patent that is 
                included on such lists.
                    ``(C) Notification and publication of complaint.--
                          ``(i) Notification to secretary.--Not later 
                      than 30 days after a complaint is served to a 
                      subsection (k) applicant in an action for patent 
                      infringement described under this paragraph, the 
                      subsection (k) applicant shall provide the 
                      Secretary with notice and a copy of such 
                      complaint.
                          ``(ii) Publication by 
                      secretary. <<NOTE: Federal Register, 
                      publication. Notice.>> --The Secretary shall 
                      publish in the Federal Register notice of a 
                      complaint received under clause (i).
            ``(7) Newly issued or licensed patents.--In the case of a 
        patent that--
                    ``(A) is issued to, or exclusively licensed by, the 
                reference product sponsor after the date that the 
                reference product sponsor provided the list to the 
                subsection (k) applicant under paragraph (3)(A); and
                    ``(B) the reference product sponsor reasonably 
                believes that, due to the issuance of such patent, a 
                claim of patent infringement could reasonably be 
                asserted by the reference product sponsor if a person 
                not licensed by the reference product sponsor engaged in 
                the making, using, offering to sell, selling, or 
                importing into the United States of the biological 
                product that is the subject of the subsection 
                (k) <<NOTE: Deadlines.>> application,
        not later than 30 days after such issuance or licensing, the 
        reference product sponsor shall provide to the subsection (k) 
        applicant a supplement to the list provided by the reference 
        product sponsor under paragraph (3)(A) that includes such 
        patent, not later than 30 days after such supplement is 
        provided, the subsection (k) applicant shall provide a statement 
        to the reference product sponsor in accordance with paragraph 
        (3)(B), and such patent shall be subject to paragraph (8).
            ``(8) Notice of commercial marketing and preliminary 
        injunction.--
                    ``(A) Notice of commercial 
                marketing. <<NOTE: Deadline.>> --The subsection (k) 
                applicant shall provide notice to the reference product 
                sponsor not later than 180 days before the date of the 
                first commercial marketing of the biological product 
                licensed under subsection (k).
                    ``(B) Preliminary injunction.--After receiving the 
                notice under subparagraph (A) and before such date of 
                the first commercial marketing of such biological 
                product, the reference product sponsor may seek a 
                preliminary injunction prohibiting the subsection (k) 
                applicant from

[[Page 124 STAT. 814]]

                engaging in the commercial manufacture or sale of such 
                biological product until the court decides the issue of 
                patent validity, enforcement, and infringement with 
                respect to any patent that is--
                          ``(i) included in the list provided by the 
                      reference product sponsor under paragraph (3)(A) 
                      or in the list provided by the subsection (k) 
                      applicant under paragraph (3)(B); and
                          ``(ii) not included, as applicable, on--
                                    ``(I) the list of patents described 
                                in paragraph (4); or
                                    ``(II) the lists of patents 
                                described in paragraph (5)(B).
                    ``(C) Reasonable cooperation.--If the reference 
                product sponsor has sought a preliminary injunction 
                under subparagraph (B), the reference product sponsor 
                and the subsection (k) applicant shall reasonably 
                cooperate to expedite such further discovery as is 
                needed in connection with the preliminary injunction 
                motion.
            ``(9) Limitation on declaratory judgment action.--
                    ``(A) Subsection (k) application provided.--If a 
                subsection (k) applicant provides the application and 
                information required under paragraph (2)(A), neither the 
                reference product sponsor nor the subsection (k) 
                applicant may, prior to the date notice is received 
                under paragraph (8)(A), bring any action under section 
                2201 of title 28, United States Code, for a declaration 
                of infringement, validity, or enforceability of any 
                patent that is described in clauses (i) and (ii) of 
                paragraph (8)(B).
                    ``(B) Subsequent failure to act by subsection (k) 
                applicant.--If a subsection (k) applicant fails to 
                complete an action required of the subsection (k) 
                applicant under paragraph (3)(B)(ii), paragraph (5), 
                paragraph (6)(C)(i), paragraph (7), or paragraph (8)(A), 
                the reference product sponsor, but not the subsection 
                (k) applicant, may bring an action under section 2201 of 
                title 28, United States Code, for a declaration of 
                infringement, validity, or enforceability of any patent 
                included in the list described in paragraph (3)(A), 
                including as provided under paragraph (7).
                    ``(C) Subsection (k) application not provided.--If a 
                subsection (k) applicant fails to provide the 
                application and information required under paragraph 
                (2)(A), the reference product sponsor, but not the 
                subsection (k) applicant, may bring an action under 
                section 2201 of title 28, United States Code, for a 
                declaration of infringement, validity, or enforceability 
                of any patent that claims the biological product or a 
                use of the biological product.''.

    (b) Definitions.--Section 351(i) of the Public Health Service Act 
(42 U.S.C. 262(i)) is amended--
            (1) by striking ``In this section, the term `biological 
        product' means'' and inserting the following: ``In this section:
            ``(1) The term `biological product' means'';
            (2) in paragraph (1), as so designated, by inserting 
        ``protein (except any chemically synthesized polypeptide),'' 
        after ``allergenic product,''; and
            (3) by adding at the end the following:

[[Page 124 STAT. 815]]

            ``(2) The term `biosimilar' or `biosimilarity', in reference 
        to a biological product that is the subject of an application 
        under subsection (k), means--
                    ``(A) that the biological product is highly similar 
                to the reference product notwithstanding minor 
                differences in clinically inactive components; and
                    ``(B) there are no clinically meaningful differences 
                between the biological product and the reference product 
                in terms of the safety, purity, and potency of the 
                product.
            ``(3) The term `interchangeable' or `interchangeability', in 
        reference to a biological product that is shown to meet the 
        standards described in subsection (k)(4), means that the 
        biological product may be substituted for the reference product 
        without the intervention of the health care provider who 
        prescribed the reference product.
            ``(4) The term `reference product' means the single 
        biological product licensed under subsection (a) against which a 
        biological product is evaluated in an application submitted 
        under subsection (k).''.

    (c) Conforming Amendments Relating to Patents.--
            (1) Patents.--Section 271(e) of title 35, United States 
        Code, is amended--
                    (A) in paragraph (2)--
                          (i) in subparagraph (A), by striking ``or'' at 
                      the end;
                          (ii) in subparagraph (B), by adding ``or'' at 
                      the end; and
                          (iii) by inserting after subparagraph (B) the 
                      following:
            ``(C)(i) with respect to a patent that is identified in the 
        list of patents described in section 351(l)(3) of the Public 
        Health Service Act (including as provided under section 
        351(l)(7) of such Act), an application seeking approval of a 
        biological product, or
            ``(ii) if the applicant for the application fails to provide 
        the application and information required under section 
        351(l)(2)(A) of such Act, an application seeking approval of a 
        biological product for a patent that could be identified 
        pursuant to section 351(l)(3)(A)(i) of such Act,''; and
                          (iv) in the matter following subparagraph (C) 
                      (as added by clause (iii)), by striking ``or 
                      veterinary biological product'' and inserting ``, 
                      veterinary biological product, or biological 
                      product'';
                    (B) in paragraph (4)--
                          (i) in subparagraph (B), by--
                                    (I) striking ``or veterinary 
                                biological product'' and inserting ``, 
                                veterinary biological product, or 
                                biological product''; and
                                    (II) striking ``and'' at the end;
                          (ii) in subparagraph (C), by--
                                    (I) striking ``or veterinary 
                                biological product'' and inserting ``, 
                                veterinary biological product, or 
                                biological product''; and
                                    (II) striking the period and 
                                inserting ``, and'';
                          (iii) by inserting after subparagraph (C) the 
                      following:

[[Page 124 STAT. 816]]

            ``(D) <<NOTE: Courts.>> the court shall order a permanent 
        injunction prohibiting any infringement of the patent by the 
        biological product involved in the infringement until a date 
        which is not earlier than the date of the expiration of the 
        patent that has been infringed under paragraph (2)(C), provided 
        the patent is the subject of a final court decision, as defined 
        in section 351(k)(6) of the Public Health Service Act, in an 
        action for infringement of the patent under section 351(l)(6) of 
        such Act, and the biological product has not yet been approved 
        because of section 351(k)(7) of such Act.''; and
                          (iv) in the matter following subparagraph (D) 
                      (as added by clause (iii)), by striking ``and 
                      (C)'' and inserting ``(C), and (D)''; and
                    (C) by adding at the end the following:

    ``(6)(A) <<NOTE: Applicability.>> Subparagraph (B) applies, in lieu 
of paragraph (4), in the case of a patent--
            ``(i) that is identified, as applicable, in the list of 
        patents described in section 351(l)(4) of the Public Health 
        Service Act or the lists of patents described in section 
        351(l)(5)(B) of such Act with respect to a biological product; 
        and
            ``(ii) for which an action for infringement of the patent 
        with respect to the biological product--
                    ``(I) was brought after the expiration of the 30-day 
                period described in subparagraph (A) or (B), as 
                applicable, of section 351(l)(6) of such Act; or
                    ``(II) was brought before the expiration of the 30-
                day period described in subclause (I), but which was 
                dismissed without prejudice or was not prosecuted to 
                judgment in good faith.

    ``(B) In an action for infringement of a patent described in 
subparagraph (A), the sole and exclusive remedy that may be granted by a 
court, upon a finding that the making, using, offering to sell, selling, 
or importation into the United States of the biological product that is 
the subject of the action infringed the patent, shall be a reasonable 
royalty.
    ``(C) The owner of a patent that should have been included in the 
list described in section 351(l)(3)(A) of the Public Health Service Act, 
including as provided under section 351(l)(7) of such Act for a 
biological product, but was not timely included in such list, may not 
bring an action under this section for infringement of the patent with 
respect to the biological product.''.
            (2) Conforming amendment under title 28.--Section 2201(b) of 
        title 28, United States Code, is amended by inserting before the 
        period the following: ``, or section 351 of the Public Health 
        Service Act''.

    (d) Conforming Amendments Under the Federal Food, Drug, and Cosmetic 
Act.--
            (1) Content and review of applications.--Section 
        505(b)(5)(B) of the Federal Food, Drug, and Cosmetic Act (21 
        U.S.C. 355(b)(5)(B)) is amended by inserting before the period 
        at the end of the first sentence the following: ``or, with 
        respect to an applicant for approval of a biological product 
        under section 351(k) of the Public Health Service Act, any 
        necessary clinical study or studies''.
            (2) New active ingredient.--Section 505B of the Federal 
        Food, Drug, and Cosmetic Act (21 U.S.C. 355c) is amended by 
        adding at the end the following:

[[Page 124 STAT. 817]]

    ``(n) New Active Ingredient.--
            ``(1) Non-interchangeable biosimilar biological product.--A 
        biological product that is biosimilar to a reference product 
        under section 351 of the Public Health Service Act, and that the 
        Secretary has not determined to meet the standards described in 
        subsection (k)(4) of such section for interchangeability with 
        the reference product, shall be considered to have a new active 
        ingredient under this section.
            ``(2) Interchangeable biosimilar biological product.--A 
        biological product that is interchangeable with a reference 
        product under section 351 of the Public Health Service Act shall 
        not be considered to have a new active ingredient under this 
        section.''.

    (e) <<NOTE: 42 USC 262 note.>> Products Previously Approved Under 
Section 505.--
            (1) Requirement to follow section 351.--Except as provided 
        in paragraph (2), an application for a biological product shall 
        be submitted under section 351 of the Public Health Service Act 
        (42 U.S.C. 262) (as amended by this Act).
            (2) Exception.--An application for a biological product may 
        be submitted under section 505 of the Federal Food, Drug, and 
        Cosmetic Act (21 U.S.C. 355) if--
                    (A) such biological product is in a product class 
                for which a biological product in such product class is 
                the subject of an application approved under such 
                section 505 not later than the date of enactment of this 
                Act; and
                    (B) <<NOTE: Deadlines.>> such application--
                          (i) has been submitted to the Secretary of 
                      Health and Human Services (referred to in this 
                      subtitle as the ``Secretary'') before the date of 
                      enactment of this Act; or
                          (ii) is submitted to the Secretary not later 
                      than the date that is 10 years after the date of 
                      enactment of this Act.
            (3) Limitation.--Notwithstanding paragraph (2), an 
        application for a biological product may not be submitted under 
        section 505 of the Federal Food, Drug, and Cosmetic Act (21 
        U.S.C. 355) if there is another biological product approved 
        under subsection (a) of section 351 of the Public Health Service 
        Act that could be a reference product with respect to such 
        application (within the meaning of such section 351) if such 
        application were submitted under subsection (k) of such section 
        351.
            (4) Deemed approved under section 351 <<NOTE: Effective 
        date.>> .--An approved application for a biological product 
        under section 505 of the Federal Food, Drug, and Cosmetic Act 
        (21 U.S.C. 355) shall be deemed to be a license for the 
        biological product under such section 351 on the date that is 10 
        years after the date of enactment of this Act.
            (5) Definitions.--For purposes of this subsection, the term 
        ``biological product'' has the meaning given such term under 
        section 351 of the Public Health Service Act (42 U.S.C. 262) (as 
        amended by this Act).

    (f) Follow-on Biologics User Fees.--
            (1) Development of user fees for biosimilar biological 
        products.--
                    (A) In general. <<NOTE: Deadline. Recommenda- 
                tions.>> --Beginning not later than October 1, 2010, the 
                Secretary shall develop recommendations to

[[Page 124 STAT. 818]]

                present to Congress with respect to the goals, and plans 
                for meeting the goals, for the process for the review of 
                biosimilar biological product applications submitted 
                under section 351(k) of the Public Health Service Act 
                (as added by this Act) for the first 5 fiscal years 
                after fiscal year 2012. <<NOTE: Consultation.>> In 
                developing such recommendations, the Secretary shall 
                consult with--
                          (i) the Committee on Health, Education, Labor, 
                      and Pensions of the Senate;
                          (ii) the Committee on Energy and Commerce of 
                      the House of Representatives;
                          (iii) scientific and academic experts;
                          (iv) health care professionals;
                          (v) representatives of patient and consumer 
                      advocacy groups; and
                          (vi) the regulated industry.
                    (B) Public review of recommendations.--After 
                negotiations with the regulated industry, the Secretary 
                shall--
                          (i) present the recommendations developed 
                      under subparagraph (A) to the Congressional 
                      committees specified in such subparagraph;
                          (ii) <<NOTE: Federal Register, 
                      publication.>> publish such recommendations in the 
                      Federal Register;
                          (iii) <<NOTE: Time period.>> provide for a 
                      period of 30 days for the public to provide 
                      written comments on such recommendations;
                          (iv) hold a meeting at which the public may 
                      present its views on such recommendations; and
                          (v) after consideration of such public views 
                      and comments, revise such recommendations as 
                      necessary.
                    (C) Transmittal of 
                recommendations. <<NOTE: Deadline.>> --Not later than 
                January 15, 2012, the Secretary shall transmit to 
                Congress the revised recommendations under subparagraph 
                (B), a summary of the views and comments received under 
                such subparagraph, and any changes made to the 
                recommendations in response to such views and comments.
            (2) <<NOTE: Effective date.>>  Establishment of user fee 
        program.--It is the sense of the Senate that, based on the 
        recommendations transmitted to Congress by the Secretary 
        pursuant to paragraph (1)(C), Congress should authorize a 
        program, effective on October 1, 2012, for the collection of 
        user fees relating to the submission of biosimilar biological 
        product applications under section 351(k) of the Public Health 
        Service Act (as added by this Act).
            (3) Transitional provisions for user fees for biosimilar 
        biological products.--
                    (A) Application of the prescription drug user fee 
                provisions.--Section 735(1)(B) of the Federal Food, 
                Drug, and Cosmetic Act (21 U.S.C. 379g(1)(B)) is amended 
                by striking ``section 351'' and inserting ``subsection 
                (a) or (k) of section 351''.
                    (B) <<NOTE: 42 USC 262 note.>> Evaluation of costs 
                of reviewing biosimilar biological product 
                applications. <<NOTE: Time period.>> --During the period 
                beginning on the date of enactment of this Act and 
                ending on October 1, 2010, the Secretary shall collect 
                and evaluate data regarding the costs of reviewing 
                applications for biological products submitted under 
                section 351(k) of the

[[Page 124 STAT. 819]]

                Public Health Service Act (as added by this Act) during 
                such period.
                    (C) Audit.--
                          (i) <<NOTE: Time period.>>  In general.--On 
                      the date that is 2 years after first receiving a 
                      user fee applicable to an application for a 
                      biological product under section 351(k) of the 
                      Public Health Service Act (as added by this Act), 
                      and on a biennial basis thereafter until October 
                      1, 2013, the Secretary shall perform an audit of 
                      the costs of reviewing such applications under 
                      such section 351(k). Such an audit shall compare--
                                    (I) the costs of reviewing such 
                                applications under such section 351(k) 
                                to the amount of the user fee applicable 
                                to such applications; and
                                    (II)(aa) such ratio determined under 
                                subclause (I); to
                                    (bb) the ratio of the costs of 
                                reviewing applications for biological 
                                products under section 351(a) of such 
                                Act (as amended by this Act) to the 
                                amount of the user fee applicable to 
                                such applications under such section 
                                351(a).
                          (ii) Alteration of user fee.--If the audit 
                      performed under clause (i) indicates that the 
                      ratios compared under subclause (II) of such 
                      clause differ by more than 5 percent, then the 
                      Secretary shall alter the user fee applicable to 
                      applications submitted under such section 351(k) 
                      to more appropriately account for the costs of 
                      reviewing such applications.
                          (iii) Accounting standards.--The Secretary 
                      shall perform an audit under clause (i) in 
                      conformance with the accounting principles, 
                      standards, and requirements prescribed by the 
                      Comptroller General of the United States under 
                      section 3511 of title 31, United State Code, to 
                      ensure the validity of any potential variability.
            (4) Authorization of appropriations.--There is authorized to 
        be appropriated to carry out this subsection such sums as may be 
        necessary for each of fiscal years 2010 through 2012.

    (g) Pediatric Studies of Biological Products.--
            (1) In general.--Section 351 of the Public Health Service 
        Act (42 U.S.C. 262) is amended by adding at the end the 
        following:

    ``(m) Pediatric Studies.--
            ``(1) Application of certain provisions.--The provisions of 
        subsections (a), (d), (e), (f), (i), (j), (k), (l), (p), and (q) 
        of section 505A of the Federal Food, Drug, and Cosmetic Act 
        shall apply with respect to the extension of a period under 
        paragraphs (2) and (3) to the same extent and in the same manner 
        as such provisions apply with respect to the extension of a 
        period under subsection (b) or (c) of section 505A of the 
        Federal Food, Drug, and Cosmetic Act.
            ``(2) Market exclusivity for new biological products.--If, 
        prior <<NOTE: Determination.>>  to approval of an application 
        that is submitted under subsection (a), the Secretary determines 
        that information relating to the use of a new biological product 
        in the pediatric population may produce health benefits in that 
        population, the Secretary makes a written request for pediatric 
        studies

[[Page 124 STAT. 820]]

        (which shall include a timeframe for completing such studies), 
        the applicant agrees to the request, such studies are completed 
        using appropriate formulations for each age group for which the 
        study is requested within any such timeframe, and the reports 
        thereof are submitted and accepted in accordance with section 
        505A(d)(3) of the Federal Food, Drug, and Cosmetic Act--
                    ``(A) the periods for such biological product 
                referred to in subsection (k)(7) are deemed to be 4 
                years and 6 months rather than 4 years and 12 years and 
                6 months rather than 12 years; and
                    ``(B) if the biological product is designated under 
                section 526 for a rare disease or condition, the period 
                for such biological product referred to in section 
                527(a) is deemed to be 7 years and 6 months rather than 
                7 years.
            ``(3) Market exclusivity for already-marketed biological 
        products.--If the Secretary <<NOTE: Determination.>>  determines 
        that information relating to the use of a licensed biological 
        product in the pediatric population may produce health benefits 
        in that population and makes a written request to the holder of 
        an approved application under subsection (a) for pediatric 
        studies (which shall include a timeframe for completing such 
        studies), the holder agrees to the request, such studies are 
        completed using appropriate formulations for each age group for 
        which the study is requested within any such timeframe, and the 
        reports thereof are submitted and accepted in accordance with 
        section 505A(d)(3) of the Federal Food, Drug, and Cosmetic Act--
                    ``(A) the periods for such biological product 
                referred to in subsection (k)(7) are deemed to be 4 
                years and 6 months rather than 4 years and 12 years and 
                6 months rather than 12 years; and
                    ``(B) if the biological product is designated under 
                section 526 for a rare disease or condition, the period 
                for such biological product referred to in section 
                527(a) is deemed to be 7 years and 6 months rather than 
                7 years.
            ``(4) Exception.--The Secretary shall not extend a period 
        referred to in paragraph (2)(A), (2)(B), (3)(A), or (3)(B) if 
        the determination under section 505A(d)(3) is made later than 9 
        months prior to the expiration of such period.''.
            (2) Studies regarding pediatric research.--
                    (A) Program for pediatric study of drugs.--
                Subsection (a)(1) of section 409I of the Public Health 
                Service Act (42 U.S.C. 284m) is amended by inserting ``, 
                biological products,'' after ``including drugs''.
                    (B) Institute of medicine study.--Section 505A(p) of 
                the Federal Food, Drug, and Cosmetic Act <<NOTE: 21 USC 
                355a.>>  (21 U.S.C. 355b(p)) is amended by striking 
                paragraphs (4) and (5) and inserting the following:
            ``(4) review and assess the number and importance of 
        biological products for children that are being tested as a 
        result of the amendments made by the Biologics Price Competition 
        and Innovation Act of 2009 and the importance for children, 
        health care providers, parents, and others of labeling changes 
        made as a result of such testing;

[[Page 124 STAT. 821]]

            ``(5) review and assess the number, importance, and 
        prioritization of any biological products that are not being 
        tested for pediatric use; and
            ``(6) offer recommendations for ensuring pediatric testing 
        of biological products, including consideration of any 
        incentives, such as those provided under this section or section 
        351(m) of the Public Health Service Act.''.

    (h) <<NOTE: Time periods. 42 USC 262 note.>>  Orphan Products.--If a 
reference product, as defined in section 351 of the Public Health 
Service Act (42 U.S.C. 262) (as amended by this Act) 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, a biological product seeking 
approval for such disease or condition under subsection (k) of such 
section 351 as biosimilar to, or interchangeable with, such reference 
product may be licensed by the Secretary only after the expiration for 
such reference product of the later of--
            (1) the 7-year period described in section 527(a) of the 
        Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360cc(a)); and
            (2) the 12-year period described in subsection (k)(7) of 
        such section 351.

SEC. 7003. <<NOTE: 42 USC 262 note.>>  SAVINGS.

    (a) Determination.--The Secretary of the Treasury, in consultation 
with the Secretary of Health and Human Services, shall for each fiscal 
year determine the amount of savings to the Federal Government as a 
result of the enactment of this subtitle.
    (b) Use.--Notwithstanding any other provision of this subtitle (or 
an amendment made by this subtitle), the savings to the Federal 
Government generated as a result of the enactment of this subtitle shall 
be used for deficit reduction.

   Subtitle B--More Affordable Medicines for Children and Underserved 
                               Communities

SEC. 7101. EXPANDED PARTICIPATION IN 340B PROGRAM.

    (a) Expansion of Covered Entities Receiving Discounted Prices.--
Section 340B(a)(4) of the Public Health Service Act (42 U.S.C. 
256b(a)(4)) is amended by adding at the end the following:
                    ``(M) A children's hospital excluded from the 
                Medicare prospective payment system pursuant to section 
                1886(d)(1)(B)(iii) of the Social Security Act, or a 
                free-standing cancer hospital excluded from the Medicare 
                prospective payment system pursuant to section 
                1886(d)(1)(B)(v) of the Social Security Act, that would 
                meet the requirements of subparagraph (L), including the 
                disproportionate share adjustment percentage requirement 
                under clause (ii) of such subparagraph, if the hospital 
                were a subsection (d) hospital as defined by section 
                1886(d)(1)(B) of the Social Security Act.
                    ``(N) An entity that is a critical access hospital 
                (as determined under section 1820(c)(2) of the Social 
                Security Act), and that meets the requirements of 
                subparagraph (L)(i).
                    ``(O) An entity that is a rural referral center, as 
                defined by section 1886(d)(5)(C)(i) of the Social 
                Security Act, or

[[Page 124 STAT. 822]]

                a sole community hospital, as defined by section 
                1886(d)(5)(C)(iii) of such Act, and that both meets the 
                requirements of subparagraph (L)(i) and has a 
                disproportionate share adjustment percentage equal to or 
                greater than 8 percent.''.

    (b) Extension of Discount to Inpatient Drugs.--Section 340B of the 
Public Health Service Act (42 U.S.C. 256b) is amended--
            (1) in paragraphs (2), (5), (7), and (9) of subsection (a), 
        by striking ``outpatient'' each place it appears; and
            (2) in subsection (b)--
                    (A) by striking ``Other Definition'' and all that 
                follows through ``In this section'' and inserting the 
                following: ``Other Definitions.--
            ``(1) In general.--In this section''; and
                    (B) by adding at the end the following new 
                paragraph:
            ``(2) Covered drug.--In this section, the term `covered 
        drug'--
                    ``(A) means a covered outpatient drug (as defined in 
                section 1927(k)(2) of the Social Security Act); and
                    ``(B) includes, notwithstanding paragraph (3)(A) of 
                section 1927(k) of such Act, a drug used in connection 
                with an inpatient or outpatient service provided by a 
                hospital described in subparagraph (L), (M), (N), or (O) 
                of subsection (a)(4) that is enrolled to participate in 
                the drug discount program under this section.''.

    (c) Prohibition on Group Purchasing Arrangements.--Section 340B(a) 
of the Public Health Service Act (42 U.S.C. 256b(a)) is amended--
            (1) in paragraph (4)(L)--
                    (A) in clause (i), by adding ``and'' at the end;
                    (B) in clause (ii), by striking ``; and'' and 
                inserting a period; and
                    (C) by striking clause (iii); and
            (2) in paragraph (5), as amended by subsection (b)--
                    (A) by redesignating subparagraphs (C) and (D) as 
                subparagraphs (D) and (E); respectively; and
                    (B) by inserting after subparagraph (B), the 
                following:
                    ``(C) Prohibition on group purchasing 
                arrangements.--
                          ``(i) In general.--A hospital described in 
                      subparagraph (L), (M), (N), or (O) of paragraph 
                      (4) shall not obtain covered outpatient drugs 
                      through a group purchasing organization or other 
                      group purchasing arrangement, except as permitted 
                      or provided for pursuant to clauses (ii) or (iii).
                          ``(ii) Inpatient drugs.--Clause (i) shall not 
                      apply to drugs purchased for inpatient use.
                          ``(iii) Exceptions.--The Secretary shall 
                      establish reasonable exceptions to clause (i)--
                                    ``(I) with respect to a covered 
                                outpatient drug that is unavailable to 
                                be purchased through the program under 
                                this section due to a drug shortage 
                                problem, manufacturer noncompliance, or 
                                any other circumstance beyond the 
                                hospital's control;
                                    ``(II) to facilitate generic 
                                substitution when a generic covered 
                                outpatient drug is available at a lower 
                                price; or

[[Page 124 STAT. 823]]

                                    ``(III) to reduce in other ways the 
                                administrative burdens of managing both 
                                inventories of drugs subject to this 
                                section and inventories of drugs that 
                                are not subject to this section, so long 
                                as the exceptions do not create a 
                                duplicate discount problem in violation 
                                of subparagraph (A) or a diversion 
                                problem in violation of subparagraph 
                                (B).
                          ``(iv) Purchasing arrangements for inpatient 
                      drugs.--The Secretary shall ensure that a hospital 
                      described in subparagraph (L), (M), (N), or (O) of 
                      subsection (a)(4) that is enrolled to participate 
                      in the drug discount program under this section 
                      shall have multiple options for purchasing covered 
                      drugs for inpatients, including by utilizing a 
                      group purchasing organization or other group 
                      purchasing arrangement, establishing and utilizing 
                      its own group purchasing program, purchasing 
                      directly from a manufacturer, and any other 
                      purchasing arrangements that the Secretary 
                      determines is appropriate to ensure access to drug 
                      discount pricing under this section for inpatient 
                      drugs taking into account the particular needs of 
                      small and rural hospitals.''.

    (d) Medicaid Credits on Inpatient Drugs.--Section 340B of the Public 
Health Service Act (42 U.S.C. 256b) is amended by striking subsection 
(c) and inserting the following:
    ``(c) Medicaid Credit.--Not 
later <<NOTE: Deadline. Determination.>>  than 90 days after the date of 
filing of the hospital's most recently filed Medicare cost report, the 
hospital shall issue a credit as determined by the Secretary to the 
State Medicaid program for inpatient covered drugs provided to Medicaid 
recipients.''.

    (e) <<NOTE: 42 USC 256b.>>  Effective Dates.--
            (1) In general.--The amendments made by this section and 
        section 7102 shall take effect on January 1, 2010, and shall 
        apply to drugs purchased on or after January 1, 2010.
            (2) Effectiveness.--The amendments made by this section and 
        section 7102 shall be effective and shall be taken into account 
        in determining whether a manufacturer is deemed to meet the 
        requirements of section 340B(a) of the Public Health Service Act 
        (42 U.S.C. 256b(a)), notwithstanding any other provision of law.

SEC. 7102. IMPROVEMENTS TO 340B PROGRAM INTEGRITY.

    (a) Integrity Improvements.--Subsection (d) of section 340B of the 
Public Health Service Act (42 U.S.C. 256b) is amended to read as 
follows:
    ``(d) Improvements in Program Integrity.--
            ``(1) Manufacturer compliance.--
                    ``(A) In general.--From amounts appropriated under 
                paragraph (4), the Secretary shall provide for 
                improvements in compliance by manufacturers with the 
                requirements of this section in order to prevent 
                overcharges and other violations of the discounted 
                pricing requirements specified in this section.
                    ``(B) Improvements.--The improvements described in 
                subparagraph (A) shall include the following:

[[Page 124 STAT. 824]]

                          ``(i) The development of a system to enable 
                      the Secretary to verify the accuracy of ceiling 
                      prices calculated by manufacturers under 
                      subsection (a)(1) and charged to covered entities, 
                      which shall include the following:
                                    ``(I) Developing and publishing 
                                through an appropriate policy or 
                                regulatory issuance, precisely defined 
                                standards and methodology for the 
                                calculation of ceiling prices under such 
                                subsection.
                                    ``(II) Comparing regularly the 
                                ceiling prices calculated by the 
                                Secretary with the quarterly pricing 
                                data that is reported by manufacturers 
                                to the Secretary.
                                    ``(III) Performing spot checks of 
                                sales transactions by covered entities.
                                    ``(IV) Inquiring into the cause of 
                                any pricing discrepancies that may be 
                                identified and either taking, or 
                                requiring manufacturers to take, such 
                                corrective action as is appropriate in 
                                response to such price discrepancies.
                          ``(ii) The <<NOTE: Procedures.>>  
                      establishment of procedures for manufacturers to 
                      issue refunds to covered entities in the event 
                      that there is an overcharge by the manufacturers, 
                      including the following:
                                    ``(I) Providing the Secretary with 
                                an explanation of why and how the 
                                overcharge occurred, how the refunds 
                                will be calculated, and to whom the 
                                refunds will be issued.
                                    ``(II) Oversight by the Secretary to 
                                ensure that the refunds are issued 
                                accurately and within a reasonable 
                                period of time, both in routine 
                                instances of retroactive adjustment to 
                                relevant pricing data and exceptional 
                                circumstances such as erroneous or 
                                intentional overcharging for covered 
                                drugs.
                          ``(iii) The provision of access through the 
                      Internet website of the Department of Health and 
                      Human Services to the applicable ceiling prices 
                      for covered drugs as calculated and verified by 
                      the Secretary in accordance with this section, in 
                      a manner (such as through the use of password 
                      protection) that limits such access to covered 
                      entities and adequately assures security and 
                      protection of privileged pricing data from 
                      unauthorized re-disclosure.
                          ``(iv) The development of a mechanism by 
                      which--
                                    ``(I) rebates and other discounts 
                                provided by manufacturers to other 
                                purchasers subsequent to the sale of 
                                covered drugs to covered entities are 
                                reported to the Secretary; and
                                    ``(II) appropriate credits and 
                                refunds are issued to covered entities 
                                if such discounts or rebates have the 
                                effect of lowering the applicable 
                                ceiling price for the relevant quarter 
                                for the drugs involved.
                          ``(v) Selective auditing of manufacturers and 
                      wholesalers to ensure the integrity of the drug 
                      discount program under this section.

[[Page 124 STAT. 825]]

                          ``(vi) The imposition of sanctions in the form 
                      of civil monetary penalties, which--
                                    ``(I) shall be assessed according to 
                                standards established in regulations to 
                                be promulgated by the Secretary not 
                                later than 180 days after the date of 
                                enactment of the Patient Protection and 
                                Affordable Care Act;
                                    ``(II) shall not exceed $5,000 for 
                                each instance of overcharging a covered 
                                entity that may have occurred; and
                                    ``(III) <<NOTE: Applicability.>>  
                                shall apply to any manufacturer with an 
                                agreement under this section that 
                                knowingly and intentionally charges a 
                                covered entity a price for purchase of a 
                                drug that exceeds the maximum applicable 
                                price under subsection (a)(1).
            ``(2) Covered entity compliance.--
                    ``(A) In general.--From amounts appropriated under 
                paragraph (4), the Secretary shall provide for 
                improvements in compliance by covered entities with the 
                requirements of this section in order to prevent 
                diversion and violations of the duplicate discount 
                provision and other requirements specified under 
                subsection (a)(5).
                    ``(B) Improvements.--The improvements described in 
                subparagraph (A) shall include the following:
                          ``(i) <<NOTE: Procedures.>>  The development 
                      of procedures to enable and require covered 
                      entities to regularly update (at least annually) 
                      the information on the Internet website of the 
                      Department of Health and Human Services relating 
                      to this section.
                          ``(ii) The development of a system for the 
                      Secretary to verify the accuracy of information 
                      regarding covered entities that is listed on the 
                      website described in clause (i).
                          ``(iii) <<NOTE: Guidance.>>  The development 
                      of more detailed guidance describing methodologies 
                      and options available to covered entities for 
                      billing covered drugs to State Medicaid agencies 
                      in a manner that avoids duplicate discounts 
                      pursuant to subsection (a)(5)(A).
                          ``(iv) The establishment of a single, 
                      universal, and standardized identification system 
                      by which each covered entity site can be 
                      identified by manufacturers, distributors, covered 
                      entities, and the Secretary for purposes of 
                      facilitating the ordering, purchasing, and 
                      delivery of covered drugs under this section, 
                      including the processing of chargebacks for such 
                      drugs.
                          ``(v) <<NOTE: Sanctions. Determination.>>  The 
                      imposition of sanctions, in appropriate cases as 
                      determined by the Secretary, additional to those 
                      to which covered entities are subject under 
                      subsection (a)(5)(E), through one or more of the 
                      following actions:
                                    ``(I) Where a covered entity 
                                knowingly and intentionally violates 
                                subsection (a)(5)(B), the covered entity 
                                shall be required to pay a monetary 
                                penalty to a manufacturer or 
                                manufacturers in the form of interest on 
                                sums for which the covered entity is 
                                found liable under subsection (a)(5)(E), 
                                such interest to be compounded monthly 
                                and equal

[[Page 124 STAT. 826]]

                                to the current short term interest rate 
                                as determined by the Federal Reserve for 
                                the time period for which the covered 
                                entity is liable.
                                    ``(II) Where the Secretary 
                                determines a violation of subsection 
                                (a)(5)(B) was systematic and egregious 
                                as well as knowing and intentional, 
                                removing the covered entity from the 
                                drug discount program under this section 
                                and disqualifying the entity from re-
                                entry into such program for a reasonable 
                                period of time to be determined by the 
                                Secretary.
                                    ``(III) Referring matters to 
                                appropriate Federal authorities within 
                                the Food and Drug Administration, the 
                                Office of Inspector General of 
                                Department of Health and Human Services, 
                                or other Federal agencies for 
                                consideration of appropriate action 
                                under other Federal statutes, such as 
                                the Prescription Drug Marketing Act (21 
                                U.S.C. 353).
            ``(3) Administrative dispute resolution process.--
                    ``(A) In general.--Not 
                later <<NOTE: Deadline. Regulations.>>  than 180 days 
                after the date of enactment of the Patient Protection 
                and Affordable Care Act, the Secretary shall promulgate 
                regulations to establish and implement an administrative 
                process for the resolution of claims by covered entities 
                that they have been overcharged for drugs purchased 
                under this section, and claims by manufacturers, after 
                the conduct of audits as authorized by subsection 
                (a)(5)(D), of violations of subsections (a)(5)(A) or 
                (a)(5)(B), including appropriate procedures for the 
                provision of remedies and enforcement of determinations 
                made pursuant to such process through mechanisms and 
                sanctions described in paragraphs (1)(B) and (2)(B).
                    ``(B) Deadlines and procedures.--Regulations 
                promulgated by the Secretary under subparagraph (A) 
                shall--
                          ``(i) designate or establish a decision-making 
                      official or decision-making body within the 
                      Department of Health and Human Services to be 
                      responsible for reviewing and finally resolving 
                      claims by covered entities that they have been 
                      charged prices for covered drugs in excess of the 
                      ceiling price described in subsection (a)(1), and 
                      claims by manufacturers that violations of 
                      subsection (a)(5)(A) or (a)(5)(B) have occurred;
                          ``(ii) establish such deadlines and procedures 
                      as may be necessary to ensure that claims shall be 
                      resolved fairly, efficiently, and expeditiously;
                          ``(iii) establish procedures by which a 
                      covered entity may discover and obtain such 
                      information and documents from manufacturers and 
                      third parties as may be relevant to demonstrate 
                      the merits of a claim that charges for a 
                      manufacturer's product have exceeded the 
                      applicable ceiling price under this section, and 
                      may submit such documents and information to the 
                      administrative official or body responsible for 
                      adjudicating such claim;
                          ``(iv) <<NOTE: Audits.>>  require that a 
                      manufacturer conduct an audit of a covered entity 
                      pursuant to subsection (a)(5)(D)

[[Page 124 STAT. 827]]

                      as a prerequisite to initiating administrative 
                      dispute resolution proceedings against a covered 
                      entity;
                          ``(v) permit the official or body designated 
                      under clause (i), at the request of a manufacturer 
                      or manufacturers, to consolidate claims brought by 
                      more than one manufacturer against the same 
                      covered entity where, in the judgment of such 
                      official or body, consolidation is appropriate and 
                      consistent with the goals of fairness and economy 
                      of resources; and
                          ``(vi) include provisions and procedures to 
                      permit multiple covered entities to jointly assert 
                      claims of overcharges by the same manufacturer for 
                      the same drug or drugs in one administrative 
                      proceeding, and permit such claims to be asserted 
                      on behalf of covered entities by associations or 
                      organizations representing the interests of such 
                      covered entities and of which the covered entities 
                      are members.
                    ``(C) Finality of administrative resolution.--The 
                administrative resolution of a claim or claims under the 
                regulations promulgated under subparagraph (A) shall be 
                a final agency decision and shall be binding upon the 
                parties involved, unless invalidated by an order of a 
                court of competent jurisdiction.
            ``(4) Authorization of appropriations.--There are authorized 
        to be appropriated to carry out this subsection, such sums as 
        may be necessary for fiscal year 2010 and each succeeding fiscal 
        year.''.

    (b) Conforming Amendments.--Section 340B(a) of the Public Health 
Service Act (42 U.S.C. 256b(a)) is amended--
            (1) in subsection (a)(1), by adding at the end the 
        following: ``Each such 
        agreement <<NOTE: Contracts. Reports. Deadlines.>>  shall 
        require that the manufacturer furnish the Secretary with 
        reports, on a quarterly basis, of the price for each covered 
        drug subject to the agreement that, according to the 
        manufacturer, represents the maximum price that covered entities 
        may permissibly be required to pay for the drug (referred to in 
        this section as the `ceiling price'), and shall require that the 
        manufacturer offer each covered entity covered drugs for 
        purchase at or below the applicable ceiling price if such drug 
        is made available to any other purchaser at any price.''; and
            (2) in the first sentence of subsection (a)(5)(E), as 
        redesignated by section 7101(c), by inserting ``after audit as 
        described in subparagraph (D) and'' after ``finds,''.

SEC. 7103. GAO STUDY TO MAKE RECOMMENDATIONS ON IMPROVING THE 340B 
            PROGRAM.

    (a) Report.--Not later than 18 months after the date of enactment of 
this Act, the Comptroller General of the United States shall submit to 
Congress a report that examines whether those individuals served by the 
covered entities under the program under section 340B of the Public 
Health Service Act (42 U.S.C. 256b) (referred to in this section as the 
``340B program'') are receiving optimal health care services.
    (b) Recommendations.--The report under subsection (a) shall include 
recommendations on the following:

[[Page 124 STAT. 828]]

            (1) Whether the 340B program should be expanded since it is 
        anticipated that the 47,000,000 individuals who are uninsured as 
        of the date of enactment of this Act will have health care 
        coverage once this Act is implemented.
            (2) Whether mandatory sales of certain products by the 340B 
        program could hinder patients access to those therapies through 
        any provider.
            (3) Whether income from the 340B program is being used by 
        the covered entities under the program to further the program 
        objectives.

 TITLE VIII--CLASS ACT <<NOTE: Community Living Assistance Services and 
Supports Act. 42 USC 201 note.>> 

SEC. 8001. SHORT TITLE OF TITLE.

    This title may be cited as the ``Community Living Assistance 
Services and Supports Act'' or the ``CLASS Act''.

SEC. 8002. ESTABLISHMENT OF NATIONAL VOLUNTARY INSURANCE PROGRAM FOR 
            PURCHASING COMMUNITY LIVING ASSISTANCE SERVICES AND SUPPORT.

    (a) Establishment of CLASS Program.--
            (1) In general.--The Public Health Service Act (42 U.S.C. 
        201 et seq.), as amended by section 4302(a), is amended by 
        adding at the end the following:

    ``TITLE XXXII--COMMUNITY LIVING ASSISTANCE SERVICES AND SUPPORTS

``SEC. 3201. <<NOTE: 42 USC 300ll.>>  PURPOSE.

    ``The purpose of this title is to establish a national voluntary 
insurance program for purchasing community living assistance services 
and supports in order to--
            ``(1) provide individuals with functional limitations with 
        tools that will allow them to maintain their personal and 
        financial independence and live in the community through a new 
        financing strategy for community living assistance services and 
        supports;
            ``(2) establish an infrastructure that will help address the 
        Nation's community living assistance services and supports 
        needs;
            ``(3) alleviate burdens on family caregivers; and
            ``(4) address institutional bias by providing a financing 
        mechanism that supports personal choice and independence to live 
        in the community.

``SEC. 3202. <<NOTE: 42 USC 300ll-1.>>  DEFINITIONS.

    ``In this title:
            ``(1) Active enrollee.--The term `active enrollee' means an 
        individual who is enrolled in the CLASS program in accordance 
        with section 3204 and who has paid any premiums due to maintain 
        such enrollment.
            ``(2) Actively employed.--The term `actively employed' means 
        an individual who--
                    ``(A) is reporting for work at the individual's 
                usual place of employment or at another location to 
                which the

[[Page 124 STAT. 829]]

                individual is required to travel because of the 
                individual's employment (or in the case of an individual 
                who is a member of the uniformed services, is on active 
                duty and is physically able to perform the duties of the 
                individual's position); and
                    ``(B) is able to perform all the usual and customary 
                duties of the individual's employment on the 
                individual's regular work schedule.
            ``(3) Activities of daily living.--The term `activities of 
        daily living' means each of the following activities specified 
        in section 7702B(c)(2)(B) of the Internal Revenue Code of 1986:
                    ``(A) Eating.
                    ``(B) Toileting.
                    ``(C) Transferring.
                    ``(D) Bathing.
                    ``(E) Dressing.
                    ``(F) Continence.
            ``(4) CLASS program.--The term `CLASS program' means the 
        program established under this title.
            ``(5) Eligibility assessment system.--The term `Eligibility 
        Assessment System' means the entity established by the Secretary 
        under section 3205(a)(2) to make functional eligibility 
        determinations for the CLASS program.
            ``(6) Eligible beneficiary.--
                    ``(A) In general.--The term `eligible beneficiary' 
                means any individual who is an active enrollee in the 
                CLASS program and, as of the date described in 
                subparagraph (B)--
                          ``(i) has paid premiums for enrollment in such 
                      program for at least 60 months;
                          ``(ii) has earned, with respect to at least 3 
                      calendar years that occur during the first 60 
                      months for which the individual has paid premiums 
                      for enrollment in the program, at least an amount 
                      equal to the amount of wages and self-employment 
                      income which an individual must have in order to 
                      be credited with a quarter of coverage under 
                      section 213(d) of the Social Security Act for the 
                      year; and
                          ``(iii) has paid premiums for enrollment in 
                      such program for at least 24 consecutive months, 
                      if a lapse in premium payments of more than 3 
                      months has occurred during the period that begins 
                      on the date of the individual's enrollment and 
                      ends on the date of such determination.
                    ``(B) Date described.--For purposes of subparagraph 
                (A), the date described in this subparagraph is the date 
                on which the individual is determined to have a 
                functional limitation described in section 3203(a)(1)(C) 
                that is expected to last for a continuous period of more 
                than 90 days.
                    ``(C) Regulations.--The Secretary shall promulgate 
                regulations specifying exceptions to the minimum 
                earnings requirements under subparagraph (A)(ii) for 
                purposes of being considered an eligible beneficiary for 
                certain populations.
            ``(7) Hospital; nursing facility; intermediate care facility 
        for the mentally retarded; institution for

[[Page 124 STAT. 830]]

        mental diseases.--The terms `hospital', `nursing facility', 
        `intermediate care facility for the mentally retarded', and 
        `institution for mental diseases' have the meanings given such 
        terms for purposes of Medicaid.
            ``(8) CLASS independence advisory council.--The term `CLASS 
        Independence Advisory Council' or `Council' means the Advisory 
        Council established under section 3207 to advise the Secretary.
            ``(9) CLASS independence benefit plan.--The term `CLASS 
        Independence Benefit Plan' means the benefit plan developed and 
        designated by the Secretary in accordance with section 3203.
            ``(10) CLASS independence fund.--The term `CLASS 
        Independence Fund' or `Fund' means the fund established under 
        section 3206.
            ``(11) Medicaid.--The term `Medicaid' means the program 
        established under title XIX of the Social Security Act (42 
        U.S.C. 1396 et seq.).
            ``(12) Poverty line.--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)).
            ``(13) Protection and advocacy system.--The term `Protection 
        and Advocacy System' means the system for each State established 
        under section 143 of the Developmental Disabilities Assistance 
        and Bill of Rights Act of 2000 (42 U.S.C. 15043).

``SEC. 3203. <<NOTE: 42 USC 300ll-2.>>  CLASS INDEPENDENCE BENEFIT PLAN.

    ``(a) Process for Development.--
            ``(1) In general.--The Secretary, in consultation with 
        appropriate actuaries and other experts, shall develop at least 
        3 actuarially sound benefit plans as alternatives for 
        consideration for designation by the Secretary as the CLASS 
        Independence Benefit Plan under which eligible beneficiaries 
        shall receive benefits under this title. Each of the plan 
        alternatives developed shall be designed to provide eligible 
        beneficiaries with the benefits described in section 3205 
        consistent with the following requirements:
                    ``(A) Premiums.--
                          ``(i) In general.--Beginning with the first 
                      year of the CLASS program, and for each year 
                      thereafter, subject to clauses (ii) and (iii), the 
                      Secretary shall establish all premiums to be paid 
                      by enrollees for the year based on an actuarial 
                      analysis of the 75-year costs of the program that 
                      ensures solvency throughout such 75-year period.
                          ``(ii) Nominal premium for poorest individuals 
                      and full-time students.--
                                    ``(I) In general.--The monthly 
                                premium for enrollment in the CLASS 
                                program shall not exceed the applicable 
                                dollar amount per month determined under 
                                subclause (II) for--
                                            ``(aa) any individual whose 
                                        income does not exceed the 
                                        poverty line; and
                                            ``(bb) any individual who 
                                        has not attained age 22, and is 
                                        actively employed during any

[[Page 124 STAT. 831]]

                                        period in which the individual 
                                        is a full-time student (as 
                                        determined by the Secretary).
                                    ``(II) Applicable dollar amount.--
                                The applicable dollar amount described 
                                in this subclause is the amount equal to 
                                $5, increased by the percentage increase 
                                in the consumer price index for all 
                                urban consumers (U.S. city average) for 
                                each year occurring after 2009 and 
                                before such year.
                          ``(iii) Class independence fund reserves.--At 
                      such time as the CLASS program has been in 
                      operation for 10 years, the Secretary shall 
                      establish all premiums to be paid by enrollees for 
                      the year based on an actuarial analysis that 
                      accumulated reserves in the CLASS Independence 
                      Fund would not decrease in that year. At such 
                      time <<NOTE: Determination.>>  as the Secretary 
                      determines the CLASS program demonstrates a 
                      sustained ability to finance expected yearly 
                      expenses with expected yearly premiums and 
                      interest credited to the CLASS Independence Fund, 
                      the Secretary may decrease the required amount of 
                      CLASS Independence Fund reserves.
                    ``(B) Vesting period.--A 5-year vesting period for 
                eligibility for benefits.
                    ``(C) Benefit triggers.--A benefit trigger for 
                provision of benefits that requires a determination that 
                an individual has a functional limitation, as certified 
                by a licensed health care practitioner, described in any 
                of the following clauses that is expected to last for a 
                continuous period of more than 90 days:
                          ``(i) The individual is determined to be 
                      unable to perform at least the minimum number 
                      (which may be 2 or 3) of activities of daily 
                      living as are required under the plan for the 
                      provision of benefits without substantial 
                      assistance (as defined by the Secretary) from 
                      another individual.
                          ``(ii) The individual requires substantial 
                      supervision to protect the individual from threats 
                      to health and safety due to substantial cognitive 
                      impairment.
                          ``(iii) <<NOTE: Regulations.>>  The individual 
                      has a level of functional limitation similar (as 
                      determined under regulations prescribed by the 
                      Secretary) to the level of functional limitation 
                      described in clause (i) or (ii).
                    ``(D) Cash benefit.--Payment of a cash benefit that 
                satisfies the following requirements:
                          ``(i) Minimum required amount.--The benefit 
                      amount provides an eligible beneficiary with not 
                      less than an average of $50 per day (as determined 
                      based on the reasonably expected distribution of 
                      beneficiaries receiving benefits at various 
                      benefit levels).
                          ``(ii) Amount scaled to functional ability.--
                      The benefit amount is varied based on a scale of 
                      functional ability, with not less than 2, and not 
                      more than 6, benefit level amounts.
                          ``(iii) Daily or weekly.--The benefit is paid 
                      on a daily or weekly basis.
                          ``(iv) No lifetime or aggregate limit.--The 
                      benefit is not subject to any lifetime or 
                      aggregate limit.

[[Page 124 STAT. 832]]

                    ``(E) Coordination with supplemental coverage 
                obtained through the exchange.--The benefits allow for 
                coordination with any supplemental coverage purchased 
                through an Exchange established under section 1311 of 
                the Patient Protection and Affordable Care Act.
            ``(2) Review and recommendation by the class independence 
        advisory council.--The CLASS Independence Advisory Council 
        shall--
                    ``(A) evaluate the alternative benefit plans 
                developed under paragraph (1); and
                    ``(B) recommend for designation as the CLASS 
                Independence Benefit Plan for offering to the public the 
                plan that the Council determines best balances price and 
                benefits to meet enrollees' needs in an actuarially 
                sound manner, while optimizing the probability of the 
                long-term sustainability of the CLASS program.
            ``(3) Designation by the secretary.--Not 
        later <<NOTE: Deadline.>>  than October 1, 2012, the Secretary, 
        taking into consideration the recommendation of the CLASS 
        Independence Advisory Council under paragraph (2)(B), shall 
        designate a benefit plan as the CLASS Independence Benefit 
        Plan. <<NOTE: Publication. Regulations. Public information.>>  
        The Secretary shall publish such designation, along with details 
        of the plan and the reasons for the selection by the Secretary, 
        in a final rule that allows for a period of public comment.

    ``(b) Additional Premium Requirements.--
            ``(1) Adjustment of premiums.--
                    ``(A) In general.--Except as provided in 
                subparagraphs (B), (C), (D), and (E), the amount of the 
                monthly premium determined for an individual upon such 
                individual's enrollment in the CLASS program shall 
                remain the same for as long as the individual is an 
                active enrollee in the program.
                    ``(B) Recalculated premium if required for program 
                solvency.--
                          ``(i) <<NOTE: Determination.>>  In general.--
                      Subject to clause (ii), if the Secretary 
                      determines, based on the most recent report of the 
                      Board of Trustees of the CLASS Independence Fund, 
                      the advice of the CLASS Independence Advisory 
                      Council, and the annual report of the Inspector 
                      General of the Department of Health and Human 
                      Services, and waste, fraud, and abuse, or such 
                      other information as the Secretary determines 
                      appropriate, that the monthly premiums and income 
                      to the CLASS Independence Fund for a year are 
                      projected to be insufficient with respect to the 
                      20-year period that begins with that year, the 
                      Secretary shall adjust the monthly premiums for 
                      individuals enrolled in the CLASS program as 
                      necessary (but maintaining a nominal premium for 
                      enrollees whose income is below the poverty line 
                      or who are full-time students actively employed).
                          ``(ii) Exemption from increase.--Any increase 
                      in a monthly premium imposed as result of a 
                      determination described in clause (i) shall not 
                      apply with respect to the monthly premium of any 
                      active enrollee who--
                                    ``(I) has attained age 65;

[[Page 124 STAT. 833]]

                                    ``(II) has paid premiums for 
                                enrollment in the program for at least 
                                20 years; and
                                    ``(III) is not actively employed.
                    ``(C) Recalculated premium if reenrollment after 
                more than a 3-month lapse.--
                          ``(i) In general.--The reenrollment of an 
                      individual after a 90-day period during which the 
                      individual failed to pay the monthly premium 
                      required to maintain the individual's enrollment 
                      in the CLASS program shall be treated as an 
                      initial enrollment for purposes of age-adjusting 
                      the premium for enrollment in the program.
                          ``(ii) Credit for prior months if reenrolled 
                      within 5 years.--An individual who reenrolls in 
                      the CLASS program after such a 90-day period and 
                      before the end of the 5-year period that begins 
                      with the first month for which the individual 
                      failed to pay the monthly premium required to 
                      maintain the individual's enrollment in the 
                      program shall be--
                                    ``(I) credited with any months of 
                                paid premiums that accrued prior to the 
                                individual's lapse in enrollment; and
                                    ``(II) notwithstanding the total 
                                amount of any such credited months, 
                                required to satisfy section 
                                3202(6)(A)(ii) before being eligible to 
                                receive benefits.
                    ``(D) No longer status as a full-time student.--An 
                individual subject to a nominal premium on the basis of 
                being described in subsection (a)(1)(A)(ii)(I)(bb) who 
                ceases to be described in that subsection, beginning 
                with the first month following the month in which the 
                individual ceases to be so described, shall be subject 
                to the same monthly premium as the monthly premium that 
                applies to an individual of the same age who first 
                enrolls in the program under the most similar 
                circumstances as the individual (such as the first year 
                of eligibility for enrollment in the program or in a 
                subsequent year).
                    ``(E) Penalty for reenollment after 5-year lapse.--
                In the case of an individual who reenrolls in the CLASS 
                program after the end of the 5-year period described in 
                subparagraph (C)(ii), the monthly premium required for 
                the individual shall be the age-adjusted premium that 
                would be applicable to an initially enrolling individual 
                who is the same age as the reenrolling individual, 
                increased by the greater of--
                          ``(i) an amount that the Secretary determines 
                      is actuarially sound for each month that occurs 
                      during the period that begins with the first month 
                      for which the individual failed to pay the monthly 
                      premium required to maintain the individual's 
                      enrollment in the CLASS program and ends with the 
                      month preceding the month in which the reenollment 
                      is effective; or
                          ``(ii) 1 percent of the applicable age-
                      adjusted premium for each such month occurring in 
                      such period.
            ``(2) Administrative expenses.--In determining the monthly 
        premiums for the CLASS program the Secretary may

[[Page 124 STAT. 834]]

        factor in costs for administering the program, not to exceed for 
        any year in which the program is in effect under this title, an 
        amount equal to 3 percent of all premiums paid during the year.
            ``(3) No underwriting requirements.--No underwriting (other 
        than on the basis of age in accordance with subparagraphs (D) 
        and (E) of paragraph (1)) shall be used to--
                    ``(A) determine the monthly premium for enrollment 
                in the CLASS program; or
                    ``(B) prevent an individual from enrolling in the 
                program.

    ``(c) <<NOTE: Procedures.>>  Self-attestation and Verification of 
Income.--The Secretary shall establish procedures to--
            ``(1) permit an individual who is eligible for the nominal 
        premium required under subsection (a)(1)(A)(ii), as part of 
        their automatic enrollment in the CLASS program, to self-attest 
        that their income does not exceed the poverty line or that their 
        status as a full-time student who is actively employed;
            ``(2) verify, using procedures similar to the procedures 
        used by the Commissioner of Social Security under section 
        1631(e)(1)(B)(ii) of the Social Security Act and consistent with 
        the requirements applicable to the conveyance of data and 
        information under section 1942 of such Act, the validity of such 
        self-attestation; and
            ``(3) require an individual to confirm, on at least an 
        annual basis, that their income does not exceed the poverty line 
        or that they continue to maintain such status.

``SEC. 3204. <<NOTE: 42 USC 300ll-3.>>  ENROLLMENT AND DISENROLLMENT 
            REQUIREMENTS.

    ``(a) <<NOTE: Procedures.>>  Automatic Enrollment.--
            ``(1) In general.--Subject to paragraph (2), the Secretary, 
        in coordination with the Secretary of the Treasury, shall 
        establish procedures under which each individual described in 
        subsection (c) may be automatically enrolled in the CLASS 
        program by an employer of such individual in the same manner as 
        an employer may elect to automatically enroll employees in a 
        plan under section 401(k), 403(b), or 457 of the Internal 
        Revenue Code of 1986.
            ``(2) Alternative enrollment procedures.--The procedures 
        established under paragraph (1) shall provide for an alternative 
        enrollment process for an individual described in subsection (c) 
        in the case of such an individual--
                    ``(A) who is self-employed;
                    ``(B) who has more than 1 employer; or
                    ``(C) whose employer does not elect to participate 
                in the automatic enrollment process established by the 
                Secretary.
            ``(3) Administration.--
                    ``(A) <<NOTE: Regulations.>>  In general.--The 
                Secretary and the Secretary of the Treasury shall, by 
                regulation, establish procedures to ensure that an 
                individual is not automatically enrolled in the CLASS 
                program by more than 1 employer.
                    ``(B) Form.--Enrollment in the CLASS program shall 
                be made in such manner as the Secretary may prescribe in 
                order to ensure ease of administration.

    ``(b) Election to Opt-Out.--An individual described in subsection 
(c) may elect to waive enrollment in the CLASS program

[[Page 124 STAT. 835]]

at any time in such form and manner as the Secretary and the Secretary 
of the Treasury shall prescribe.
    ``(c) Individual Described.--For purposes of enrolling in the CLASS 
program, an individual described in this paragraph is an individual--
            ``(1) who has attained age 18;
            ``(2) who--
                    ``(A) receives wages on which there is imposed a tax 
                under section 3201(a) of the Internal Revenue Code of 
                1986; or
                    ``(B) derives self-employment income on which there 
                is imposed a tax under section 1401(a) of the Internal 
                Revenue Code of 1986;
            ``(3) who is actively employed; and
            ``(4) who is not--
                    ``(A) a patient in a hospital or nursing facility, 
                an intermediate care facility for the mentally retarded, 
                or an institution for mental diseases and receiving 
                medical assistance under Medicaid; or
                    ``(B) confined in a jail, prison, other penal 
                institution or correctional facility, or by court order 
                pursuant to conviction of a criminal offense or in 
                connection with a verdict or finding described in 
                section 202(x)(1)(A)(ii) of the Social Security Act (42 
                U.S.C. 402(x)(1)(A)(ii)).

    ``(d) Rule of Construction.--Nothing in this title shall be 
construed as requiring an active enrollee to continue to satisfy 
subparagraph (B) or (C) of subsection (c)(1) in order to maintain 
enrollment in the CLASS program.
    ``(e) Payment.--
            ``(1) Payroll deduction.--An amount equal to the monthly 
        premium for the enrollment in the CLASS program of an individual 
        shall be deducted from the wages or self-employment income of 
        such individual in accordance with such procedures as the 
        Secretary, in coordination with the Secretary of the Treasury, 
        shall establish for employers who elect to deduct and withhold 
        such premiums on behalf of enrolled employees.
            ``(2) Alternative payment mechanism.--The Secretary, in 
        coordination with the Secretary of the Treasury, shall establish 
        alternative procedures for the payment of monthly premiums by an 
        individual enrolled in the CLASS program--
                    ``(A) who does not have an employer who elects to 
                deduct and withhold premiums in accordance with 
                subparagraph (A); or
                    ``(B) who does not earn wages or derive self-
                employment income.

    ``(f) Transfer of Premiums Collected.--
            ``(1) In general.--During each calendar year the Secretary 
        of the Treasury shall deposit into the CLASS Independence Fund a 
        total amount equal, in the aggregate, to 100 percent of the 
        premiums collected during that year.
            ``(2) Transfers based on estimates.--The amount deposited 
        pursuant to paragraph (1) shall be transferred in at least 
        monthly payments to the CLASS Independence Fund on the basis of 
        estimates by the Secretary and certified to the Secretary of the 
        Treasury of the amounts collected in accordance with 
        subparagraphs (A) and (B) of paragraph (5). Proper adjustments 
        shall be made in amounts subsequently transferred to

[[Page 124 STAT. 836]]

        the Fund to the extent prior estimates were in excess of, or 
        were less than, actual amounts collected.

    ``(g) Other Enrollment and Disenrollment Opportunities.--The 
Secretary, <<NOTE: Procedures.>>  in coordination with the Secretary of 
the Treasury, shall establish procedures under which--
            ``(1) an individual who, in the year of the individual's 
        initial eligibility to enroll in the CLASS program, has elected 
        to waive enrollment in the program, is eligible to elect to 
        enroll in the program, in such form and manner as the 
        Secretaries shall establish, only during an open enrollment 
        period established by the Secretaries that is specific to the 
        individual and that may not occur more frequently than 
        biennially after the date on which the individual first elected 
        to waive enrollment in the program; and
            ``(2) an individual shall only be permitted to disenroll 
        from the program (other than for nonpayment of premiums) during 
        an annual disenrollment period established by the Secretaries 
        and in such form and manner as the Secretaries shall establish.

``SEC. 3205. <<NOTE: 42 USC 300ll-4.>>  BENEFITS.

    ``(a) Determination of Eligibility.--
            ``(1) Application for receipt of benefits.--The Secretary 
        shall establish procedures under which an active enrollee shall 
        apply for receipt of benefits under the CLASS Independence 
        Benefit Plan.
            ``(2) Eligibility assessments.--
                    ``(A) In general.--Not 
                later <<NOTE: Deadline. Contracts.>>  than January 1, 
                2012, the Secretary shall--
                          ``(i) establish an Eligibility Assessment 
                      System (other than a service with which the 
                      Commissioner of Social Security has entered into 
                      an agreement, with respect to any State, to make 
                      disability determinations for purposes of title II 
                      or XVI of the Social Security Act) to provide for 
                      eligibility assessments of active enrollees who 
                      apply for receipt of benefits;
                          ``(ii) enter into an agreement with the 
                      Protection and Advocacy System for each State to 
                      provide advocacy services in accordance with 
                      subsection (d); and
                          ``(iii) enter into an agreement with public 
                      and private entities to provide advice and 
                      assistance counseling in accordance with 
                      subsection (e).
                    ``(B) Regulations.--The Secretary shall promulgate 
                regulations to develop an expedited nationally equitable 
                eligibility determination process, as certified by a 
                licensed health care practitioner, an appeals process, 
                and a redetermination process, as certified by a 
                licensed health care practitioner, including whether an 
                active enrollee is eligible for a cash benefit under the 
                program and if so, the amount of the cash benefit (in 
                accordance the sliding scale established under the 
                plan).
                    ``(C) Presumptive eligibility for certain 
                institutionalized enrollees planning to discharge.--An 
                active enrollee shall be deemed presumptively eligible 
                if the enrollee--
                          ``(i) has applied for, and attests is eligible 
                      for, the maximum cash benefit available under the 
                      sliding

[[Page 124 STAT. 837]]

                      scale established under the CLASS Independence 
                      Benefit Plan;
                          ``(ii) is a patient in a hospital (but only if 
                      the hospitalization is for long-term care), 
                      nursing facility, intermediate care facility for 
                      the mentally retarded, or an institution for 
                      mental diseases; and
                          ``(iii) <<NOTE: Deadline.>>  is in the process 
                      of, or about to begin the process of, planning to 
                      discharge from the hospital, facility, or 
                      institution, or within 60 days from the date of 
                      discharge from the hospital, facility, or 
                      institution.
                    ``(D) Appeals.--The Secretary <<NOTE: Procedures.>>  
                shall establish procedures under which an applicant for 
                benefits under the CLASS Independence Benefit Plan shall 
                be guaranteed the right to appeal an adverse 
                determination.

    ``(b) Benefits.--An eligible beneficiary shall receive the following 
benefits under the CLASS Independence Benefit Plan:
            ``(1) Cash benefit.--A cash benefit established by the 
        Secretary in accordance with the requirements of section 
        3203(a)(1)(D) that--
                    ``(A) the first year in which beneficiaries receive 
                the benefits under the plan, is not less than the 
                average dollar amount specified in clause (i) of such 
                section; and
                    ``(B) for any subsequent year, is not less than the 
                average per day dollar limit applicable under this 
                subparagraph for the preceding year, increased by the 
                percentage increase in the consumer price index for all 
                urban consumers (U.S. city average) over the previous 
                year.
            ``(2) Advocacy services.--Advocacy services in accordance 
        with subsection (d).
            ``(3) Advice and assistance counseling.--Advice and 
        assistance counseling in accordance with subsection (e).
            ``(4) Administrative expenses.--Advocacy services and advise 
        and assistance counseling services under paragraphs (2) and (3) 
        of this subsection shall be included as administrative expenses 
        under section 3203(b)(3).

    ``(c) Payment of Benefits.--
            ``(1) Life independence account.--
                    ``(A) In general.--The 
                Secretary <<NOTE: Procedures.>>  shall establish 
                procedures for administering the provision of benefits 
                to eligible beneficiaries under the CLASS Independence 
                Benefit Plan, including the payment of the cash benefit 
                for the beneficiary into a Life Independence Account 
                established by the Secretary on behalf of each eligible 
                beneficiary.
                    ``(B) Use of cash benefits.--Cash benefits paid into 
                a Life Independence Account of an eligible beneficiary 
                shall be used to purchase nonmedical services and 
                supports that the beneficiary needs to maintain his or 
                her independence at home or in another residential 
                setting of their choice in the community, including (but 
                not limited to) home modifications, assistive 
                technology, accessible transportation, homemaker 
                services, respite care, personal assistance services, 
                home care aides, and nursing support. Nothing in the 
                preceding sentence shall prevent an eligible beneficiary 
                from using cash benefits paid into a Life Independence 
                Account for obtaining assistance with decision making 
                concerning medical care, including the right to accept 
                or refuse medical or surgical treatment and the

[[Page 124 STAT. 838]]

                right to formulate advance directives or other written 
                instructions recognized under State law, such as a 
                living will or durable power of attorney for health 
                care, in the case that an injury or illness causes the 
                individual to be unable to make health care decisions.
                    ``(C) <<NOTE: Procedures.>>  Electronic management 
                of funds.--The Secretary shall establish procedures 
                for--
                          ``(i) crediting an account established on 
                      behalf of a beneficiary with the beneficiary's 
                      cash daily benefit;
                          ``(ii) allowing the beneficiary to access such 
                      account through debit cards; and
                          ``(iii) accounting for withdrawals by the 
                      beneficiary from such account.
                    ``(D) Primary payor rules for beneficiaries who are 
                enrolled in medicaid.--In the case of an eligible 
                beneficiary who is enrolled in Medicaid, the following 
                payment rules shall apply:
                          ``(i) Institutionalized beneficiary.--If the 
                      beneficiary is a patient in a hospital, nursing 
                      facility, intermediate care facility for the 
                      mentally retarded, or an institution for mental 
                      diseases, the beneficiary shall retain an amount 
                      equal to 5 percent of the beneficiary's daily or 
                      weekly cash benefit (as applicable) (which shall 
                      be in addition to the amount of the beneficiary's 
                      personal needs allowance provided under Medicaid), 
                      and the remainder of such benefit shall be applied 
                      toward the facility's cost of providing the 
                      beneficiary's care, and Medicaid shall provide 
                      secondary coverage for such care.
                          ``(ii) Beneficiaries receiving home and 
                      community-based services.--
                                    ``(I) 50 percent of benefit retained 
                                by beneficiary.--Subject to subclause 
                                (II), if a beneficiary is receiving 
                                medical assistance under Medicaid for 
                                home and community based services, the 
                                beneficiary shall retain an amount equal 
                                to 50 percent of the beneficiary's daily 
                                or weekly cash benefit (as applicable), 
                                and the remainder of the daily or weekly 
                                cash benefit shall be applied toward the 
                                cost to the State of providing such 
                                assistance (and shall not be used to 
                                claim Federal matching funds under 
                                Medicaid), and Medicaid shall provide 
                                secondary coverage for the remainder of 
                                any costs incurred in providing such 
                                assistance.
                                    ``(II) Requirement for state 
                                offset.--A State shall be paid the 
                                remainder of a beneficiary's daily or 
                                weekly cash benefit under subclause (I) 
                                only if the State home and community-
                                based waiver under section 1115 of the 
                                Social Security Act (42 U.S.C. 1315) or 
                                subsection (c) or (d) of section 1915 of 
                                such Act (42 U.S.C. 1396n), or the State 
                                plan amendment under subsection (i) of 
                                such section does not include a waiver 
                                of the requirements of section 
                                1902(a)(1) of the Social Security Act 
                                (relating to statewideness) or of 
                                section 1902(a)(10)(B) of such Act 
                                (relating to comparability) and the 
                                State offers at a minimum

[[Page 124 STAT. 839]]

                                case management services, personal care 
                                services, habilitation services, and 
                                respite care under such a waiver or 
                                State plan amendment.
                                    ``(III) Definition of home and 
                                community-based services.--In this 
                                clause, the term `home and community-
                                based services' means any services which 
                                may be offered under a home and 
                                community-based waiver authorized for a 
                                State under section 1115 of the Social 
                                Security Act (42 U.S.C. 1315) or 
                                subsection (c) or (d) of section 1915 of 
                                such Act (42 U.S.C. 1396n) or under a 
                                State plan amendment under subsection 
                                (i) of such section.
                          ``(iii) Beneficiaries enrolled in programs of 
                      all-inclusive care for the elderly (pace).--
                                    ``(I) In general.--Subject to 
                                subclause (II), if a beneficiary is 
                                receiving medical assistance under 
                                Medicaid for PACE program services under 
                                section 1934 of the Social Security Act 
                                (42 U.S.C. 1396u-4), the beneficiary 
                                shall retain an amount equal to 50 
                                percent of the beneficiary's daily or 
                                weekly cash benefit (as applicable), and 
                                the remainder of the daily or weekly 
                                cash benefit shall be applied toward the 
                                cost to the State of providing such 
                                assistance (and shall not be used to 
                                claim Federal matching funds under 
                                Medicaid), and Medicaid shall provide 
                                secondary coverage for the remainder of 
                                any costs incurred in providing such 
                                assistance.
                                    ``(II) Institutionalized recipients 
                                of pace program services.--If a 
                                beneficiary receiving assistance under 
                                Medicaid for PACE program services is a 
                                patient in a hospital, nursing facility, 
                                intermediate care facility for the 
                                mentally retarded, or an institution for 
                                mental diseases, the beneficiary shall 
                                be treated as in institutionalized 
                                beneficiary under clause (i).
            ``(2) Authorized representatives.--
                    ``(A) In general.--The 
                Secretary <<NOTE: Procedures.>>  shall establish 
                procedures to allow access to a beneficiary's cash 
                benefits by an authorized representative of the eligible 
                beneficiary on whose behalf such benefits are paid.
                    ``(B) Quality assurance and protection against fraud 
                and abuse.--The procedures established under 
                subparagraph (A) shall ensure that authorized 
                representatives of eligible beneficiaries comply with 
                standards of conduct established by the Secretary, 
                including standards requiring that such representatives 
                provide quality services on behalf of such 
                beneficiaries, do not have conflicts of interest, and do 
                not misuse benefits paid on behalf of such beneficiaries 
                or otherwise engage in fraud or abuse.
            ``(3) Commencement of benefits.--Benefits shall be paid to, 
        or on behalf of, an eligible beneficiary beginning with the 
        first month in which an application for such benefits is 
        approved.
            ``(4) Rollover option for lump-sum payment.--An eligible 
        beneficiary may elect to--

[[Page 124 STAT. 840]]

                    ``(A) defer payment of their daily or weekly benefit 
                and to rollover any such deferred benefits from month-
                to-month, but not from year-to-year; and
                    ``(B) receive a lump-sum payment of such deferred 
                benefits in an amount that may not exceed the lesser 
                of--
                          ``(i) the total amount of the accrued deferred 
                      benefits; or
                          ``(ii) the applicable annual benefit.
            ``(5) Period for determination of annual benefits.--
                    ``(A) In general.--The applicable period for 
                determining with respect to an eligible beneficiary the 
                applicable annual benefit and the amount of any accrued 
                deferred benefits is the 12-month period that commences 
                with the first month in which the beneficiary began to 
                receive such benefits, and each 12-month period 
                thereafter.
                    ``(B) Inclusion of increased benefits.--The 
                Secretary shall establish procedures under which cash 
                benefits paid to an eligible beneficiary that increase 
                or decrease as a result of a change in the functional 
                status of the beneficiary before the end of a 12-month 
                benefit period shall be included in the determination of 
                the applicable annual benefit paid to the eligible 
                beneficiary.
                    ``(C) Recoupment of unpaid, accrued benefits.--
                          ``(i) In general.--The Secretary, in 
                      coordination with the Secretary of the Treasury, 
                      shall recoup any accrued benefits in the event 
                      of--
                                    ``(I) the death of a beneficiary; or
                                    ``(II) the failure of a beneficiary 
                                to elect under paragraph (4)(B) to 
                                receive such benefits as a lump-sum 
                                payment before the end of the 12-month 
                                period in which such benefits accrued.
                          ``(ii) Payment into class independence fund.--
                      Any benefits recouped in accordance with clause 
                      (i) shall be paid into the CLASS Independence Fund 
                      and used in accordance with section 3206.
            ``(6) Requirement to recertify eligibility for receipt of 
        benefits.--An eligible beneficiary shall periodically, as 
        determined by the Secretary--
                    ``(A) recertify by submission of medical evidence 
                the beneficiary's continued eligibility for receipt of 
                benefits; and
                    ``(B) submit records of expenditures attributable to 
                the aggregate cash benefit received by the beneficiary 
                during the preceding year.
            ``(7) Supplement, not supplant other health care benefits.--
        Subject to the Medicaid payment rules under paragraph (1)(D), 
        benefits received by an eligible beneficiary shall supplement, 
        but not supplant, other health care benefits for which the 
        beneficiary is eligible under Medicaid or any other Federally 
        funded program that provides health care benefits or assistance.

    ``(d) <<NOTE: Contracts.>>  Advocacy Services.--An agreement entered 
into under subsection (a)(2)(A)(ii) shall require the Protection and 
Advocacy System for the State to--
            ``(1) assign, as needed, an advocacy counselor to each 
        eligible beneficiary that is covered by such agreement and who 
        shall provide an eligible beneficiary with--

[[Page 124 STAT. 841]]

                    ``(A) information regarding how to access the 
                appeals process established for the program;
                    ``(B) assistance with respect to the annual 
                recertification and notification required under 
                subsection (c)(6); and
                    ``(C) <<NOTE: Regulations.>>  such other assistance 
                with obtaining services as the Secretary, by regulation, 
                shall require; and
            ``(2) ensure that the System and such counselors comply with 
        the requirements of subsection (h).

    ``(e) <<NOTE: Contracts.>>  Advice and Assistance Counseling.--An 
agreement entered into under subsection (a)(2)(A)(iii) shall require the 
entity to assign, as requested by an eligible beneficiary that is 
covered by such agreement, an advice and assistance counselor who shall 
provide an eligible beneficiary with information regarding--
            ``(1) accessing and coordinating long-term services and 
        supports in the most integrated setting;
            ``(2) possible eligibility for other benefits and services;
            ``(3) development of a service and support plan;
            ``(4) information about programs established under the 
        Assistive Technology Act of 1998 and the services offered under 
        such programs;
            ``(5) available assistance with decision making concerning 
        medical care, including the right to accept or refuse medical or 
        surgical treatment and the right to formulate advance directives 
        or other written instructions recognized under State law, such 
        as a living will or durable power of attorney for health care, 
        in the case that an injury or illness causes the individual to 
        be unable to make health care decisions; and
            ``(6) such other services as the Secretary, by regulation, 
        may require.

    ``(f) No Effect on Eligibility for Other Benefits.--Benefits paid to 
an eligible beneficiary under the CLASS program shall be disregarded for 
purposes of determining or continuing the beneficiary's eligibility for 
receipt of benefits under any other Federal, State, or locally funded 
assistance program, including benefits paid under titles II, XVI, XVIII, 
XIX, or XXI of the Social Security Act (42 U.S.C. 401 et seq., 1381 et 
seq., 1395 et seq., 1396 et seq., 1397aa et seq.), under the laws 
administered by the Secretary of Veterans Affairs, under low-income 
housing assistance programs, or under the supplemental nutrition 
assistance program established under the Food and Nutrition Act of 2008 
(7 U.S.C. 2011 et seq.).
    ``(g) Rule of Construction.--Nothing in this title shall be 
construed as prohibiting benefits paid under the CLASS Independence 
Benefit Plan from being used to compensate a family caregiver for 
providing community living assistance services and supports to an 
eligible beneficiary.
    ``(h) <<NOTE: Procedures.>>  Protection Against Conflict of 
Interests.--The Secretary shall establish procedures to ensure that the 
Eligibility Assessment System, the Protection and Advocacy System for a 
State, advocacy counselors for eligible beneficiaries, and any other 
entities that provide services to active enrollees and eligible 
beneficiaries under the CLASS program comply with the following:
            ``(1) If the entity provides counseling or planning 
        services, such services are provided in a manner that fosters 
        the best interests of the active enrollee or beneficiary.

[[Page 124 STAT. 842]]

            ``(2) The entity has established operating procedures that 
        are designed to avoid or minimize conflicts of interest between 
        the entity and an active enrollee or beneficiary.
            ``(3) The entity provides information about all services and 
        options available to the active enrollee or beneficiary, to the 
        best of its knowledge, including services available through 
        other entities or providers.
            ``(4) The entity assists the active enrollee or beneficiary 
        to access desired services, regardless of the provider.
            ``(5) The entity reports the number of active enrollees and 
        beneficiaries provided with assistance by age, disability, and 
        whether such enrollees and beneficiaries received services from 
        the entity or another entity.
            ``(6) If the entity provides counseling or planning 
        services, the entity ensures that an active enrollee or 
        beneficiary is informed of any financial interest that the 
        entity has in a service provider.
            ``(7) The entity provides an active enrollee or beneficiary 
        with a list of available service providers that can meet the 
        needs of the active enrollee or beneficiary.

``SEC. 3206. <<NOTE: 42 USC 300ll-5.>>  CLASS INDEPENDENCE FUND.

    ``(a) Establishment of CLASS Independence Fund.--There is 
established in the Treasury of the United States a trust fund to be 
known as the `CLASS Independence Fund'. The Secretary of the Treasury 
shall serve as Managing Trustee of such Fund. The Fund shall consist of 
all amounts derived from payments into the Fund under sections 3204(f) 
and 3205(c)(5)(C)(ii), and remaining after investment of such amounts 
under subsection (b), including additional amounts derived as income 
from such investments. The amounts held in the Fund are appropriated and 
shall remain available without fiscal year limitation--
            ``(1) to be held for investment on behalf of individuals 
        enrolled in the CLASS program;
            ``(2) to pay the administrative expenses related to the Fund 
        and to investment under subsection (b); and
            ``(3) to pay cash benefits to eligible beneficiaries under 
        the CLASS Independence Benefit Plan.

    ``(b) Investment of Fund Balance.--The Secretary of the Treasury 
shall invest and manage the CLASS Independence Fund in the same manner, 
and to the same extent, as the Federal Supplementary Medical Insurance 
Trust Fund may be invested and managed under subsections (c), (d), and 
(e) of section 1841(d) of the Social Security Act (42 U.S.C. 1395t).
    ``(c) Board of Trustees.--
            ``(1) <<NOTE: Establishment.>>  In general.--With respect to 
        the CLASS Independence Fund, there is hereby created a body to 
        be known as the Board of Trustees of the CLASS Independence Fund 
        (hereinafter in this section referred to as the `Board of 
        Trustees') composed of the Secretary of the Treasury, the 
        Secretary of Labor, and the Secretary of Health and Human 
        Services, all ex officio, and of two members of the public (both 
        of whom may not be from the same political party), who shall be 
        nominated by the President for a term of 4 years and subject to 
        confirmation by the Senate. A member of the Board of Trustees 
        serving as a member of the public and nominated and confirmed to 
        fill a vacancy occurring during a term shall

[[Page 124 STAT. 843]]

        be nominated and confirmed only for the remainder of such term. 
        An individual nominated and confirmed as a member of the public 
        may serve in such position after the expiration of such member's 
        term until the earlier of the time at which the member's 
        successor takes office or the time at which a report of the 
        Board is first issued under paragraph (2) after the expiration 
        of the member's term. The Secretary of the Treasury shall be the 
        Managing Trustee of the Board of Trustees. The Board of Trustees 
        shall meet not less frequently than once each calendar year. A 
        person serving on the Board of Trustees shall not be considered 
        to be a fiduciary and shall not be personally liable for actions 
        taken in such capacity with respect to the Trust Fund.
            ``(2) Duties.--
                    ``(A) In general.--It shall be the duty of the Board 
                of Trustees to do the following:
                          ``(i) Hold the CLASS Independence Fund.
                          ``(ii) <<NOTE: Reports. Deadline.>>  Report to 
                      the Congress not later than the first day of April 
                      of each year on the operation and status of the 
                      CLASS Independence Fund during the preceding 
                      fiscal year and on its expected operation and 
                      status during the current fiscal year and the next 
                      2 fiscal years.
                          ``(iii) <<NOTE: Reports.>>  Report immediately 
                      to the Congress whenever the Board is of the 
                      opinion that the amount of the CLASS Independence 
                      Fund is not actuarially sound in regards to the 
                      projection under section 3203(b)(1)(B)(i).
                          ``(iv) Review the general policies followed in 
                      managing the CLASS Independence Fund, and 
                      recommend changes in such policies, including 
                      necessary changes in the provisions of law which 
                      govern the way in which the CLASS Independence 
                      Fund is to be managed.
                    ``(B) Report.--The report provided for in 
                subparagraph (A)(ii) shall--
                          ``(i) include--
                                    ``(I) a statement of the assets of, 
                                and the disbursements made from, the 
                                CLASS Independence Fund during the 
                                preceding fiscal year;
                                    ``(II) an estimate of the expected 
                                income to, and disbursements to be made 
                                from, the CLASS Independence Fund during 
                                the current fiscal year and each of the 
                                next 2 fiscal years;
                                    ``(III) a statement of the actuarial 
                                status of the CLASS Independence Fund 
                                for the current fiscal year, each of the 
                                next 2 fiscal years, and as projected 
                                over the 75-year period beginning with 
                                the current fiscal year; and
                                    ``(IV) an actuarial opinion by the 
                                Chief Actuary of the Centers for 
                                Medicare & Medicaid Services certifying 
                                that the techniques and methodologies 
                                used are generally accepted within the 
                                actuarial profession and that the 
                                assumptions and cost estimates used are 
                                reasonable; and
                          ``(ii) <<NOTE: Publication.>>  be printed as a 
                      House document of the session of the Congress to 
                      which the report is made.

[[Page 124 STAT. 844]]

                    ``(C) <<NOTE: Determination.>>  Recommendations.--If 
                the Board of Trustees determines that enrollment trends 
                and expected future benefit claims on the CLASS 
                Independence Fund are not actuarially sound in regards 
                to the projection under section 3203(b)(1)(B)(i) and are 
                unlikely to be resolved with reasonable premium 
                increases or through other means, the Board of Trustees 
                shall include in the report provided for in subparagraph 
                (A)(ii) recommendations for such legislative action as 
                the Board of Trustees determine to be appropriate, 
                including whether to adjust monthly premiums or impose a 
                temporary moratorium on new enrollments.

``SEC. 3207. <<NOTE: 42 USC 300ll-6.>>  CLASS INDEPENDENCE ADVISORY 
            COUNCIL.

    ``(a) Establishment.--There is hereby created an Advisory Committee 
to be known as the `CLASS Independence Advisory Council'.
    ``(b) Membership.--
            ``(1) In general.--The CLASS Independence Advisory Council 
        shall be composed of not more than 15 individuals, not otherwise 
        in the employ of the United States--
                    ``(A) <<NOTE: Appointment. President.>>  who shall 
                be appointed by the President without regard to the 
                civil service laws and regulations; and
                    ``(B) a majority of whom shall be representatives of 
                individuals who participate or are likely to participate 
                in the CLASS program, and shall include representatives 
                of older and younger workers, individuals with 
                disabilities, family caregivers of individuals who 
                require services and supports to maintain their 
                independence at home or in another residential setting 
                of their choice in the community, individuals with 
                expertise in long-term care or disability insurance, 
                actuarial science, economics, and other relevant 
                disciplines, as determined by the Secretary.
            ``(2) Terms.--
                    ``(A) In general.--The members of the CLASS 
                Independence Advisory Council shall serve overlapping 
                terms of 3 years (unless appointed to fill a vacancy 
                occurring prior to the expiration of a term, in which 
                case the individual shall serve for the remainder of the 
                term).
                    ``(B) Limitation.--A member shall not be eligible to 
                serve for more than 2 consecutive terms.
            ``(3) <<NOTE: President. Appointment.>>  Chair.--The 
        President shall, from time to time, appoint one of the members 
        of the CLASS Independence Advisory Council to serve as the 
        Chair.

    ``(c) Duties.--The CLASS Independence Advisory Council shall advise 
the Secretary on matters of general policy in the administration of the 
CLASS program established under this title and in the formulation of 
regulations under this title including with respect to--
            ``(1) the development of the CLASS Independence Benefit Plan 
        under section 3203;
            ``(2) the determination of monthly premiums under such plan; 
        and
            ``(3) the financial solvency of the program.

    ``(d) Application of FACA.--The Federal Advisory Committee Act (5 
U.S.C. App.), other than section 14 of that Act, shall apply to the 
CLASS Independence Advisory Council.
    ``(e) Authorization of Appropriations.--

[[Page 124 STAT. 845]]

            ``(1) In general.--There are authorized to be appropriated 
        to the CLASS Independence Advisory Council to carry out its 
        duties under this section, such sums as may be necessary for 
        fiscal year 2011 and for each fiscal year thereafter.
            ``(2) Availability.--Any sums appropriated under the 
        authorization contained in this section shall remain available, 
        without fiscal year limitation, until expended.

``SEC. 3208. <<NOTE: 42 USC 300ll-7.>>  SOLVENCY AND FISCAL 
            INDEPENDENCE; REGULATIONS; ANNUAL REPORT.

    ``(a) <<NOTE: Consultation.>>  Solvency.--The Secretary shall 
regularly consult with the Board of Trustees of the CLASS Independence 
Fund and the CLASS Independence Advisory Council, for purposes of 
ensuring that enrollees premiums are adequate to ensure the financial 
solvency of the CLASS program, both with respect to fiscal years 
occurring in the near-term and fiscal years occurring over 20- and 75-
year periods, taking into account the projections required for such 
periods under subsections (a)(1)(A)(i) and (b)(1)(B)(i) of section 3202.

    ``(b) No Taxpayer Funds Used To Pay Benefits.--No taxpayer funds 
shall be used for payment of benefits under a CLASS Independent Benefit 
Plan. <<NOTE: Definitions.>>  For purposes of this subsection, the term 
`taxpayer funds' means any Federal funds from a source other than 
premiums deposited by CLASS program participants in the CLASS 
Independence Fund and any associated interest earnings.

    ``(c) Regulations.--The Secretary shall promulgate such regulations 
as are necessary to carry out the CLASS program in accordance with this 
title. Such regulations shall include provisions to prevent fraud and 
abuse under the program.
    ``(d) <<NOTE: Effective date.>>  Annual Report.--Beginning January 
1, 2014, the Secretary shall submit an annual report to Congress on the 
CLASS program. Each report shall include the following:
            ``(1) The total number of enrollees in the program.
            ``(2) The total number of eligible beneficiaries during the 
        fiscal year.
            ``(3) The total amount of cash benefits provided during the 
        fiscal year.
            ``(4) A description of instances of fraud or abuse 
        identified during the fiscal year.
            ``(5) Recommendations for such administrative or legislative 
        action as the Secretary determines is necessary to improve the 
        program, ensure the solvency of the program, or to prevent the 
        occurrence of fraud or abuse.

``SEC. 3209. <<NOTE: 42 USC 300ll-8.>>  INSPECTOR GENERAL'S REPORT.

    ``The Inspector General of the Department of Health and Human 
Services shall submit an annual report to the Secretary and Congress 
relating to the overall progress of the CLASS program and of the 
existence of waste, fraud, and abuse in the CLASS program. Each such 
report shall include findings in the following areas:
            ``(1) The eligibility determination process.
            ``(2) The provision of cash benefits.
            ``(3) Quality assurance and protection against waste, fraud, 
        and abuse.
            ``(4) Recouping of unpaid and accrued benefits.

[[Page 124 STAT. 846]]

``SEC. 3210. <<NOTE: 42 USC 300ll-9.>>  TAX TREATMENT OF PROGRAM.

    ``The CLASS program shall be treated for purposes of the Internal 
Revenue Code of 1986 in the same manner as a qualified long-term care 
insurance contract for qualified long-term care services.''.
            (2) Conforming amendments to medicaid.--Section 1902(a) of 
        the Social Security Act (42 U.S.C. 1396a(a)), as amended by 
        section 6505, is amended by inserting after paragraph (80) the 
        following:
            ``(81) <<NOTE: Regulations.>>  provide that the State will 
        comply with such regulations regarding the application of 
        primary and secondary payor rules with respect to individuals 
        who are eligible for medical assistance under this title and are 
        eligible beneficiaries under the CLASS program established under 
        title XXXII of the Public Health Service Act as the Secretary 
        shall establish; and''.

    (b) Assurance of Adequate Infrastructure for the Provision of 
Personal Care Attendant Workers.--Section 1902(a) of the Social Security 
Act (42 U.S.C. 1396a(a)), as amended by subsection (a)(2), is amended by 
inserting after paragraph (81) the following:
            ``(82) <<NOTE: Deadline.>>  provide that, not later than 2 
        years after the date of enactment of the Community Living 
        Assistance Services and Supports Act, each State shall--
                    ``(A) assess the extent to which entities such as 
                providers of home care, home health services, home and 
                community service providers, public authorities created 
                to provide personal care services to individuals 
                eligible for medical assistance under the State plan, 
                and nonprofit organizations, are serving or have the 
                capacity to serve as fiscal agents for, employers of, 
                and providers of employment-related benefits for, 
                personal care attendant workers who provide personal 
                care services to individuals receiving benefits under 
                the CLASS program established under title XXXII of the 
                Public Health Service Act, including in rural and 
                underserved areas;
                    ``(B) <<NOTE: Designation.>>  designate or create 
                such entities to serve as fiscal agents for, employers 
                of, and providers of employment-related benefits for, 
                such workers to ensure an adequate supply of the workers 
                for individuals receiving benefits under the CLASS 
                program, including in rural and underserved areas; and
                    ``(C) ensure that the designation or creation of 
                such entities will not negatively alter or impede 
                existing programs, models, methods, or administration of 
                service delivery that provide for consumer controlled or 
                self-directed home and community services and further 
                ensure that such entities will not impede the ability of 
                individuals to direct and control their home and 
                community services, including the ability to select, 
                manage, dismiss, co-employ, or employ such workers or 
                inhibit such individuals from relying on family members 
                for the provision of personal care services.''.

    (c) <<NOTE: 42 USC 300ll note.>>  Personal Care Attendants Workforce 
Advisory Panel.--
            (1) <<NOTE: Deadline.>>  Establishment.--Not later than 90 
        days after the date of enactment of this Act, the Secretary of 
        Health and Human Services shall establish a Personal Care 
        Attendants Workforce

[[Page 124 STAT. 847]]

        Advisory Panel for the purpose of examining and advising the 
        Secretary and Congress on workforce issues related to personal 
        care attendant workers, including with respect to the adequacy 
        of the number of such workers, the salaries, wages, and benefits 
        of such workers, and access to the services provided by such 
        workers.
            (2) Membership.--In appointing members to the Personal Care 
        Attendants Workforce Advisory Panel, the Secretary shall ensure 
        that such members include the following:
                    (A) Individuals with disabilities of all ages.
                    (B) Senior individuals.
                    (C) Representatives of individuals with 
                disabilities.
                    (D) Representatives of senior individuals.
                    (E) Representatives of workforce and labor 
                organizations.
                    (F) Representatives of home and community-based 
                service providers.
                    (G) Representatives of assisted living providers.

    (d) Inclusion of Information on Supplemental Coverage in the 
National Clearinghouse for Long-term Care Information; Extension of 
Funding.--Section 6021(d) of the Deficit Reduction Act of 2005 (42 
U.S.C. 1396p note) is amended--
            (1) in paragraph (2)(A)--
                    (A) in clause (ii), by striking ``and'' at the end;
                    (B) in clause (iii), by striking the period at the 
                end and inserting ``; and''; and
                    (C) by adding at the end the following:
                          ``(iv) include information regarding the CLASS 
                      program established under title XXXII of the 
                      Public Health Service Act and coverage available 
                      for purchase through a Exchange established under 
                      section 1311 of the Patient Protection and 
                      Affordable Care Act that is supplemental coverage 
                      to the benefits provided under a CLASS 
                      Independence Benefit Plan under that program, and 
                      information regarding how benefits provided under 
                      a CLASS Independence Benefit Plan differ from 
                      disability insurance benefits.''; and
            (2) in paragraph (3), by striking ``2010'' and inserting 
        ``2015''.

    (e) <<NOTE: 42 USC 300ll note.>>  Effective Date.--The amendments 
made by subsections (a), (b), and (d) take effect on January 1, 2011.

    (f) <<NOTE: 42 USC 300ll note.>>  Rule of Construction.--Nothing in 
this title or the amendments made by this title are intended to replace 
or displace public or private disability insurance benefits, including 
such benefits that are for income replacement.

                      TITLE IX--REVENUE PROVISIONS

                  Subtitle A--Revenue Offset Provisions

SEC. 9001. EXCISE TAX ON HIGH COST EMPLOYER-SPONSORED HEALTH COVERAGE.

    (a) In General.--Chapter 43 of the Internal Revenue Code of 1986, as 
amended by section 1513, is amended by adding at the end the following:

[[Page 124 STAT. 848]]

``SEC. 4980I. <<NOTE: 26 USC 4980I.>>  EXCISE TAX ON HIGH COST EMPLOYER-
            SPONSORED HEALTH COVERAGE.

    ``(a) Imposition of Tax.--If--
            ``(1) an employee is covered under any applicable employer-
        sponsored coverage of an employer at any time during a taxable 
        period, and
            ``(2) there is any excess benefit with respect to the 
        coverage,

there is hereby imposed a tax equal to 40 percent of the excess benefit.
    ``(b) Excess Benefit.--For purposes of this section--
            ``(1) <<NOTE: Definition.>>  In general.--The term `excess 
        benefit' means, with respect to any applicable employer-
        sponsored coverage made available by an employer to an employee 
        during any taxable period, the sum of the excess amounts 
        determined under paragraph (2) for months during the taxable 
        period.
            ``(2) Monthly excess amount.--The excess amount determined 
        under this paragraph for any month is the excess (if any) of--
                    ``(A) the aggregate cost of the applicable employer-
                sponsored coverage of the employee for the month, over
                    ``(B) an amount equal to \1/12\ of the annual 
                limitation under paragraph (3) for the calendar year in 
                which the month occurs.
            ``(3) Annual limitation.--For purposes of this subsection--
                    ``(A) In general.--The annual limitation under this 
                paragraph for any calendar year is the dollar limit 
                determined under subparagraph (C) for the calendar year.
                    ``(B) Applicable annual limitation.--The annual 
                limitation which applies for any month shall be 
                determined on the basis of the type of coverage (as 
                determined under subsection (f)(1)) provided to the 
                employee by the employer as of the beginning of the 
                month.
                    ``(C) Applicable dollar limit.--Except as provided 
                in subparagraph (D)--
                          ``(i) 2013.--In the case of 2013, the dollar 
                      limit under this subparagraph is--
                                    ``(I) in the case of an employee 
                                with self-only coverage, $8,500, and
                                    ``(II) in the case of an employee 
                                with coverage other than self-only 
                                coverage, $23,000.
                          ``(ii) Exception for certain individuals.--In 
                      the case of an individual who is a qualified 
                      retiree or who participates in a plan sponsored by 
                      an employer the majority of whose employees are 
                      engaged in a high-risk profession or employed to 
                      repair or install electrical or telecommunications 
                      lines--
                                    ``(I) the dollar amount in clause 
                                (i)(I) (determined after the application 
                                of subparagraph (D)) shall be increased 
                                by $1,350, and
                                    ``(II) the dollar amount in clause 
                                (i)(II) (determined after the 
                                application of subparagraph (D)) shall 
                                be increased by $3,000.
                          ``(iii) Subsequent years.--In the case of any 
                      calendar year after 2013, each of the dollar 
                      amounts under clauses (i) and (ii) shall be 
                      increased to the amount equal to such amount as in 
                      effect for the

[[Page 124 STAT. 849]]

                      calendar year preceding such year, increased by an 
                      amount equal to the product of--
                                    ``(I) such amount as so in effect, 
                                multiplied by
                                    ``(II) the cost-of-living adjustment 
                                determined under section 1(f)(3) for 
                                such year (determined by substituting 
                                the calendar year that is 2 years before 
                                such year for `1992' in subparagraph (B) 
                                thereof), increased by 1 percentage 
                                point.
                      If any amount determined under this clause is not 
                      a multiple of $50, such amount shall be rounded to 
                      the nearest multiple of $50.
                    ``(D) Transition rule for states with highest 
                coverage costs.--
                          ``(i) In general.--If an employee is a 
                      resident of a high cost State on the first day of 
                      any month beginning in 2013, 2014, or 2015, the 
                      annual limitation under this paragraph for such 
                      month with respect to such employee shall be an 
                      amount equal to the applicable percentage of the 
                      annual limitation (determined without regard to 
                      this subparagraph or subparagraph (C)(ii)).
                          ``(ii) Applicable percentage.--The applicable 
                      percentage is 120 percent for 2013, 110 percent 
                      for 2014, and 105 percent for 2015.
                          ``(iii) <<NOTE: Definition.>>  High cost 
                      state.--The term `high cost State' means each of 
                      the 17 States which the Secretary of Health and 
                      Human Services, in consultation with the 
                      Secretary, estimates had the highest average cost 
                      during 2012 for employer-sponsored coverage under 
                      health plans. The Secretary's estimate shall be 
                      made on the basis of aggregate premiums paid in 
                      the State for such health plans, determined using 
                      the most recent data available as of August 31, 
                      2012.

    ``(c) Liability To Pay Tax.--
            ``(1) In general.--Each coverage provider shall pay the tax 
        imposed by subsection (a) on its applicable share of the excess 
        benefit with respect to an employee for any taxable period.
            ``(2) <<NOTE: Definitions.>>  Coverage provider.--For 
        purposes of this subsection, the term `coverage provider' means 
        each of the following:
                    ``(A) Health insurance coverage.--If the applicable 
                employer-sponsored coverage consists of coverage under a 
                group health plan which provides health insurance 
                coverage, the health insurance issuer.
                    ``(B) HSA and msa contributions.--If the applicable 
                employer-sponsored coverage consists of coverage under 
                an arrangement under which the employer makes 
                contributions described in subsection (b) or (d) of 
                section 106, the employer.
                    ``(C) Other coverage.--In the case of any other 
                applicable employer-sponsored coverage, the person that 
                administers the plan benefits.
            ``(3) Applicable share.--For purposes of this subsection, a 
        coverage provider's applicable share of an excess benefit for 
        any taxable period is the amount which bears the same ratio to 
        the amount of such excess benefit as--

[[Page 124 STAT. 850]]

                    ``(A) the cost of the applicable employer-sponsored 
                coverage provided by the provider to the employee during 
                such period, bears to
                    ``(B) the aggregate cost of all applicable employer-
                sponsored coverage provided to the employee by all 
                coverage providers during such period.
            ``(4) Responsibility to calculate tax and applicable 
        shares.--
                    ``(A) In general.--Each employer shall--
                          ``(i) calculate for each taxable period the 
                      amount of the excess benefit subject to the tax 
                      imposed by subsection (a) and the applicable share 
                      of such excess benefit for each coverage provider, 
                      and
                          ``(ii) <<NOTE: Notification.>>  notify, at 
                      such time and in such manner as the Secretary may 
                      prescribe, the Secretary and each coverage 
                      provider of the amount so determined for the 
                      provider.
                    ``(B) Special rule for multiemployer plans.--In the 
                case of applicable employer-sponsored coverage made 
                available to employees through a multiemployer plan (as 
                defined in section 414(f)), the plan sponsor shall make 
                the calculations, and provide the notice, required under 
                subparagraph (A).

    ``(d) Applicable Employer-Sponsored Coverage; Cost.--For purposes of 
this section--
            ``(1) Applicable employer-sponsored coverage.--
                    ``(A) <<NOTE: Definitions.>>  In general.--The term 
                `applicable employer-sponsored coverage' means, with 
                respect to any employee, coverage under any group health 
                plan made available to the employee by an employer which 
                is excludable from the employee's gross income under 
                section 106, or would be so excludable if it were 
                employer-provided coverage (within the meaning of such 
                section 106).
                    ``(B) Exceptions.--The term `applicable employer-
                sponsored coverage' shall not include--
                          ``(i) any coverage (whether through insurance 
                      or otherwise) described in section 9832(c)(1)(A) 
                      or for long-term care, or
                          ``(ii) any coverage described in section 
                      9832(c)(3) the payment for which is not excludable 
                      from gross income and for which a deduction under 
                      section 162(l) is not allowable.
                    ``(C) Coverage includes employee paid portion.--
                Coverage shall be treated as applicable employer-
                sponsored coverage without regard to whether the 
                employer or employee pays for the coverage.
                    ``(D) Self-employed individual.--In the case of an 
                individual who is an employee within the meaning of 
                section 401(c)(1), coverage under any group health plan 
                providing health insurance coverage shall be treated as 
                applicable employer-sponsored coverage if a deduction is 
                allowable under section 162(l) with respect to all or 
                any portion of the cost of the coverage.
                    ``(E) Governmental plans included.--Applicable 
                employer-sponsored coverage shall include coverage under 
                any group health plan established and maintained 
                primarily for its civilian employees by the Government 
                of

[[Page 124 STAT. 851]]

                the United States, by the government of any State or 
                political subdivision thereof, or by any agency or 
                instrumentality of any such government.
            ``(2) Determination of cost.--
                    ``(A) In general.--The cost of applicable employer-
                sponsored coverage shall be determined under rules 
                similar to the rules of section 4980B(f)(4), except that 
                in determining such cost, any portion of the cost of 
                such coverage which is attributable to the tax imposed 
                under this section shall not be taken into account and 
                the amount of such cost shall be calculated separately 
                for self-only coverage and other coverage. In the case 
                of applicable employer-sponsored coverage which provides 
                coverage to retired employees, the plan may elect to 
                treat a retired employee who has not attained the age of 
                65 and a retired employee who has attained the age of 65 
                as similarly situated beneficiaries.
                    ``(B) Health fsas.--In the case of applicable 
                employer-sponsored coverage consisting of coverage under 
                a flexible spending arrangement (as defined in section 
                106(c)(2)), the cost of the coverage shall be equal to 
                the sum of--
                          ``(i) the amount of employer contributions 
                      under any salary reduction election under the 
                      arrangement, plus
                          ``(ii) the amount determined under 
                      subparagraph (A) with respect to any reimbursement 
                      under the arrangement in excess of the 
                      contributions described in clause (i).
                    ``(C) Archer msas and hsas.--In the case of 
                applicable employer-sponsored coverage consisting of 
                coverage under an arrangement under which the employer 
                makes contributions described in subsection (b) or (d) 
                of section 106, the cost of the coverage shall be equal 
                to the amount of employer contributions under the 
                arrangement.
                    ``(D) Allocation on a monthly basis.--If cost is 
                determined on other than a monthly basis, the cost shall 
                be allocated to months in a taxable period on such basis 
                as the Secretary may prescribe.

    ``(e) Penalty for Failure To Properly Calculate Excess Benefit.--
            ``(1) In general.--If, for any taxable period, the tax 
        imposed by subsection (a) exceeds the tax determined under such 
        subsection with respect to the total excess benefit calculated 
        by the employer or plan sponsor under subsection (c)(4)--
                    ``(A) each coverage provider shall pay the tax on 
                its applicable share (determined in the same manner as 
                under subsection (c)(4)) of the excess, but no penalty 
                shall be imposed on the provider with respect to such 
                amount, and
                    ``(B) the employer or plan sponsor shall, in 
                addition to any tax imposed by subsection (a), pay a 
                penalty in an amount equal to such excess, plus interest 
                at the underpayment rate determined under section 6621 
                for the period beginning on the due date for the payment 
                of tax imposed by subsection (a) to which the excess 
                relates and ending on the date of payment of the 
                penalty.

[[Page 124 STAT. 852]]

            ``(2) Limitations on penalty.--
                    ``(A) Penalty not to apply where failure not 
                discovered exercising reasonable diligence.--No penalty 
                shall be imposed by paragraph (1)(B) on any failure to 
                properly calculate the excess benefit during any period 
                for which it is established to the satisfaction of the 
                Secretary that the employer or plan sponsor neither 
                knew, nor exercising reasonable diligence would have 
                known, that such failure existed.
                    ``(B) Penalty not to apply to failures corrected 
                within 30 days.--No penalty shall be imposed by 
                paragraph (1)(B) on any such failure if--
                          ``(i) such failure was due to reasonable cause 
                      and not to willful neglect, and
                          ``(ii) such failure is corrected during the 
                      30-day period beginning on the 1st date that the 
                      employer knew, or exercising reasonable diligence 
                      would have known, that such failure existed.
                    ``(C) Waiver by secretary.--In the case of any such 
                failure which is due to reasonable cause and not to 
                willful neglect, the Secretary may waive part or all of 
                the penalty imposed by paragraph (1), to the extent that 
                the payment of such penalty would be excessive or 
                otherwise inequitable relative to the failure involved.

    ``(f) Other Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Coverage determinations.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), an employee shall be treated as having 
                self-only coverage with respect to any applicable 
                employer-sponsored coverage of an employer.
                    ``(B) Minimum essential coverage.--An employee shall 
                be treated as having coverage other than self-only 
                coverage only if the employee is enrolled in coverage 
                other than self-only coverage in a group health plan 
                which provides minimum essential coverage (as defined in 
                section 5000A(f)) to the employee and at least one other 
                beneficiary, and the benefits provided under such 
                minimum essential coverage do not vary based on whether 
                any individual covered under such coverage is the 
                employee or another beneficiary.
            ``(2) Qualified retiree.--The term `qualified retiree' means 
        any individual who--
                    ``(A) is receiving coverage by reason of being a 
                retiree,
                    ``(B) has attained age 55, and
                    ``(C) is not entitled to benefits or eligible for 
                enrollment under the Medicare program under title XVIII 
                of the Social Security Act.
            ``(3) Employees engaged in high-risk profession.--The term 
        `employees engaged in a high-risk profession' means law 
        enforcement officers (as such term is defined in section 1204 of 
        the Omnibus Crime Control and Safe Streets Act of 1968), 
        employees in fire protection activities (as such term is defined 
        in section 3(y) of the Fair Labor Standards Act of 1938), 
        individuals who provide out-of-hospital emergency medical care 
        (including emergency medical technicians, paramedics, and first-
        responders), and individuals engaged in the construction,

[[Page 124 STAT. 853]]

        mining, agriculture (not including food processing), forestry, 
        and fishing industries. Such term includes an employee who is 
        retired from a high-risk profession described in the preceding 
        sentence, if such employee satisfied the requirements of such 
        sentence for a period of not less than 20 years during the 
        employee's employment.
            ``(4) Group health plan.--The term `group health plan' has 
        the meaning given such term by section 5000(b)(1).
            ``(5) Health insurance coverage; health insurance issuer.--
                    ``(A) Health insurance coverage.--The term `health 
                insurance coverage' has the meaning given such term by 
                section 9832(b)(1) (applied without regard to 
                subparagraph (B) thereof, except as provided by the 
                Secretary in regulations).
                    ``(B) Health insurance issuer.--The term `health 
                insurance issuer' has the meaning given such term by 
                section 9832(b)(2).
            ``(6) Person that administers the plan benefits.--The term 
        `person that administers the plan benefits' shall include the 
        plan sponsor if the plan sponsor administers benefits under the 
        plan.
            ``(7) Plan sponsor.--The term `plan sponsor' has the meaning 
        given such term in section 3(16)(B) of the Employee Retirement 
        Income Security Act of 1974.
            ``(8) Taxable period.--The term `taxable period' means the 
        calendar year or such shorter period as the Secretary may 
        prescribe. The Secretary may have different taxable periods for 
        employers of varying sizes.
            ``(9) 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.
            ``(10) Denial of deduction.--For denial of a deduction for 
        the tax imposed by this section, see section 275(a)(6).

    ``(g) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary to carry out this section.''.
    (b) Clerical Amendment.--The table of sections for chapter 43 of 
such Code, as amended by section 1513, is amended by adding at the end 
the following new item:

``Sec. 4980I. Excise tax on high cost employer-sponsored health 
           coverage.''.

    (c) <<NOTE: 26 USC 4980I note.>>  Effective Date.--The amendments 
made by this section shall apply to taxable years beginning after 
December 31, 2012.

SEC. 9002. INCLUSION OF COST OF EMPLOYER-SPONSORED HEALTH COVERAGE ON W-
            2.

    (a) In General.--Section 6051(a) of the Internal Revenue Code of 
1986 <<NOTE: 26 USC 6051.>>  (relating to receipts for employees) 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 after paragraph (13) the following new paragraph:
            ``(14) the aggregate cost (determined under rules similar to 
        the rules of section 4980B(f)(4)) of applicable employer-
        sponsored coverage (as defined in section 4980I(d)(1)), except 
        that this paragraph shall not apply to--
                    ``(A) coverage to which paragraphs (11) and (12) 
                apply, or

[[Page 124 STAT. 854]]

                    ``(B) the amount of any salary reduction 
                contributions to a flexible spending arrangement (within 
                the meaning of section 125).''.

    (b) <<NOTE: 26 USC 6051 note.>>  Effective Date.--The amendments 
made by this section shall apply to taxable years beginning after 
December 31, 2010.

SEC. 9003. DISTRIBUTIONS FOR MEDICINE QUALIFIED ONLY IF FOR PRESCRIBED 
            DRUG OR INSULIN.

    (a) HSAs.--Subparagraph (A) of section 223(d)(2) of the Internal 
Revenue Code of 1986 <<NOTE: 26 USC 223.>>  is amended by adding at the 
end the following: ``Such term shall include an amount paid for medicine 
or a drug only if such medicine or drug is a prescribed drug (determined 
without regard to whether such drug is available without a prescription) 
or is insulin.''.

    (b) Archer MSAs.--Subparagraph (A) of section 220(d)(2) of the 
Internal Revenue Code of 1986 <<NOTE: 26 USC 220.>>  is amended by 
adding at the end the following: ``Such term shall include an amount 
paid for medicine or a drug only if such medicine or drug is a 
prescribed drug (determined without regard to whether such drug is 
available without a prescription) or is insulin.''.

    (c) Health Flexible Spending Arrangements and Health Reimbursement 
Arrangements.--Section 106 of the Internal Revenue Code of 
1986 <<NOTE: 26 USC 106.>>  is amended by adding at the end the 
following new subsection:

    ``(f) Reimbursements for Medicine Restricted to Prescribed Drugs and 
Insulin.--For purposes of this section and section 105, reimbursement 
for expenses incurred for a medicine or a drug shall be treated as a 
reimbursement for medical expenses only if such medicine or drug is a 
prescribed drug (determined without regard to whether such drug is 
available without a prescription) or is insulin.''.
    (d) Effective Dates.--
            (1) <<NOTE: 26 USC 220 note.>>  Distributions from savings 
        accounts.--The amendments made by subsections (a) and (b) shall 
        apply to amounts paid with respect to taxable years beginning 
        after December 31, 2010.
            (2) <<NOTE: 26 USC 106 note.>>  Reimbursements.--The 
        amendment made by subsection (c) shall apply to expenses 
        incurred with respect to taxable years beginning after December 
        31, 2010.

SEC. 9004. INCREASE IN ADDITIONAL TAX ON DISTRIBUTIONS FROM HSAS AND 
            ARCHER MSAS NOT USED FOR QUALIFIED MEDICAL EXPENSES.

    (a) HSAs.--Section 223(f)(4)(A) of the Internal Revenue Code of 1986 
is amended by striking ``10 percent'' and inserting ``20 percent''.
    (b) Archer MSAs.--Section 220(f)(4)(A) of the Internal Revenue Code 
of 1986 is amended by striking ``15 percent'' and inserting ``20 
percent''.
    (c) <<NOTE: 26 USC 220 note.>>  Effective Date.--The amendments made 
by this section shall apply to distributions made after December 31, 
2010.

SEC. 9005. LIMITATION ON HEALTH FLEXIBLE SPENDING ARRANGEMENTS UNDER 
            CAFETERIA PLANS.

    (a) In General.--Section 125 of the Internal Revenue Code of 
1986 <<NOTE: 26 USC 125.>>  is amended--
            (1) by redesignating subsections (i) and (j) as subsections 
        (j) and (k), respectively, and

[[Page 124 STAT. 855]]

            (2) by inserting after subsection (h) the following new 
        subsection:

    ``(i) Limitation on Health Flexible Spending Arrangements.--For 
purposes of this section, if a benefit is provided under a cafeteria 
plan through employer contributions to a health flexible spending 
arrangement, such benefit shall not be treated as a qualified benefit 
unless the cafeteria plan provides that an employee may not elect for 
any taxable year to have salary reduction contributions in excess of 
$2,500 made to such arrangement.''.
    (b) <<NOTE: 26 USC 125 note.>>  Effective Date.--The amendments made 
by this section shall apply to taxable years beginning after December 
31, 2010.

SEC. 9006. EXPANSION OF INFORMATION REPORTING REQUIREMENTS.

    (a) In General.--Section 6041 of the Internal Revenue Code of 
1986 <<NOTE: 26 USC 6041.>>  is amended by adding at the end the 
following new subsections:

    ``(h) Application to Corporations.--Notwithstanding any regulation 
prescribed by the Secretary before the date of the enactment of this 
subsection, for purposes of this section the term `person' includes any 
corporation that is not an organization exempt from tax under section 
501(a).
    ``(i) Regulations.--The Secretary may prescribe such regulations and 
other guidance as may be appropriate or necessary to carry out the 
purposes of this section, including rules to prevent duplicative 
reporting of transactions.''.
    (b) Payments for Property and Other Gross Proceeds.--Subsection (a) 
of section 6041 of the Internal Revenue Code of 1986 is amended--
            (1) by inserting ``amounts in consideration for property,'' 
        after ``wages,'',
            (2) by inserting ``gross proceeds,'' after ``emoluments, or 
        other'', and
            (3) by inserting ``gross proceeds,'' after ``setting forth 
        the amount of such''.

    (c) Effective Date.--The amendments made by this section shall apply 
to payments made after December 31, 2011.

SEC. 9007. ADDITIONAL REQUIREMENTS FOR CHARITABLE HOSPITALS.

    (a) Requirements To Qualify as Section 501(c)(3) Charitable Hospital 
Organization.--Section 501 of the Internal Revenue Code of 
1986 <<NOTE: 26 USC 501.>>  (relating to exemption from tax on 
corporations, certain trusts, etc.) is amended by redesignating 
subsection (r) as subsection (s) and by inserting after subsection (q) 
the following new subsection:

    ``(r) Additional Requirements for Certain Hospitals.--
            ``(1) <<NOTE: Applicability.>>  In general.--A hospital 
        organization to which this subsection applies shall not be 
        treated as described in subsection (c)(3) unless the 
        organization--
                    ``(A) meets the community health needs assessment 
                requirements described in paragraph (3),
                    ``(B) meets the financial assistance policy 
                requirements described in paragraph (4),
                    ``(C) meets the requirements on charges described in 
                paragraph (5), and
                    ``(D) meets the billing and collection requirement 
                described in paragraph (6).
            ``(2) Hospital organizations to which subsection applies.--

[[Page 124 STAT. 856]]

                    ``(A) In general.--This subsection shall apply to--
                          ``(i) an organization which operates a 
                      facility which is required by a State to be 
                      licensed, registered, or similarly recognized as a 
                      hospital, and
                          ``(ii) any other organization which the 
                      Secretary determines has the provision of hospital 
                      care as its principal function or purpose 
                      constituting the basis for its exemption under 
                      subsection (c)(3) (determined without regard to 
                      this subsection).
                    ``(B) Organizations with more than 1 hospital 
                facility.--If a hospital organization operates more than 
                1 hospital facility--
                          ``(i) the organization shall meet the 
                      requirements of this subsection separately with 
                      respect to each such facility, and
                          ``(ii) the organization shall not be treated 
                      as described in subsection (c)(3) with respect to 
                      any such facility for which such requirements are 
                      not separately met.
            ``(3) Community health needs assessments.--
                    ``(A) In general.--An organization meets the 
                requirements of this paragraph with respect to any 
                taxable year only if the organization--
                          ``(i) has conducted a community health needs 
                      assessment which meets the requirements of 
                      subparagraph (B) in such taxable year or in either 
                      of the 2 taxable years immediately preceding such 
                      taxable year, and
                          ``(ii) has adopted an implementation strategy 
                      to meet the community health needs identified 
                      through such assessment.
                    ``(B) Community health needs assessment.--A 
                community health needs assessment meets the requirements 
                of this paragraph if such community health needs 
                assessment--
                          ``(i) takes into account input from persons 
                      who represent the broad interests of the community 
                      served by the hospital facility, including those 
                      with special knowledge of or expertise in public 
                      health, and
                          ``(ii) <<NOTE: Public information.>>  is made 
                      widely available to the public.
            ``(4) Financial assistance policy.--An organization meets 
        the requirements of this paragraph if the organization 
        establishes the following policies:
                    ``(A) Financial assistance policy.--A written 
                financial assistance policy which includes--
                          ``(i) eligibility criteria for financial 
                      assistance, and whether such assistance includes 
                      free or discounted care,
                          ``(ii) the basis for calculating amounts 
                      charged to patients,
                          ``(iii) the method for applying for financial 
                      assistance,
                          ``(iv) in the case of an organization which 
                      does not have a separate billing and collections 
                      policy, the actions the organization may take in 
                      the event of non-payment, including collections 
                      action and reporting to credit agencies, and

[[Page 124 STAT. 857]]

                          ``(v) measures to widely publicize the policy 
                      within the community to be served by the 
                      organization.
                    ``(B) Policy relating to emergency medical care.--A 
                written policy requiring the organization to provide, 
                without discrimination, care for emergency medical 
                conditions (within the meaning of section 1867 of the 
                Social Security Act (42 U.S.C. 1395dd)) to individuals 
                regardless of their eligibility under the financial 
                assistance policy described in subparagraph (A).
            ``(5) Limitation on charges.--An organization meets the 
        requirements of this paragraph if the organization--
                    ``(A) limits amounts charged for emergency or other 
                medically necessary care provided to individuals 
                eligible for assistance under the financial assistance 
                policy described in paragraph (4)(A) to not more than 
                the lowest amounts charged to individuals who have 
                insurance covering such care, and
                    ``(B) prohibits the use of gross charges.
            ``(6) Billing and collection requirements.--An organization 
        meets the requirement of this paragraph only if the organization 
        does not engage in extraordinary collection actions before the 
        organization has made reasonable efforts to determine whether 
        the individual is eligible for assistance under the financial 
        assistance policy described in paragraph (4)(A).
            ``(7) <<NOTE: Regulations. Guidelines.>>  Regulatory 
        authority.--The Secretary shall issue such regulations and 
        guidance as may be necessary to carry out the provisions of this 
        subsection, including guidance relating to what constitutes 
        reasonable efforts to determine the eligibility of a patient 
        under a financial assistance policy for purposes of paragraph 
        (6).''.

    (b) Excise Tax for Failures To Meet Hospital Exemption 
Requirements.--
            (1) In general.--Subchapter D of chapter 42 of the Internal 
        Revenue Code of 1986 (relating to failure by certain charitable 
        organizations to meet certain qualification requirements) is 
        amended by adding at the end the following new section:

``SEC. 4959. <<NOTE: 26 USC 4959.>>  TAXES ON FAILURES BY HOSPITAL 
            ORGANIZATIONS.

    ``If a hospital organization to which section 501(r) applies fails 
to meet the requirement of section 501(r)(3) for any taxable year, there 
is imposed on the organization a tax equal to $50,000.''.
            (2) Conforming amendment.--The table of sections for 
        subchapter D of chapter 42 of such Code is amended by adding at 
        the end the following new item:

``Sec. 4959. Taxes on failures by hospital organizations.''.

    (c) <<NOTE: 26 USC 501 note.>>  Mandatory Review of Tax Exemption 
for Hospitals.--The Secretary <<NOTE: Deadline.>>  of the Treasury or 
the Secretary's delegate shall review at least once every 3 years the 
community benefit activities of each hospital organization to which 
section 501(r) of the Internal Revenue Code of 1986 (as added by this 
section) applies.

    (d) Additional Reporting Requirements.--
            (1) Community health needs assessments and audited financial 
        statements.--Section 6033(b) of the Internal Revenue Code of 
        1986 <<NOTE: 26 USC 6033.>>  (relating to certain organizations 
        described in section 501(c)(3)) is amended by striking ``and'' 
        at the end

[[Page 124 STAT. 858]]

        of paragraph (14), by redesignating paragraph (15) as paragraph 
        (16), and by inserting after paragraph (14) the following new 
        paragraph:
            ``(15) in the case of an organization to which the 
        requirements of section 501(r) apply for the taxable year--
                    ``(A) a description of how the organization is 
                addressing the needs identified in each community health 
                needs assessment conducted under section 501(r)(3) and a 
                description of any such needs that are not being 
                addressed together with the reasons why such needs are 
                not being addressed, and
                    ``(B) the audited financial statements of such 
                organization (or, in the case of an organization the 
                financial statements of which are included in a 
                consolidated financial statement with other 
                organizations, such consolidated financial 
                statement).''.
            (2) Taxes.--Section 6033(b)(10) of such Code is amended by 
        striking ``and'' at the end of subparagraph (B), by inserting 
        ``and'' at the end of subparagraph (C), and by adding at the end 
        the following new subparagraph:
                    ``(D) section 4959 (relating to taxes on failures by 
                hospital organizations),''.

    (e) <<NOTE: 26 USC 501 note.>>  Reports.--
            (1) Report on levels of charity care.--The Secretary of the 
        Treasury, in consultation with the Secretary of Health and Human 
        Services, shall submit to the Committees on Ways and Means, 
        Education and Labor, and Energy and Commerce of the House of 
        Representatives and to the Committees on Finance and Health, 
        Education, Labor, and Pensions of the Senate an annual report on 
        the following:
                    (A) Information with respect to private tax-exempt, 
                taxable, and government-owned hospitals regarding--
                          (i) levels of charity care provided,
                          (ii) bad debt expenses,
                          (iii) unreimbursed costs for services provided 
                      with respect to means-tested government programs, 
                      and
                          (iv) unreimbursed costs for services provided 
                      with respect to non-means tested government 
                      programs.
                    (B) Information with respect to private tax-exempt 
                hospitals regarding costs incurred for community benefit 
                activities.
            (2) Report on trends.--
                    (A) Study.--The Secretary of the Treasury, in 
                consultation with the Secretary of Health and Human 
                Services, shall conduct a study on trends in the 
                information required to be reported under paragraph (1).
                    (B) Report.--Not later than 5 years after the date 
                of the enactment of this Act, the Secretary of the 
                Treasury, in consultation with the Secretary of Health 
                and Human Services, shall submit a report on the study 
                conducted under subparagraph (A) to the Committees on 
                Ways and Means, Education and Labor, and Energy and 
                Commerce of the House of Representatives and to the 
                Committees on Finance and Health, Education, Labor, and 
                Pensions of the Senate.

    (f) <<NOTE: Applicability. 26 USC 501 note.>>  Effective Dates.--

[[Page 124 STAT. 859]]

            (1) In general.--Except as provided in paragraphs (2) and 
        (3), the amendments made by this section shall apply to taxable 
        years beginning after the date of the enactment of this Act.
            (2) Community health needs assessment.--The requirements of 
        section 501(r)(3) of the Internal Revenue Code of 1986, as added 
        by subsection (a), shall apply to taxable years beginning after 
        the date which is 2 years after the date of the enactment of 
        this Act.
            (3) Excise tax.--The amendments made by subsection (b) shall 
        apply to failures occurring after the date of the enactment of 
        this Act.

SEC. 9008. <<NOTE: 26 USC 4001 note prec.>>  IMPOSITION OF ANNUAL FEE ON 
            BRANDED PRESCRIPTION PHARMACEUTICAL MANUFACTURERS AND 
            IMPORTERS.

    (a) <<NOTE: Deadlines.>>  Imposition of Fee.--
            (1) In general.--Each covered entity engaged in the business 
        of manufacturing or importing branded prescription drugs shall 
        pay to the Secretary of the Treasury not later than the annual 
        payment date of each calendar year beginning after 2009 a fee in 
        an amount determined under subsection (b).
            (2) <<NOTE: Definition.>>  Annual payment date.--For 
        purposes of this section, the term ``annual payment date'' means 
        with respect to any calendar year the date determined by the 
        Secretary, but in no event later than September 30 of such 
        calendar year.

    (b) Determination of Fee Amount.--
            (1) In general.--With respect to each covered entity, the 
        fee under this section for any calendar year shall be equal to 
        an amount that bears the same ratio to $2,300,000,000 as--
                    (A) the covered entity's branded prescription drug 
                sales taken into account during the preceding calendar 
                year, bear to
                    (B) the aggregate branded prescription drug sales of 
                all covered entities taken into account during such 
                preceding calendar year.
            (2) Sales taken into account.--For purposes of paragraph 
        (1), the branded prescription drug sales taken into account 
        during any calendar year with respect to any covered entity 
        shall be determined in accordance with the following table:

 
   With respect to a covered entity's
  aggregate branded prescription drug      The percentage of such sales
  sales during the calendar year that         taken into account is:
                  are:
 
  Not more than $5,000,000.............  0 percent
  More than $5,000,000 but not more      10 percent
   than $125,000,000.
  More than $125,000,000 but not more    40 percent
   than $225,000,000.
  More than $225,000,000 but not more    75 percent
   than $400,000,000.
  More than $400,000,000...............  100 percent.
 


[[Page 124 STAT. 860]]

            (3) Secretarial determination.--The Secretary of the 
        Treasury shall calculate the amount of each covered entity's fee 
        for any calendar year under paragraph (1). In calculating such 
        amount, the Secretary of the Treasury shall determine such 
        covered entity's branded prescription drug sales on the basis of 
        reports submitted under subsection (g) and through the use of 
        any other source of information available to the Secretary of 
        the Treasury.

    (c) Transfer of Fees to Medicare Part B Trust Fund.--There is hereby 
appropriated to the Federal Supplementary Medical Insurance Trust Fund 
established under section 1841 of the Social Security Act an amount 
equal to the fees received by the Secretary of the Treasury under 
subsection (a).
    (d) Covered Entity.--
            (1) In general.--For purposes <<NOTE: Definition.>>  of this 
        section, the term ``covered entity'' means any manufacturer or 
        importer with gross receipts from branded prescription drug 
        sales.
            (2) Controlled groups.--
                    (A) In general.--For purposes of this subsection, 
                all persons treated as a single employer under 
                subsection (a) or (b) of section 52 of the Internal 
                Revenue Code of 1986 or subsection (m) or (o) of section 
                414 of such Code shall be treated as a single covered 
                entity.
                    (B) <<NOTE: Applicability.>>  Inclusion of foreign 
                corporations.--For purposes of subparagraph (A), in 
                applying subsections (a) and (b) of section 52 of such 
                Code to this section, section 1563 of such Code shall be 
                applied without regard to subsection (b)(2)(C) thereof.

    (e) <<NOTE: Definitions.>>  Branded Prescription Drug Sales.--For 
purposes of this section--
            (1) In general.--The term ``branded prescription drug 
        sales'' means sales of branded prescription drugs to any 
        specified government program or pursuant to coverage under any 
        such program.
            (2) Branded prescription drugs.--
                    (A) In general.--The term ``branded prescription 
                drug'' means--
                          (i) any prescription drug the application for 
                      which was submitted under section 505(b) of the 
                      Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
                      355(b)), or
                          (ii) any biological product the license for 
                      which was submitted under section 351(a) of the 
                      Public Health Service Act (42 U.S.C. 262(a)).
                    (B) Prescription drug.--For purposes of subparagraph 
                (A)(i), the term ``prescription drug'' means any drug 
                which is subject to section 503(b) of the Federal Food, 
                Drug, and Cosmetic Act (21 U.S.C. 353(b)).
            (3) Exclusion of orphan drug sales.--The term ``branded 
        prescription drug sales'' shall not include sales of any drug or 
        biological product with respect to which a credit was allowed 
        for any taxable year under section 45C of the Internal Revenue 
        Code of 1986. The preceding sentence shall not apply with 
        respect to any such drug or biological product after the date on 
        which such drug or biological product is approved by the Food 
        and Drug Administration for marketing for any indication other 
        than the treatment of the rare disease or condition with respect 
        to which such credit was allowed.

[[Page 124 STAT. 861]]

            (4) Specified government program.--The term ``specified 
        government program'' means--
                    (A) the Medicare Part D program under part D of 
                title XVIII of the Social Security Act,
                    (B) the Medicare Part B program under part B of 
                title XVIII of the Social Security Act,
                    (C) the Medicaid program under title XIX of the 
                Social Security Act,
                    (D) any program under which branded prescription 
                drugs are procured by the Department of Veterans 
                Affairs,
                    (E) any program under which branded prescription 
                drugs are procured by the Department of Defense, or
                    (F) the TRICARE retail pharmacy program under 
                section 1074g of title 10, United States Code.

    (f) Tax Treatment of Fees.--The fees imposed by this section--
            (1) <<NOTE: Applicability.>>  for purposes of subtitle F of 
        the Internal Revenue Code of 1986, shall be treated as excise 
        taxes with respect to which only civil actions for refund under 
        procedures of such subtitle shall apply, and
            (2) for purposes of section 275 of such Code, shall be 
        considered to be a tax described in section 275(a)(6).

    (g) Reporting Requirement.--Not later than the date determined by 
the Secretary of the Treasury following the end of any calendar year, 
the Secretary of Health and Human Services, the Secretary of Veterans 
Affairs, and the Secretary of Defense shall report to the Secretary of 
the Treasury, in such manner as the Secretary of the Treasury 
prescribes, the total branded prescription drug sales for each covered 
entity with respect to each specified government program under such 
Secretary's jurisdiction using the following methodology:
            (1) Medicare part d program.--The Secretary of Health and 
        Human Services shall report, for each covered entity and for 
        each branded prescription drug of the covered entity covered by 
        the Medicare Part D program, the product of--
                    (A) the per-unit ingredient cost, as reported to the 
                Secretary of Health and Human Services by prescription 
                drug plans and Medicare Advantage prescription drug 
                plans, minus any per-unit rebate, discount, or other 
                price concession provided by the covered entity, as 
                reported to the Secretary of Health and Human Services 
                by the prescription drug plans and Medicare Advantage 
                prescription drug plans, and
                    (B) the number of units of the branded prescription 
                drug paid for under the Medicare Part D program.
            (2) Medicare part b program.--The Secretary of Health and 
        Human Services shall report, for each covered entity and for 
        each branded prescription drug of the covered entity covered by 
        the Medicare Part B program under section 1862(a) of the Social 
        Security Act, the product of--
                    (A) the per-unit average sales price (as defined in 
                section 1847A(c) of the Social Security Act) or the per-
                unit Part B payment rate for a separately paid branded 
                prescription drug without a reported average sales 
                price, and
                    (B) the number of units of the branded prescription 
                drug paid for under the Medicare Part B program.

[[Page 124 STAT. 862]]

        The Centers <<NOTE: Process.>>  for Medicare and Medicaid 
        Services shall establish a process for determining the units and 
        the allocated price for purposes of this section for those 
        branded prescription drugs that are not separately payable or 
        for which National Drug Codes are not reported.
            (3) Medicaid program.--The Secretary of Health and Human 
        Services shall report, for each covered entity and for each 
        branded prescription drug of the covered entity covered under 
        the Medicaid program, the product of--
                    (A) the per-unit ingredient cost paid to pharmacies 
                by States for the branded prescription drug dispensed to 
                Medicaid beneficiaries, minus any per-unit rebate paid 
                by the covered entity under section 1927 of the Social 
                Security Act and any State supplemental rebate, and
                    (B) the number of units of the branded prescription 
                drug paid for under the Medicaid program.
            (4) Department of veterans affairs programs.--The Secretary 
        of Veterans Affairs shall report, for each covered entity and 
        for each branded prescription drug of the covered entity the 
        total amount paid for each such branded prescription drug 
        procured by the Department of Veterans Affairs for its 
        beneficiaries.
            (5) Department of defense programs and tricare.--The 
        Secretary of Defense shall report, for each covered entity and 
        for each branded prescription drug of the covered entity, the 
        sum of--
                    (A) the total amount paid for each such branded 
                prescription drug procured by the Department of Defense 
                for its beneficiaries, and
                    (B) for each such branded prescription drug 
                dispensed under the TRICARE retail pharmacy program, the 
                product of--
                          (i) the per-unit ingredient cost, minus any 
                      per-unit rebate paid by the covered entity, and
                          (ii) the number of units of the branded 
                      prescription drug dispensed under such program.

    (h) Secretary.--For purposes of this section, the term ``Secretary'' 
includes the Secretary's delegate.
    (i) <<NOTE: Publication.>>  Guidance.--The Secretary of the Treasury 
shall publish guidance necessary to carry out the purposes of this 
section.

    (j) Application of Section.--This section shall apply to any branded 
prescription drug sales after December 31, 2008.
    (k) Conforming Amendment.--Section 1841(a) of the Social Security 
Act <<NOTE: 42 USC 1395t.>>  is amended by inserting ``or section 
9008(c) of the Patient Protection and Affordable Care Act of 2009'' 
after ``this part''.

SEC. 9009. <<NOTE: 26 USC 4001 note prec. Definitions.>>  IMPOSITION OF 
            ANNUAL FEE ON MEDICAL DEVICE MANUFACTURERS AND IMPORTERS.

    (a) <<NOTE: Deadlines.>>  Imposition of Fee.--
            (1) In general.--Each covered entity engaged in the business 
        of manufacturing or importing medical devices shall pay to the 
        Secretary not later than the annual payment date of each 
        calendar year beginning after 2009 a fee in an amount determined 
        under subsection (b).
            (2) Annual payment date.--For purposes of this section, the 
        term ``annual payment date'' means with respect to any

[[Page 124 STAT. 863]]

        calendar year the date determined by the Secretary, but in no 
        event later than September 30 of such calendar year.

    (b) Determination of Fee Amount.--
            (1) In general.--With respect to each covered entity, the 
        fee under this section for any calendar year shall be equal to 
        an amount that bears the same ratio to $2,000,000,000 as--
                    (A) the covered entity's gross receipts from medical 
                device sales taken into account during the preceding 
                calendar year, bear to
                    (B) the aggregate gross receipts of all covered 
                entities from medical device sales taken into account 
                during such preceding calendar year.
            (2) Gross receipts from sales taken into account.--For 
        purposes of paragraph (1), the gross receipts from medical 
        device sales taken into account during any calendar year with 
        respect to any covered entity shall be determined in accordance 
        with the following table:

 
   With respect to a covered entity's
 aggregate gross receipts from medical       The percentage of gross
 device sales during the calendar year   receipts taken into account is:
               that are:
 
  Not more than $5,000,000.............  0 percent
  More than $5,000,000 but not more      50 percent
   than $25,000,000.
  More than $25,000,000................  100 percent.
 

            (3) Secretarial determination.--The Secretary shall 
        calculate the amount of each covered entity's fee for any 
        calendar year under paragraph (1). In calculating such amount, 
        the Secretary shall determine such covered entity's gross 
        receipts from medical device sales on the basis of reports 
        submitted by the covered entity under subsection (f) and through 
        the use of any other source of information available to the 
        Secretary.

    (c) Covered Entity.--
            (1) In general.--For purposes of this section, the term 
        ``covered entity'' means any manufacturer or importer with gross 
        receipts from medical device sales.
            (2) Controlled groups.--
                    (A) In general.--For purposes of this subsection, 
                all persons treated as a single employer under 
                subsection (a) or (b) of section 52 of the Internal 
                Revenue Code of 1986 or subsection (m) or (o) of section 
                414 of such Code shall be treated as a single covered 
                entity.
                    (B) <<NOTE: Applicability.>>  Inclusion of foreign 
                corporations.--For purposes of subparagraph (A), in 
                applying subsections (a) and (b) of section 52 of such 
                Code to this section, section 1563 of such Code shall be 
                applied without regard to subsection (b)(2)(C) thereof.

    (d) Medical Device Sales.--For purposes of this section--
            (1) In general.--The term ``medical device sales'' means 
        sales for use in the United States of any medical device, other 
        than the sales of a medical device that--
                    (A) has been classified in class II under section 
                513 of the Federal Food, Drug, and Cosmetic Act (21 
                U.S.C.

[[Page 124 STAT. 864]]

                360c) and is primarily sold to consumers at retail for 
                not more than $100 per unit, or
                    (B) has been classified in class I under such 
                section.
            (2) United states.--For purposes of paragraph (1), the term 
        ``United States'' means the several States, the District of 
        Columbia, the Commonwealth of Puerto Rico, and the possessions 
        of the United States.
            (3) Medical device.--For purposes of paragraph (1), the term 
        ``medical device'' means any device (as defined in section 
        201(h) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
        321(h))) intended for humans.

    (e) Tax Treatment of Fees.--The fees imposed by this section--
            (1) for purposes of subtitle F of the Internal Revenue Code 
        of 1986, shall be treated as excise taxes with respect to which 
        only civil actions for refund under procedures of such subtitle 
        shall apply, and
            (2) for purposes of section 275 of such Code, shall be 
        considered to be a tax described in section 275(a)(6).

    (f) Reporting Requirement.--
            (1) In general.--Not later than the date determined by the 
        Secretary following the end of any calendar year, each covered 
        entity shall report to the Secretary, in such manner as the 
        Secretary prescribes, the gross receipts from medical device 
        sales of such covered entity during such calendar year.
            (2) Penalty for failure to report.--
                    (A) In general.--In the case of any failure to make 
                a report containing the information required by 
                paragraph (1) on the date prescribed therefor 
                (determined with regard to any extension of time for 
                filing), unless it is shown that such failure is due to 
                reasonable cause, there shall be paid by the covered 
                entity failing to file such report, an amount equal to--
                          (i) $10,000, plus
                          (ii) the lesser of--
                                    (I) an amount equal to $1,000, 
                                multiplied by the number of days during 
                                which such failure continues, or
                                    (II) the amount of the fee imposed 
                                by this section for which such report 
                                was required.
                    (B) Treatment of penalty.--The penalty imposed under 
                subparagraph (A)--
                          (i) shall be treated as a penalty for purposes 
                      of subtitle F of the Internal Revenue Code of 
                      1986,
                          (ii) <<NOTE: Notice.>>  shall be paid on 
                      notice and demand by the Secretary and in the same 
                      manner as tax under such Code, and
                          (iii) <<NOTE: Applicability.>>  with respect 
                      to which only civil actions for refund under 
                      procedures of such subtitle F shall apply.

    (g) Secretary.--For purposes of this section, the term ``Secretary'' 
means the Secretary of the Treasury or the Secretary's delegate.
    (h) <<NOTE: Publication.>>  Guidance.--The Secretary shall publish 
guidance necessary to carry out the purposes of this section, including 
identification of medical devices described in subsection (d)(1)(A) and 
with respect to the treatment of gross receipts from sales of medical 
devices

[[Page 124 STAT. 865]]

to another covered entity or to another entity by reason of the 
application of subsection (c)(2).

    (i) Application of Section.--This section shall apply to any medical 
device sales after December 31, 2008.

SEC. 9010. <<NOTE: 26 USC 4001 note prec.>>  IMPOSITION OF ANNUAL FEE ON 
            HEALTH INSURANCE PROVIDERS.

    (a) <<NOTE: Deadline.>>  Imposition of Fee.--
            (1) In general.--Each covered entity engaged in the business 
        of providing health insurance shall pay to the Secretary not 
        later than the annual payment date of each calendar year 
        beginning after 2009 a fee in an amount determined under 
        subsection (b).
            (2) <<NOTE: Definition.>>  Annual payment date.--For 
        purposes of this section, the term ``annual payment date'' means 
        with respect to any calendar year the date determined by the 
        Secretary, but in no event later than September 30 of such 
        calendar year.

    (b) Determination of Fee Amount.--
            (1) In general.--With respect to each covered entity, the 
        fee under this section for any calendar year shall be equal to 
        an amount that bears the same ratio to $6,700,000,000 as--
                    (A) the sum of--
                          (i) the covered entity's net premiums written 
                      with respect to health insurance for any United 
                      States health risk that are taken into account 
                      during the preceding calendar year, plus
                          (ii) 200 percent of the covered entity's third 
                      party administration agreement fees that are taken 
                      into account during the preceding calendar year, 
                      bears to
                    (B) the sum of--
                          (i) the aggregate net premiums written with 
                      respect to such health insurance of all covered 
                      entities that are taken into account during such 
                      preceding calendar year, plus
                          (ii) 200 percent of the aggregate third party 
                      administration agreement fees of all covered 
                      entities that are taken into account during such 
                      preceding calendar year.
            (2) Amounts taken into account.--For purposes of paragraph 
        (1)--
                    (A) Net premiums written.--The net premiums written 
                with respect to health insurance for any United States 
                health risk that are taken into account during any 
                calendar year with respect to any covered entity shall 
                be determined in accordance with the following table:

 
 With respect to a covered entity's net   The percentage of net premiums
  premiums written during the calendar     written that are taken into
             year that are:                        account is:
 
  Not more than $25,000,000............  0 percent
  More than $25,000,000 but not more     50 percent
   than $50,000,000.
  More than $50,000,000................  100 percent.
 


[[Page 124 STAT. 866]]

                    (B) Third party administration agreement fees.--The 
                third party administration agreement fees that are taken 
                into account during any calendar year with respect to 
                any covered entity shall be determined in accordance 
                with the following table:

 
   With respect to a covered entity's     The percentage of third party
  third party administration agreement    administration agreement fees
fees during the calendar year that are:  that are taken into account is:
 
  Not more than $5,000,000.............  0 percent
  More than $5,000,000 but not more      50 percent
   than $10,000,000.
  More than $10,000,000................  100 percent.
 

            (3) Secretarial determination.--The Secretary shall 
        calculate the amount of each covered entity's fee for any 
        calendar year under paragraph (1). In calculating such amount, 
        the Secretary shall determine such covered entity's net premiums 
        written with respect to any United States health risk and third 
        party administration agreement fees on the basis of reports 
        submitted by the covered entity under subsection (g) and through 
        the use of any other source of information available to the 
        Secretary.

    (c) Covered Entity.--
            (1) <<NOTE: Definition.>>  In general.--For purposes of this 
        section, the term ``covered entity'' means any entity which 
        provides health insurance for any United States health risk.
            (2) Exclusion.--Such term does not include--
                    (A) any employer to the extent that such employer 
                self-insures its employees' health risks, or
                    (B) any governmental entity (except to the extent 
                such an entity provides health insurance coverage 
                through the community health insurance option under 
                section 1323).
            (3) Controlled groups.--
                    (A) In general.--For purposes of this subsection, 
                all persons treated as a single employer under 
                subsection (a) or (b) of section 52 of the Internal 
                Revenue Code of 1986 or subsection (m) or (o) of section 
                414 of such Code shall be treated as a single covered 
                entity (or employer for purposes of paragraph (2)).
                    (B) <<NOTE: Applicability.>>  Inclusion of foreign 
                corporations.--For purposes of subparagraph (A), in 
                applying subsections (a) and (b) of section 52 of such 
                Code to this section, section 1563 of such Code shall be 
                applied without regard to subsection (b)(2)(C) thereof.

    (d) <<NOTE: Definition.>>  United States Health Risk.--For purposes 
of this section, the term ``United States health risk'' means the health 
risk of any individual who is--
            (1) a United States citizen,
            (2) a resident of the United States (within the meaning of 
        section 7701(b)(1)(A) of the Internal Revenue Code of 1986), or
            (3) located in the United States, with respect to the period 
        such individual is so located.

[[Page 124 STAT. 867]]

    (e) <<NOTE: Definition.>>  Third Party Administration Agreement 
Fees.--For purposes of this section, the term ``third party 
administration agreement fees'' means, with respect to any covered 
entity, amounts received from an employer which are in excess of 
payments made by such covered entity for health benefits under an 
arrangement under which such employer self-insures the United States 
health risk of its employees.

    (f) Tax Treatment of Fees.--The fees imposed by this section--
            (1) <<NOTE: Applicability.>>  for purposes of subtitle F of 
        the Internal Revenue Code of 1986, shall be treated as excise 
        taxes with respect to which only civil actions for refund under 
        procedures of such subtitle shall apply, and
            (2) for purposes of section 275 of such Code shall be 
        considered to be a tax described in section 275(a)(6).

    (g) Reporting Requirement.--
            (1) In general.--Not later than the date determined by the 
        Secretary following the end of any calendar year, each covered 
        entity shall report to the Secretary, in such manner as the 
        Secretary prescribes, the covered entity's net premiums written 
        with respect to health insurance for any United States health 
        risk and third party administration agreement fees for such 
        calendar year.
            (2) Penalty for failure to report.--
                    (A) In general.--In the case of any failure to make 
                a report containing the information required by 
                paragraph (1) on the date prescribed therefor 
                (determined with regard to any extension of time for 
                filing), unless it is shown that such failure is due to 
                reasonable cause, there shall be paid by the covered 
                entity failing to file such report, an amount equal to--
                          (i) $10,000, plus
                          (ii) the lesser of--
                                    (I) an amount equal to $1,000, 
                                multiplied by the number of days during 
                                which such failure continues, or
                                    (II) the amount of the fee imposed 
                                by this section for which such report 
                                was required.
                    (B) Treatment of penalty.--The penalty imposed under 
                subparagraph (A)--
                          (i) shall be treated as a penalty for purposes 
                      of subtitle F of the Internal Revenue Code of 
                      1986,
                          (ii) <<NOTE: Notice.>>  shall be paid on 
                      notice and demand by the Secretary and in the same 
                      manner as tax under such Code, and
                          (iii) with respect to which only civil actions 
                      for refund under procedures of such subtitle F 
                      shall apply.

    (h) Additional Definitions.--For purposes of this section--
            (1) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury or the Secretary's delegate.
            (2) United states.--The term ``United States'' means the 
        several States, the District of Columbia, the Commonwealth of 
        Puerto Rico, and the possessions of the United States.
            (3) Health insurance.--The term ``health insurance'' shall 
        not include insurance for long-term care or disability.

    (i) <<NOTE: Publication.>>  Guidance.--The Secretary shall publish 
guidance necessary to carry out the purposes of this section.

[[Page 124 STAT. 868]]

    (j) Application of Section.--This section shall apply to any net 
premiums written after December 31, 2008, with respect to health 
insurance for any United States health risk, and any third party 
administration agreement fees received after such date.

SEC. 9011. STUDY AND REPORT OF EFFECT ON VETERANS HEALTH CARE.

    (a) In General.--The Secretary of Veterans Affairs shall conduct a 
study on the effect (if any) of the provisions of sections 9008, 9009, 
and 9010 on--
            (1) the cost of medical care provided to veterans, and
            (2) veterans' access to medical devices and branded 
        prescription drugs.

    (b) Report.--The Secretary of Veterans Affairs shall report the 
results of the study under subsection (a) to the Committee on Ways and 
Means of the House of Representatives and to the Committee on Finance of 
the Senate not later than December 31, 2012.

SEC. 9012. ELIMINATION OF DEDUCTION FOR EXPENSES ALLOCABLE TO MEDICARE 
            PART D SUBSIDY.

    (a) In General.--Section 139A of the Internal Revenue Code of 
1986 <<NOTE: 26 USC 139A.>>  is amended by striking the second sentence.

    (b) <<NOTE: 26 USC 139A note.>>  Effective Date.--The amendment made 
by this section shall apply to taxable years beginning after December 
31, 2010.

SEC. 9013. MODIFICATION OF ITEMIZED DEDUCTION FOR MEDICAL EXPENSES.

    (a) In General.--Subsection (a) of section 213 of the Internal 
Revenue Code of 1986 <<NOTE: 26 USC 213.>>  is amended by striking ``7.5 
percent'' and inserting ``10 percent''.

    (b) Temporary Waiver of Increase for Certain Seniors.--Section 213 
of the Internal Revenue Code of 1986 is amended by adding at the end the 
following new subsection:
    ``(f) <<NOTE: Time period. Applicability.>>  Special Rule for 2013, 
2014, 2015, and 2016.--In the case of any taxable year beginning after 
December 31, 2012, and ending before January 1, 2017, subsection (a) 
shall be applied with respect to a taxpayer by substituting `7.5 
percent' for `10 percent' if such taxpayer or such taxpayer's spouse has 
attained age 65 before the close of such taxable year.''.

    (c) Conforming Amendment.--Section 56(b)(1)(B) of the Internal 
Revenue Code of 1986 <<NOTE: 26 USC 56.>>  is amended by striking ``by 
substituting `10 percent' for `7.5 percent' '' and inserting ``without 
regard to subsection (f) of such section''.

    (d) <<NOTE: 26 USC 56 note.>>  Effective Date.--The amendments made 
by this section shall apply to taxable years beginning after December 
31, 2012.

SEC. 9014. LIMITATION ON EXCESSIVE REMUNERATION PAID BY CERTAIN HEALTH 
            INSURANCE PROVIDERS.

    (a) In General.--Section 162(m) of the Internal Revenue Code of 
1986 <<NOTE: 26 USC 162.>>  is amended by adding at the end the 
following new subparagraph:
            ``(6) <<NOTE: Definitions.>>  Special rule for application 
        to certain health insurance providers.--
                    ``(A) In general.--No deduction shall be allowed 
                under this chapter--

[[Page 124 STAT. 869]]

                          ``(i) in the case of applicable individual 
                      remuneration which is for any disqualified taxable 
                      year beginning after December 31, 2012, and which 
                      is attributable to services performed by an 
                      applicable individual during such taxable year, to 
                      the extent that the amount of such remuneration 
                      exceeds $500,000, or
                          ``(ii) in the case of deferred deduction 
                      remuneration for any taxable year beginning after 
                      December 31, 2012, which is attributable to 
                      services performed by an applicable individual 
                      during any disqualified taxable year beginning 
                      after December 31, 2009, to the extent that the 
                      amount of such remuneration exceeds $500,000 
                      reduced (but not below zero) by the sum of--
                                    ``(I) the applicable individual 
                                remuneration for such disqualified 
                                taxable year, plus
                                    ``(II) the portion of the deferred 
                                deduction remuneration for such services 
                                which was taken into account under this 
                                clause in a preceding taxable year (or 
                                which would have been taken into account 
                                under this clause in a preceding taxable 
                                year if this clause were applied by 
                                substituting `December 31, 2009' for 
                                `December 31, 2012' in the matter 
                                preceding subclause (I)).
                    ``(B) Disqualified taxable year.--For purposes of 
                this paragraph, the term `disqualified taxable year' 
                means, with respect to any employer, any taxable year 
                for which such employer is a covered health insurance 
                provider.
                    ``(C) Covered health insurance provider.--For 
                purposes of this paragraph--
                          ``(i) In general.--The term `covered health 
                      insurance provider' means--
                                    ``(I) with respect to taxable years 
                                beginning after December 31, 2009, and 
                                before January 1, 2013, any employer 
                                which is a health insurance issuer (as 
                                defined in section 9832(b)(2)) and which 
                                receives premiums from providing health 
                                insurance coverage (as defined in 
                                section 9832(b)(1)), and
                                    ``(II) with respect to taxable years 
                                beginning after December 31, 2012, any 
                                employer which is a health insurance 
                                issuer (as defined in section 
                                9832(b)(2)) and with respect to which 
                                not less than 25 percent of the gross 
                                premiums received from providing health 
                                insurance coverage (as defined in 
                                section 9832(b)(1)) is from minimum 
                                essential coverage (as defined in 
                                section 5000A(f)).
                          ``(ii) Aggregation rules.--Two or more persons 
                      who are treated as a single employer under 
                      subsection (b), (c), (m), or (o) of section 414 
                      shall be treated as a single employer, except that 
                      in applying section 1563(a) for purposes of any 
                      such subsection, paragraphs (2) and (3) thereof 
                      shall be disregarded.
                    ``(D) Applicable individual remuneration.--For 
                purposes of this paragraph, the term `applicable 
                individual

[[Page 124 STAT. 870]]

                remuneration' means, with respect to any applicable 
                individual for any disqualified taxable year, the 
                aggregate amount allowable as a deduction under this 
                chapter for such taxable year (determined without regard 
                to this subsection) for remuneration (as defined in 
                paragraph (4) without regard to subparagraphs (B), (C), 
                and (D) thereof) for services performed by such 
                individual (whether or not during the taxable year). 
                Such term shall not include any deferred deduction 
                remuneration with respect to services performed during 
                the disqualified taxable year.
                    ``(E) Deferred deduction remuneration.--For purposes 
                of this paragraph, the term `deferred deduction 
                remuneration' means remuneration which would be 
                applicable individual remuneration for services 
                performed in a disqualified taxable year but for the 
                fact that the deduction under this chapter (determined 
                without regard to this paragraph) for such remuneration 
                is allowable in a subsequent taxable year.
                    ``(F) Applicable individual.--For purposes of this 
                paragraph, the term `applicable individual' means, with 
                respect to any covered health insurance provider for any 
                disqualified taxable year, any individual--
                          ``(i) who is an officer, director, or employee 
                      in such taxable year, or
                          ``(ii) who provides services for or on behalf 
                      of such covered health insurance provider during 
                      such taxable year.
                    ``(G) Coordination.--Rules similar to the rules of 
                subparagraphs (F) and (G) of paragraph (4) shall apply 
                for purposes of this paragraph.
                    ``(H) Regulatory authority.--The Secretary may 
                prescribe such guidance, rules, or regulations as are 
                necessary to carry out the purposes of this 
                paragraph.''.

    (b) <<NOTE: 26 USC 162 note.>>  Effective Date.--The amendment made 
by this section shall apply to taxable years beginning after December 
31, 2009, with respect to services performed after such date.

SEC. 9015. ADDITIONAL HOSPITAL INSURANCE TAX ON HIGH-INCOME TAXPAYERS.

    (a) FICA.--
            (1) <<NOTE: 26 USC 3101.>>  In general.--Section 3101(b) of 
        the Internal Revenue Code of 1986 is amended--
                    (A) by striking ``In addition'' and inserting the 
                following:
            ``(1) In general.--In addition'',
                    (B) by striking ``the following percentages of the'' 
                and inserting ``1.45 percent of the'',
                    (C) by striking ``(as defined in section 3121(b))--
                '' and all that follows and inserting ``(as defined in 
                section 3121(b)).'', and
                    (D) by adding at the end the following new 
                paragraph:
            ``(2) Additional tax.--In addition to the tax imposed by 
        paragraph (1) and the preceding subsection, there is hereby 
        imposed on every taxpayer (other than a corporation, estate, or 
        trust) a tax equal to 0.5 percent of wages which are received 
        with respect to employment (as defined in section 3121(b))

[[Page 124 STAT. 871]]

        during any taxable year beginning after December 31, 2012, and 
        which are in excess of--
                    ``(A) in the case of a joint return, $250,000, and
                    ``(B) in any other case, $200,000.''.
            (2) Collection of tax.--Section 3102 of the Internal Revenue 
        Code of 1986 <<NOTE: 26 USC 3102.>>  is amended by adding at the 
        end the following new subsection:

    ``(f) Special Rules for Additional Tax.--
            ``(1) In general.--In the case of any tax imposed by section 
        3101(b)(2), subsection (a) shall only apply to the extent to 
        which the taxpayer receives wages from the employer in excess of 
        $200,000, and the employer may disregard the amount of wages 
        received by such taxpayer's spouse.
            ``(2) Collection of amounts not withheld.--To the extent 
        that the amount of any tax imposed by section 3101(b)(2) is not 
        collected by the employer, such tax shall be paid by the 
        employee.
            ``(3) Tax paid by recipient.--If an employer, in violation 
        of this chapter, fails to deduct and withhold the tax imposed by 
        section 3101(b)(2) and thereafter the tax is paid by the 
        employee, the tax so required to be deducted and withheld shall 
        not be collected from the employer, but this paragraph shall in 
        no case relieve the employer from liability for any penalties or 
        additions to tax otherwise applicable in respect of such failure 
        to deduct and withhold.''.

    (b) SECA.--
            (1) In general.--Section 1401(b) of the Internal Revenue 
        Code of 1986 <<NOTE: 26 USC 1401.>>  is amended--
                    (A) by striking ``In addition'' and inserting the 
                following:
            ``(1) In general.--In addition'', and
                    (B) by adding at the end the following new 
                paragraph:
            ``(2) Additional tax.--
                    ``(A) In general.--In addition to the tax imposed by 
                paragraph (1) and the preceding subsection, there is 
                hereby imposed on every taxpayer (other than a 
                corporation, estate, or trust) for each taxable year 
                beginning after December 31, 2012, a tax equal to 0.5 
                percent of the self-employment income for such taxable 
                year which is in excess of--
                          ``(i) in the case of a joint return, $250,000, 
                      and
                          ``(ii) in any other case, $200,000.
                    ``(B) Coordination with fica.--The amounts under 
                clauses (i) and (ii) of subparagraph (A) shall be 
                reduced (but not below zero) by the amount of wages 
                taken into account in determining the tax imposed under 
                section 3121(b)(2) with respect to the taxpayer.''.
            (2) No deduction for additional tax.--
                    (A) In general.--Section 164(f) of such Code is 
                amended by inserting ``(other than the taxes imposed by 
                section 1401(b)(2))'' after ``section 1401)''.
                    (B) Deduction for net earnings from self-
                employment.--Subparagraph (B) of section 
                1402(a)(12) <<NOTE: 26 USC 1402.>>  is amended by 
                inserting ``(determined without regard to the rate 
                imposed under paragraph (2) of section 1401(b))'' after 
                ``for such year''.

[[Page 124 STAT. 872]]

    (c) <<NOTE: 26 USC 164 note.>>  Effective Date.--The amendments made 
by this section shall apply with respect to remuneration received, and 
taxable years beginning, after December 31, 2012.

SEC. 9016. MODIFICATION OF SECTION 833 TREATMENT OF CERTAIN HEALTH 
            ORGANIZATIONS.

    (a) In General.--Subsection (c) of section 833 of the Internal 
Revenue Code of 1986 <<NOTE: 26 USC 833.>>  is amended by adding at the 
end the following new paragraph:
            ``(5) Nonapplication of section in case of low medical loss 
        ratio.--Notwithstanding the preceding paragraphs, this section 
        shall not apply to any organization unless such organization's 
        percentage of total premium revenue expended on reimbursement 
        for clinical services provided to enrollees under its policies 
        during such taxable year (as reported under section 2718 of the 
        Public Health Service Act) is not less than 85 percent.''.

    (b) <<NOTE: 26 USC 853 note.>>  Effective Date.--The amendment made 
by this section shall apply to taxable years beginning after December 
31, 2009.

SEC. 9017. EXCISE TAX ON ELECTIVE COSMETIC MEDICAL PROCEDURES.

    (a) In General.--Subtitle D of the Internal Revenue Code of 1986, as 
amended by this Act, is amended by adding at the end the following new 
chapter:

           ``CHAPTER 49--ELECTIVE COSMETIC MEDICAL PROCEDURES

``Sec. 5000B. Imposition of tax on elective cosmetic medical procedures.

``SEC. 5000B. <<NOTE: 26 USC 5000B.>>  IMPOSITION OF TAX ON ELECTIVE 
            COSMETIC MEDICAL PROCEDURES.

    ``(a) In General.--There is hereby imposed on any cosmetic surgery 
and medical procedure a tax equal to 5 percent of the amount paid for 
such procedure (determined without regard to this section), whether paid 
by insurance or otherwise.
    ``(b) Cosmetic Surgery and Medical Procedure.--For purposes of this 
section, the term `cosmetic surgery and medical procedure' means any 
cosmetic surgery (as defined in section 213(d)(9)(B)) or other similar 
procedure which--
            ``(1) is performed by a licensed medical professional, and
            ``(2) is not necessary to ameliorate a deformity arising 
        from, or directly related to, a congenital abnormality, a 
        personal injury resulting from an accident or trauma, or 
        disfiguring disease.

    ``(c) Payment of Tax.--
            ``(1) In general.--The tax imposed by this section shall be 
        paid by the individual on whom the procedure is performed.
            ``(2) Collection.--Every person receiving a payment for 
        procedures on which a tax is imposed under subsection (a) shall 
        collect the amount of the tax from the individual on whom the 
        procedure is performed and remit such tax quarterly to the 
        Secretary at such time and in such manner as provided by the 
        Secretary.
            ``(3) Secondary liability.--Where any tax imposed by 
        subsection (a) is not paid at the time payments for cosmetic 
        surgery and medical procedures are made, then to the extent that

[[Page 124 STAT. 873]]

        such tax is not collected, such tax shall be paid by the person 
        who performs the procedure.''.

    (b) Clerical Amendment.--The table of chapters for subtitle D of the 
Internal Revenue Code of 1986, as amended by this Act, is amended by 
inserting after the item relating to chapter 48 the following new item:

          ``Chapter 49--Elective Cosmetic Medical Procedures''.

    (c) <<NOTE: 26 USC 5000B note.>>  Effective Date.--The amendments 
made by this section shall apply to procedures performed on or after 
January 1, 2010.

                      Subtitle B--Other Provisions

SEC. 9021. EXCLUSION OF HEALTH BENEFITS PROVIDED BY INDIAN TRIBAL 
            GOVERNMENTS.

    (a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 is amended by inserting after section 139C 
the following new section:

``SEC. 139D. <<NOTE: 26 USC 139D.>>  INDIAN HEALTH CARE BENEFITS.

    ``(a) General Rule.--Except as otherwise provided in this section, 
gross income does not include the value of any qualified Indian health 
care benefit.
    ``(b) <<NOTE: Definition.>>  Qualified Indian Health Care Benefit.--
For purposes of this section, the term `qualified Indian health care 
benefit' means--
            ``(1) any health service or benefit provided or purchased, 
        directly or indirectly, by the Indian Health Service through a 
        grant to or a contract or compact with an Indian tribe or tribal 
        organization, or through a third-party program funded by the 
        Indian Health Service,
            ``(2) medical care provided or purchased by, or amounts to 
        reimburse for such medical care provided by, an Indian tribe or 
        tribal organization for, or to, a member of an Indian tribe, 
        including a spouse or dependent of such a member,
            ``(3) coverage under accident or health insurance (or an 
        arrangement having the effect of accident or health insurance), 
        or an accident or health plan, provided by an Indian tribe or 
        tribal organization for medical care to a member of an Indian 
        tribe, include a spouse or dependent of such a member, and
            ``(4) any other medical care provided by an Indian tribe or 
        tribal organization that supplements, replaces, or substitutes 
        for a program or service relating to medical care provided by 
        the Federal government to Indian tribes or members of such a 
        tribe.

    ``(c) Definitions.--For purposes of this section--
            ``(1) Indian tribe.--The term `Indian tribe' has the meaning 
        given such term by section 45A(c)(6).
            ``(2) Tribal organization.--The term `tribal organization' 
        has the meaning given such term by section 4(l) of the Indian 
        Self-Determination and Education Assistance Act.
            ``(3) Medical care.--The term `medical care' has the same 
        meaning as when used in section 213.
            ``(4) Accident or health insurance; accident or health 
        plan.--The terms `accident or health insurance' and `accident

[[Page 124 STAT. 874]]

        or health plan' have the same meaning as when used in section 
        105.
            ``(5) Dependent.--The term `dependent' has the meaning given 
        such term by section 152, determined without regard to 
        subsections (b)(1), (b)(2), and (d)(1)(B) thereof.

    ``(d) Denial of Double Benefit.--Subsection (a) shall not apply to 
the amount of any qualified Indian health care benefit which is not 
includible in gross income of the beneficiary of such benefit under any 
other provision of this chapter, or to the amount of any such benefit 
for which a deduction is allowed to such beneficiary under any other 
provision of this chapter.''.
    (b) Clerical Amendment.--The table of sections for part III of 
subchapter B of chapter 1 of the Internal Revenue Code of 1986 is 
amended by inserting after the item relating to section 139C the 
following new item:

``Sec. 139D. Indian health care benefits.''.

    (c) <<NOTE: 26 USC 139D note.>>  Effective Date.--The amendments 
made by this section shall apply to benefits and coverage provided after 
the date of the enactment of this Act.

    (d) <<NOTE: 26 USC 139D note.>>  No Inference.--Nothing in the 
amendments made by this section shall be construed to create an 
inference with respect to the exclusion from gross income of--
            (1) benefits provided by an Indian tribe or tribal 
        organization that are not within the scope of this section, and
            (2) benefits provided prior to the date of the enactment of 
        this Act.

SEC. 9022. ESTABLISHMENT OF SIMPLE CAFETERIA PLANS FOR SMALL BUSINESSES.

    (a) In General.--Section 125 of the Internal Revenue Code of 
1986 <<NOTE: 26 USC 125.>>  (relating to cafeteria plans), as amended by 
this Act, is amended by redesignating subsections (j) and (k) as 
subsections (k) and (l), respectively, and by inserting after subsection 
(i) the following new subsection:

    ``(j) Simple Cafeteria Plans for Small Businesses.--
            ``(1) In general.--An eligible employer maintaining a simple 
        cafeteria plan with respect to which the requirements of this 
        subsection are met for any year shall be treated as meeting any 
        applicable nondiscrimination requirement during such year.
            ``(2) Simple cafeteria plan.--For purposes of this 
        subsection, the term `simple cafeteria plan' means a cafeteria 
        plan--
                    ``(A) which is established and maintained by an 
                eligible employer, and
                    ``(B) with respect to which the contribution 
                requirements of paragraph (3), and the eligibility and 
                participation requirements of paragraph (4), are met.
            ``(3) Contribution requirements.--
                    ``(A) In general.--The requirements of this 
                paragraph are met if, under the plan the employer is 
                required, without regard to whether a qualified employee 
                makes any salary reduction contribution, to make a 
                contribution to provide qualified benefits under the 
                plan on behalf of each qualified employee in an amount 
                equal to--
                          ``(i) a uniform percentage (not less than 2 
                      percent) of the employee's compensation for the 
                      plan year, or

[[Page 124 STAT. 875]]

                          ``(ii) an amount which is not less than the 
                      lesser of--
                                    ``(I) 6 percent of the employee's 
                                compensation for the plan year, or
                                    ``(II) twice the amount of the 
                                salary reduction contributions of each 
                                qualified employee.
                    ``(B) Matching contributions on behalf of highly 
                compensated and key employees.--The requirements of 
                subparagraph (A)(ii) shall not be treated as met if, 
                under the plan, the rate of contributions with respect 
                to any salary reduction contribution of a highly 
                compensated or key employee at any rate of contribution 
                is greater than that with respect to an employee who is 
                not a highly compensated or key employee.
                    ``(C) Additional contributions.--Subject to 
                subparagraph (B), nothing in this paragraph shall be 
                treated as prohibiting an employer from making 
                contributions to provide qualified benefits under the 
                plan in addition to contributions required under 
                subparagraph (A).
                    ``(D) Definitions.--For purposes of this paragraph--
                          ``(i) Salary reduction contribution.--The term 
                      `salary reduction contribution' means, with 
                      respect to a cafeteria plan, any amount which is 
                      contributed to the plan at the election of the 
                      employee and which is not includible in gross 
                      income by reason of this section.
                          ``(ii) Qualified employee.--The term 
                      `qualified employee' means, with respect to a 
                      cafeteria plan, any employee who is not a highly 
                      compensated or key employee and who is eligible to 
                      participate in the plan.
                          ``(iii) Highly compensated employee.--The term 
                      `highly compensated employee' has the meaning 
                      given such term by section 414(q).
                          ``(iv) Key employee.--The term `key employee' 
                      has the meaning given such term by section 416(i).
            ``(4) Minimum eligibility and participation requirements.--
                    ``(A) In general.--The requirements of this 
                paragraph shall be treated as met with respect to any 
                year if, under the plan--
                          ``(i) all employees who had at least 1,000 
                      hours of service for the preceding plan year are 
                      eligible to participate, and
                          ``(ii) each employee eligible to participate 
                      in the plan may, subject to terms and conditions 
                      applicable to all participants, elect any benefit 
                      available under the plan.
                    ``(B) Certain employees may be excluded.--For 
                purposes of subparagraph (A)(i), an employer may elect 
                to exclude under the plan employees--
                          ``(i) who have not attained the age of 21 
                      before the close of a plan year,
                          ``(ii) who have less than 1 year of service 
                      with the employer as of any day during the plan 
                      year,
                          ``(iii) who are covered under an agreement 
                      which the Secretary of Labor finds to be a 
                      collective bargaining agreement if there is 
                      evidence that the benefits

[[Page 124 STAT. 876]]

                      covered under the cafeteria plan were the subject 
                      of good faith bargaining between employee 
                      representatives and the employer, or
                          ``(iv) who are described in section 
                      410(b)(3)(C) (relating to nonresident aliens 
                      working outside the United States).
                A plan may provide a shorter period of service or 
                younger age for purposes of clause (i) or (ii).
            ``(5) Eligible employer.--For purposes of this subsection--
                    ``(A) In general.--The term `eligible employer' 
                means, with respect to any year, any employer if such 
                employer employed an average of 100 or fewer employees 
                on business days during either of the 2 preceding years. 
                For purposes of this subparagraph, a year may only be 
                taken into account if the employer was in existence 
                throughout the year.
                    ``(B) Employers not in existence during preceding 
                year.--If an employer was not in existence throughout 
                the preceding year, the determination under subparagraph 
                (A) shall be based on the average number of employees 
                that it is reasonably expected such employer will employ 
                on business days in the current year.
                    ``(C) Growing employers retain treatment as small 
                employer.--
                          ``(i) In general.--If--
                                    ``(I) an employer was an eligible 
                                employer for any year (a `qualified 
                                year'), and
                                    ``(II) such employer establishes a 
                                simple cafeteria plan for its employees 
                                for such year,
                      then, notwithstanding the fact the employer fails 
                      to meet the requirements of subparagraph (A) for 
                      any subsequent year, such employer shall be 
                      treated as an eligible employer for such 
                      subsequent year with respect to employees (whether 
                      or not employees during a qualified year) of any 
                      trade or business which was covered by the plan 
                      during any qualified year.
                          ``(ii) Exception.--This subparagraph shall 
                      cease to apply if the employer employs an average 
                      of 200 or more employees on business days during 
                      any year preceding any such subsequent year.
                    ``(D) Special rules.--
                          ``(i) Predecessors.--Any reference in this 
                      paragraph to an employer shall include a reference 
                      to any predecessor of such employer.
                          ``(ii) Aggregation rules.--All persons treated 
                      as a single employer under subsection (a) or (b) 
                      of section 52, or subsection (n) or (o) of section 
                      414, shall be treated as one person.
            ``(6) Applicable nondiscrimination requirement.--For 
        purposes of this subsection, the term `applicable 
        nondiscrimination requirement' means any requirement under 
        subsection (b) of this section, section 79(d), section 105(h), 
        or paragraph (2), (3), (4), or (8) of section 129(d).
            ``(7) Compensation.--The term `compensation' has the meaning 
        given such term by section 414(s).''.

    (b) <<NOTE: 26 USC 125 note.>>  Effective Date.--The amendments made 
by this section shall apply to years beginning after December 31, 2010.

[[Page 124 STAT. 877]]

SEC. 9023. QUALIFYING THERAPEUTIC DISCOVERY PROJECT CREDIT.

    (a) In General.--Subpart E of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by inserting after 
section 48C the following new section:

``SEC. 48D. <<NOTE: 26 USC 48D.>>  QUALIFYING THERAPEUTIC DISCOVERY 
            PROJECT CREDIT.

    ``(a) In General.--For purposes of section 46, the qualifying 
therapeutic discovery project credit for any taxable year is an amount 
equal to 50 percent of the qualified investment for such taxable year 
with respect to any qualifying therapeutic discovery project of an 
eligible taxpayer.
    ``(b) Qualified Investment.--
            ``(1) In general.--For purposes of subsection (a), the 
        qualified investment for any taxable year is the aggregate 
        amount of the costs paid or incurred in such taxable year for 
        expenses necessary for and directly related to the conduct of a 
        qualifying therapeutic discovery project.
            ``(2) Limitation.--The amount which is treated as qualified 
        investment for all taxable years with respect to any qualifying 
        therapeutic discovery project shall not exceed the amount 
        certified by the Secretary as eligible for the credit under this 
        section.
            ``(3) Exclusions.--The qualified investment for any taxable 
        year with respect to any qualifying therapeutic discovery 
        project shall not take into account any cost--
                    ``(A) for remuneration for an employee described in 
                section 162(m)(3),
                    ``(B) for interest expenses,
                    ``(C) for facility maintenance expenses,
                    ``(D) which is identified as a service cost under 
                section 1.263A-1(e)(4) of title 26, Code of Federal 
                Regulations, or
                    ``(E) for any other expense as determined by the 
                Secretary as appropriate to carry out the purposes of 
                this section.
            ``(4) Certain progress expenditure rules made applicable.--
        In the case of costs described in paragraph (1) that are paid 
        for property of a character subject to an allowance for 
        depreciation, rules similar to the rules of subsections (c)(4) 
        and (d) of section 46 (as in effect on the day before the date 
        of the enactment of the Revenue Reconciliation Act of 1990) 
        shall apply for purposes of this section.
            ``(5) Application of subsection.--An investment shall be 
        considered a qualified investment under this subsection only if 
        such investment is made in a taxable year beginning in 2009 or 
        2010.

    ``(c) Definitions.--
            ``(1) Qualifying therapeutic discovery project.--The term 
        `qualifying therapeutic discovery project' means a project which 
        is designed--
                    ``(A) to treat or prevent diseases or conditions by 
                conducting pre-clinical activities, clinical trials, and 
                clinical studies, or carrying out research protocols, 
                for the purpose of securing approval of a product under 
                section 505(b) of the Federal Food, Drug, and Cosmetic 
                Act or section 351(a) of the Public Health Service Act,

[[Page 124 STAT. 878]]

                    ``(B) to diagnose diseases or conditions or to 
                determine molecular factors related to diseases or 
                conditions by developing molecular diagnostics to guide 
                therapeutic decisions, or
                    ``(C) to develop a product, process, or technology 
                to further the delivery or administration of 
                therapeutics.
            ``(2) Eligible taxpayer.--
                    ``(A) In general.--The term `eligible taxpayer' 
                means a taxpayer which employs not more than 250 
                employees in all businesses of the taxpayer at the time 
                of the submission of the application under subsection 
                (d)(2).
                    ``(B) Aggregation rules.--All persons treated as a 
                single employer under subsection (a) or (b) of section 
                52, or subsection (m) or (o) of section 414, shall be so 
                treated for purposes of this paragraph.
            ``(3) Facility maintenance expenses.--The term `facility 
        maintenance expenses' means costs paid or incurred to maintain a 
        facility, including--
                    ``(A) mortgage or rent payments,
                    ``(B) insurance payments,
                    ``(C) utility and maintenance costs, and
                    ``(D) costs of employment of maintenance personnel.

    ``(d) Qualifying Therapeutic Discovery Project Program.--
            ``(1) Establishment.--
                    ``(A) <<NOTE: Deadline.>>  In general.--Not later 
                than 60 days after the date of the enactment of this 
                section, the Secretary, in consultation with the 
                Secretary of Health and Human Services, shall establish 
                a qualifying therapeutic discovery project program to 
                consider and award certifications for qualified 
                investments eligible for credits under this section to 
                qualifying therapeutic discovery project sponsors.
                    ``(B) Limitation.--The total amount of credits that 
                may be allocated under the program shall not exceed 
                $1,000,000,000 for the 2-year period beginning with 
                2009.
            ``(2) Certification.--
                    ``(A) Application period.--Each applicant for 
                certification under this paragraph shall submit an 
                application containing such information as the Secretary 
                may require during the period beginning on the date the 
                Secretary establishes the program under paragraph (1).
                    ``(B) Time for review of applications.--The 
                Secretary shall take action to approve or deny any 
                application under subparagraph (A) within 30 days of the 
                submission of such application.
                    ``(C) Multi-year applications.--An application for 
                certification under subparagraph (A) may include a 
                request for an allocation of credits for more than 1 of 
                the years described in paragraph (1)(B).
            ``(3) Selection criteria.--In determining the qualifying 
        therapeutic discovery projects with respect to which qualified 
        investments may be certified under this section, the Secretary--
                    ``(A) shall take into consideration only those 
                projects that show reasonable potential--
                          ``(i) to result in new therapies--
                                    ``(I) to treat areas of unmet 
                                medical need, or
                                    ``(II) to prevent, detect, or treat 
                                chronic or acute diseases and 
                                conditions,

[[Page 124 STAT. 879]]

                          ``(ii) to reduce long-term health care costs 
                      in the United States, or
                          ``(iii) to significantly advance the goal of 
                      curing cancer within the 30-year period beginning 
                      on the date the Secretary establishes the program 
                      under paragraph (1), and
                    ``(B) shall take into consideration which projects 
                have the greatest potential--
                          ``(i) to create and sustain (directly or 
                      indirectly) high quality, high-paying jobs in the 
                      United States, and
                          ``(ii) to advance United States 
                      competitiveness in the fields of life, biological, 
                      and medical sciences.
            ``(4) <<NOTE: Certification. Public information.>>  
        Disclosure of allocations.--The Secretary shall, upon making a 
        certification under this subsection, publicly disclose the 
        identity of the applicant and the amount of the credit with 
        respect to such applicant.

    ``(e) Special Rules.--
            ``(1) Basis adjustment.--For purposes of this subtitle, if a 
        credit is allowed under this section for an expenditure related 
        to property of a character subject to an allowance for 
        depreciation, the basis of such property shall be reduced by the 
        amount of such credit.
            ``(2) Denial of double benefit.--
                    ``(A) Bonus depreciation.--A credit shall not be 
                allowed under this section for any investment for which 
                bonus depreciation is allowed under section 168(k), 
                1400L(b)(1), or 1400N(d)(1).
                    ``(B) Deductions.--No deduction under this subtitle 
                shall be allowed for the portion of the expenses 
                otherwise allowable as a deduction taken into account in 
                determining the credit under this section for the 
                taxable year which is equal to the amount of the credit 
                determined for such taxable year under subsection (a) 
                attributable to such portion. This subparagraph shall 
                not apply to expenses related to property of a character 
                subject to an allowance for depreciation the basis of 
                which is reduced under paragraph (1), or which are 
                described in section 280C(g).
                    ``(C) Credit for research activities.--
                          ``(i) In general.--Except as provided in 
                      clause (ii), any expenses taken into account under 
                      this section for a taxable year shall not be taken 
                      into account for purposes of determining the 
                      credit allowable under section 41 or 45C for such 
                      taxable year.
                          ``(ii) Expenses included in determining base 
                      period research expenses.--Any expenses for any 
                      taxable year which are qualified research expenses 
                      (within the meaning of section 41(b)) shall be 
                      taken into account in determining base period 
                      research expenses for purposes of applying section 
                      41 to subsequent taxable years.

    ``(f) Coordination With Department of Treasury Grants.--In the case 
of any investment with respect to which the Secretary makes a grant 
under section 9023(e) of the Patient Protection and Affordable Care Act 
of 2009--
            ``(1) Denial of credit.--No credit shall be determined under 
        this section with respect to such investment for the

[[Page 124 STAT. 880]]

        taxable year in which such grant is made or any subsequent 
        taxable year.
            ``(2) Recapture of credits for progress expenditures made 
        before grant.--If a credit was determined under this section 
        with respect to such investment for any taxable year ending 
        before such grant is made--
                    ``(A) the tax imposed under subtitle A on the 
                taxpayer for the taxable year in which such grant is 
                made shall be increased by so much of such credit as was 
                allowed under section 38,
                    ``(B) the general business carryforwards under 
                section 39 shall be adjusted so as to recapture the 
                portion of such credit which was not so allowed, and
                    ``(C) the amount of such grant shall be determined 
                without regard to any reduction in the basis of any 
                property of a character subject to an allowance for 
                depreciation by reason of such credit.
            ``(3) Treatment of grants.--Any such grant shall not be 
        includible in the gross income of the taxpayer.''.

    (b) Inclusion as Part of Investment Credit.--Section 46 of the 
Internal Revenue Code of 1986 <<NOTE: 26 USC 46.>>  is amended--
            (1) by adding a comma at the end of paragraph (2),
            (2) by striking the period at the end of paragraph (5) and 
        inserting ``, and'', and
            (3) by adding at the end the following new paragraph:
            ``(6) the qualifying therapeutic discovery project 
        credit.''.

    (c) Conforming Amendments.--
            (1) Section 49(a)(1)(C) of the Internal Revenue Code of 1986 
        is <<NOTE: 26 USC 49.>>  amended--
                    (A) by striking ``and'' at the end of clause (iv),
                    (B) by striking the period at the end of clause (v) 
                and inserting ``, and'', and
                    (C) by adding at the end the following new clause:
                          ``(vi) the basis of any property to which 
                      paragraph (1) of section 48D(e) applies which is 
                      part of a qualifying therapeutic discovery project 
                      under such section 48D.''.
            (2) <<NOTE: 26 USC 280C.>>  Section 280C of such Code is 
        amended by adding at the end the following new subsection:

    ``(g) Qualifying Therapeutic Discovery Project Credit.--
            ``(1) In general.--No deduction shall be allowed for that 
        portion of the qualified investment (as defined in section 
        48D(b)) otherwise allowable as a deduction for the taxable year 
        which--
                    ``(A) would be qualified research expenses (as 
                defined in section 41(b)), basic research expenses (as 
                defined in section 41(e)(2)), or qualified clinical 
                testing expenses (as defined in section 45C(b)) if the 
                credit under section 41 or section 45C were allowed with 
                respect to such expenses for such taxable year, and
                    ``(B) is equal to the amount of the credit 
                determined for such taxable year under section 48D(a), 
                reduced by--
                          ``(i) the amount disallowed as a deduction by 
                      reason of section 48D(e)(2)(B), and
                          ``(ii) the amount of any basis reduction under 
                      section 48D(e)(1).
            ``(2) Similar rule where taxpayer capitalizes rather than 
        deducts expenses.--In the case of expenses described

[[Page 124 STAT. 881]]

        in paragraph (1)(A) taken into account in determining the credit 
        under section 48D for the taxable year, if--
                    ``(A) the amount of the portion of the credit 
                determined under such section with respect to such 
                expenses, exceeds
                    ``(B) the amount allowable as a deduction for such 
                taxable year for such expenses (determined without 
                regard to paragraph (1)),
        the amount chargeable to capital account for the taxable year 
        for such expenses shall be reduced by the amount of such excess.
            ``(3) <<NOTE: Applicability.>>  Controlled groups.--
        Paragraph (3) of subsection (b) shall apply for purposes of this 
        subsection.''.

    (d) Clerical Amendment.--The table of sections for subpart E 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 48C the 
following new item:

``Sec. 48D. Qualifying therapeutic discovery project credit.''.

    (e) <<NOTE: 26 USC 48D note.>>  Grants for Qualified Investments in 
Therapeutic Discovery Projects in Lieu of Tax Credits.--
            (1) In general.--Upon application, the Secretary of the 
        Treasury shall, subject to the requirements of this subsection, 
        provide a grant to each person who makes a qualified investment 
        in a qualifying therapeutic discovery project in the amount of 
        50 percent of such investment. No grant shall be made under this 
        subsection with respect to any investment unless such investment 
        is made during a taxable year beginning in 2009 or 2010.
            (2) Application.--
                    (A) In general.--At the stated election of the 
                applicant, an application for certification under 
                section 48D(d)(2) of the Internal Revenue Code of 1986 
                for a credit under such section for the taxable year of 
                the applicant which begins in 2009 shall be considered 
                to be an application for a grant under paragraph (1) for 
                such taxable year.
                    (B) Taxable years beginning in 2010.--An application 
                for a grant under paragraph (1) for a taxable year 
                beginning in 2010 shall be submitted--
                          (i) not earlier than the day after the last 
                      day of such taxable year, and
                          (ii) not later than the due date (including 
                      extensions) for filing the return of tax for such 
                      taxable year.
                    (C) Information to be submitted.--An application for 
                a grant under paragraph (1) shall include such 
                information and be in such form as the Secretary may 
                require to state the amount of the credit allowable (but 
                for the receipt of a grant under this subsection) under 
                section 48D for the taxable year for the qualified 
                investment with respect to which such application is 
                made.
            (3) Time for payment of grant.--
                    (A) In general.--The Secretary of the Treasury shall 
                make payment of the amount of any grant under paragraph 
                (1) during the 30-day period beginning on the later of--
                          (i) the date of the application for such 
                      grant, or
                          (ii) the date the qualified investment for 
                      which the grant is being made is made.

[[Page 124 STAT. 882]]

                    (B) Regulations.--In the case of investments of an 
                ongoing nature, the Secretary shall issue regulations to 
                determine the date on which a qualified investment shall 
                be deemed to have been made for purposes of this 
                paragraph.
            (4) <<NOTE: Definition.>>  Qualified investment.--For 
        purposes of this subsection, the term ``qualified investment'' 
        means a qualified investment that is certified under section 
        48D(d) of the Internal Revenue Code of 1986 for purposes of the 
        credit under such section 48D.
            (5) Application of certain rules.--
                    (A) In general.--In making grants under this 
                subsection, the Secretary of the Treasury shall apply 
                rules similar to the rules of section 50 of the Internal 
                Revenue Code of 1986. In applying such rules, any 
                increase in tax under chapter 1 of such Code by reason 
                of an investment ceasing to be a qualified investment 
                shall be imposed on the person to whom the grant was 
                made.
                    (B) Special rules.--
                          (i) Recapture of excessive grant amounts.--If 
                      the amount of a grant made under this subsection 
                      exceeds the amount allowable as a grant under this 
                      subsection, such excess shall be recaptured under 
                      subparagraph (A) as if the investment to which 
                      such excess portion of the grant relates had 
                      ceased to be a qualified investment immediately 
                      after such grant was made.
                          (ii) Grant information not treated as return 
                      information.--In no event shall the amount of a 
                      grant made under paragraph (1), the identity of 
                      the person to whom such grant was made, or a 
                      description of the investment with respect to 
                      which such grant was made be treated as return 
                      information for purposes of section 6103 of the 
                      Internal Revenue Code of 1986.
            (6) Exception for certain non-taxpayers.--The Secretary of 
        the Treasury shall not make any grant under this subsection to--
                    (A) any Federal, State, or local government (or any 
                political subdivision, agency, or instrumentality 
                thereof),
                    (B) any organization described in section 501(c) of 
                the Internal Revenue Code of 1986 and exempt from tax 
                under section 501(a) of such Code,
                    (C) any entity referred to in paragraph (4) of 
                section 54(j) of such Code, or
                    (D) any partnership or other pass-thru entity any 
                partner (or other holder of an equity or profits 
                interest) of which is described in subparagraph (A), (B) 
                or (C).
        In the case of a partnership or other pass-thru entity described 
        in subparagraph (D), partners and other holders of any equity or 
        profits interest shall provide to such partnership or entity 
        such information as the Secretary of the Treasury may require to 
        carry out the purposes of this paragraph.
            (7) Secretary.--Any reference in this subsection to the 
        Secretary of the Treasury shall be treated as including the 
        Secretary's delegate.
            (8) Other terms.--Any term used in this subsection which is 
        also used in section 48D of the Internal Revenue Code

[[Page 124 STAT. 883]]

        of 1986 shall have the same meaning for purposes of this 
        subsection as when used in such section.
            (9) Denial of double benefit.--No credit shall be allowed 
        under section 46(6) of the Internal Revenue Code of 1986 by 
        reason of section 48D of such Code for any investment for which 
        a grant is awarded under this subsection.
            (10) Appropriations.--There is hereby appropriated to the 
        Secretary of the Treasury such sums as may be necessary to carry 
        out this subsection.
            (11) Termination.--The Secretary of the Treasury shall not 
        make any grant to any person under this subsection unless the 
        application of such person for such grant is received before 
        January 1, 2013.
            (12) Protecting middle class families from tax increases.--
        It is the sense of the Senate that the Senate should reject any 
        procedural maneuver that would raise taxes on middle class 
        families, such as a motion to commit the pending legislation to 
        the Committee on Finance, which is designed to kill legislation 
        that provides tax cuts for American workers and families, 
        including the affordability tax credit and the small business 
        tax credit.

    (f) <<NOTE: 26 USC 46 note.>>  Effective Date.--The amendments made 
by subsections (a) through (d) of this section shall apply to amounts 
paid or incurred after December 31, 2008, in taxable years beginning 
after such date.

TITLE X--STRENGTHENING QUALITY, AFFORDABLE HEALTH CARE FOR ALL AMERICANS

               Subtitle A--Provisions Relating to Title I

SEC. 10101. AMENDMENTS TO SUBTITLE A.

    (a) Section 2711 of the Public Health Service Act, as added by 
section 1001(5) of this Act, is amended to read as follows:

``SEC. 2711. <<NOTE: 42 USC 300gg-11.>>  NO LIFETIME OR ANNUAL LIMITS.

    ``(a) Prohibition.--
            ``(1) In general.--A group health plan and a health 
        insurance issuer offering group or individual health insurance 
        coverage may not establish--
                    ``(A) lifetime limits on the dollar value of 
                benefits for any participant or beneficiary; or
                    ``(B) except as provided in paragraph (2), annual 
                limits on the dollar value of benefits for any 
                participant or beneficiary.
            ``(2) Annual limits prior to 2014.--With respect to plan 
        years beginning prior to January 1, 2014, a group health plan 
        and a health insurance issuer offering group or individual 
        health insurance coverage may only establish a restricted annual 
        limit on the dollar value of benefits for any participant or 
        beneficiary with respect to the scope of benefits that are 
        essential health benefits under section 1302(b) of the Patient

[[Page 124 STAT. 884]]

        Protection and Affordable Care Act, as determined by the 
        Secretary. In defining the term `restricted annual limit' for 
        purposes of the preceding sentence, the Secretary shall ensure 
        that access to needed services is made available with a minimal 
        impact on premiums.

    ``(b) Per Beneficiary Limits.--Subsection (a) shall not be construed 
to prevent a group health plan or health insurance coverage from placing 
annual or lifetime per beneficiary limits on specific covered benefits 
that are not essential health benefits under section 1302(b) of the 
Patient Protection and Affordable Care Act, to the extent that such 
limits are otherwise permitted under Federal or State law.''.
    (b) Section 2715(a) of the Public Health Service Act, as added by 
section 1001(5) of this Act, <<NOTE: 42 USC 300gg-15.>>  is amended by 
striking ``and providing to enrollees'' and inserting ``and providing to 
applicants, enrollees, and policyholders or certificate holders''.

    (c) Subpart II of part A of title XXVII of the Public Health Service 
Act, as added by section 1001(5), is amended by inserting after section 
2715, the following:

``SEC. 2715A. <<NOTE: Public information. 42 USC 300gg-15a.>>  PROVISION 
            OF ADDITIONAL INFORMATION.

    ``A group health plan and a health insurance issuer offering group 
or individual health insurance coverage shall comply with the provisions 
of section 1311(e)(3) of the Patient Protection and Affordable Care Act, 
except that a plan or coverage that is not offered through an Exchange 
shall only be required to submit the information required to the 
Secretary and the State insurance commissioner, and make such 
information available to the public.''.
    (d) Section 2716 of the Public Health Service Act, as added by 
section 1001(5) of this Act, is amended to read as follows:

``SEC. 2716. <<NOTE: 42 USC 300gg-16.>>  PROHIBITION ON DISCRIMINATION 
            IN FAVOR OF HIGHLY COMPENSATED INDIVIDUALS.

    ``(a) In General.--A group health plan (other than a self-insured 
plan) shall satisfy the requirements of section 105(h)(2) of the 
Internal Revenue Code of 1986 (relating to prohibition on discrimination 
in favor of highly compensated individuals).
    ``(b) Rules and Definitions.--For purposes of this section--
            ``(1) Certain rules to apply.--Rules similar to the rules 
        contained in paragraphs (3), (4), and (8) of section 105(h) of 
        such Code shall apply.
            ``(2) Highly compensated individual.--The term `highly 
        compensated individual' has the meaning given such term by 
        section 105(h)(5) of such Code.''.

    (e) Section 2717 of the Public Health Service Act, as added by 
section 1001(5) of this Act, <<NOTE: 42 USC 300gg-17.>>  is amended--
            (1) by redesignating subsections (c) and (d) as subsections 
        (d) and (e), respectively; and
            (2) by inserting after subsection (b), the following:

    ``(c) Protection of Second Amendment Gun Rights.--
            ``(1) Wellness and prevention programs.--A wellness and 
        health promotion activity implemented under subsection (a)(1)(D) 
        may not require the disclosure or collection of any information 
        relating to--
                    ``(A) the presence or storage of a lawfully-
                possessed firearm or ammunition in the residence or on 
                the property of an individual; or

[[Page 124 STAT. 885]]

                    ``(B) the lawful use, possession, or storage of a 
                firearm or ammunition by an individual.
            ``(2) Limitation on data collection.--None of the 
        authorities provided to the Secretary under the Patient 
        Protection and Affordable Care Act or an amendment made by that 
        Act shall be construed to authorize or may be used for the 
        collection of any information relating to--
                    ``(A) the lawful ownership or possession of a 
                firearm or ammunition;
                    ``(B) the lawful use of a firearm or ammunition; or
                    ``(C) the lawful storage of a firearm or ammunition.
            ``(3) Limitation on databases or data banks.--None of the 
        authorities provided to the Secretary under the Patient 
        Protection and Affordable Care Act or an amendment made by that 
        Act shall be construed to authorize or may be used to maintain 
        records of individual ownership or possession of a firearm or 
        ammunition.
            ``(4) Limitation on determination of premium rates or 
        eligibility for health insurance.--A premium rate may not be 
        increased, health insurance coverage may not be denied, and a 
        discount, rebate, or reward offered for participation in a 
        wellness program may not be reduced or withheld under any health 
        benefit plan issued pursuant to or in accordance with the 
        Patient Protection and Affordable Care Act or an amendment made 
        by that Act on the basis of, or on reliance upon--
                    ``(A) the lawful ownership or possession of a 
                firearm or ammunition; or
                    ``(B) the lawful use or storage of a firearm or 
                ammunition.
            ``(5) Limitation on data collection requirements for 
        individuals.--No individual shall be required to disclose any 
        information under any data collection activity authorized under 
        the Patient Protection and Affordable Care Act or an amendment 
        made by that Act relating to--
                    ``(A) the lawful ownership or possession of a 
                firearm or ammunition; or
                    ``(B) the lawful use, possession, or storage of a 
                firearm or ammunition.''.

    (f) Section 2718 of the Public Health Service Act, as added by 
section 1001(5), is amended to read as follows:

``SEC. 2718. <<NOTE: 42 USC 300gg-18. Reports.>>  BRINGING DOWN THE COST 
            OF HEALTH CARE COVERAGE.

    ``(a) Clear Accounting for Costs.--A health insurance issuer 
offering group or individual health insurance coverage (including a 
grandfathered health plan) shall, with respect to each plan year, submit 
to the Secretary a report concerning the ratio of the incurred loss (or 
incurred claims) plus the loss adjustment expense (or change in contract 
reserves) to earned premiums. Such report shall include the percentage 
of total premium revenue, after accounting for collections or receipts 
for risk adjustment and risk corridors and payments of reinsurance, 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

[[Page 124 STAT. 886]]

            ``(3) on all other non-claims costs, including an 
        explanation of the nature of such costs, and excluding Federal 
        and State taxes and licensing or regulatory fees.

The Secretary <<NOTE: Public information. Web posting.>>  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) <<NOTE: Deadline.>>  Requirement.--Beginning 
                not later than January 1, 2011, a health insurance 
                issuer offering group or individual health insurance 
                coverage (including a grandfathered health plan) shall, 
                with respect to each plan year, provide an annual rebate 
                to each enrollee under such coverage, on a pro rata 
                basis, if the ratio of the amount of premium revenue 
                expended by the issuer on costs described in paragraphs 
                (1) and (2) of subsection (a) to the total amount of 
                premium revenue (excluding Federal and State taxes and 
                licensing or regulatory fees and after accounting for 
                payments or receipts for risk adjustment, risk 
                corridors, and reinsurance under sections 1341, 1342, 
                and 1343 of the Patient Protection and Affordable Care 
                Act) for the plan year (except as provided in 
                subparagraph (B)(ii)), is less than--
                          ``(i) with respect to a health insurance 
                      issuer offering coverage in the large group 
                      market, 85 percent, or such higher percentage as a 
                      State may by regulation determine; or
                          ``(ii) with respect to a health insurance 
                      issuer offering coverage in the small group market 
                      or in the individual market, 80 percent, or such 
                      higher percentage as a State may by regulation 
                      determine, except that the Secretary may adjust 
                      such percentage with respect to a State if the 
                      Secretary determines that the application of such 
                      80 percent may destabilize the individual market 
                      in such State.
                    ``(B) Rebate amount.--
                          ``(i) Calculation of amount.--The total amount 
                      of an annual rebate required under this paragraph 
                      shall be in an amount equal to the product of--
                                    ``(I) the amount by which the 
                                percentage described in clause (i) or 
                                (ii) of subparagraph (A) exceeds the 
                                ratio described in such subparagraph; 
                                and
                                    ``(II) the total amount of premium 
                                revenue (excluding Federal and State 
                                taxes and licensing or regulatory fees 
                                and after accounting for payments or 
                                receipts for risk adjustment, risk 
                                corridors, and reinsurance under 
                                sections 1341, 1342, and 1343 of the 
                                Patient Protection and Affordable Care 
                                Act) for such plan year.
                          ``(ii) Calculation based on average ratio.--
                      Beginning on January 1, 2014, <<NOTE: Effective 
                      date.>>  the determination made under subparagraph 
                      (A) for the year involved shall be based on the 
                      averages of the premiums expended on the costs 
                      described in such subparagraph and total

[[Page 124 STAT. 887]]

                      premium revenue for each of the previous 3 years 
                      for the plan.
            ``(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) <<NOTE: Regulations.>>  Enforcement.--The Secretary 
        shall promulgate regulations for enforcing the provisions of 
        this section and may provide for appropriate penalties.

    ``(c) <<NOTE: Deadline. Certification.>>  Definitions.--Not later 
than December 31, 2010, and subject to the certification of the 
Secretary, the National Association of Insurance Commissioners shall 
establish uniform definitions of the activities reported under 
subsection (a) and standardized methodologies for calculating measures 
of such activities, including definitions of which activities, and in 
what regard such activities, constitute activities described in 
subsection (a)(2). Such methodologies shall be designed to take into 
account the special circumstances of smaller plans, different types of 
plans, and newer plans.

    ``(d) Adjustments.--The Secretary may adjust the rates described in 
subsection (b) if the Secretary determines appropriate on account of the 
volatility of the individual market due to the establishment of State 
Exchanges.
    ``(e) 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.''.
    (g) Section 2719 of the Public Health Service Act, as added by 
section 1001(4) of this Act, is amended to read as follows:

``SEC. 2719. <<NOTE: 42 USC 300gg-19.>>  APPEALS PROCESS.

    ``(a) Internal Claims Appeals.--
            ``(1) In general.--A group health plan and a health 
        insurance issuer offering group 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--
                    ``(A) have in effect an internal claims appeal 
                process;
                    ``(B) 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; and
                    ``(C) 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.
            ``(2) Established processes.--To comply with paragraph (1)--
                    ``(A) a group health plan and a health insurance 
                issuer offering group health coverage shall provide an 
                internal claims and appeals process that initially 
                incorporates the

[[Page 124 STAT. 888]]

                claims and appeals procedures (including urgent claims) 
                set forth at section 2560.503-1 of title 29, Code of 
                Federal Regulations, as published on November 21, 2000 
                (65 Fed. Reg. 70256), and shall update such process in 
                accordance with any standards established by the 
                Secretary of Labor for such plans and issuers; and
                    ``(B) a health insurance issuer offering individual 
                health coverage, and any other issuer not subject to 
                subparagraph (A), shall provide an internal claims and 
                appeals process that initially incorporates the claims 
                and appeals procedures set forth under applicable law 
                (as in existence on the date of enactment of this 
                section), and shall update such process in accordance 
                with any standards established by the Secretary of 
                Health and Human Services for such issuers.

    ``(b) External Review.--A group health plan and a health insurance 
issuer offering group or individual health insurance coverage--
            ``(1) shall comply with the applicable State 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; or
            ``(2) shall implement an effective external review process 
        that meets minimum standards established by the Secretary 
        through guidance and that is similar to the process described 
        under paragraph (1)--
                    ``(A) if the applicable State has not established an 
                external review process that meets the requirements of 
                paragraph (1); or
                    ``(B) if the plan is a self-insured plan that is not 
                subject to State insurance regulation (including a State 
                law that establishes an external review process 
                described in paragraph (1)).

    ``(c) Secretary Authority.--The Secretary may deem the external 
review process of a group health plan or health insurance issuer, in 
operation as of the date of enactment of this section, to be in 
compliance with the applicable process established under subsection (b), 
as determined appropriate by the Secretary.''.
    (h) Subpart II of part A of title XVIII of the Public Health Service 
Act, as added by section 1001(5) of this Act, is amended by inserting 
after section 2719 the following:

``SEC. 2719A. <<NOTE: 42 USC 300gg-19a.>>  PATIENT PROTECTIONS.

    ``(a) Choice of Health Care Professional.--If a group health plan, 
or a health insurance issuer offering group or individual health 
insurance coverage, requires or provides for designation by a 
participant, beneficiary, or enrollee of a participating primary care 
provider, then the plan or issuer shall permit each participant, 
beneficiary, and enrollee to designate any participating primary care 
provider who is available to accept such individual.
    ``(b) Coverage of Emergency Services.--
            ``(1) In general.--If a group health plan, or a health 
        insurance issuer offering group or individual health insurance 
        issuer, provides or covers any benefits with respect to services 
        in an emergency department of a hospital, the plan or issuer

[[Page 124 STAT. 889]]

        shall cover emergency services (as defined in paragraph 
        (2)(B))--
                    ``(A) without the need for any prior authorization 
                determination;
                    ``(B) whether the health care provider furnishing 
                such services is a participating provider with respect 
                to such services;
                    ``(C) in a manner so that, if such services are 
                provided to a participant, beneficiary, or enrollee--
                          ``(i) by a nonparticipating health care 
                      provider with or without prior authorization; or
                          ``(ii)(I) such 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;
                    ``(D) without regard to any other term or condition 
                of such coverage (other than exclusion or coordination 
                of benefits, or an affiliation or waiting period, 
                permitted under section 2701 of this Act, section 701 of 
                the Employee Retirement Income Security Act of 1974, or 
                section 9801 of the Internal Revenue Code of 1986, and 
                other than applicable cost-sharing).
            ``(2) Definitions.--In this subsection:
                    ``(A) Emergency medical condition.--The term 
                `emergency medical condition' means a medical condition 
                manifesting itself by acute symptoms of sufficient 
                severity (including severe pain) such that a prudent 
                layperson, who possesses an average knowledge of health 
                and medicine, could reasonably expect the absence of 
                immediate medical attention to result in a condition 
                described in clause (i), (ii), or (iii) of section 
                1867(e)(1)(A) of the Social Security Act.
                    ``(B) Emergency services.--The term `emergency 
                services' means, with respect to an emergency medical 
                condition--
                          ``(i) a medical screening examination (as 
                      required under section 1867 of the Social Security 
                      Act) that is within the capability of the 
                      emergency department of a hospital, including 
                      ancillary services routinely available to the 
                      emergency department to evaluate such emergency 
                      medical condition, and
                          ``(ii) within the capabilities of the staff 
                      and facilities available at the hospital, such 
                      further medical examination and treatment as are 
                      required under section 1867 of such Act to 
                      stabilize the patient.

[[Page 124 STAT. 890]]

                    ``(C) Stabilize.--The term `to stabilize', with 
                respect to an emergency medical condition (as defined in 
                subparagraph (A)), has the meaning give in section 
                1867(e)(3) of the Social Security Act (42 U.S.C. 
                1395dd(e)(3)).

    ``(c) Access to Pediatric Care.--
            ``(1) Pediatric care.--In the case of a person who has a 
        child who is a participant, beneficiary, or enrollee under a 
        group health plan, or health insurance coverage offered by a 
        health insurance issuer in the group or individual market, if 
        the plan or issuer requires or provides for the designation of a 
        participating primary care provider for the child, the plan or 
        issuer shall permit such person to designate a physician 
        (allopathic or osteopathic) who specializes in pediatrics as the 
        child's primary care provider if such provider participates in 
        the network of the plan or issuer.
            ``(2) Construction.--Nothing in paragraph (1) shall be 
        construed to waive any exclusions of coverage under the terms 
        and conditions of the plan or health insurance coverage with 
        respect to coverage of pediatric care.

    ``(d) Patient Access to Obstetrical and Gynecological Care.--
            ``(1) General rights.--
                    ``(A) Direct access.--A group health plan, or health 
                insurance issuer offering group or individual health 
                insurance coverage, described in paragraph (2) may not 
                require authorization or referral by the plan, issuer, 
                or any person (including a primary care provider 
                described in paragraph (2)(B)) in the case of a female 
                participant, beneficiary, or enrollee who seeks coverage 
                for obstetrical or gynecological care provided by a 
                participating health care professional who specializes 
                in obstetrics or gynecology. Such professional shall 
                agree to otherwise adhere to such plan's or issuer's 
                policies and procedures, including procedures regarding 
                referrals and obtaining prior authorization and 
                providing services pursuant to a treatment plan (if any) 
                approved by the plan or issuer.
                    ``(B) Obstetrical and gynecological care.--A group 
                health plan or health insurance issuer described in 
                paragraph (2) shall treat the provision of obstetrical 
                and gynecological care, and the ordering of related 
                obstetrical and gynecological items and services, 
                pursuant to the direct access described under 
                subparagraph (A), by a participating health care 
                professional who specializes in obstetrics or gynecology 
                as the authorization of the primary care provider.
            ``(2) Application of paragraph.--A group health plan, or 
        health insurance issuer offering group or individual health 
        insurance coverage, described in this paragraph is a group 
        health plan or coverage that--
                    ``(A) provides coverage for obstetric or gynecologic 
                care; and
                    ``(B) requires the designation by a participant, 
                beneficiary, or enrollee of a participating primary care 
                provider.
            ``(3) Construction.--Nothing in paragraph (1) shall be 
        construed to--
                    ``(A) waive any exclusions of coverage under the 
                terms and conditions of the plan or health insurance 
                coverage

[[Page 124 STAT. 891]]

                with respect to coverage of obstetrical or gynecological 
                care; or
                    ``(B) preclude the group health plan or health 
                insurance issuer involved from requiring that the 
                obstetrical or gynecological provider notify the primary 
                care health care professional or the plan or issuer of 
                treatment decisions.''.

    (i) Section 2794 of the Public Health Service Act, as added by 
section 1003 of this Act, <<NOTE: 42 USC 300gg-94.>>  is amended--
            (1) in subsection (c)(1)--
                    (A) in subparagraph (A), by striking ``and'' at the 
                end;
                    (B) in subparagraph (B), by striking the period and 
                inserting ``; and''; and
                    (C) by adding at the end the following:
                    ``(C) in establishing centers (consistent with 
                subsection (d)) at academic or other nonprofit 
                institutions to collect medical reimbursement 
                information from health insurance issuers, to analyze 
                and organize such information, and to make such 
                information available to such issuers, health care 
                providers, health researchers, health care policy 
                makers, and the general public.''; and
            (2) by adding at the end the following:

    ``(d) Medical Reimbursement Data Centers.--
            ``(1) Functions.--A center established under subsection 
        (c)(1)(C) shall--
                    ``(A) develop fee schedules and other database tools 
                that fairly and accurately reflect market rates for 
                medical services and the geographic differences in those 
                rates;
                    ``(B) use the best available statistical methods and 
                data processing technology to develop such fee schedules 
                and other database tools;
                    ``(C) regularly update such fee schedules and other 
                database tools to reflect changes in charges for medical 
                services;
                    ``(D) <<NOTE: Public information. Web posting.>>  
                make health care cost information readily available to 
                the public through an Internet website that allows 
                consumers to understand the amounts that health care 
                providers in their area charge for particular medical 
                services; and
                    ``(E) <<NOTE: Publication.>>  regularly publish 
                information concerning the statistical methodologies 
                used by the center to analyze health charge data and 
                make such data available to researchers and policy 
                makers.
            ``(2) <<NOTE: By-laws.>>  Conflicts of interest.--A center 
        established under subsection (c)(1)(C) shall adopt by-laws that 
        ensures that the center (and all members of the governing board 
        of the center) is independent and free from all conflicts of 
        interest. Such by-laws shall ensure that the center is not 
        controlled or influenced by, and does not have any corporate 
        relation to, any individual or entity that may make or receive 
        payments for health care services based on the center's analysis 
        of health care costs.
            ``(3) Rule of construction.--Nothing in this subsection 
        shall be construed to permit a center established under 
        subsection (c)(1)(C) to compel health insurance issuers to 
        provide data to the center.''.

[[Page 124 STAT. 892]]

SEC. 10102. AMENDMENTS TO SUBTITLE B.

    (a) <<NOTE: 42 USC 18002.>>  Section 1102(a)(2)(B) of this Act is 
amended--
            (1) in the matter preceding clause (i), by striking ``group 
        health benefits plan'' and inserting ``group benefits plan 
        providing health benefits''; and
            (2) in clause (i)(I), by inserting ``or any agency or 
        instrumentality of any of the foregoing'' before the closed 
        parenthetical.

    (b) <<NOTE: 42 USC 18003.>>  Section 1103(a) of this Act is 
amended--
            (1) in paragraph (1), by inserting ``, or small business 
        in,'' after ``residents of any''; and
            (2) by striking paragraph (2) and inserting the following:
            ``(2) Connecting to affordable coverage.--An Internet 
        website established under paragraph (1) shall, to the extent 
        practicable, provide ways for residents of, and small businesses 
        in, 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.
                    ``(F) Coverage within the small group market for 
                small businesses and their employees, including 
                reinsurance for early retirees under section 1102, tax 
                credits available under section 45R of the Internal 
                Revenue Code of 1986 (as added by section 1421), and 
                other information specifically for small businesses 
                regarding affordable health care options.''.

SEC. 10103. AMENDMENTS TO SUBTITLE C.

    (a) Section 2701(a)(5) of the Public Health Service Act, as added by 
section 1201(4) of this Act, <<NOTE: 42 USC 300gg.>>  is amended by 
inserting ``(other than self-insured group health plans offered in such 
market)'' after ``such market''.

    (b) Section 2708 of the Public Health Service Act, as added by 
section 1201(4) of this Act, <<NOTE: 42 USC 300gg-7.>>  is amended by 
striking ``or individual''.

    (c) Subpart I of part A of title XXVII of the Public Health Service 
Act, as added by section 1201(4) of this Act, is amended by inserting 
after section 2708, the following:

``SEC. 2709. <<NOTE: 42 USC 300gg-8.>>  COVERAGE FOR INDIVIDUALS 
            PARTICIPATING IN APPROVED CLINICAL TRIALS.

    ``(a) Coverage.--
            ``(1) In general.--If a group health plan or a health 
        insurance issuer offering group or individual health insurance 
        coverage provides coverage to a qualified individual, then such 
        plan or issuer--

[[Page 124 STAT. 893]]

                    ``(A) may not deny the individual participation in 
                the clinical trial referred to in subsection (b)(2);
                    ``(B) subject to subsection (c), may not deny (or 
                limit or impose additional conditions on) the coverage 
                of routine patient costs for items and services 
                furnished in connection with participation in the trial; 
                and
                    ``(C) may not discriminate against the individual on 
                the basis of the individual's participation in such 
                trial.
            ``(2) Routine patient costs.--
                    ``(A) Inclusion.--For purposes of paragraph (1)(B), 
                subject to subparagraph (B), routine patient costs 
                include all items and services consistent with the 
                coverage provided in the plan (or coverage) that is 
                typically covered for a qualified individual who is not 
                enrolled in a clinical trial.
                    ``(B) Exclusion.--For purposes of paragraph (1)(B), 
                routine patient costs does not include--
                          ``(i) the investigational item, device, or 
                      service, itself;
                          ``(ii) items and services that are provided 
                      solely to satisfy data collection and analysis 
                      needs and that are not used in the direct clinical 
                      management of the patient; or
                          ``(iii) a service that is clearly inconsistent 
                      with widely accepted and established standards of 
                      care for a particular diagnosis.
            ``(3) Use of in-network providers.--If one or more 
        participating providers is participating in a clinical trial, 
        nothing in paragraph (1) shall be construed as preventing a plan 
        or issuer from requiring that a qualified individual participate 
        in the trial through such a participating provider if the 
        provider will accept the individual as a participant in the 
        trial.
            ``(4) <<NOTE: Applicability.>>  Use of out-of-network.--
        Notwithstanding paragraph (3), paragraph (1) shall apply to a 
        qualified individual participating in an approved clinical trial 
        that is conducted outside the State in which the qualified 
        individual resides.

    ``(b) Qualified Individual Defined.--For purposes of subsection (a), 
the term `qualified individual' means an individual who is a participant 
or beneficiary in a health plan or with coverage described in subsection 
(a)(1) and who meets the following conditions:
            ``(1) The individual is eligible to participate in an 
        approved clinical trial according to the trial protocol with 
        respect to treatment of cancer or other life-threatening disease 
        or condition.
            ``(2) Either--
                    ``(A) the referring health care professional is a 
                participating health care provider and has concluded 
                that the individual's participation in such trial would 
                be appropriate based upon the individual meeting the 
                conditions described in paragraph (1); or
                    ``(B) the participant or beneficiary provides 
                medical and scientific information establishing that the 
                individual's participation in such trial would be 
                appropriate based upon the individual meeting the 
                conditions described in paragraph (1).

    ``(c) Limitations on Coverage.--This section shall not be construed 
to require a group health plan, or a health insurance issuer

[[Page 124 STAT. 894]]

offering group or individual health insurance coverage, to provide 
benefits for routine patient care services provided outside of the 
plan's (or coverage's) health care provider network unless out-of-
network benefits are otherwise provided under the plan (or coverage).
    ``(d) Approved Clinical Trial Defined.--
            ``(1) In general.--In this section, the term `approved 
        clinical trial' means a phase I, phase II, phase III, or phase 
        IV clinical trial that is conducted in relation to the 
        prevention, detection, or treatment of cancer or other life-
        threatening disease or condition and is described in any of the 
        following subparagraphs:
                    ``(A) Federally funded trials.--The study or 
                investigation is approved or funded (which may include 
                funding through in-kind contributions) by one or more of 
                the following:
                          ``(i) The National Institutes of Health.
                          ``(ii) The Centers for Disease Control and 
                      Prevention.
                          ``(iii) The Agency for Health Care Research 
                      and Quality.
                          ``(iv) The Centers for Medicare & Medicaid 
                      Services.
                          ``(v) cooperative group or center of any of 
                      the entities described in clauses (i) through (iv) 
                      or the Department of Defense or the Department of 
                      Veterans Affairs.
                          ``(vi) A qualified non-governmental research 
                      entity identified in the guidelines issued by the 
                      National Institutes of Health for center support 
                      grants.
                          ``(vii) Any of the following if the conditions 
                      described in paragraph (2) are met:
                                    ``(I) The Department of Veterans 
                                Affairs.
                                    ``(II) The Department of Defense.
                                    ``(III) The Department of Energy.
                    ``(B) The study or investigation is conducted under 
                an investigational new drug application reviewed by the 
                Food and Drug Administration.
                    ``(C) The study or investigation is a drug trial 
                that is exempt from having such an investigational new 
                drug application.
            ``(2) <<NOTE: Determination.>>  Conditions for 
        departments.--The conditions described in this paragraph, for a 
        study or investigation conducted by a Department, are that the 
        study or investigation has been reviewed and approved through a 
        system of peer review that the Secretary determines--
                    ``(A) to be comparable to the system of peer review 
                of studies and investigations used by the National 
                Institutes of Health, and
                    ``(B) assures unbiased review of the highest 
                scientific standards by qualified individuals who have 
                no interest in the outcome of the review.

    ``(e) Life-threatening Condition Defined.--In this section, the term 
`life-threatening condition' means any disease or condition from which 
the likelihood of death is probable unless the course of the disease or 
condition is interrupted.
    ``(f) Construction.--Nothing in this section shall be construed to 
limit a plan's or issuer's coverage with respect to clinical trials.

[[Page 124 STAT. 895]]

    ``(g) Application to FEHBP.--Notwithstanding any provision of 
chapter 89 of title 5, United States Code, this section shall apply to 
health plans offered under the program under such chapter.
    ``(h) Preemption.--Notwithstanding any other provision of this Act, 
nothing in this section shall preempt State laws that require a clinical 
trials policy for State regulated health insurance plans that is in 
addition to the policy required under this section.''.
    (d) <<NOTE: 42 USC 18011.>>  Section 1251(a) of this Act is 
amended--
            (1) in paragraph (2), by striking ``With'' and inserting 
        ``Except as provided in paragraph (3), with''; and
            (2) by adding at the end the following:
            ``(3) Application of certain provisions.--The provisions of 
        sections 2715 and 2718 of the Public Health Service Act (as 
        added by subtitle A) shall apply to grandfathered health plans 
        for plan years beginning on or after the date of enactment of 
        this Act.''.

    (e) <<NOTE: Effective date. 42 USC 300gg note.>>  Section 1253 of 
this Act is amended insert before the period the following: ``, except 
that--
            ``(1) section 1251 shall take effect on the date of 
        enactment of this Act; and
            ``(2) the provisions of section 2704 of the Public Health 
        Service Act (as amended by section 1201), as they apply to 
        enrollees who are under 19 years of age, shall become effective 
        for plan years beginning on or after the date that is 6 months 
        after the date of enactment of this Act.''.

    (f) Subtitle C of title I of this Act is amended--
            (1) by redesignating section 1253 as section 1255; and
            (2) by inserting after section 1252, the following:

``SEC. 1253. <<NOTE: 42 USC 18013.>>  ANNUAL REPORT ON SELF-INSURED 
            PLANS.

    ``Not later than 1 year after the date of enactment of this Act, and 
annually thereafter, the Secretary of Labor shall prepare an aggregate 
annual report, using data collected from the Annual Return/Report of 
Employee Benefit Plan (Department of Labor Form 5500), that shall 
include general information on self-insured group health plans 
(including plan type, number of participants, benefits offered, funding 
arrangements, and benefit arrangements) as well as data from the 
financial filings of self-insured employers (including information on 
assets, liabilities, contributions, investments, and expenses). The 
Secretary shall submit such reports to the appropriate committees of 
Congress.

``SEC. 1254. STUDY OF LARGE GROUP MARKET.

    ``(a) In General.--The Secretary of Health and Human Services shall 
conduct a study of the fully-insured and self-insured group health plan 
markets to--
            ``(1) compare the characteristics of employers (including 
        industry, size, and other characteristics as determined 
        appropriate by the Secretary), health plan benefits, financial 
        solvency, capital reserve levels, and the risks of becoming 
        insolvent; and
            ``(2) determine the extent to which new insurance market 
        reforms are likely to cause adverse selection in the large group 
        market or to encourage small and midsize employers to self-
        insure.

    ``(b) Collection of Information.--In conducting the study under 
subsection (a), the Secretary, in coordination with the Secretary of 
Labor, shall collect information and analyze--

[[Page 124 STAT. 896]]

            ``(1) the extent to which self-insured group health plans 
        can offer less costly coverage and, if so, whether lower costs 
        are due to more efficient plan administration and lower overhead 
        or to the denial of claims and the offering very limited benefit 
        packages;
            ``(2) claim denial rates, plan benefit fluctuations (to 
        evaluate the extent that plans scale back health benefits during 
        economic downturns), and the impact of the limited recourse 
        options on consumers; and
            ``(3) any potential conflict of interest as it relates to 
        the health care needs of self-insured enrollees and self-insured 
        employer's financial contribution or profit margin, and the 
        impact of such conflict on administration of the health plan.

    ``(c) Report.--Not later than 1 year after the date of enactment of 
this Act, the Secretary shall submit to the appropriate committees of 
Congress a report concerning the results of the study conducted under 
subsection (a).''.

SEC. 10104. AMENDMENTS TO SUBTITLE D.

    (a) <<NOTE: 42 USC 18021.>>  Section 1301(a) of this Act is amended 
by striking paragraph (2) and inserting the following:
            ``(2) Inclusion of co-op plans and multi-state qualified 
        health plans.--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, and a multi-State 
        plan under section 1334, unless specifically provided for 
        otherwise.
            ``(3) Treatment of qualified direct primary care medical 
        home plans.--The Secretary <<NOTE: Criteria.>>  of Health and 
        Human Services shall permit a qualified health plan to provide 
        coverage through a qualified direct primary care medical home 
        plan that meets criteria established by the Secretary, so long 
        as the qualified health plan meets all requirements that are 
        otherwise applicable and the services covered by the medical 
        home plan are coordinated with the entity offering the qualified 
        health plan.
            ``(4) Variation based on rating area.--A qualified health 
        plan, including a multi-State qualified health plan, may as 
        appropriate vary premiums by rating area (as defined in section 
        2701(a)(2) of the Public Health Service Act).''.

    (b) <<NOTE: 42 USC 18022.>>  Section 1302 of this Act is amended--
            (1) in subsection (d)(2)(B), by striking ``may issue'' and 
        inserting ``shall issue''; and
            (2) by adding at the end the following:

    ``(g) Payments to Federally-qualified Health Centers.--If any item 
or service covered by a qualified health plan is provided by a 
Federally-qualified health center (as defined in section 1905(l)(2)(B) 
of the Social Security Act (42 U.S.C. 1396d(l)(2)(B)) to an enrollee of 
the plan, the offeror of the plan shall pay to the center for the item 
or service an amount that is not less than the amount of payment that 
would have been paid to the center under section 1902(bb) of such Act 
(42 U.S.C. 1396a(bb)) for such item or service.''.
    (c) Section 1303 of this Act is amended to read as follows:

``SEC. 1303. <<NOTE: 42 USC 18023.>>  SPECIAL RULES.

    ``(a) State Opt-out of Abortion Coverage.--

[[Page 124 STAT. 897]]

            ``(1) In general.--A State may elect to prohibit abortion 
        coverage in qualified health plans offered through an Exchange 
        in such State if such State enacts a law to provide for such 
        prohibition.
            ``(2) Termination of opt out.--A State may repeal a law 
        described in paragraph (1) and provide for the offering of such 
        services through the Exchange.

    ``(b) 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)--
                          ``(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) subject to subsection (a), 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.--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 permitted, based on the law 
                      as in effect as of the date that is 6 months 
                      before the beginning of the plan year involved.
            ``(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 the Patient Protection and 
                      Affordable Care Act (and the amount (if any) of 
                      the advance payment of the reduction under section 
                      1412 of the Patient Protection and Affordable Care 
                      Act).
                    ``(B) Establishment of allocation accounts.--In the 
                case of a plan to which subparagraph (A) applies, the 
                issuer of the plan shall--

[[Page 124 STAT. 898]]

                          ``(i) collect from each enrollee in the plan 
                      (without regard to the enrollee's age, sex, or 
                      family status) a separate payment for each of the 
                      following:
                                    ``(I) an amount equal to the portion 
                                of the premium to be paid directly by 
                                the enrollee for coverage under the plan 
                                of services other than services 
                                described in paragraph (1)(B)(i) (after 
                                reduction for credits and cost-sharing 
                                reductions described in subparagraph 
                                (A)); and
                                    ``(II) an amount equal to the 
                                actuarial value of the coverage of 
                                services described in paragraph 
                                (1)(B)(i), and
                          ``(ii) shall deposit all such separate 
                      payments into separate allocation accounts as 
                      provided in subparagraph (C).
                In the case of an enrollee whose premium for coverage 
                under the plan is paid through employee payroll deposit, 
                the separate payments required under this subparagraph 
                shall each be paid by a separate deposit.
                    ``(C) Segregation of funds.--
                          ``(i) In general.--The issuer of a plan to 
                      which subparagraph (A) applies shall establish 
                      allocation accounts described in clause (ii) for 
                      enrollees receiving amounts described in 
                      subparagraph (A).
                          ``(ii) Allocation accounts.--The issuer of a 
                      plan to which subparagraph (A) applies shall 
                      deposit--
                                    ``(I) all payments described in 
                                subparagraph (B)(i)(I) into a separate 
                                account that consists solely of such 
                                payments and that is used exclusively to 
                                pay for services other than services 
                                described in paragraph (1)(B)(i); and
                                    ``(II) all payments described in 
                                subparagraph (B)(i)(II) into a separate 
                                account that consists solely of such 
                                payments and that is used exclusively to 
                                pay for services described in paragraph 
                                (1)(B)(i).
                    ``(D) Actuarial value.--
                          ``(i) In general.--The issuer of a qualified 
                      health plan shall estimate the basic per enrollee, 
                      per month cost, determined on an average actuarial 
                      basis, for including coverage under the qualified 
                      health plan of the services described in paragraph 
                      (1)(B)(i).
                          ``(ii) Considerations.--In making such 
                      estimate, the issuer--
                                    ``(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.
                    ``(E) Ensuring compliance with segregation 
                requirements.--

[[Page 124 STAT. 899]]

                          ``(i) In general.--Subject to clause (ii), 
                      State health insurance commissioners shall ensure 
                      that health plans comply with the segregation 
                      requirements in this subsection through the 
                      segregation of plan funds 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.
                          ``(ii) Clarification.--Nothing in clause (i) 
                      shall prohibit the right of an individual or 
                      health plan to appeal such action in courts of 
                      competent jurisdiction.
            ``(3) Rules relating to notice.--
                    ``(A) Notice.--A qualified health plan that provides 
                for coverage of the services described in paragraph 
                (1)(B)(i) shall provide a notice to enrollees, only as 
                part of the summary of benefits and coverage 
                explanation, at the time of enrollment, of such 
                coverage.
                    ``(B) Rules relating to payments.--The notice 
                described in subparagraph (A), any advertising used by 
                the issuer with respect to the plan, any information 
                provided by the Exchange, and any other information 
                specified by the Secretary shall provide information 
                only with respect to the total amount of the combined 
                payments for services described in paragraph (1)(B)(i) 
                and other services covered by the plan.
            ``(4) No discrimination on basis of provision of abortion.--
        No qualified health plan offered through an Exchange may 
        discriminate against any individual health care provider or 
        health care facility because of its unwillingness to provide, 
        pay for, provide coverage of, or refer for abortions

    ``(c) 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 abortion.
            ``(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.

    ``(d) 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').''.

[[Page 124 STAT. 900]]

    (d) <<NOTE: 42 USC 18024.>>  Section 1304 of this Act is amended by 
adding at the end the following:

    ``(e) <<NOTE: Definition.>>  Educated Health Care Consumers.--The 
term `educated health care consumer' means an individual who is 
knowledgeable about the health care system, and has background or 
experience in making informed decisions regarding health, medical, and 
scientific matters.''.

    (e) <<NOTE: 42 USC 18031.>>  Section 1311(d) of this Act is 
amended--
            (1) in paragraph (3)(B), by striking clause (ii) and 
        inserting the following:
                          ``(ii) State must assume cost.--A State shall 
                      make payments--
                                    ``(I) to an individual enrolled in a 
                                qualified health plan offered in such 
                                State; or
                                    ``(II) on behalf of an individual 
                                described in subclause (I) directly to 
                                the qualified health plan in which such 
                                individual is enrolled;
                      to defray the cost of any additional benefits 
                      described in clause (i).''; and
            (2) in paragraph (6)(A), by inserting ``educated'' before 
        ``health care''.

    (f) Section 1311(e) of this Act is amended--
            (1) in paragraph (2), by striking ``may'' in the second 
        sentence and inserting ``shall''; and
            (2) by adding at the end the following:
            ``(3) Transparency in coverage.--
                    ``(A) <<NOTE: Public information.>>  In general.--
                The Exchange shall require health plans seeking 
                certification as qualified health plans to submit to the 
                Exchange, the Secretary, the State insurance 
                commissioner, and make available to the public, accurate 
                and timely disclosure of the following information:
                          ``(i) Claims payment policies and practices.
                          ``(ii) Periodic financial disclosures.
                          ``(iii) Data on enrollment.
                          ``(iv) Data on disenrollment.
                          ``(v) Data on the number of claims that are 
                      denied.
                          ``(vi) Data on rating practices.
                          ``(vii) Information on cost-sharing and 
                      payments with respect to any out-of-network 
                      coverage.
                          ``(viii) Information on enrollee and 
                      participant rights under this title.
                          ``(ix) Other information as determined 
                      appropriate by the Secretary.
                    ``(B) Use of plain language.--The information 
                required to be submitted under subparagraph (A) shall be 
                provided in plain language. <<NOTE: Definition.>>  The 
                term `plain language' means language that the intended 
                audience, including individuals with limited English 
                proficiency, can readily understand and use because that 
                language is concise, well-organized, and follows other 
                best practices of plain language 
                writing. <<NOTE: Guidance.>>  The Secretary and the 
                Secretary of Labor shall jointly develop and issue 
                guidance on best practices of plain language writing.
                    ``(C) Cost sharing transparency.--The Exchange shall 
                require health plans seeking certification as qualified 
                health plans to permit individuals to learn the amount 
                of cost-sharing (including deductibles, copayments, and

[[Page 124 STAT. 901]]

                coinsurance) under the individual's plan or coverage 
                that the individual would be responsible for paying with 
                respect to the furnishing of a specific item or service 
                by a participating provider in a timely manner upon the 
                request of the individual. <<NOTE: Web posting.>>  At a 
                minimum, such information shall be made available to 
                such individual through an Internet website and such 
                other means for individuals without access to the 
                Internet.
                    ``(D) Group health plans.--The Secretary of Labor 
                shall update and harmonize the Secretary's rules 
                concerning the accurate and timely disclosure to 
                participants by group health plans of plan disclosure, 
                plan terms and conditions, and periodic financial 
                disclosure with the standards established by the 
                Secretary under subparagraph (A).''.

    (g) <<NOTE: 42 USC 18031.>>  Section 1311(g)(1) of this Act is 
amended--
            (1) in subparagraph (C), by striking ``; and'' and inserting 
        a semicolon;
            (2) in subparagraph (D), by striking the period and 
        inserting ``; and''; and
            (3) by adding at the end the following:
                    ``(E) the implementation of activities to reduce 
                health and health care disparities, including through 
                the use of language services, community outreach, and 
                cultural competency trainings.''.

    (h) Section 1311(i)(2)((B) of this Act is amended by striking 
``small business development centers'' and inserting ``resource partners 
of the Small Business Administration''.
    (i) <<NOTE: 42 USC 18032.>>  Section 1312 of this Act is amended--
            (1) in subsection (a)(1), by inserting ``and for which such 
        individual is eligible'' before the period;
            (2) in subsection (e)--
                    (A) in paragraph (1), by inserting ``and employers'' 
                after ``enroll individuals''; and
                    (B) by striking the flush sentence at the end; and
            (3) in subsection (f)(1)(A)(ii), by striking the 
        parenthetical.

    (j)(1) Subparagraph (B) of section 1313(a)(6) <<NOTE: 42 USC 18033 
note.>>  of this Act is hereby deemed null, void, and of no effect.

    (2) Section 3730(e) of title 31, United States Code, is amended by 
striking paragraph (4) and inserting the following:
            ``(4)(A) <<NOTE: Courts.>>  The court shall dismiss an 
        action or claim under this section, unless opposed by the 
        Government, if substantially the same allegations or 
        transactions as alleged in the action or claim were publicly 
        disclosed--
                    ``(i) in a Federal criminal, civil, or 
                administrative hearing in which the Government or its 
                agent is a party;
                    ``(ii) in a congressional, Government Accountability 
                Office, or other Federal report, hearing, audit, or 
                investigation; or
                    ``(iii) from the news media,
        unless the action is brought by the Attorney General or the 
        person bringing the action is an original source of the 
        information.
            ``(B) <<NOTE: Definition.>>  For purposes of this paragraph, 
        ``original source'' means an individual who either (i) prior to 
        a public disclosure under subsection (e)(4)(a), has voluntarily 
        disclosed to the

[[Page 124 STAT. 902]]

        Government the information on which allegations or transactions 
        in a claim are based, or (2) who has knowledge that is 
        independent of and materially adds to the publicly disclosed 
        allegations or transactions, and who has voluntarily provided 
        the information to the Government before filing an action under 
        this section.''.

    (k) <<NOTE: 42 USC 18033.>>  Section 1313(b) of this Act is 
amended--
            (1) in paragraph (3), by striking ``and'' at the end;
            (2) by redesignating paragraph (4) as paragraph (5); and
            (3) by inserting after paragraph (3) the following:
            ``(4) a survey of the cost and affordability of health care 
        insurance provided under the Exchanges for owners and employees 
        of small business concerns (as defined under section 3 of the 
        Small Business Act (15 U.S.C. 632)), including data on enrollees 
        in Exchanges and individuals purchasing health insurance 
        coverage outside of Exchanges; and''.

    (l) <<NOTE: 42 USC 18042.>>  Section 1322(b) of this Act is 
amended--
            (1) by redesignating paragraph (3) as paragraph (4); and
            (2) by inserting after paragraph (2), the following:
            ``(3) <<NOTE: Deadlines. Regulations.>>  Repayment of loans 
        and grants.--Not later than July 1, 2013, and prior to awarding 
        loans and grants under the CO-OP program, the Secretary shall 
        promulgate regulations with respect to the repayment of such 
        loans and grants in a manner that is consistent with State 
        solvency regulations and other similar State laws that may 
        apply. In promulgating such regulations, the Secretary shall 
        provide that such loans shall be repaid within 5 years and such 
        grants shall be repaid within 15 years, taking into 
        consideration any appropriate State reserve requirements, 
        solvency regulations, and requisite surplus note arrangements 
        that must be constructed in a State to provide for such 
        repayment prior to awarding such loans and grants.''.

    (m) <<NOTE: 42 USC 18043.>>  Part III of subtitle D of title I of 
this Act is amended by striking section 1323.

    (n) <<NOTE: 42 USC 18044.>>  Section 1324(a) of this Act is amended 
by striking ``, a community health'' and all that follows through 
``1333(b)'' and inserting ``, or a multi-State qualified health plan 
under section 1334''.

    (o) <<NOTE: 42 USC 18051.>>  Section 1331 of this Act is amended--
            (1) in subsection (d)(3)(A)(i), by striking ``85'' and 
        inserting ``95''; and
            (2) in subsection (e)(1)(B), by inserting before the 
        semicolon the following: ``, or, in the case of an alien 
        lawfully present in the United States, whose income is not 
        greater than 133 percent of the poverty line for the size of the 
        family involved but who is not eligible for the Medicaid program 
        under title XIX of the Social Security Act by reason of such 
        alien status''.

    (p) <<NOTE: 42 USC 18053.>>  Section 1333 of this Act is amended by 
striking subsection (b).

    (q) Part IV of subtitle D of title I of this Act is amended by 
adding at the end the following:

``SEC. 1334. <<NOTE: Contracts. 42 USC 18054.>>  MULTI-STATE PLANS.

    ``(a) Oversight by the Office of Personnel Management.--
            ``(1) In general.--The Director of the Office of Personnel 
        Management (referred to in this section as the `Director') shall 
        enter into contracts with health insurance issuers (which may

[[Page 124 STAT. 903]]

        include a group of health insurance issuers affiliated either by 
        common ownership and control or by the common use of a 
        nationally licensed service mark), without regard to section 5 
        of title 41, United States Code, or other statutes requiring 
        competitive bidding, to offer at least 2 multi-State qualified 
        health plans through each Exchange in each State. Such plans 
        shall provide individual, or in the case of small employers, 
        group coverage.
            ``(2) Terms.--Each contract entered into under paragraph (1) 
        shall be for a uniform term of at least 1 year, but may be made 
        automatically renewable from term to term in the absence of 
        notice of termination by either party. In entering into such 
        contracts, the Director shall ensure that health benefits 
        coverage is provided in accordance with the types of coverage 
        provided for under section 2701(a)(1)(A)(i) of the Public Health 
        Service Act.
            ``(3) Non-profit entities.--In entering into contracts under 
        paragraph (1), the Director shall ensure that at least one 
        contract is entered into with a non-profit entity.
            ``(4) Administration.--The Director shall implement this 
        subsection in a manner similar to the manner in which the 
        Director implements the contracting provisions with respect to 
        carriers under the Federal employees health benefit program 
        under chapter 89 of title 5, United States Code, including 
        (through negotiating with each multi-state plan)--
                    ``(A) a medical loss ratio;
                    ``(B) a profit margin;
                    ``(C) the premiums to be charged; and
                    ``(D) such other terms and conditions of coverage as 
                are in the interests of enrollees in such plans.
            ``(5) Authority to protect consumers.--The Director may 
        prohibit the offering of any multi-State health plan that does 
        not meet the terms and conditions defined by the Director with 
        respect to the elements described in subparagraphs (A) through 
        (D) of paragraph (4).
            ``(6) Assured availability of varied coverage.--In entering 
        into contracts under this subsection, the Director shall ensure 
        that with respect to multi-State qualified health plans offered 
        in an Exchange, there is at least one such plan that does not 
        provide coverage of services described in section 
        1303(b)(1)(B)(i).
            ``(7) Withdrawal.--Approval of a contract under this 
        subsection may be withdrawn by the Director only after notice 
        and opportunity for hearing to the issuer concerned without 
        regard to subchapter II of chapter 5 and chapter 7 of title 5, 
        United States Code.

    ``(b) Eligibility.--A health insurance issuer shall be eligible to 
enter into a contract under subsection (a)(1) if such issuer--
            ``(1) agrees to offer a multi-State qualified health plan 
        that meets the requirements of subsection (c) in each Exchange 
        in each State;
            ``(2) is licensed in each State and is subject to all 
        requirements of State law not inconsistent with this section, 
        including 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 title;

[[Page 124 STAT. 904]]

            ``(3) otherwise complies with the minimum standards 
        prescribed for carriers offering health benefits plans under 
        section 8902(e) of title 5, United States Code, to the extent 
        that such standards do not conflict with a provision of this 
        title; and
            ``(4) meets such other requirements as determined 
        appropriate by the Director, in consultation with the Secretary.

    ``(c) Requirements for Multi-State Qualified Health Plan.--
            ``(1) In general.--A multi-State qualified health plan meets 
        the requirements of this subsection if, in the determination of 
        the Director--
                    ``(A) the plan offers a benefits package that is 
                uniform in each State and consists of the essential 
                benefits described in section 1302;
                    ``(B) the plan meets all requirements of this title 
                with respect to a qualified health plan, including 
                requirements relating to the offering of the bronze, 
                silver, and gold levels of coverage and catastrophic 
                coverage in each State Exchange;
                    ``(C) except as provided in paragraph (5), the 
                issuer provides for determinations of premiums for 
                coverage under the plan on the basis of the rating 
                requirements of part A of title XXVII of the Public 
                Health Service Act; and
                    ``(D) the issuer offers the plan in all geographic 
                regions, and in all States that have adopted adjusted 
                community rating before the date of enactment of this 
                Act.
            ``(2) States may offer additional benefits.--Nothing in 
        paragraph (1)(A) shall preclude a State from requiring that 
        benefits in addition to the essential health benefits required 
        under such paragraph be provided to enrollees of a multi-State 
        qualified health plan offered in such State.
            ``(3) Credits.--
                    ``(A) In general.--An individual enrolled in a 
                multi-State qualified health plan under this section 
                shall be eligible for credits under section 36B of the 
                Internal Revenue Code of 1986 and cost sharing 
                assistance under section 1402 in the same manner as an 
                individual who is enrolled in a qualified health plan.
                    ``(B) No additional federal cost.--A requirement by 
                a State under paragraph (2) that benefits in addition to 
                the essential health benefits required under paragraph 
                (1)(A) be provided to enrollees of a multi-State 
                qualified health plan 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.
            ``(4) State must assume cost.--A State shall make payments--
                    ``(A) to an individual enrolled in a multi-State 
                qualified health plan offered in such State; or
                    ``(B) on behalf of an individual described in 
                subparagraph (A) directly to the multi-State qualified 
                health plan in which such individual is enrolled;
        to defray the cost of any additional benefits described in 
        paragraph (2).
            ``(5) Application of certain state rating requirements.--
        With respect to a multi-State qualified health plan that is 
        offered in a State with age rating requirements that

[[Page 124 STAT. 905]]

        are lower than 3:1, the State may require that Exchanges 
        operating in such State only permit the offering of such multi-
        State qualified health plans if such plans comply with the 
        State's more protective age rating requirements.

    ``(d) Plans Deemed To Be Certified.--A multi-State qualified health 
plan that is offered under a contract under subsection (a) shall be 
deemed to be certified by an Exchange for purposes of section 
1311(d)(4)(A).
    ``(e) <<NOTE: Contracts.>>  Phase-in.--Notwithstanding paragraphs 
(1) and (2) of subsection (b), the Director shall enter into a contract 
with a health insurance issuer for the offering of a multi-State 
qualified health plan under subsection (a) if--
            ``(1) with respect to the first year for which the issuer 
        offers such plan, such issuer offers the plan in at least 60 
        percent of the States;
            ``(2) with respect to the second such year, such issuer 
        offers the plan in at least 70 percent of the States;
            ``(3) with respect to the third such year, such issuer 
        offers the plan in at least 85 percent of the States; and
            ``(4) with respect to each subsequent year, such issuer 
        offers the plan in all States.

    ``(f) Applicability.--The requirements under chapter 89 of title 5, 
United States Code, applicable to health benefits plans under such 
chapter shall apply to multi-State qualified health plans provided for 
under this section to the extent that such requirements do not conflict 
with a provision of this title.
    ``(g) Continued Support for FEHBP.--
            ``(1) Maintenance of effort.--Nothing in this section shall 
        be construed to permit the Director to allocate fewer financial 
        or personnel resources to the functions of the Office of 
        Personnel Management related to the administration of the 
        Federal Employees Health Benefit Program under chapter 89 of 
        title 5, United States Code.
            ``(2) Separate risk pool.--Enrollees in multi-State 
        qualified health plans under this section shall be treated as a 
        separate risk pool apart from enrollees in the Federal Employees 
        Health Benefit Program under chapter 89 of title 5, United 
        States Code.
            ``(3) Authority to establish separate entities.--The 
        Director may establish such separate units or offices within the 
        Office of Personnel Management as the Director determines to be 
        appropriate to ensure that the administration of multi-State 
        qualified health plans under this section does not interfere 
        with the effective administration of the Federal Employees 
        Health Benefit Program under chapter 89 of title 5, United 
        States Code.
            ``(4) Effective oversight.--The Director may appoint such 
        additional personnel as may be necessary to enable the Director 
        to carry out activities under this section.
            ``(5) Assurance of separate program.--In carrying out this 
        section, the Director shall ensure that the program under this 
        section is separate from the Federal Employees Health Benefit 
        Program under chapter 89 of title 5, United States Code. 
        Premiums paid for coverage under a multi-State qualified health 
        plan under this section shall not be considered to be Federal 
        funds for any purposes.

[[Page 124 STAT. 906]]

            ``(6) FEHBP plans not required to participate.--Nothing in 
        this section shall require that a carrier offering coverage 
        under the Federal Employees Health Benefit Program under chapter 
        89 of title 5, United States Code, also offer a multi-State 
        qualified health plan under this section.

    ``(h) <<NOTE: Establishment.>>  Advisory Board.--The Director shall 
establish an advisory board to provide recommendations on the activities 
described in this section. A significant percentage of the members of 
such board shall be comprised of enrollees in a multi-State qualified 
health plan, or representatives of such enrollees.

    ``(i) Authorization of Appropriations.--There is authorized to be 
appropriated, such sums as may be necessary to carry out this 
section.''.
    (r) <<NOTE: 42 USC 18061.>>  Section 1341 of this Act is amended--
            (1) in the section heading, by striking ``and small group 
        markets'' and inserting ``market'';
            (2) in subsection (b)(2)(B), by striking ``paragraph 
        (1)(A)'' and inserting ``paragraph (1)(B)''; and
            (3) in subsection (c)(1)(A), by striking ``and small group 
        markets'' and inserting ``market''.

SEC. 10105. AMENDMENTS TO SUBTITLE E.

    (a) Section 36B(b)(3)(A)(ii) of the Internal Revenue Code of 1986, 
as added by section 1401(a) of this Act, <<NOTE: 26 USC 36B.>>  is 
amended by striking ``is in excess of'' and inserting ``equals or 
exceeds''.

    (b) Section 36B(c)(1)(A) of the Internal Revenue Code of 1986, as 
added by section 1401(a) of this Act, is amended by inserting ``equals 
or'' before ``exceeds''.
    (c) Section 36B(c)(2)(C)(iv) of the Internal Revenue Code of 1986, 
as added by section 1401(a) of this Act, is amended by striking 
``subsection (b)(3)(A)(ii)'' and inserting ``subsection 
(b)(3)(A)(iii)''.
    (d) <<NOTE: 26 USC 6211.>>  Section 1401(d) of this Act is amended 
by adding at the end the following:
            ``(3) Section 6211(b)(4)(A) of the Internal Revenue Code of 
        1986 is amended by inserting `36B,' after `36A,'.''.

    (e)(1) Subparagraph (B) of section 45R(d)(3) of the Internal Revenue 
Code of 1986, as added by section 1421(a) <<NOTE: 26 USC 45R.>>  of this 
Act, is amended to read as follows:
                    ``(B) Dollar amount.--For purposes of paragraph 
                (1)(B) and subsection (c)(2)--
                          ``(i) 2010, 2011, 2012, and 2013.--The dollar 
                      amount in effect under this paragraph for taxable 
                      years beginning in 2010, 2011, 2012, or 2013 is 
                      $25,000.
                          ``(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 $25,000, multiplied by 
                      the cost-of-living adjustment under section 
                      1(f)(3) for the calendar year, determined by 
                      substituting `calendar year 2012' for `calendar 
                      year 1992' in subparagraph (B) thereof.''.

    (2) Subsection (g) of section 45R of the Internal Revenue Code of 
1986, as added by section 1421(a) of this Act, is amended by striking 
``2011'' both places it appears and inserting ``2010, 2011''.
    (3) Section 280C(h) of the Internal Revenue Code of 1986, as added 
by section 1421(d)(1) of this Act, <<NOTE: 26 USC 280C.>>  is amended by 
striking ``2011'' and inserting ``2010, 2011''.

[[Page 124 STAT. 907]]

    (4) <<NOTE: 26 USC 38 note.>>  Section 1421(f) of this Act is 
amended by striking ``2010'' both places it appears and inserting 
``2009''.

    (5) <<NOTE: 26 USC 45R note.>>  The amendments made by this 
subsection shall take effect as if included in the enactment of section 
1421 of this Act.

    (f) Part I of subtitle E of title I of this Act is amended by adding 
at the end of subpart B, the following:

``SEC. 1416. STUDY OF GEOGRAPHIC VARIATION IN APPLICATION OF FPL.

    ``(a) In General.--The Secretary shall conduct a study to examine 
the feasibility and implication of adjusting the application of the 
Federal poverty level under this subtitle (and the amendments made by 
this subtitle) for different geographic areas so as to reflect the 
variations in cost-of-living among different areas within the United 
States. <<NOTE: Determination.>>  If the Secretary determines that an 
adjustment is feasible, the study should include a methodology to make 
such an adjustment. <<NOTE: Deadline. Reports. Recommenda- tions.>>  Not 
later than January 1, 2013, the Secretary shall submit to Congress a 
report on such study and shall include such recommendations as the 
Secretary determines appropriate.

    ``(b) Inclusion of Territories.--
            ``(1) In general.--The Secretary shall ensure that the study 
        under subsection (a) covers the territories of the United States 
        and that special attention is paid to the disparity that exists 
        among poverty levels and the cost of living in such territories 
        and to the impact of such disparity on efforts to expand health 
        coverage and ensure health care.
            ``(2) Territories defined.--In this subsection, the term 
        `territories of the United States' includes the Commonwealth of 
        Puerto Rico, the United States Virgin Islands, Guam, the 
        Northern Mariana Islands, and any other territory or possession 
        of the United States.''.

SEC. 10106. AMENDMENTS TO SUBTITLE F.

    (a) <<NOTE: 42 USC 18091.>>  Section 1501(a)(2) of this Act is 
amended to read as follows:
            ``(2) Effects on the national economy and interstate 
        commerce.--The effects described in this paragraph are the 
        following:
                    ``(A) The requirement regulates activity that is 
                commercial and economic in nature: economic and 
                financial decisions about how and when health care is 
                paid for, and when health insurance is purchased. In the 
                absence of the requirement, some individuals would make 
                an economic and financial decision to forego health 
                insurance coverage and attempt to self-insure, which 
                increases financial risks to households and medical 
                providers.
                    ``(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.

[[Page 124 STAT. 908]]

                    ``(C) The requirement, together with the other 
                provisions of this Act, will add millions of new 
                consumers to the health insurance market, increasing the 
                supply of, and demand for, health care services, and 
                will increase the number and share of Americans who are 
                insured.
                    ``(D) The requirement achieves near-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) The economy loses up to $207,000,000,000 a 
                year because of the poorer health and shorter lifespan 
                of the uninsured. By significantly reducing the number 
                of the uninsured, the requirement, together with the 
                other provisions of this Act, will significantly reduce 
                this economic cost.
                    ``(F) The cost of providing uncompensated care to 
                the uninsured was $43,000,000,000 in 2008. To pay for 
                this cost, health care providers pass on the cost to 
                private insurers, which pass on the cost to families. 
                This cost-shifting increases family premiums by on 
                average over $1,000 a year. By significantly reducing 
                the number of the uninsured, the requirement, together 
                with the other provisions of this Act, will lower health 
                insurance premiums.
                    ``(G) 62 percent of all personal bankruptcies are 
                caused in part by medical expenses. By significantly 
                increasing health insurance coverage, the requirement, 
                together with the other provisions of this Act, will 
                improve financial security for families.
                    ``(H) 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. The requirement is an essential part 
                of this larger regulation of economic activity, and the 
                absence of the requirement would undercut Federal 
                regulation of the health insurance market.
                    ``(I) Under sections 2704 and 2705 of the Public 
                Health Service Act (as added by section 1201 of this 
                Act), if there were no requirement, many individuals 
                would wait to purchase health insurance until they 
                needed care. By 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.
                    ``(J) Administrative costs for private health 
                insurance, which were $90,000,000,000 in 2006, are 26 to 
                30 percent of premiums in the current individual and 
                small group

[[Page 124 STAT. 909]]

                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.''.

    (b)(1) Section 5000A(b)(1) of the Internal Revenue Code of 1986, as 
added by section 1501(b) of this Act, <<NOTE: 26 USC 5000A.>>  is 
amended to read as follows:
            ``(1) In general.--If a taxpayer who is an applicable 
        individual, or an applicable individual for whom the taxpayer is 
        liable under paragraph (3), fails to meet the requirement of 
        subsection (a) for 1 or more months, then, except as provided in 
        subsection (e), there is hereby imposed on the taxpayer a 
        penalty with respect to such failures in the amount determined 
        under subsection (c).''.
            (2) Paragraphs (1) and (2) of section 5000A(c) of the 
        Internal Revenue Code of 1986, as so added, are amended to read 
        as follows:
            ``(1) In general.--The amount of the penalty imposed by this 
        section on any taxpayer for any taxable year with respect to 
        failures described in subsection (b)(1) shall be equal to the 
        lesser of--
                    ``(A) the sum of the monthly penalty amounts 
                determined under paragraph (2) for months in the taxable 
                year during which 1 or more such failures occurred, or
                    ``(B) an amount equal to the national average 
                premium for qualified health plans which have a bronze 
                level of coverage, provide coverage for the applicable 
                family size involved, and are offered through Exchanges 
                for plan years beginning in the calendar year with or 
                within which the taxable year ends.
            ``(2) Monthly penalty amounts.--For purposes of paragraph 
        (1)(A), the monthly penalty amount with respect to any taxpayer 
        for any month during which any failure described in subsection 
        (b)(1) occurred is an amount equal to \1/12\ of the greater of 
        the following amounts:
                    ``(A) Flat dollar amount.--An amount equal to the 
                lesser of--
                          ``(i) the sum of the applicable dollar amounts 
                      for all individuals with respect to whom such 
                      failure occurred during such month, or
                          ``(ii) 300 percent of the applicable dollar 
                      amount (determined without regard to paragraph 
                      (3)(C)) for the calendar year with or within which 
                      the taxable year ends.
                    ``(B) Percentage of income.--An amount equal to the 
                following percentage of the taxpayer's household income 
                for the taxable year:
                          ``(i) 0.5 percent for taxable years beginning 
                      in 2014.
                          ``(ii) 1.0 percent for taxable years beginning 
                      in 2015.
                          ``(iii) 2.0 percent for taxable years 
                      beginning after 2015.''.

[[Page 124 STAT. 910]]

    (3) Section 5000A(c)(3) of the Internal Revenue Code of 1986, as 
added by section 1501(b) of this Act, <<NOTE: 26 USC 5000A.>>  is 
amended by striking ``$350'' and inserting ``$495''.

    (c) Section 5000A(d)(2)(A) of the Internal Revenue Code of 1986, as 
added by section 1501(b) of this Act, is amended to read as follows:
                    ``(A) Religious conscience 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--
                          ``(i) a member of a recognized religious sect 
                      or division thereof which is described in section 
                      1402(g)(1), and
                          ``(ii) an adherent of established tenets or 
                      teachings of such sect or division as described in 
                      such section.''.

    (d) Section 5000A(e)(1)(C) of the Internal Revenue Code of 1986, as 
added by section 1501(b) of this Act, is amended to read as follows:
                    ``(C) Special rules for individuals 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 under subparagraph (A) 
                shall be made by reference to required contribution of 
                the employee.''.

    (e) Section 4980H(b) of the Internal Revenue Code of 1986, as added 
by section 1513(a) of this Act, <<NOTE: 26 USC 4980H.>>  is amended to 
read as follows:

    ``(b) Large Employers With Waiting Periods Exceeding 60 Days.--
            ``(1) In general.--In the case of any applicable large 
        employer which requires an extended waiting period to enroll in 
        any minimum essential coverage under an employer-sponsored plan 
        (as defined in section 5000A(f)(2)), there is hereby imposed on 
        the employer an assessable payment of $600 for each full-time 
        employee of the employer to whom the extended waiting period 
        applies.
            ``(2) <<NOTE: Definition.>>  Extended waiting period.--The 
        term `extended waiting period' means any waiting period (as 
        defined in section 2701(b)(4) of the Public Health Service Act) 
        which exceeds 60 days.''.

    (f)(1) Subparagraph (A) of section 4980H(d)(4) of the Internal 
Revenue Code of 1986, as added by section 1513(a) of this Act, is 
amended by inserting ``, with respect to any month,'' after ``means''.
    (2) Section 4980H(d)(2) of the Internal Revenue Code of 1986, as 
added by section 1513(a) of this Act, is amended by adding at the end 
the following:
                    ``(D) Application to construction industry 
                employers.--In the case of any employer the substantial 
                annual gross receipts of which are attributable to the 
                construction industry--
                          ``(i) subparagraph (A) shall be applied by 
                      substituting `who employed an average of at least 
                      5 full-time employees on business days during the 
                      preceding calendar year and whose annual payroll 
                      expenses

[[Page 124 STAT. 911]]

                      exceed $250,000 for such preceding calendar year' 
                      for `who employed an average of at least 50 full-
                      time employees on business days during the 
                      preceding calendar year', and
                          ``(ii) subparagraph (B) shall be applied by 
                      substituting `5' for `50'.''.

    (3) <<NOTE: Applicability. 26 USC 4980H note.>>  The amendment made 
by paragraph (2) shall apply to months beginning after December 31, 
2013.

    (g) Section 6056(b) of the Internal Revenue Code of 1986, as added 
by section 1514(a) of the Act, <<NOTE: 26 USC 6056.>>  is amended by 
adding at the end the following new flush sentence:

``The Secretary shall have the authority to review the accuracy of the 
information provided under this subsection, including the applicable 
large employer's share under paragraph (2)(C)(iv).''.

SEC. 10107. AMENDMENTS TO SUBTITLE G.

    (a) Section 1562 of this Act <<NOTE: 42 USC 300gg-21.>>  is amended, 
in the amendment made by subsection (a)(2)(B)(iii), by striking 
``subpart 1'' and inserting ``subparts I and II''; and

    (b) Subtitle G of title I of this Act is amended--
            (1) <<NOTE: 26 USC 9815; 29 USC 1185d; 42 USC 300gg-1-- 
        300gg-3, 300gg-9, 300gg-11, 300gg-12, 300gg-21--300gg-23, 300gg-
        25--300gg-28, 300gg-62, 300gg-91, 18120.>>  by redesignating 
        section 1562 (as amended) as section 1563; and
            (2) by inserting after section 1561 the following:

``SEC. 1562. GAO STUDY REGARDING THE RATE OF DENIAL OF COVERAGE AND 
            ENROLLMENT BY HEALTH INSURANCE ISSUERS AND GROUP HEALTH 
            PLANS.

    ``(a) In General.--The Comptroller General of the United States 
(referred to in this section as the `Comptroller General') shall conduct 
a study of the incidence of denials of coverage for medical services and 
denials of applications to enroll in health insurance plans, as 
described in subsection (b), by group health plans and health insurance 
issuers.
    ``(b) Data.--
            ``(1) In general.--In conducting the study described in 
        subsection (a), the Comptroller General shall consider samples 
        of data concerning the following:
                    ``(A)(i) denials of coverage for medical services to 
                a plan enrollees, by the types of services for which 
                such coverage was denied; and
                    ``(ii) the reasons such coverage was denied; and
                    ``(B)(i) incidents in which group health plans and 
                health insurance issuers deny the application of an 
                individual to enroll in a health insurance plan offered 
                by such group health plan or issuer; and
                    ``(ii) the reasons such applications are denied.
            ``(2) Scope of data.--
                    ``(A) Favorably resolved disputes.--The data that 
                the Comptroller General considers under paragraph (1) 
                shall include data concerning denials of coverage for 
                medical services and denials of applications for 
                enrollment in a plan by a group health plan or health 
                insurance issuer, where such group health plan or health 
                insurance issuer later approves such coverage or 
                application.
                    ``(B) All health plans.--The study under this 
                section shall consider data from varied group health 
                plans and health insurance plans offered by health 
                insurance issuers,

[[Page 124 STAT. 912]]

                including qualified health plans and health plans that 
                are not qualified health plans.

    ``(c) Report.--Not later than one year after the date of enactment 
of this Act, the Comptroller General shall submit to the Secretaries of 
Health and Human Services and Labor a report describing the results of 
the study conducted under this section.
    ``(d) <<NOTE: Public information. Web posting.>>  Publication of 
Report.--The Secretaries of Health and Human Services and Labor shall 
make the report described in subsection (c) available to the public on 
an Internet website.

``SEC. 1563. <<NOTE: 42 USC 18119.>>  SMALL BUSINESS PROCUREMENT.

    ``Part 19 of the Federal Acquisition Regulation, section 15 of the 
Small Business Act (15 U.S.C. 644), and any other applicable laws or 
regulations establishing procurement requirements relating to small 
business concerns (as defined in section 3 of the Small Business Act (15 
U.S.C. 632)) may not be waived with respect to any contract awarded 
under any program or other authority under this Act or an amendment made 
by this Act.''.

SEC. 10108. <<NOTE: 42 USC 18101.>>  FREE CHOICE VOUCHERS.

    (a) In General.--An offering employer shall provide free choice 
vouchers to each qualified employee of such employer.
    (b) Offering Employer.--For purposes of this section, the term 
``offering employer'' means any employer who--
            (1) offers minimum essential coverage to its employees 
        consisting of coverage through an eligible employer-sponsored 
        plan; and
            (2) pays any portion of the costs of such plan.

    (c) Qualified Employee.--For purposes of this section--
            (1) <<NOTE: Definition.>>  In general.--The term ``qualified 
        employee'' means, with respect to any plan year of an offering 
        employer, any employee--
                    (A) whose required contribution (as determined under 
                section 5000A(e)(1)(B)) for minimum essential coverage 
                through an eligible employer-sponsored plan--
                          (i) exceeds 8 percent of such employee's 
                      household income for the taxable year described in 
                      section 1412(b)(1)(B) which ends with or within in 
                      the plan year; and
                          (ii) does not exceed 9.8 percent of such 
                      employee's household income for such taxable year;
                    (B) whose household income for such taxable year is 
                not greater than 400 percent of the poverty line for a 
                family of the size involved; and
                    (C) who does not participate in a health plan 
                offered by the offering employer.
            (2) Indexing.--In the case of any calendar year beginning 
        after 2014, the Secretary shall adjust the 8 percent under 
        paragraph (1)(A)(i) and 9.8 percent under paragraph (1)(A)(ii) 
        for the calendar year to reflect the rate of premium growth 
        between the preceding calendar year and 2013 over the rate of 
        income growth for such period.

    (d) Free Choice Voucher.--
            (1) Amount.--
                    (A) In general.--The amount of any free choice 
                voucher provided under subsection (a) shall be equal to 
                the monthly portion of the cost of the eligible 
                employer-sponsored plan which would have been paid by 
                the

[[Page 124 STAT. 913]]

                employer if the employee were covered under the plan 
                with respect to which the employer pays the largest 
                portion of the cost of the plan. Such amount shall be 
                equal to the amount the employer would pay for an 
                employee with self-only coverage unless such employee 
                elects family coverage (in which case such amount shall 
                be the amount the employer would pay for family 
                coverage).
                    (B) <<NOTE: Regulations.>>  Determination of cost.--
                The cost of any health plan shall be determined under 
                the rules similar to the rules of section 2204 of the 
                Public Health Service Act, except that such amount shall 
                be adjusted for age and category of enrollment in 
                accordance with regulations established by the 
                Secretary.
            (2) Use of vouchers.--An Exchange shall credit the amount of 
        any free choice voucher provided under subsection (a) to the 
        monthly premium of any qualified health plan in the Exchange in 
        which the qualified employee is enrolled and the offering 
        employer shall pay any amounts so credited to the Exchange.
            (3) Payment of excess amounts.--If the amount of the free 
        choice voucher exceeds the amount of the premium of the 
        qualified health plan in which the qualified employee is 
        enrolled for such month, such excess shall be paid to the 
        employee.

    (e) Other Definitions.--Any term used in this section which is also 
used in section 5000A of the Internal Revenue Code of 1986 shall have 
the meaning given such term under such section 5000A.
    (f) Exclusion From Income for Employee.--
            (1) In general.--Part III of subchapter B of chapter 1 of 
        the Internal Revenue Code of 1986 is amended by inserting after 
        section 139C the following new section:

``SEC. 139D. <<NOTE: 26 USC 139D.>>  FREE CHOICE VOUCHERS.

    ``Gross income shall not include the amount of any free choice 
voucher provided by an employer under section 10108 of the Patient 
Protection and Affordable Care Act to the extent that the amount of such 
voucher does not exceed the amount paid for a qualified health plan (as 
defined in section 1301 of such Act) by the taxpayer.''.
            (2) Clerical amendment.--The table of sections for part III 
        of subchapter B of chapter 1 of such Code is amended by 
        inserting after the item relating to section 139C the following 
        new item:

``Sec. 139D. Free choice vouchers.''.

            (3) <<NOTE: 26 USC 139D note.>>  Effective date.--The 
        amendments made by this subsection shall apply to vouchers 
        provided after December 31, 2013.

    (g) Deduction Allowed to Employer.--
            (1) In general.--Section 162(a) of the Internal Revenue Code 
        of 1986 <<NOTE: 26 USC 162.>>  is amended by adding at the end 
        the following new sentence: ``For purposes of paragraph (1), the 
        amount of a free choice voucher provided under section 10108 of 
        the Patient Protection and Affordable Care Act shall be treated 
        as an amount for compensation for personal services actually 
        rendered.''.

[[Page 124 STAT. 914]]

            (2) <<NOTE: 26 USC 162 note.>>  Effective date.--The 
        amendments made by this subsection shall apply to vouchers 
        provided after December 31, 2013.

    (h) Voucher Taken Into Account in Determining Premium Credit.--
            (1) In general.--Subsection (c)(2) of section 36B of the 
        Internal Revenue Code of 1986, <<NOTE: 26 USC 36B.>>  as added 
        by section 1401, is amended by adding at the end the following 
        new subparagraph:
                    ``(D) Exception for individual receiving free choice 
                vouchers.--The term `coverage month' shall not include 
                any month in which such individual has a free choice 
                voucher provided under section 10108 of the Patient 
                Protection and Affordable Care Act.''.
            (2) <<NOTE: 26 USC 36B note.>>  Effective date.--The 
        amendment made by this subsection shall apply to taxable years 
        beginning after December 31, 2013.

    (i) Coordination With Employer Responsibilities.--
            (1) Shared responsibility penalty.--
                    (A) In general.--Subsection (c) of section 4980H of 
                the Internal Revenue Code of 1986, as added by section 
                1513, is amended <<NOTE: 26 USC 4980H.>>  by adding at 
                the end the following new paragraph:
            ``(3) Special rules for employers providing free choice 
        vouchers.--No assessable payment shall be imposed under 
        paragraph (1) for any month with respect to any employee to whom 
        the employer provides a free choice voucher under section 10108 
        of the Patient Protection and Affordable Care Act for such 
        month.''.
                    (B) <<NOTE: 26 USC 4980H note.>>  Effective date.--
                The amendment made by this paragraph shall apply to 
                months beginning after December 31, 2013.
            (2) Notification requirement.--Section 18B(a)(3) of the Fair 
        Labor Standards Act of 1938, <<NOTE: 29 USC 218b.>>  as added by 
        section 1512, is amended--
                    (A) by inserting ``and the employer does not offer a 
                free choice voucher'' after ``Exchange''; and
                    (B) by striking ``will lose'' and inserting ``may 
                lose''.

    (j) Employer Reporting.--
            (1) In general.--Subsection (a) of section 6056 of the 
        Internal Revenue Code of 1986, <<NOTE: 26 USC 6056.>>  as added 
        by section 1514, is amended by inserting ``and every offering 
        employer'' before ``shall''.
            (2) Offering employers.--Subsection (f) of section 6056 of 
        such Code, as added by section 1514, is amended to read as 
        follows:

    ``(f) Definitions.--For purposes of this section--
            ``(1) Offering employer.--
                    ``(A) In general.--The term `offering employer' 
                means any offering employer (as defined in section 
                10108(b) of the Patient Protection and Affordable Care 
                Act) if the required contribution (within the meaning of 
                section 5000A(e)(1)(B)(i)) of any employee exceeds 8 
                percent of the wages (as defined in section 3121(a)) 
                paid to such employee by such employer.
                    ``(B) Indexing.--In the case of any calendar year 
                beginning after 2014, the 8 percent under subparagraph 
                (A)

[[Page 124 STAT. 915]]

                shall be adjusted for the calendar year to reflect the 
                rate of premium growth between the preceding calendar 
                year and 2013 over the rate of income growth for such 
                period.
            ``(2) Other definitions.--Any term used in this section 
        which is also used in section 4980H shall have the meaning given 
        such term by section 4980H.''.
            (3) Conforming amendments.--
                    (A) The heading of section 6056 of such Code, as 
                added by section 1514, <<NOTE: 26 USC 6056.>>  is 
                amended by striking ``large'' and inserting ``certain''.
                    (B) Section 6056(b)(2)(C) of such Code is amended--
                          (i) by inserting ``in the case of an 
                      applicable large employer,'' before ``the length'' 
                      in clause (i);
                          (ii) by striking ``and'' at the end of clause 
                      (iii);
                          (iii) by striking ``applicable large 
                      employer'' in clause (iv) and inserting 
                      ``employer'';
                          (iv) by inserting ``and'' at the end of clause 
                      (iv); and
                          (v) by inserting at the end the following new 
                      clause:
                          ``(v) in the case of an offering employer, the 
                      option for which the employer pays the largest 
                      portion of the cost of the plan and the portion of 
                      the cost paid by the employer in each of the 
                      enrollment categories under such option,''.
                    (C) Section 6056(d)(2) of such Code is amended by 
                inserting ``or offering employer'' after ``applicable 
                large employer''.
                    (D) Section 6056(e) of such Code is amended by 
                inserting ``or offering employer'' after ``applicable 
                large employer''.
                    (E) Section 6724(d)(1)(B)(xxv) of such Code, as 
                added by section 1514, is amended by striking ``large'' 
                and inserting ``certain''.
                    (F) Section 6724(d)(2)(HH) of such Code, as added by 
                section 1514, is amended by striking ``large'' and 
                inserting ``certain''.
                    (G) The table of sections for subpart D of part III 
                of subchapter A of chapter 1 of such Code, as amended by 
                section 1514, is amended by striking ``Large employers'' 
                in the item relating to section 6056 and inserting 
                ``Certain employers''.
            (4) <<NOTE: 26 USC 6056 note.>>  Effective date.--The 
        amendments made by this subsection shall apply to periods 
        beginning after December 31, 2013.

SEC. 10109. DEVELOPMENT OF STANDARDS FOR FINANCIAL AND ADMINISTRATIVE 
            TRANSACTIONS.

    (a) Additional Transaction Standards and Operating Rules.--
            (1) Development of additional transaction standards and 
        operating rules.--Section 1173(a) of the Social Security Act (42 
        U.S.C. 1320d-2(a)), as amended by section 1104(b)(2), is 
        amended--
                    (A) in paragraph (1)(B), by inserting before the 
                period the following: ``, and subject to the 
                requirements under paragraph (5)''; and

[[Page 124 STAT. 916]]

                    (B) by adding at the end the following new 
                paragraph:
            ``(5) Consideration of standardization of activities and 
        items.--
                    ``(A) <<NOTE: Deadlines.>>  In general.--For 
                purposes of carrying out paragraph (1)(B), the Secretary 
                shall solicit, not later than January 1, 2012, and not 
                less than every 3 years thereafter, input from entities 
                described in subparagraph (B) on--
                          ``(i) whether there could be greater 
                      uniformity in financial and administrative 
                      activities and items, as determined appropriate by 
                      the Secretary; and
                          ``(ii) whether such activities should be 
                      considered financial and administrative 
                      transactions (as described in paragraph (1)(B)) 
                      for which the adoption of standards and operating 
                      rules would improve the operation of the health 
                      care system and reduce administrative costs.
                    ``(B) Solicitation of input.--For purposes of 
                subparagraph (A), the Secretary shall seek input from--
                          ``(i) the National Committee on Vital and 
                      Health Statistics, the Health Information 
                      Technology Policy Committee, and the Health 
                      Information Technology Standards Committee; and
                          ``(ii) standard setting organizations and 
                      stakeholders, as determined appropriate by the 
                      Secretary.''.

    (b) <<NOTE: Deadline.>>  Activities and Items for Initial 
Consideration.--For purposes of section 1173(a)(5) of the Social 
Security Act, as added by subsection (a), the Secretary of Health and 
Human Services (in this section referred to as the ``Secretary'') shall, 
not later than January 1, 2012, seek input on activities and items 
relating to the following areas:
            (1) Whether the application process, including the use of a 
        uniform application form, for enrollment of health care 
        providers by health plans could be made electronic and 
        standardized.
            (2) Whether standards and operating rules described in 
        section 1173 of the Social Security Act should apply to the 
        health care transactions of automobile insurance, worker's 
        compensation, and other programs or persons not described in 
        section 1172(a) of such Act (42 U.S.C. 1320d-1(a)).
            (3) Whether standardized forms could apply to financial 
        audits required by health plans, Federal and State agencies 
        (including State auditors, the Office of the Inspector General 
        of the Department of Health and Human Services, and the Centers 
        for Medicare & Medicaid Services), and other relevant entities 
        as determined appropriate by the Secretary.
            (4) Whether there could be greater transparency and 
        consistency of methodologies and processes used to establish 
        claim edits used by health plans (as described in section 
        1171(5) of the Social Security Act (42 U.S.C. 1320d(5))).
            (5) Whether health plans should be required to publish their 
        timeliness of payment rules.

    (c) ICD Coding Crosswalks.--
            (1) <<NOTE: Meeting. Deadline.>>  ICD-9 to icd-10 
        crosswalk.--The Secretary shall task the ICD-9-CM Coordination 
        and Maintenance Committee to convene a meeting, not later than 
        January 1, 2011, to receive input from appropriate stakeholders 
        (including health plans, health care providers, and clinicians) 
        regarding the crosswalk

[[Page 124 STAT. 917]]

        between the Ninth and Tenth Revisions of the International 
        Classification of Diseases (ICD-9 and ICD-10, respectively) that 
        is posted on the website of the Centers for Medicare & Medicaid 
        Services, and make recommendations about appropriate revisions 
        to such crosswalk.
            (2) Revision of crosswalk.--For purposes of the crosswalk 
        described in paragraph (1), the Secretary shall make appropriate 
        revisions and post any such revised crosswalk on the website of 
        the Centers for Medicare & Medicaid Services.
            (3) Use of revised crosswalk.--For purposes of paragraph 
        (2), any revised crosswalk shall be treated as a code set for 
        which a standard has been adopted by the Secretary for purposes 
        of section 1173(c)(1)(B) of the Social Security Act (42 U.S.C. 
        1320d-2(c)(1)(B)).
            (4) <<NOTE: Deadline.>>  Subsequent crosswalks.--For 
        subsequent revisions of the International Classification of 
        Diseases that are adopted by the Secretary as a standard code 
        set under section 1173(c) of the Social Security Act (42 U.S.C. 
        1320d-2(c)), the Secretary shall, after consultation with the 
        appropriate stakeholders, post on the website of the Centers for 
        Medicare & Medicaid Services a crosswalk between the previous 
        and subsequent version of the International Classification of 
        Diseases not later than the date of implementation of such 
        subsequent revision.

               Subtitle B--Provisions Relating to Title II

                        PART I--MEDICAID AND CHIP

SEC. 10201. AMENDMENTS TO THE SOCIAL SECURITY ACT AND TITLE II OF THIS 
            ACT.

    (a)(1) Section 1902(a)(10)(A)(i)(IX) of the Social Security Act (42 
U.S.C. 1396a(a)(10)(A)(i)(IX)), as added by section 2004(a), is amended 
to read as follows:
                                    ``(IX) who--
                                            ``(aa) are under 26 years of 
                                        age;
                                            ``(bb) are not described in 
                                        or enrolled under any of 
                                        subclauses (I) through (VII) of 
                                        this clause or are described in 
                                        any of such subclauses but have 
                                        income that exceeds the level of 
                                        income applicable under the 
                                        State plan for eligibility to 
                                        enroll for medical assistance 
                                        under such subclause;
                                            ``(cc) were in foster care 
                                        under the responsibility of the 
                                        State on the date of attaining 
                                        18 years of age or such higher 
                                        age as the State has elected 
                                        under section 475(8)(B)(iii); 
                                        and
                                            ``(dd) were enrolled in the 
                                        State plan under this title or 
                                        under a waiver of the plan while 
                                        in such foster care;''.

    (2) Section 1902(a)(10) of the Social Security Act (42 U.S.C. 
1396a(a)(10), as amended by section 2001(a)(5)(A), is amended in the 
matter following subparagraph (G), by striking ``and (XV)'' and 
inserting ``(XV)'', and by inserting ``and (XVI) if an individual is 
described in subclause (IX) of subparagraph (A)(i) and is also described 
in subclause (VIII) of that subparagraph, the medical

[[Page 124 STAT. 918]]

assistance shall be made available to the individual through subclause 
(IX) instead of through subclause (VIII)'' before the semicolon.
    (3) <<NOTE: 42 USC 1396a note.>>  Section 2004(d) of this Act is 
amended by striking ``2019'' and inserting ``2014''.

    (b) Section 1902(k)(2) of the Social Security Act (42 U.S.C. 
1396a(k)(2)), as added by section 2001(a)(4)(A), is amended by striking 
``January 1, 2011'' and inserting ``April 1, 2010''.
    (c) Section 1905 of the Social Security Act (42 U.S.C. 1396d), as 
amended by sections 2001(a)(3), 2001(a)(5)(C), 2006, and 4107(a)(2), is 
amended--
            (1) in subsection (a), in the matter preceding paragraph 
        (1), by inserting in clause (xiv), ``or 1902(a)(10)(A)(i)(IX)'' 
        before the comma;
            (2) in subsection (b), in the first sentence, by inserting 
        ``, (z),'' before ``and (aa)'';
            (3) in subsection (y)--
                    (A) in paragraph (1)(B)(ii)(II), in the first 
                sentence, by inserting ``includes inpatient hospital 
                services,'' after ``100 percent of the poverty line, 
                that''; and
                    (B) in paragraph (2)(A), by striking ``on the date 
                of enactment of the Patient Protection and Affordable 
                Care Act'' and inserting ``as of December 1, 2009'';
            (4) by inserting after subsection (y) the following:

    ``(z) Equitable Support for Certain States.--
            ``(1)(A) <<NOTE: Time period.>>  During the period that 
        begins on January 1, 2014, and ends on September 30, 2019, 
        notwithstanding subsection (b), the Federal medical assistance 
        percentage otherwise determined under subsection (b) with 
        respect to a fiscal year occurring during that period shall be 
        increased by 2.2 percentage points for any State described in 
        subparagraph (B) for amounts expended for medical assistance for 
        individuals who are not newly eligible (as defined in subsection 
        (y)(2)) individuals described in subclause (VIII) of section 
        1902(a)(10)(A)(i).
            ``(B) For purposes of subparagraph (A), a State described in 
        this subparagraph is a State that--
                    ``(i) is an expansion State described in subsection 
                (y)(1)(B)(ii)(II);
                    ``(ii) the Secretary determines will not receive any 
                payments under this title on the basis of an increased 
                Federal medical assistance percentage under subsection 
                (y) for expenditures for medical assistance for newly 
                eligible individuals (as so defined); and
                    ``(iii) has not been approved by the Secretary to 
                divert a portion of the DSH allotment for a State to the 
                costs of providing medical assistance or other health 
                benefits coverage under a waiver that is in effect on 
                July 2009.

    ``(2)(A) <<NOTE: Time period.>>  During the period that begins on 
January 1, 2014, and ends on December 31, 2016, notwithstanding 
subsection (b), the Federal medical assistance percentage otherwise 
determined under subsection (b) with respect to all or any portion of a 
fiscal year occurring during that period shall be increased by .5 
percentage point for a State described in subparagraph (B) for amounts 
expended for medical assistance under the State plan under this title or 
under a waiver of that plan during that period.

    ``(B) For purposes of subparagraph (A), a State described in this 
subparagraph is a State that--

[[Page 124 STAT. 919]]

            ``(i) is described in clauses (i) and (ii) of paragraph 
        (1)(B); and
            ``(ii) is the State with the highest percentage of its 
        population insured during 2008, based on the Current Population 
        Survey.

    ``(3) <<NOTE: Nebraska. Determination.>> Notwithstanding subsection 
(b) and paragraphs (1) and (2) of this subsection, the Federal medical 
assistance percentage otherwise determined under subsection (b) with 
respect to all or any portion of a fiscal year that begins on or after 
January 1, 2017, for the State of Nebraska, with respect to amounts 
expended for newly eligible individuals described in subclause (VIII) of 
section 1902(a)(10)(A)(i), shall be determined as provided for under 
subsection (y)(1)(A) (notwithstanding the period provided for in such 
paragraph).

    ``(4) <<NOTE: Applicability.>> The increase in the Federal medical 
assistance percentage for a State under paragraphs (1), (2), or (3) 
shall apply only for purposes of this title and shall not apply with 
respect to--
            ``(A) disproportionate share hospital payments described in 
        section 1923;
            ``(B) payments under title IV;
            ``(C) payments under title XXI; and
            ``(D) payments under this title that are based on the 
        enhanced FMAP described in section 2105(b).'';
            (5) in subsection (aa), is amended by striking ``without 
        regard to this subsection and subsection (y)'' and inserting 
        ``without regard to this subsection, subsection (y), subsection 
        (z), and section 10202 of the Patient Protection and Affordable 
        Care Act'' each place it appears;
            (6) by adding after subsection (bb), the following:

    ``(cc) Requirement for Certain States.--Notwithstanding subsections 
(y), (z), and (aa), in the case of a State that requires political 
subdivisions within the State to contribute toward the non-Federal share 
of expenditures required under the State plan under section 1902(a)(2), 
the State shall not be eligible for an increase in its Federal medical 
assistance percentage under such subsections if it requires that 
political subdivisions pay a greater percentage of the non-Federal share 
of such expenditures, or a greater percentage of the non-Federal share 
of payments under section 1923, than the respective percentages that 
would have been required by the State under the State plan under this 
title, State law, or both, as in effect on December 31, 2009, and 
without regard to any such increase. Voluntary contributions by a 
political subdivision to the non-Federal share of expenditures under the 
State plan under this title or to the non-Federal share of payments 
under section 1923, shall not be considered to be required contributions 
for purposes of this subsection. The treatment of voluntary 
contributions, and the treatment of contributions required by a State 
under the State plan under this title, or State law, as provided by this 
subsection, shall also apply to the increases in the Federal medical 
assistance percentage under section 5001 of the American Recovery and 
Reinvestment Act of 2009.''.
    (d) Section 1108(g)(4)(B) of the Social Security Act (42 U.S.C. 
1308(g)(4)(B)), as added by section 2005(b), is amended by striking 
``income eligibility level in effect for that population under title XIX 
or under a waiver'' and inserting ``the highest income eligibility level 
in effect for parents under the commonwealth's or territory's State plan 
under title XIX or under a waiver of the plan''.

[[Page 124 STAT. 920]]

    (e)(1) Section 1923(f) of the Social Security Act (42 U.S.C. 1396r-
4(f)), as amended by section 2551, is amended--
            (A) in paragraph (6)--
                    (i) by striking the paragraph heading and inserting 
                the following: ``Allotment adjustments''; and
                    (ii) in subparagraph (B), by adding at the end the 
                following:
                          ``(iii) <<NOTE: Hawaii.>> Allotment for 2d, 
                      3rd, and 4th quarter of fiscal year 2012, fiscal 
                      year 2013, and succeeding fiscal years.--
                      Notwithstanding the table set forth in paragraph 
                      (2) or paragraph (7):
                                    ``(I) 2d, 3rd, and 4th quarter of 
                                fiscal year 2012.--The DSH allotment for 
                                Hawaii for the 2d, 3rd, and 4th quarters 
                                of fiscal year 2012 shall be $7,500,000.
                                    ``(II) Treatment as a low-dsh state 
                                for fiscal year 2013 and succeeding 
                                fiscal years.--With respect to fiscal 
                                year 2013, and each fiscal year 
                                thereafter, the DSH allotment for Hawaii 
                                shall be increased in the same manner as 
                                allotments for low DSH States are 
                                increased for such fiscal year under 
                                clause (iii) of paragraph (5)(B).
                                    ``(III) Certain hospital payments.--
                                The Secretary may not impose a 
                                limitation on the total amount of 
                                payments made to hospitals under the 
                                QUEST section 1115 Demonstration Project 
                                except to the extent that such 
                                limitation is necessary to ensure that a 
                                hospital does not receive payments in 
                                excess of the amounts described in 
                                subsection (g), or as necessary to 
                                ensure that such payments under the 
                                waiver and such payments pursuant to the 
                                allotment provided in this clause do 
                                not, in the aggregate in any year, 
                                exceed the amount that the Secretary 
                                determines is equal to the Federal 
                                medical assistance percentage component 
                                attributable to disproportionate share 
                                hospital payment adjustments for such 
                                year that is reflected in the budget 
                                neutrality provision of the QUEST 
                                Demonstration Project.''; and
            (B) in paragraph (7)--
                    (i) in subparagraph (A), in the matter preceding 
                clause (i), by striking ``subparagraph (E)'' and 
                inserting ``subparagraphs (E) and (G)'';
                    (ii) in subparagraph (B)--
                          (I) in clause (i), by striking subclauses (I) 
                      and (II), and inserting the following:
                                    ``(I) if the State is a low DSH 
                                State described in paragraph (5)(B) and 
                                has spent not more than 99.90 percent of 
                                the DSH allotments for the State on 
                                average for the period of fiscal years 
                                2004 through 2008, as of September 30, 
                                2009, the applicable percentage is equal 
                                to 25 percent;
                                    ``(II) if the State is a low DSH 
                                State described in paragraph (5)(B) and 
                                has spent more than 99.90 percent of the 
                                DSH allotments for the State on average 
                                for the period of fiscal years 2004 
                                through

[[Page 124 STAT. 921]]

                                2008, as of September 30, 2009, the 
                                applicable percentage is equal to 17.5 
                                percent;
                                    ``(III) if the State is not a low 
                                DSH State described in paragraph (5)(B) 
                                and has spent not more than 99.90 
                                percent of the DSH allotments for the 
                                State on average for the period of 
                                fiscal years 2004 through 2008, as of 
                                September 30, 2009, the applicable 
                                percentage is equal to 50 percent; and
                                    ``(IV) if the State is not a low DSH 
                                State described in paragraph (5)(B) and 
                                has spent more than 99.90 percent of the 
                                DSH allotments for the State on average 
                                for the period of fiscal years 2004 
                                through 2008, as of September 30, 2009, 
                                the applicable percentage is equal to 35 
                                percent.'';
                          (II) in clause (ii), by striking subclauses 
                      (I) and (II), and inserting the following:
                                    ``(I) if the State is a low DSH 
                                State described in paragraph (5)(B) and 
                                has spent not more than 99.90 percent of 
                                the DSH allotments for the State on 
                                average for the period of fiscal years 
                                2004 through 2008, as of September 30, 
                                2009, the applicable percentage is equal 
                                to the product of the percentage 
                                reduction in uncovered individuals for 
                                the fiscal year from the preceding 
                                fiscal year and 27.5 percent;
                                    ``(II) if the State is a low DSH 
                                State described in paragraph (5)(B) and 
                                has spent more than 99.90 percent of the 
                                DSH allotments for the State on average 
                                for the period of fiscal years 2004 
                                through 2008, as of September 30, 2009, 
                                the applicable percentage is equal to 
                                the product of the percentage reduction 
                                in uncovered individuals for the fiscal 
                                year from the preceding fiscal year and 
                                20 percent;
                                    ``(III) if the State is not a low 
                                DSH State described in paragraph (5)(B) 
                                and has spent not more than 99.90 
                                percent of the DSH allotments for the 
                                State on average for the period of 
                                fiscal years 2004 through 2008, as of 
                                September 30, 2009, the applicable 
                                percentage is equal to the product of 
                                the percentage reduction in uncovered 
                                individuals for the fiscal year from the 
                                preceding fiscal year and 55 percent; 
                                and
                                    ``(IV) if the State is not a low DSH 
                                State described in paragraph (5)(B) and 
                                has spent more than 99.90 percent of the 
                                DSH allotments for the State on average 
                                for the period of fiscal years 2004 
                                through 2008, as of September 30, 2009, 
                                the applicable percentage is equal to 
                                the product of the percentage reduction 
                                in uncovered individuals for the fiscal 
                                year from the preceding fiscal year and 
                                40 percent.'';
                          (III) in subparagraph (E), by striking ``35 
                      percent'' and inserting ``50 percent''; and
                          (IV) by adding at the end the following:

[[Page 124 STAT. 922]]

                    ``(G) Nonapplication.--The preceding provisions of 
                this paragraph shall not apply to the DSH allotment 
                determined for the State of Hawaii for a fiscal year 
                under paragraph (6).''.

    (f) Section 2551 of this Act <<NOTE: 42 USC 1396r-4 note.>> is 
amended by striking subsection (b).

    (g) Section 2105(d)(3)(B) of the Social Security Act (42 U.S.C. 
1397ee(d)(3)(B)), as added by section 2101(b)(1), is amended by adding 
at the end the following: ``For purposes of eligibility for premium 
assistance for the purchase of a qualified health plan under section 36B 
of the Internal Revenue Code of 1986 and reduced cost-sharing under 
section 1402 of the Patient Protection and Affordable Care Act, children 
described in the preceding sentence shall be deemed to be ineligible for 
coverage under the State child health plan.''.
    (h) Clause (i) of subparagraph (C) of section 513(b)(2) of the 
Social Security Act, <<NOTE: 42 USC 713.>> as added by section 2953 of 
this Act, is amended to read as follows:
                          ``(i) Healthy relationships, including 
                      marriage and family interactions.''.

    (i) Section 1115 of the Social Security Act (42 U.S.C. 1315) is 
amended by inserting after subsection (c) the following:
    ``(d)(1) An application or renewal of any experimental, pilot, or 
demonstration project undertaken under subsection (a) to promote the 
objectives of title XIX or XXI in a State that would result in an impact 
on eligibility, enrollment, benefits, cost-sharing, or financing with 
respect to a State program under title XIX or XXI (in this subsection 
referred to as a `demonstration project') shall be considered by the 
Secretary in accordance with the regulations required to be promulgated 
under paragraph (2).
    ``(2) <<NOTE: Deadline. Regulations.>> Not later than 180 days after 
the date of enactment of this subsection, the Secretary shall promulgate 
regulations relating to applications for, and renewals of, a 
demonstration project that provide for--
            ``(A) a process for public notice and comment at the State 
        level, including public hearings, sufficient to ensure a 
        meaningful level of public input;
            ``(B) requirements relating to--
                    ``(i) the goals of the program to be implemented or 
                renewed under the demonstration project;
                    ``(ii) the expected State and Federal costs and 
                coverage projections of the demonstration project; and
                    ``(iii) the specific plans of the State to ensure 
                that the demonstration project will be in compliance 
                with title XIX or XXI;
            ``(C) a process for providing public notice and comment 
        after the application is received by the Secretary, that is 
        sufficient to ensure a meaningful level of public input;
            ``(D) a process for the submission to the Secretary of 
        periodic reports by the State concerning the implementation of 
        the demonstration project; and
            ``(E) a process for the periodic evaluation by the Secretary 
        of the demonstration project.

    ``(3) <<NOTE: Deadline. Reports.>> The Secretary shall annually 
report to Congress concerning actions taken by the Secretary with 
respect to applications for demonstration projects under this 
section.''.

[[Page 124 STAT. 923]]

    (j) Subtitle F of title III of this Act is amended by adding at the 
end the following:

``SEC. 3512. GAO STUDY AND REPORT ON CAUSES OF ACTION.

    ``(a) Study.--
            ``(1) In general.--The Comptroller General of the United 
        States shall conduct a study of whether the development, 
        recognition, or implementation of any guideline or other 
        standards under a provision described in paragraph (2) would 
        result in the establishment of a new cause of action or claim.
            ``(2) Provisions described.--The provisions described in 
        this paragraph include the following:
                    ``(A) Section 2701 (adult health quality measures).
                    ``(B) Section 2702 (payment adjustments for health 
                care acquired conditions).
                    ``(C) Section 3001 (Hospital Value-Based Purchase 
                Program).
                    ``(D) Section 3002 (improvements to the Physician 
                Quality Reporting Initiative).
                    ``(E) Section 3003 (improvements to the Physician 
                Feedback Program).
                    ``(F) Section 3007 (value based payment modifier 
                under physician fee schedule).
                    ``(G) Section 3008 (payment adjustment for 
                conditions acquired in hospitals).
                    ``(H) Section 3013 (quality measure development).
                    ``(I) Section 3014 (quality measurement).
                    ``(J) Section 3021 (Establishment of Center for 
                Medicare and Medicaid Innovation).
                    ``(K) Section 3025 (hospital readmission reduction 
                program).
                    ``(L) Section 3501 (health care delivery system 
                research, quality improvement).
                    ``(M) Section 4003 (Task Force on Clinical and 
                Preventive Services).
                    ``(N) Section 4301 (research to optimize deliver of 
                public health services).

    ``(b) Report.--Not later than 2 years after the date of enactment of 
this Act, the Comptroller General of the United States shall submit to 
the appropriate committees of Congress, a report containing the findings 
made by the Comptroller General under the study under subsection (a).''.

SEC. 10202. <<NOTE: 42 USC 1396d note.>> INCENTIVES FOR STATES TO OFFER 
            HOME AND COMMUNITY-BASED SERVICES AS A LONG-TERM CARE 
            ALTERNATIVE TO NURSING HOMES.

    (a) State Balancing Incentive Payments Program.--Notwithstanding 
section 1905(b) of the Social Security Act (42 U.S.C. 1396d(b)), in the 
case of a balancing incentive payment State, as defined in subsection 
(b), that meets the conditions described in subsection (c), during the 
balancing incentive period, the Federal medical assistance percentage 
determined for the State under section 1905(b) of such Act and, if 
applicable, increased under subsection (z) or (aa) shall be increased by 
the applicable percentage points determined under subsection (d) with 
respect to eligible medical assistance expenditures described in 
subsection (e).
    (b) Balancing Incentive Payment State.--A balancing incentive 
payment State is a State--

[[Page 124 STAT. 924]]

            (1) in which less than 50 percent of the total expenditures 
        for medical assistance under the State Medicaid program for a 
        fiscal year for long-term services and supports (as defined by 
        the Secretary under subsection (f))(1)) are for non-
        institutionally-based long-term services and supports described 
        in subsection (f)(1)(B);
            (2) that submits an application and meets the conditions 
        described in subsection (c); and
            (3) that is selected by the Secretary to participate in the 
        State balancing incentive payment program established under this 
        section.

    (c) Conditions.--The conditions described in this subsection are the 
following:
            (1) Application.--The State submits an application to the 
        Secretary that includes, in addition to such other information 
        as the Secretary shall require--
                    (A) a proposed budget that details the State's plan 
                to expand and diversify medical assistance for non-
                institutionally-based long-term services and supports 
                described in subsection (f)(1)(B) under the State 
                Medicaid program during the balancing incentive period 
                and achieve the target spending percentage applicable to 
                the State under paragraph (2), including through 
                structural changes to how the State furnishes such 
                assistance, such as through the establishment of a ``no 
                wrong door--single entry point system'', optional 
                presumptive eligibility, case management services, and 
                the use of core standardized assessment instruments, and 
                that includes a description of the new or expanded 
                offerings of such services that the State will provide 
                and the projected costs of such services; and
                    (B) in the case of a State that proposes to expand 
                the provision of home and community-based services under 
                its State Medicaid program through a State plan 
                amendment under section 1915(i) of the Social Security 
                Act, at the option of the State, an election to increase 
                the income eligibility for such services from 150 
                percent of the poverty line to such higher percentage as 
                the State may establish for such purpose, not to exceed 
                300 percent of the supplemental security income benefit 
                rate established by section 1611(b)(1) of the Social 
                Security Act (42 U.S.C. 1382(b)(1)).
            (2) <<NOTE: Deadlines.>> Target spending percentages.--
                    (A) In the case of a balancing incentive payment 
                State in which less than 25 percent of the total 
                expenditures for long-term services and supports under 
                the State Medicaid program for fiscal year 2009 are for 
                home and community-based services, the target spending 
                percentage for the State to achieve by not later than 
                October 1, 2015, is that 25 percent of the total 
                expenditures for long-term services and supports under 
                the State Medicaid program are for home and community-
                based services.
                    (B) In the case of any other balancing incentive 
                payment State, the target spending percentage for the 
                State to achieve by not later than October 1, 2015, is 
                that 50 percent of the total expenditures for long-term 
                services and supports under the State Medicaid program 
                are for home and community-based services.

[[Page 124 STAT. 925]]

            (3) Maintenance of eligibility requirements.--The State does 
        not apply eligibility standards, methodologies, or procedures 
        for determining eligibility for medical assistance for non-
        institutionally-based long-term services and supports described 
        in subsection (f)(1)(B) under the State Medicaid program that 
        are more restrictive than the eligibility standards, 
        methodologies, or procedures in effect for such purposes on 
        December 31, 2010.
            (4) Use of additional funds.--The State agrees to use the 
        additional Federal funds paid to the State as a result of this 
        section only for purposes of providing new or expanded offerings 
        of non-institutionally-based long-term services and supports 
        described in subsection (f)(1)(B) under the State Medicaid 
        program.
            (5) Structural changes. <<NOTE: Deadline.>> --The State 
        agrees to make, not later than the end of the 6-month period 
        that begins on the date the State submits an application under 
        this section, the following changes:
                    (A) <<NOTE: Standards.>> ``No wrong door--single 
                entry point system''.--Development of a statewide system 
                to enable consumers to access all long-term services and 
                supports through an agency, organization, coordinated 
                network, or portal, in accordance with such standards as 
                the State shall establish and that shall provide 
                information regarding the availability of such services, 
                how to apply for such services, referral services for 
                services and supports otherwise available in the 
                community, and determinations of financial and 
                functional eligibility for such services and supports, 
                or assistance with assessment processes for financial 
                and functional eligibility.
                    (B) Conflict-free case management services.--
                Conflict-free case management services to develop a 
                service plan, arrange for services and supports, support 
                the beneficiary (and, if appropriate, the beneficiary's 
                caregivers) in directing the provision of services and 
                supports for the beneficiary, and conduct ongoing 
                monitoring to assure that services and supports are 
                delivered to meet the beneficiary's needs and achieve 
                intended outcomes.
                    (C) Core standardized assessment instruments.--
                Development of core standardized assessment instruments 
                for determining eligibility for non-institutionally-
                based long-term services and supports described in 
                subsection (f)(1)(B), which shall be used in a uniform 
                manner throughout the State, to determine a 
                beneficiary's needs for training, support services, 
                medical care, transportation, and other services, and 
                develop an individual service plan to address such 
                needs.
            (6) Data collection.--The State agrees to collect from 
        providers of services and through such other means as the State 
        determines appropriate the following data:
                    (A) <<NOTE: Procedures.>> Services data.--Services 
                data from providers of non-institutionally-based long-
                term services and supports described in subsection 
                (f)(1)(B) on a per-beneficiary basis and in accordance 
                with such standardized coding procedures as the State 
                shall establish in consultation with the Secretary.

[[Page 124 STAT. 926]]

                    (B) Quality data.--Quality data on a selected set of 
                core quality measures agreed upon by the Secretary and 
                the State that are linked to population-specific 
                outcomes measures and accessible to providers.
                    (C) Outcomes measures.--Outcomes measures data on a 
                selected set of core population-specific outcomes 
                measures agreed upon by the Secretary and the State that 
                are accessible to providers and include--
                          (i) measures of beneficiary and family 
                      caregiver experience with providers;
                          (ii) measures of beneficiary and family 
                      caregiver satisfaction with services; and
                          (iii) measures for achieving desired outcomes 
                      appropriate to a specific beneficiary, including 
                      employment, participation in community life, 
                      health stability, and prevention of loss in 
                      function.

    (d) Applicable Percentage Points Increase in FMAP.--The applicable 
percentage points increase is--
            (1) in the case of a balancing incentive payment State 
        subject to the target spending percentage described in 
        subsection (c)(2)(A), 5 percentage points; and
            (2) in the case of any other balancing incentive payment 
        State, 2 percentage points.

    (e) Eligible Medical Assistance Expenditures.--
            (1) In general.--Subject to paragraph (2), medical 
        assistance described in this subsection is medical assistance 
        for non-institutionally-based long-term services and supports 
        described in subsection (f)(1)(B) that is provided by a 
        balancing incentive payment State under its State Medicaid 
        program during the balancing incentive payment period.
            (2) Limitation on payments.--In no case may the aggregate 
        amount of payments made by the Secretary to balancing incentive 
        payment States under this section during the balancing incentive 
        period exceed $3,000,000,000.

    (f) Definitions.--In this section:
            (1) Long-term services and supports defined.--The term 
        ``long-term services and supports'' has the meaning given that 
        term by Secretary and may include any of the following (as 
        defined for purposes of State Medicaid programs):
                    (A) Institutionally-based long-term services and 
                supports.--Services provided in an institution, 
                including the following:
                          (i) Nursing facility services.
                          (ii) Services in an intermediate care facility 
                      for the mentally retarded described in subsection 
                      (a)(15) of section 1905 of such Act.
                    (B) Non-institutionally-based long-term services and 
                supports.--Services not provided in an institution, 
                including the following:
                          (i) Home and community-based services provided 
                      under subsection (c), (d), or (i) of section 1915 
                      of such Act or under a waiver under section 1115 
                      of such Act.
                          (ii) Home health care services.
                          (iii) Personal care services.

[[Page 124 STAT. 927]]

                          (iv) Services described in subsection (a)(26) 
                      of section 1905 of such Act (relating to PACE 
                      program services).
                          (v) Self-directed personal assistance services 
                      described in section 1915(j) of such Act.
            (2) Balancing incentive period.--The term ``balancing 
        incentive period'' means the period that begins on October 1, 
        2011, and ends on September 30, 2015.
            (3) Poverty line.--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)).
            (4) State medicaid program.--The term ``State Medicaid 
        program'' means the State program for medical assistance 
        provided under a State plan under title XIX of the Social 
        Security Act and under any waiver approved with respect to such 
        State plan.

SEC. 10203. EXTENSION OF FUNDING FOR CHIP THROUGH FISCAL YEAR 2015 AND 
            OTHER CHIP-RELATED PROVISIONS.

    (a) Section 1311(c)(1) of this Act <<NOTE: 42 USC 18031.>> is 
amended by striking ``and'' at the end of subparagraph (G), by striking 
the period at the end of subparagraph (H) and inserting ``; and'', and 
by adding at the end the following:
                    ``(I) <<NOTE: Reports. Deadline.>> report to the 
                Secretary at least annually and in such manner as the 
                Secretary shall require, pediatric quality reporting 
                measures consistent with the pediatric quality reporting 
                measures established under section 1139A of the Social 
                Security Act.''.

    (b) <<NOTE: Effective date. 42 USC 1396e note.>> Effective as if 
included in the enactment of the Children's Health Insurance Program 
Reauthorization Act of 2009 (Public Law 111-3):
            (1) Section 1906(e)(2) of the Social Security Act (42 U.S.C. 
        1396e(e)(2)) is amended by striking ``means'' and all that 
        follows through the period and inserting ``has the meaning given 
        that term in section 2105(c)(3)(A).''.
            (2)(A) Section 1906A(a) of the Social Security Act (42 
        U.S.C. 1396e-1(a)), is amended by inserting before the period 
        the following: ``and the offering of such a subsidy is cost-
        effective, as defined for purposes of section 2105(c)(3)(A)''.
            (B) <<NOTE: Applicability. 42 USC 1396e-1 and note.>> This 
        Act shall be applied without regard to subparagraph (A) of 
        section 2003(a)(1) of this Act and that subparagraph and the 
        amendment made by that subparagraph are hereby deemed null, 
        void, and of no effect.
            (3) Section 2105(c)(10) of the Social Security Act (42 
        U.S.C. 1397ee(c)(10)) is amended--
                    (A) in subparagraph (A), in the first sentence, by 
                inserting before the period the following: ``if the 
                offering of such a subsidy is cost-effective, as defined 
                for purposes of paragraph (3)(A)'';
                    (B) by striking subparagraph (M); and
                    (C) by redesignating subparagraph (N) as 
                subparagraph (M).
            (4) Section 2105(c)(3)(A) of the Social Security Act (42 
        U.S.C. 1397ee(c)(3)(A)) is amended--
                    (A) in the matter preceding clause (i), by striking 
                ``to'' and inserting ``to--''; and

[[Page 124 STAT. 928]]

                    (B) in clause (ii), by striking the period and 
                inserting a semicolon.

    (c) Section 2105 of the Social Security Act (42 U.S.C. 1397ee), as 
amended by section 2101, is amended--
            (1) in subsection (b), in the second sentence, by striking 
        ``2013'' and inserting ``2015''; and
            (2) in subsection (d)(3)--
                    (A) in subparagraph (A)--
                          (i) in the first sentence, by inserting ``as a 
                      condition of receiving payments under section 
                      1903(a),'' after ``2019,'';
                          (ii) in clause (i), by striking ``or'' at the 
                      end;
                          (iii) by redesignating clause (ii) as clause 
                      (iii); and
                          (iv) by inserting after clause (i), the 
                      following:
                          ``(ii) after September 30, 2015, enrolling 
                      children eligible to be targeted low-income 
                      children under the State child health plan in a 
                      qualified health plan that has been certified by 
                      the Secretary under subparagraph (C); or'';
                    (B) <<NOTE: Procedures.>> in subparagraph (B), by 
                striking ``provided coverage'' and inserting ``screened 
                for eligibility for medical assistance under the State 
                plan under title XIX or a waiver of that plan and, if 
                found eligible, enrolled in such plan or a waiver. In 
                the case of such children who, as a result of such 
                screening, are determined to not be eligible for medical 
                assistance under the State plan or a waiver under title 
                XIX, the State shall establish procedures to ensure that 
                the children are enrolled in a qualified health plan 
                that has been certified by the Secretary under 
                subparagraph (C) and is offered''; and
                    (C) by adding at the end the following:
                    ``(C) Certification of comparability of pediatric 
                coverage offered by qualified health plans.-- 
                <<NOTE: Deadline. Review. Determination.>> With respect 
                to each State, the Secretary, not later than April 1, 
                2015, shall review the benefits offered for children and 
                the cost-sharing imposed with respect to such benefits 
                by qualified health plans offered through an Exchange 
                established by the State under section 1311 of the 
                Patient Protection and Affordable Care Act and shall 
                certify those plans that offer benefits for children and 
                impose cost-sharing with respect to such benefits that 
                the Secretary determines are at least comparable to the 
                benefits offered and cost-sharing protections provided 
                under the State child health plan.''.

    (d)(1) Section 2104(a) of such Act (42 U.S.C. 1397dd(a)) is 
amended--
            (A) in paragraph (15), by striking ``and'' at the end; and
            (B) by striking paragraph (16) and inserting the following:
            ``(16) for fiscal year 2013, $17,406,000,000;
            ``(17) for fiscal year 2014, $19,147,000,000; and
            ``(18) for fiscal year 2015, for purposes of making 2 semi-
        annual allotments--
                    ``(A) $2,850,000,000 for the period beginning on 
                October 1, 2014, and ending on March 31, 2015, and
                    ``(B) $2,850,000,000 for the period beginning on 
                April 1, 2015, and ending on September 30, 2015.''.

[[Page 124 STAT. 929]]

    (2)(A) Section 2104(m) of such Act (42 U.S.C. 1397dd(m)), as amended 
by section 2102(a)(1), is amended--
            (i) in the subsection heading, by striking ``2013'' and 
        inserting ``2015'';
            (ii) in paragraph (2)--
                    (I) in the paragraph heading, by striking ``2012'' 
                and inserting ``2014''; and
                    (II) by adding at the end the following:
                    ``(B) <<NOTE: Allotment.>> Fiscal years 2013 and 
                2014.--Subject to paragraphs (4) and (6), from the 
                amount made available under paragraphs (16) and (17) of 
                subsection (a) for fiscal years 2013 and 2014, 
                respectively, the Secretary shall compute a State 
                allotment for each State (including the District of 
                Columbia and each commonwealth and territory) for each 
                such fiscal year as follows:
                          ``(i) Rebasing in fiscal year 2013.--For 
                      fiscal year 2013, the allotment of the State is 
                      equal to the Federal payments to the State that 
                      are attributable to (and countable towards) the 
                      total amount of allotments available under this 
                      section to the State in fiscal year 2012 
                      (including payments made to the State under 
                      subsection (n) for fiscal year 2012 as well as 
                      amounts redistributed to the State in fiscal year 
                      2012), multiplied by the allotment increase factor 
                      under paragraph (5) for fiscal year 2013.
                          ``(ii) Growth factor update for fiscal year 
                      2014.--For fiscal year 2014, the allotment of the 
                      State is equal to the sum of--
                                    ``(I) the amount of the State 
                                allotment under clause (i) for fiscal 
                                year 2013; and
                                    ``(II) the amount of any payments 
                                made to the State under subsection (n) 
                                for fiscal year 2013,
                      multiplied by the allotment increase factor under 
                      paragraph (5) for fiscal year 2014.'';
                    (iii) in paragraph (3)--
                          (I) in the paragraph heading, by striking 
                      ``2013'' and inserting ``2015'';
                          (II) in subparagraphs (A) and (B), by striking 
                      ``paragraph (16)'' each place it appears and 
                      inserting ``paragraph (18)'';
                          (III) in subparagraph (C)--
                                    (aa) by striking ``2012'' each place 
                                it appears and inserting ``2014''; and
                                    (bb) by striking ``2013'' and 
                                inserting ``2015''; and
                          (IV) in subparagraph (D)--
                                    (aa) in clause (i)(I), by striking 
                                ``subsection (a)(16)(A)'' and inserting 
                                ``subsection (a)(18)(A)''; and
                                    (bb) in clause (ii)(II), by striking 
                                ``subsection (a)(16)(B)'' and inserting 
                                ``subsection (a)(18)(B)'';
                    (iv) in paragraph (4), by striking ``2013'' and 
                inserting ``2015'';
                    (v) in paragraph (6)--
                          (I) in subparagraph (A), by striking ``2013'' 
                      and inserting ``2015''; and

[[Page 124 STAT. 930]]

                          (II) in the flush language after and below 
                      subparagraph (B)(ii), by striking ``or fiscal year 
                      2012'' and inserting ``, fiscal year 2012, or 
                      fiscal year 2014''; and
                    (vi) in paragraph (8)--
                          (I) in the paragraph heading, by striking 
                      ``2013'' and inserting ``2015''; and
                          (II) by striking ``2013'' and inserting 
                      ``2015''.

    (B) Section 2104(n) of such Act (42 U.S.C. 1397dd(n)) is amended--
            (i) in paragraph (2)--
                    (I) in subparagraph (A)(ii)--
                          (aa) by striking ``2012'' and inserting 
                      ``2014''; and
                          (bb) by striking ``2013'' and inserting 
                      ``2015'';
                    (II) in subparagraph (B)--
                          (aa) by striking ``2012'' and inserting 
                      ``2014''; and
                          (bb) by striking ``2013'' and inserting 
                      ``2015''; and
            (ii) in paragraph (3)(A), by striking ``or a semi-annual 
        allotment period for fiscal year 2013'' and inserting ``fiscal 
        year 2013, fiscal year 2014, or a semi-annual allotment period 
        for fiscal year 2015''.

    (C) Section 2105(g)(4) of such Act (42 U.S.C. 1397ee(g)(4)) is 
amended--
            (i) in the paragraph heading, by striking ``2013'' and 
        inserting ``2015''; and
            (ii) in subparagraph (A), by striking ``2013'' and inserting 
        ``2015''.

    (D) Section 2110(b) of such Act (42 U.S.C. 1397jj(b)) is amended--
            (i) in paragraph (2)(B), by inserting ``except as provided 
        in paragraph (6),'' before ``a child''; and
            (ii) by adding at the end the following new paragraph:
            ``(6) Exceptions to exclusion of children of employees of a 
        public agency in the state.--
                    ``(A) In general.--A child shall not be considered 
                to be described in paragraph (2)(B) if--
                          ``(i) the public agency that employs a member 
                      of the child's family to which such paragraph 
                      applies satisfies subparagraph (B); or
                          ``(ii) <<NOTE: Applicability.>> subparagraph 
                      (C) applies to such child.
                    ``(B) Maintenance of effort with respect to per 
                person agency contribution for family coverage.--For 
                purposes of subparagraph (A)(i), a public agency 
                satisfies this subparagraph if the amount of annual 
                agency expenditures made on behalf of each employee 
                enrolled in health coverage paid for by the agency that 
                includes dependent coverage for the most recent State 
                fiscal year is not less than the amount of such 
                expenditures made by the agency for the 1997 State 
                fiscal year, increased by the percentage increase in the 
                medical care expenditure category of the Consumer Price 
                Index for All-Urban Consumers (all items: U.S. City 
                Average) for such preceding fiscal year.
                    ``(C) <<NOTE: Applicability.>> Hardship exception.--
                For purposes of subparagraph (A)(ii), this subparagraph 
                applies to a child if the State determines, on a case-
                by-case basis, that the annual aggregate amount of 
                premiums and cost-sharing imposed

[[Page 124 STAT. 931]]

                for coverage of the family of the child would exceed 5 
                percent of such family's income for the year 
                involved.''.

    (E) Section 2113 of such Act (42 U.S.C. 1397mm) is amended--
            (i) in subsection (a)(1), by striking ``2013'' and inserting 
        ``2015''; and
            (ii) in subsection (g), by striking ``$100,000,000 for the 
        period of fiscal years 2009 through 2013'' and inserting 
        ``$140,000,000 for the period of fiscal years 2009 through 
        2015''.

    (F) Section 108 of Public Law 111-3 <<NOTE: Time period. 123 Stat. 
25.>> is amended by striking ``$11,706,000,000'' and all that follows 
through the second sentence and inserting ``$15,361,000,000 to accompany 
the allotment made for the period beginning on October 1, 2014, and 
ending on March 31, 2015, under section 2104(a)(18)(A) of the Social 
Security Act (42 U.S.C. 1397dd(a)(18)(A)), to remain available until 
expended. Such <<NOTE: Applicability.>> amount shall be used to provide 
allotments to States under paragraph (3) of section 2104(m) of the 
Social Security Act (42 U.S.C. 1397dd(m)) for the first 6 months of 
fiscal year 2015 in the same manner as allotments are provided under 
subsection (a)(18)(A) of such section 2104 and subject to the same terms 
and conditions as apply to the allotments provided from such subsection 
(a)(18)(A).''.

       PART II--SUPPORT FOR PREGNANT AND PARENTING TEENS AND WOMEN

SEC. <<NOTE: 42 USC 18201.>> 10211. DEFINITIONS.

    In this part:
            (1) Accompaniment.--The term ``accompaniment'' means 
        assisting, representing, and accompanying a woman in seeking 
        judicial relief for child support, child custody, restraining 
        orders, and restitution for harm to persons and property, and in 
        filing criminal charges, and may include the payment of court 
        costs and reasonable attorney and witness fees associated 
        therewith.
            (2) Eligible institution of higher education.--The term 
        ``eligible institution of higher education'' means an 
        institution of higher education (as such term is defined in 
        section 101 of the Higher Education Act of 1965 (20 U.S.C. 
        1001)) that has established and operates, or agrees to establish 
        and operate upon the receipt of a grant under this part, a 
        pregnant and parenting student services office.
            (3) Community service center.--The term ``community service 
        center'' means a non-profit organization that provides social 
        services to residents of a specific geographical area via direct 
        service or by contract with a local governmental agency.
            (4) High school.--The term ``high school'' means any public 
        or private school that operates grades 10 through 12, inclusive, 
        grades 9 through 12, inclusive or grades 7 through 12, 
        inclusive.
            (5) Intervention services.--The term ``intervention 
        services'' means, with respect to domestic violence, sexual 
        violence, sexual assault, or stalking, 24-hour telephone hotline 
        services for police protection and referral to shelters.
            (6) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.

[[Page 124 STAT. 932]]

            (7) State.--The term ``State'' includes the District of 
        Columbia, any commonwealth, possession, or other territory of 
        the United States, and any Indian tribe or reservation.
            (8) Supportive social services.--The term ``supportive 
        social services'' means transitional and permanent housing, 
        vocational counseling, and individual and group counseling aimed 
        at preventing domestic violence, sexual violence, sexual 
        assault, or stalking.
            (9) Violence.--The term ``violence'' means actual violence 
        and the risk or threat of violence.

SEC. 10212. <<NOTE: Grants. 42 USC 18202.>> ESTABLISHMENT OF PREGNANCY 
            ASSISTANCE FUND.

    (a) In General.--The Secretary, in collaboration and coordination 
with the Secretary of Education (as appropriate), shall establish a 
Pregnancy Assistance Fund to be administered by the Secretary, for the 
purpose of awarding competitive grants to States to assist pregnant and 
parenting teens and women.
    (b) Use of Fund.--A State may apply for a grant under subsection (a) 
to carry out any activities provided for in section 10213.
    (c) Applications.--To be eligible to receive a grant under 
subsection (a), a State shall submit to the Secretary an application at 
such time, in such manner, and containing such information as the 
Secretary may require, including a description of the purposes for which 
the grant is being requested and the designation of a State agency for 
receipt and administration of funding received under this part.

SEC. 10213. <<NOTE: Grants. 42 USC 18203.>> PERMISSIBLE USES OF FUND.

    (a) In General.--A State shall use amounts received under a grant 
under section 10212 for the purposes described in this section to assist 
pregnant and parenting teens and women.
    (b) Institutions of Higher Education.--
            (1) In general.--A State may use amounts received under a 
        grant under section 10212 to make funding available to eligible 
        institutions of higher education to enable the eligible 
        institutions to establish, maintain, or operate pregnant and 
        parenting student services. Such funding shall be used to 
        supplement, not supplant, existing funding for such services.
            (2) Application.--An eligible institution of higher 
        education that desires to receive funding under this subsection 
        shall submit an application to the designated State agency at 
        such time, in such manner, and containing such information as 
        the State agency may require.
            (3) Matching requirement.--An eligible institution of higher 
        education that receives funding under this subsection shall 
        contribute to the conduct of the pregnant and parenting student 
        services office supported by the funding an amount from non-
        Federal funds equal to 25 percent of the amount of the funding 
        provided. The non-Federal share may be in cash or in-kind, 
        fairly evaluated, including services, facilities, supplies, or 
        equipment.
            (4) Use of funds for assisting pregnant and parenting 
        college students.--An eligible institution of higher education 
        that receives funding under this subsection shall use such funds 
        to establish, maintain or operate pregnant and parenting student 
        services and may use such funding for the following programs and 
        activities:

[[Page 124 STAT. 933]]

                    (A) Conduct a needs assessment on campus and within 
                the local community--
                          (i) to assess pregnancy and parenting 
                      resources, located on the campus or within the 
                      local community, that are available to meet the 
                      needs described in subparagraph (B); and
                          (ii) to set goals for--
                                    (I) improving such resources for 
                                pregnant, parenting, and prospective 
                                parenting students; and
                                    (II) improving access to such 
                                resources.
                    (B) Annually assess the performance of the eligible 
                institution in meeting the following needs of students 
                enrolled in the eligible institution who are pregnant or 
                are parents:
                          (i) The inclusion of maternity coverage and 
                      the availability of riders for additional family 
                      members in student health care.
                          (ii) Family housing.
                          (iii) Child care.
                          (iv) Flexible or alternative academic 
                      scheduling, such as telecommuting programs, to 
                      enable pregnant or parenting students to continue 
                      their education or stay in school.
                          (v) Education to improve parenting skills for 
                      mothers and fathers and to strengthen marriages.
                          (vi) Maternity and baby clothing, baby food 
                      (including formula), baby furniture, and similar 
                      items to assist parents and prospective parents in 
                      meeting the material needs of their children.
                          (vii) Post-partum counseling.
                    (C) Identify public and private service providers, 
                located on the campus of the eligible institution or 
                within the local community, that are qualified to meet 
                the needs described in subparagraph (B), and establishes 
                programs with qualified providers to meet such needs.
                    (D) Assist pregnant and parenting students, fathers 
                or spouses in locating and obtaining services that meet 
                the needs described in subparagraph (B).
                    (E) If appropriate, provide referrals for prenatal 
                care and delivery, infant or foster care, or adoption, 
                to a student who requests such information. An office 
                shall make such referrals only to service providers that 
                serve the following types of individuals:
                          (i) Parents.
                          (ii) Prospective parents awaiting adoption.
                          (iii) Women who are pregnant and plan on 
                      parenting or placing the child for adoption.
                          (iv) Parenting or prospective parenting 
                      couples.
            (5) Reporting.--
                    (A) Annual report by institutions.--
                          (i) In general.--For each fiscal year that an 
                      eligible institution of higher education receives 
                      funds under this subsection, the eligible 
                      institution shall prepare and submit to the State, 
                      by the date determined by the State, a report 
                      that--

[[Page 124 STAT. 934]]

                                    (I) itemizes the pregnant and 
                                parenting student services office's 
                                expenditures for the fiscal year;
                                    (II) contains a review and 
                                evaluation of the performance of the 
                                office in fulfilling the requirements of 
                                this section, using the specific 
                                performance criteria or standards 
                                established under subparagraph (B)(i); 
                                and
                                    (III) describes the achievement of 
                                the office in meeting the needs listed 
                                in paragraph (4)(B) of the students 
                                served by the eligible institution, and 
                                the frequency of use of the office by 
                                such students.
                          (ii) Performance criteria.-- 
                      <<NOTE: Deadline.>> Not later than 180 days before 
                      the date the annual report described in clause (i) 
                      is submitted, the State--
                                    (I) shall identify the specific 
                                performance criteria or standards that 
                                shall be used to prepare the report; and
                                    (II) may establish the form or 
                                format of the report.
                    (B) Report by state.--The State shall annually 
                prepare and submit a report on the findings under this 
                subsection, including the number of eligible 
                institutions of higher education that were awarded funds 
                and the number of students served by each pregnant and 
                parenting student services office receiving funds under 
                this section, to the Secretary.

    (c) Support for Pregnant and Parenting Teens.--A State may use 
amounts received under a grant under section 10212 to make funding 
available to eligible high schools and community service centers to 
establish, maintain or operate pregnant and parenting services in the 
same general manner and in accordance with all conditions and 
requirements described in subsection (b), except that paragraph (3) of 
such subsection shall not apply for purposes of this subsection.
    (d) Improving Services for Pregnant Women Who Are Victims of 
Domestic Violence, Sexual Violence, Sexual Assault, and Stalking.--
            (1) In general.--A State may use amounts received under a 
        grant under section 10212 to make funding available tp its State 
        Attorney General to assist Statewide offices in providing--
                    (A) intervention services, accompaniment, and 
                supportive social services for eligible pregnant women 
                who are victims of domestic violence, sexual violence, 
                sexual assault, or stalking.
                    (B) technical assistance and training (as described 
                in subsection (c)) relating to violence against eligible 
                pregnant women to be made available to the following:
                          (i) Federal, State, tribal, territorial, and 
                      local governments, law enforcement agencies, and 
                      courts.
                          (ii) Professionals working in legal, social 
                      service, and health care settings.
                          (iii) Nonprofit organizations.
                          (iv) Faith-based organizations.

[[Page 124 STAT. 935]]

            (2) Eligibility.--To be eligible for a grant under paragraph 
        (1), a State Attorney General shall submit an application to the 
        designated State agency at such time, in such manner, and 
        containing such information, as specified by the State.
            (3) Technical assistance and training described.--For 
        purposes of paragraph (1)(B), technical assistance and training 
        is--
                    (A) the identification of eligible pregnant women 
                experiencing domestic violence, sexual violence, sexual 
                assault, or stalking;
                    (B) the assessment of the immediate and short-term 
                safety of such a pregnant woman, the evaluation of the 
                impact of the violence or stalking on the pregnant 
                woman's health, and the assistance of the pregnant woman 
                in developing a plan aimed at preventing further 
                domestic violence, sexual violence, sexual assault, or 
                stalking, as appropriate;
                    (C) the maintenance of complete medical or forensic 
                records that include the documentation of any 
                examination, treatment given, and referrals made, 
                recording the location and nature of the pregnant 
                woman's injuries, and the establishment of mechanisms to 
                ensure the privacy and confidentiality of those medical 
                records; and
                    (D) the identification and referral of the pregnant 
                woman to appropriate public and private nonprofit 
                entities that provide intervention services, 
                accompaniment, and supportive social services.
            (4) <<NOTE: Definition.>> Eligible pregnant woman.--In this 
        subsection, the term ``eligible pregnant woman'' means any woman 
        who is pregnant on the date on which such woman becomes a victim 
        of domestic violence, sexual violence, sexual assault, or 
        stalking or who was pregnant during the one-year period before 
        such date.

    (e) Public Awareness and Education.--A State may use amounts 
received under a grant under section 10212 to make funding available to 
increase public awareness and education concerning any services 
available to pregnant and parenting teens and women under this part, or 
any other resources available to pregnant and parenting women in keeping 
with the intent and purposes of this part. <<NOTE: Guidelines.>> The 
State shall be responsible for setting guidelines or limits as to how 
much of funding may be utilized for public awareness and education in 
any funding award.

SEC. 10214. <<NOTE: 42 USC 18204.>> APPROPRIATIONS.

    There is authorized to be appropriated, and there are appropriated, 
$25,000,000 for each of fiscal years 2010 through 2019, to carry out 
this part.

                PART III--INDIAN HEALTH CARE IMPROVEMENT

SEC. 10221. INDIAN HEALTH CARE IMPROVEMENT.

    (a) In General. <<NOTE: Incorporation by reference. 25 USC 16013et 
seq.>> --Except as provided in subsection (b), S. 1790 entitled ``A bill 
to amend the Indian Health Care Improvement Act to revise and extend 
that Act, and for other purposes.'', as reported by the Committee on 
Indian Affairs of the Senate in December 2009, is enacted into law.

    (b) Amendments.--

[[Page 124 STAT. 936]]

            (1) Section 119 of the Indian Health Care Improvement Act 
        (as amended by section 111 of the bill referred to in subsection 
        (a)) <<NOTE: 25 USC 1616l.>>  is amended--
                    (A) in subsection (d)--
                          (i) in paragraph (2), by striking ``In 
                      establishing'' and inserting ``Subject to 
                      paragraphs (3) and (4), in establishing''; and
                          (ii) by adding at the end the following:
            ``(3) Election of indian tribe or tribal organization.--
                    ``(A) In general.--Subparagraph (B) of paragraph (2) 
                shall not apply in the case of an election made by an 
                Indian tribe or tribal organization located in a State 
                (other than Alaska) in which the use of dental health 
                aide therapist services or midlevel dental health 
                provider services is authorized under State law to 
                supply such services in accordance with State law.
                    ``(B) Action by secretary.--On an election by an 
                Indian tribe or tribal organization under subparagraph 
                (A), the Secretary, acting through the Service, shall 
                facilitate implementation of the services elected.
            ``(4) Vacancies.--The Secretary shall not fill any vacancy 
        for a certified dentist in a program operated by the Service 
        with a dental health aide therapist.''; and
                    (B) by adding at the end the following:

    ``(e) Effect of Section.--Nothing in this section shall restrict the 
ability of the Service, an Indian tribe, or a tribal organization to 
participate in any program or to provide any service authorized by any 
other Federal law.''.
            (2) The Indian Health Care Improvement Act (as amended by 
        section 134(b) of the bill referred to in subsection <<NOTE: 25 
        USC 1616r.>>  (a)) is amended by striking section 125 (relating 
        to treatment of scholarships for certain purposes).
            (3) Section 806 of the Indian Health Care Improvement Act 
        (25 U.S.C. 1676) is amended--
                    (A) by striking ``Any limitation'' and inserting the 
                following:

    ``(a) HHS Appropriations.--Any limitation''; and
                    (B) by adding at the end the following:

    ``(b) Limitations Pursuant to Other Federal Law.-- 
<<NOTE: Applicability. Abortions.>> Any limitation pursuant to other 
Federal laws on the use of Federal funds appropriated to the Service 
shall apply with respect to the performance or coverage of abortions.''.
            (4) The bill referred to in subsection (a) <<NOTE: 42 USC 
        1395l, 1395qq.>> is amended by striking section 201.

              Subtitle C--Provisions Relating to Title III

SEC. 10301. PLANS FOR A VALUE-BASED PURCHASING PROGRAM FOR AMBULATORY 
            SURGICAL CENTERS.

    (a) In General.--Section 3006 is amended by adding at the end the 
following new subsection:
    ``(f) Ambulatory Surgical Centers.--
            ``(1) In general.--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

[[Page 124 STAT. 937]]

        Security Act for ambulatory surgical centers (as described in 
        section 1833(i) of the Social Security Act (42 U.S.C. 
        1395l(i))).
            ``(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 of such Act, as added by 
                section 3014), to the extent feasible and practicable, 
                of all dimensions of quality and efficiency in 
                ambulatory surgical centers.
                    ``(B) The reporting, collection, and validation of 
                quality data.
                    ``(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 ambulatory surgical 
                centers.
                    ``(E) Any other issues determined appropriate by the 
                Secretary.
            ``(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 January 1, 2011, 
        the Secretary shall submit to Congress a report containing the 
        plan developed under paragraph (1).''.

    (b) Technical.--Section 3006(a)(2)(A) is amended by striking clauses 
(i) and (ii).

SEC. 10302. REVISION TO NATIONAL STRATEGY FOR QUALITY IMPROVEMENT IN 
            HEALTH CARE.

    Section 399HH(a)(2)(B)(iii) of the Public Health Service Act, as 
added by section 3011, <<NOTE: 42 USC 280j.>>  is amended by inserting 
``(taking into consideration the limitations set forth in subsections 
(c) and (d) of section 1182 of the Social Security Act)'' after 
``information''.

SEC. 10303. DEVELOPMENT OF OUTCOME MEASURES.

    (a) Development.--Section 931 of the Public Health Service Act, as 
added by section 3013(a), <<NOTE: 42 USC 299b-31.>> is amended by adding 
at the end the following new subsection:

    ``(f) Development of Outcome Measures.--
            ``(1) In general. <<NOTE: Deadline.>> --The Secretary shall 
        develop, and periodically update (not less than every 3 years), 
        provider-level outcome measures for hospitals and physicians, as 
        well as other providers as determined appropriate by the 
        Secretary.
            ``(2) Categories of measures.--The measures developed under 
        this subsection shall include, to the extent determined 
        appropriate by the Secretary--
                    ``(A) outcome measurement for acute and chronic 
                diseases, including, to the extent feasible, the 5 most 
                prevalent and resource-intensive acute and chronic 
                medical conditions; and
                    ``(B) outcome measurement for primary and 
                preventative care, including, to the extent feasible, 
                measurements

[[Page 124 STAT. 938]]

                that cover provision of such care for distinct patient 
                populations (such as healthy children, chronically ill 
                adults, or infirm elderly individuals).
            ``(3) Goals.--In developing such measures, the Secretary 
        shall seek to--
                    ``(A) address issues regarding risk adjustment, 
                accountability, and sample size;
                    ``(B) include the full scope of services that 
                comprise a cycle of care; and
                    ``(C) include multiple dimensions.
            ``(4) Timeframe.--
                    ``(A) Acute and chronic diseases.--Not later than 24 
                months after the date of enactment of this Act, the 
                Secretary shall develop not less than 10 measures 
                described in paragraph (2)(A).
                    ``(B) Primary and preventive care.--Not later than 
                36 months after the date of enactment of this Act, the 
                Secretary shall develop not less than 10 measures 
                described in paragraph (2)(B).''.

    (b) Hospital-acquired Conditions.--Section 1890A of the Social 
Security Act, as amended by section 3013(b), <<NOTE: 42 USC 1395aaa-
1.>> is amended by adding at the end the following new subsection:

    ``(f) Hospital Acquired Conditions. <<NOTE: Public information.>> --
The Secretary shall, to the extent practicable, publicly report on 
measures for hospital-acquired conditions that are currently utilized by 
the Centers for Medicare & Medicaid Services for the adjustment of the 
amount of payment to hospitals based on rates of hospital-acquired 
infections.''.

    (c) Clinical Practice Guidelines.--Section 304(b) of the Medicare 
Improvements for Patients and Providers Act of 2008 (Public Law 110-
275) <<NOTE: 42 USC 299 note.>> is amended by adding at the end the 
following new paragraph:
            ``(4) Identification.--
                    ``(A) In general. <<NOTE: Deadline. Contracts.>> --
                Following receipt of the report submitted under 
                paragraph (2), and not less than every 3 years 
                thereafter, the Secretary shall contract with the 
                Institute to employ the results of the study performed 
                under paragraph (1) and the best methods identified by 
                the Institute for the purpose of identifying existing 
                and new clinical practice guidelines that were developed 
                using such best methods, including guidelines listed in 
                the National Guideline Clearinghouse.
                    ``(B) Consultation.--In carrying out the 
                identification process under subparagraph (A), the 
                Secretary shall allow for consultation with professional 
                societies, voluntary health care organizations, and 
                expert panels.''.

SEC. 10304. SELECTION OF EFFICIENCY MEASURES.

    Sections 1890(b)(7) and 1890A of the Social Security Act, as added 
by section 3014, <<NOTE: 42 USC 1395aaa, 1395aaa-1.>> are amended by 
striking ``quality'' each place it appears and inserting ``quality and 
efficiency''.

SEC. 10305. DATA COLLECTION; PUBLIC REPORTING.

    Section 399II(a) of the Public Health Service Act, as added by 
section 3015 <<NOTE: 42 USC 280j-1.>> , is amended to read as follows:

    ``(a) In General.--

[[Page 124 STAT. 939]]

            ``(1) Establishment of strategic framework.--The Secretary 
        shall establish and implement an overall strategic framework to 
        carry out the public reporting of performance information, as 
        described in section 399JJ. Such strategic framework may include 
        methods and related timelines for implementing nationally 
        consistent data collection, data aggregation, and analysis 
        methods.
            ``(2) Collection and aggregation of data.--The Secretary 
        shall collect and aggregate consistent data on quality and 
        resource use measures from information systems used to support 
        health care delivery, and may award grants or contracts for this 
        purpose. The Secretary shall align such collection and 
        aggregation efforts with the requirements and assistance 
        regarding the expansion of health information technology 
        systems, the interoperability of such technology systems, and 
        related standards that are in effect on the date of enactment of 
        the Patient Protection and Affordable Care Act.
            ``(3) Scope.--The Secretary shall ensure that the data 
        collection, data aggregation, and analysis systems described in 
        paragraph (1) involve an increasingly broad range of patient 
        populations, providers, and geographic areas over time.''.

SEC. 10306. IMPROVEMENTS UNDER THE CENTER FOR MEDICARE AND MEDICAID 
            INNOVATION.

    Section 1115A of the Social Security Act, as added by section 
3021, <<NOTE: 42 USC 1315a.>> is amended--
            (1) in subsection (a), by inserting at the end the following 
        new paragraph:
            ``(5) Testing within certain geographic areas.--For purposes 
        of testing payment and service delivery models under this 
        section, the Secretary may elect to limit testing of a model to 
        certain geographic areas.'';
            (2) in subsection (b)(2)--
                    (A) in subparagraph (A)--
                          (i) in the second sentence, by striking ``the 
                      preceding sentence may include'' and inserting 
                      ``this subparagraph may include, but are not 
                      limited to,''; and
                          (ii) by inserting after the first sentence the 
                      following new sentence: ``The Secretary shall 
                      focus on models expected to reduce program costs 
                      under the applicable title while preserving or 
                      enhancing the quality of care received by 
                      individuals receiving benefits under such 
                      title.'';
                    (B) in subparagraph (B), by adding at the end the 
                following new clauses:
                          ``(xix) Utilizing, in particular in entities 
                      located in medically underserved areas and 
                      facilities of the Indian Health Service (whether 
                      operated by such Service or by an Indian tribe or 
                      tribal organization (as those terms are defined in 
                      section 4 of the Indian Health Care Improvement 
                      Act)), telehealth services--
                                    ``(I) in treating behavioral health 
                                issues (such as post-traumatic stress 
                                disorder) and stroke; and
                                    ``(II) to improve the capacity of 
                                non-medical providers and non-
                                specialized medical providers to

[[Page 124 STAT. 940]]

                                provide health services for patients 
                                with chronic complex conditions.
                          ``(xx) Utilizing a diverse network of 
                      providers of services and suppliers to improve 
                      care coordination for applicable individuals 
                      described in subsection (a)(4)(A)(i) with 2 or 
                      more chronic conditions and a history of prior-
                      year hospitalization through interventions 
                      developed under the Medicare Coordinated Care 
                      Demonstration Project under section 4016 of the 
                      Balanced Budget Act of 1997 (42 U.S.C. 1395b-1 
                      note).''; and
                    (C) in subparagraph (C), by adding at the end the 
                following new clause:
                          ``(viii) Whether the model demonstrates 
                      effective linkage with other public sector or 
                      private sector payers.'';
            (3) in subsection (b)(4), by adding at the end the following 
        new subparagraph:
                    ``(C) Measure selection.--To the extent feasible, 
                the Secretary shall select measures under this paragraph 
                that reflect national priorities for quality improvement 
                and patient-centered care consistent with the measures 
                described in 1890(b)(7)(B).''; and
            (4) in subsection (c)--
                    (A) in paragraph (1)(B), by striking ``care and 
                reduce spending; and'' and inserting ``patient care 
                without increasing spending;'';
                    (B) in paragraph (2), by striking ``reduce program 
                spending under applicable titles.'' and inserting 
                ``reduce (or would not result in any increase in) net 
                program spending under applicable titles; and''; and
                    (C) by adding at the end the following:
            ``(3) <<NOTE: Determination.>> the Secretary determines that 
        such expansion would not deny or limit the coverage or provision 
        of benefits under the applicable title for applicable 
        individuals.

In determining which models or demonstration projects to expand under 
the preceding sentence, the Secretary shall focus on models and 
demonstration projects that improve the quality of patient care and 
reduce spending.''.

SEC. 10307. IMPROVEMENTS TO THE MEDICARE SHARED SAVINGS PROGRAM.

    Section 1899 of the Social Security Act, as added by section 
3022, <<NOTE: 42 USC 1395jjj.>> is amended by adding at the end the 
following new subsections:

    ``(i) Option To Use Other Payment Models.--
            ``(1) In general.-- <<NOTE: Determination.>> If the 
        Secretary determines appropriate, the Secretary may use any of 
        the payment models described in paragraph (2) or (3) for making 
        payments under the program rather than the payment model 
        described in subsection (d).
            ``(2) Partial capitation model.--
                    ``(A) In general.--Subject to subparagraph (B), a 
                model described in this paragraph is a partial 
                capitation model in which an ACO is at financial risk 
                for some, but not all, of the items and services covered 
                under parts A and B, such as at risk for some or all 
                physicians' services or all items and services under 
                part B. The Secretary

[[Page 124 STAT. 941]]

                may limit a partial capitation model to ACOs that are 
                highly integrated systems of care and to ACOs capable of 
                bearing risk, as determined to be appropriate by the 
                Secretary.
                    ``(B) <<NOTE: Estimate.>> No additional program 
                expenditures.--Payments to an ACO for items and services 
                under this title for beneficiaries for a year under the 
                partial capitation model shall be established in a 
                manner that does not result in spending more for such 
                ACO for such beneficiaries than would otherwise be 
                expended for such ACO for such beneficiaries for such 
                year if the model were not implemented, as estimated by 
                the Secretary.
            ``(3) Other payment models.--
                    ``(A) <<NOTE: Determination.>> In general.--Subject 
                to subparagraph (B), a model described in this paragraph 
                is any payment model that the Secretary determines will 
                improve the quality and efficiency of items and services 
                furnished under this title.
                    ``(B) <<NOTE: Applicability.>> No additional program 
                expenditures.--Subparagraph (B) of paragraph (2) shall 
                apply to a payment model under subparagraph (A) in a 
                similar manner as such subparagraph (B) applies to the 
                payment model under paragraph (2).

    ``(j) Involvement in Private Payer and Other Third Party 
Arrangements.--The Secretary may give preference to ACOs who are 
participating in similar arrangements with other payers.
    ``(k) Treatment of Physician Group Practice Demonstration.-- 
<<NOTE: Time period. Contracts.>> During the period beginning on the 
date of the enactment of this section and ending on the date the program 
is established, the Secretary may enter into an agreement with an ACO 
under the demonstration under section 1866A, subject to rebasing and 
other modifications deemed appropriate by the Secretary.''.

SEC. 10308. REVISIONS TO NATIONAL PILOT PROGRAM ON PAYMENT BUNDLING.

    (a) In General.--Section 1866D of the Social Security Act, as added 
by section 3023, <<NOTE: 42 USC 1395cc-4.>> is amended--
            (1) in paragraph (a)(2)(B), in the matter preceding clause 
        (i), by striking ``8 conditions'' and inserting ``10 
        conditions'';
            (2) by striking subsection (c)(1)(B) and inserting the 
        following:
                    ``(B) Expansion.-- <<NOTE: Determinations.>> The 
                Secretary may, at any point after January 1, 2016, 
                expand the duration and scope of the pilot program, to 
                the extent determined appropriate by the Secretary, if--
                          ``(i) the Secretary determines that such 
                      expansion is expected to--
                                    ``(I) reduce spending under title 
                                XVIII of the Social Security Act without 
                                reducing the quality of care; or
                                    ``(II) improve the quality of care 
                                and reduce spending;
                          ``(ii) <<NOTE: Certification.>> the Chief 
                      Actuary of the Centers for Medicare & Medicaid 
                      Services certifies that such expansion would 
                      reduce program spending under such title XVIII; 
                      and

[[Page 124 STAT. 942]]

                          ``(iii) the Secretary determines that such 
                      expansion would not deny or limit the coverage or 
                      provision of benefits under this title for 
                      individuals.''; and
            (3) by striking subsection (g) and inserting the following 
        new subsection:

    ``(g) Application of Pilot Program to Continuing Care Hospitals.--
            ``(1) In general.--In conducting the pilot program, the 
        Secretary shall apply the provisions of the program so as to 
        separately pilot test the continuing care hospital model.
            ``(2) Special rules.--In pilot testing the continuing care 
        hospital model under paragraph (1), the following rules shall 
        apply:
                    ``(A) Such model shall be tested without the 
                limitation to the conditions selected under subsection 
                (a)(2)(B).
                    ``(B) <<NOTE: Definition.>> Notwithstanding 
                subsection (a)(2)(D), an episode of care shall be 
                defined as the full period that a patient stays in the 
                continuing care hospital plus the first 30 days 
                following discharge from such hospital.
            ``(3) Continuing care hospital defined.--In this subsection, 
        the term `continuing care hospital' means an entity that has 
        demonstrated the ability to meet patient care and patient safety 
        standards and that provides under common management the medical 
        and rehabilitation services provided in inpatient rehabilitation 
        hospitals and units (as defined in section 1886(d)(1)(B)(ii)), 
        long term care hospitals (as defined in section 
        1886(d)(1)(B)(iv)(I)), and skilled nursing facilities (as 
        defined in section 1819(a)) that are located in a hospital 
        described in section 1886(d).''.

    (b) Technical Amendments.--
            (1) Section 3023 <<NOTE: 42 USC 1395cc-4.>> is amended by 
        striking ``1886C'' and inserting ``1866C''.
            (2) Title XVIII of the Social Security Act is amended by 
        redesignating section 1866D, as added by section 
        3024, <<NOTE: 42 USC 1395cc-5.>>  as section 1866E.

SEC. 10309. REVISIONS TO HOSPITAL READMISSIONS REDUCTION PROGRAM.

    Section 1886(q)(1) of the Social Security Act, as added by section 
3025, <<NOTE: 42 USC 1395ww.>> in the matter preceding subparagraph (A), 
is amended by striking ``the Secretary shall reduce the payments'' and 
all that follows through ``the product of'' and inserting ``the 
Secretary shall make payments (in addition to the payments described in 
paragraph (2)(A)(ii)) for such a discharge to such hospital under 
subsection (d) (or section 1814(b)(3), as the case may be) in an amount 
equal to the product of''.

SEC. 10310. REPEAL OF PHYSICIAN PAYMENT UPDATE.

    The provisions of, and the amendment made by, <<NOTE: 42 USC 1395w-
4.>> section 3101 are repealed.

SEC. 10311. REVISIONS TO EXTENSION OF AMBULANCE ADD-ONS.

    (a) Ground Ambulance.--Section 1834(l)(13)(A) of the Social Security 
Act (42 U.S.C. 1395m(l)(13)(A)), as amended by section 3105(a), is 
further amended--
            (1) in the matter preceding clause (i)--
                    (A) by striking ``2007, for'' and inserting ``2007, 
                and for''; and

[[Page 124 STAT. 943]]

                    (B) by striking ``2010, and for such services 
                furnished on or after April 1, 2010, and before January 
                1, 2011'' and inserting ``2011''; and
            (2) in each of clauses (i) and (ii)--
                    (A) by striking ``, and on or after April 1, 2010, 
                and before January 1, 2011'' each place it appears; and
                    (B) by striking ``January 1, 2010'' and inserting 
                ``January 1, 2011'' 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), as amended 
by section 3105(b), <<NOTE: 42 USC 1395m note.>> is further amended by 
striking ``December 31, 2009, and during the period beginning on April 
1, 2010, and ending on January 1, 2011'' and inserting ``December 31, 
2010''.

    (c) Super Rural Ambulance.--Section 1834(l)(12)(A) of the Social 
Security Act (42 U.S.C. 1395m(l)(12)(A)), as amended by section 3105(c), 
is further amended by striking ``2010, and on or after April 1, 2010, 
and before January 1, 2011'' and inserting ``2011''.

SEC. 10312. CERTAIN PAYMENT RULES FOR LONG-TERM CARE HOSPITAL SERVICES 
            AND MORATORIUM ON THE ESTABLISHMENT OF CERTAIN HOSPITALS AND 
            FACILITIES.

    (a) 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) and section 3106(a) of this Act, is further amended 
by striking ``4-year period'' each place it appears and inserting ``5-
year period''.
    (b) Moratorium.--Section 114(d) of such Act (42 U.S.C. 1395ww note), 
as amended by section 3106(b) of this Act, in the matter preceding 
subparagraph (A), is amended by striking ``4-year period'' and inserting 
``5-year period''.

SEC. 10313. REVISIONS TO THE EXTENSION FOR THE RURAL COMMUNITY HOSPITAL 
            DEMONSTRATION PROGRAM.

    (a) In General.--Subsection (g) of section 410A of the Medicare 
Prescription Drug, Improvement, and Modernization Act of 2003 (Public 
Law 108-173; 117 Stat. 2272), as added by section 3123(a) of this 
Act, <<NOTE: 42 USC 1395ww note.>> is amended to read as follows:

    ``(g) Five-Year Extension of Demonstration Program.--
            ``(1) In general.--Subject to the succeeding provisions of 
        this subsection, the Secretary shall conduct the demonstration 
        program under this section for an additional 5-year period (in 
        this section referred to as the `5-year extension period') that 
        begins on the date immediately following the last day of the 
        initial 5-year period under subsection (a)(5).
            ``(2) <<NOTE: Determination.>> Expansion of demonstration 
        states.--Notwithstanding subsection (a)(2), during the 5-year 
        extension period, the Secretary shall expand the number of 
        States with low population densities determined by the Secretary 
        under such subsection to 20. <<NOTE: Criteria.>> 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 5-year extension period, not more

[[Page 124 STAT. 944]]

        than 30 rural community hospitals may participate in the 
        demonstration program under this section.
            ``(4) 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--
                    ``(A) shall provide for the continued participation 
                of such rural community hospital in the demonstration 
                program during the 5-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; and
                    ``(B) in calculating the amount of payment under 
                subsection (b) to the rural community hospital for 
                covered inpatient hospital services furnished by the 
                hospital during such 5-year extension period, shall 
                substitute, under paragraph (1)(A) of such subsection--
                          ``(i) the reasonable costs of providing such 
                      services for discharges occurring in the first 
                      cost reporting period beginning on or after the 
                      first day of the 5-year extension period, for
                          ``(ii) the reasonable costs of providing such 
                      services for discharges occurring in the first 
                      cost reporting period beginning on or after the 
                      implementation of the demonstration program.''.

    (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), as amended by section 3123(b) of 
this Act, is amended by striking ``1-year extension'' and inserting ``5-
year extension''.

SEC. 10314. ADJUSTMENT TO LOW-VOLUME HOSPITAL PROVISION.

    Section 1886(d)(12) of the Social Security Act (42 U.S.C. 
1395ww(d)(12), as amended by section 3125, is amended--
            (1) in subparagraph (C)(i), by striking ``1,500 discharges'' 
        and inserting ``1,600 discharges''; and
            (2) in subparagraph (D), by striking ``1,500 discharges'' 
        and inserting ``1,600 discharges''.

SEC. 10315. REVISIONS TO HOME HEALTH CARE PROVISIONS.

    (a) Rebasing.--Section 1895(b)(3)(A)(iii) of the Social Security 
Act, as added by section 3131, <<NOTE: 42 USC 1395fff.>> is amended--
            (1) in the clause heading, by striking ``2013'' and 
        inserting ``2014'';
            (2) in subclause (I), by striking ``2013'' and inserting 
        ``2014''; and
            (3) in subclause (II), by striking ``2016'' and inserting 
        ``2017''.

    (b) <<NOTE: 42 USC 1395fff note.>> Revision of Home Health Study and 
Report.--Section 3131(d) is amended to read as follows:

    ``(d) Study and Report on the Development of Home Health Payment 
Revisions in Order to Ensure Access to Care and Payment for Severity of 
Illness.--
            ``(1) In general.--The Secretary of Health and Human 
        Services (in this section referred to as the `Secretary') shall 
        conduct a study on home health agency costs involved with

[[Page 124 STAT. 945]]

        providing ongoing access to care to low-income Medicare 
        beneficiaries or beneficiaries in medically underserved areas, 
        and in treating beneficiaries with varying levels of severity of 
        illness. In conducting the study, the Secretary may analyze 
        items such as the following:
                    ``(A) Methods to potentially revise the home health 
                prospective payment system under section 1895 of the 
                Social Security Act (42 U.S.C. 1395fff) to account for 
                costs related to patient severity of illness or to 
                improving beneficiary access to care, such as--
                          ``(i) payment adjustments for services that 
                      may involve additional or fewer resources;
                          ``(ii) changes to reflect resources involved 
                      with providing home health services to low-income 
                      Medicare beneficiaries or Medicare beneficiaries 
                      residing in medically underserved areas;
                          ``(iii) ways outlier payments might be revised 
                      to reflect costs of treating Medicare 
                      beneficiaries with high levels of severity of 
                      illness; and
                          ``(iv) other issues determined appropriate by 
                      the Secretary.
                    ``(B) Operational issues involved with potential 
                implementation of potential revisions to the home health 
                payment system, including impacts for both home health 
                agencies and administrative and systems issues for the 
                Centers for Medicare & Medicaid Services, and any 
                possible payment vulnerabilities associated with 
                implementing potential revisions.
                    ``(C) Whether additional research might be needed.
                    ``(D) Other items determined appropriate by the 
                Secretary.
            ``(2) Considerations.--In conducting the study under 
        paragraph (1), the Secretary may consider whether patient 
        severity of illness and access to care could be measured by 
        factors, 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, 
                which might be measured by multiple, discontinuous home 
                health episodes;
                    ``(D) poverty status, such as evidenced by the 
                receipt of Supplemental Security Income under title XVI 
                of the Social Security Act; and
                    ``(E) other factors determined appropriate by the 
                Secretary.
            ``(3) Report.--Not later than March 1, 2014, the Secretary 
        shall submit to Congress a report on the study conducted under 
        paragraph (1), together with recommendations for such 
        legislation and administrative action as the Secretary 
        determines appropriate.
            ``(4) Consultations.--In conducting the study under 
        paragraph (1), the Secretary shall consult with appropriate 
        stakeholders, such as groups representing home health agencies 
        and groups representing Medicare beneficiaries.

[[Page 124 STAT. 946]]

            ``(5) Medicare demonstration project based on the results of 
        the study.--
                    ``(A) In general.--Subject to subparagraph (D), 
                taking into account the results of the study conducted 
                under paragraph (1), the Secretary may, as determined 
                appropriate, provide for a demonstration project to test 
                whether making payment adjustments for home health 
                services under the Medicare program would substantially 
                improve access to care for patients with high severity 
                levels of illness or for low-income or underserved 
                Medicare beneficiaries.
                    ``(B) Waiving budget neutrality.--The Secretary 
                shall not reduce the standard prospective payment amount 
                (or amounts) under section 1895 of the Social Security 
                Act (42 U.S.C. 1395fff) applicable to home health 
                services furnished during a period to offset any 
                increase in payments during such period resulting from 
                the application of the payment adjustments under 
                subparagraph (A).
                    ``(C) No effect on subsequent periods.--A payment 
                adjustment resulting from the application of 
                subparagraph (A) for a period--
                          ``(i) shall not apply to payments for home 
                      health services under title XVIII after such 
                      period; and
                          ``(ii) shall not be taken into account in 
                      calculating the payment amounts applicable for 
                      such services after such period.
                    ``(D) <<NOTE: Determination.>> Duration.--If the 
                Secretary determines it appropriate to conduct the 
                demonstration project under this subsection, the 
                Secretary shall conduct the project for a four year 
                period beginning not later than January 1, 2015.
                    ``(E) Funding.--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 established under section 1841 of such Act 
                (42 U.S.C. 1395t), in such proportion as the Secretary 
                determines appropriate, of $500,000,000 for the period 
                of fiscal years 2015 through 2018. Such funds shall be 
                made available for the study described in paragraph (1) 
                and the design, implementation and evaluation of the 
                demonstration described in this paragraph. Amounts 
                available under this subparagraph shall be available 
                until expended.
                    ``(F) Evaluation and report.--If the Secretary 
                determines it appropriate to conduct the demonstration 
                project under this subsection, the Secretary shall--
                          ``(i) provide for an evaluation of the 
                      project; and
                          ``(ii) submit to Congress, by a date specified 
                      by the Secretary, a report on the project.
                    ``(G) Administration.--Chapter 35 of title 44, 
                United States Code, shall not apply with respect to this 
                subsection.''.

SEC. 10316. MEDICARE DSH.

    Section 1886(r)(2)(B) of the Social Security Act, as added by 
section 3133, <<NOTE: 42 USC 1395ww.>> is amended--
            (1) in clause (i)--
                    (A) in the matter preceding subclause (I), by 
                striking ``(divided by 100)'';

[[Page 124 STAT. 947]]

                    (B) in subclause (I), by striking ``2012'' and 
                inserting ``2013'';
                    (C) in subclause (II), by striking the period at the 
                end and inserting a comma; and
                    (D) by adding at the end the following flush matter:
                      ``minus 1.5 percentage points.''.
            (2) in clause (ii)--
                    (A) in the matter preceding subclause (I), by 
                striking ``(divided by 100)'';
                    (B) in subclause (I), by striking ``2012'' and 
                inserting ``2013'';
                    (C) in subclause (II), by striking the period at the 
                end and inserting a comma; and
                    (D) by adding at the end the following flush matter:
                      ``and, for each of 2018 and 2019, minus 1.5 
                      percentage points.''.

SEC. 10317. <<NOTE: 42 USC 1395ww note.>> REVISIONS TO EXTENSION OF 
            SECTION 508 HOSPITAL PROVISIONS.

    Section 3137(a) is amended to read as follows:
    ``(a) Extension.--
            ``(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) Special rule for fiscal year 2010.--
                    ``(A) In general.--Subject to subparagraph (B), for 
                purposes of implementation of the amendment made by 
                paragraph (1), including (notwithstanding paragraph (3) 
                of section 117(a) of the Medicare, Medicaid and SCHIP 
                Extension Act of 2007 (Public Law 110-173), as amended 
                by section 124(b) of the Medicare Improvements for 
                Patients and Providers Act of 2008 (Public Law 110-275)) 
                for purposes of the implementation of paragraph (2) of 
                such section 117(a), during fiscal year 2010, the 
                Secretary of Health and Human Services (in this 
                subsection referred to as 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) <<NOTE: Effective date.>> Exception.--
                Beginning on April 1, 2010, in determining the wage 
                index applicable to hospitals that qualify for wage 
                index reclassification, the Secretary shall include the 
                average hourly wage data of hospitals whose 
                reclassification was extended pursuant to the amendment 
                made by paragraph (1) only if including such data 
                results in a higher applicable reclassified wage index.
            ``(3) Adjustment for certain hospitals in fiscal year 
        2010.--
                    ``(A) In general.--In the case of a subsection (d) 
                hospital (as defined in subsection (d)(1)(B) of section 
                1886 of the Social Security Act (42 U.S.C. 1395ww)) with 
                respect to which--

[[Page 124 STAT. 948]]

                          ``(i) a reclassification of its wage index for 
                      purposes of such section was extended pursuant to 
                      the amendment made by paragraph (1); and
                          ``(ii) <<NOTE: Time period.>> the wage index 
                      applicable for such hospital for the period 
                      beginning on October 1, 2009, and ending on March 
                      31, 2010, was lower than for the period beginning 
                      on April 1, 2010, and ending on September 30, 
                      2010, by reason of the application of paragraph 
                      (2)(B);
                the Secretary shall pay such hospital an additional 
                payment that reflects the difference between the wage 
                index for such periods.
                    ``(B) Timeframe for payments.--The Secretary shall 
                make payments required under subparagraph by not later 
                than December 31, 2010.''.

SEC. 10318. REVISIONS TO TRANSITIONAL EXTRA BENEFITS UNDER MEDICARE 
            ADVANTAGE.

    Section 1853(p)(3)(A) of the Social Security Act, as added by 
section 3201(h), <<NOTE: 42 USC 1395w-23.>> is amended by inserting ``in 
2009'' before the period at the end.

SEC. 10319. REVISIONS TO MARKET BASKET ADJUSTMENTS.

    (a) Inpatient Acute Hospitals.--Section 1886(b)(3)(B)(xii) of the 
Social Security Act, as added by section 3401(a), <<NOTE: 42 USC 
1395ww.>> is amended--
            (1) in subclause (I), by striking ``and'' at the end;
            (2) by redesignating subclause (II) as subclause (III);
            (3) by inserting after subclause (II) the following new 
        subclause:
            ``(II) for each of fiscal years 2012 and 2013, by 0.1 
        percentage point; and''; and
            (4) in subclause (III), as redesignated by paragraph (2), by 
        striking ``2012'' and inserting ``2014''.

    (b) Long-term Care Hospitals.--Section 1886(m)(4) of the Social 
Security Act, as added by section 3401(c), is amended--
            (1) in subparagraph (A)--
                    (A) in clause (i)--
                          (i) by striking ``each of rate years 2010 and 
                      2011'' and inserting ``rate year 2010''; and
                          (ii) by striking ``and'' at the end;
                    (B) by redesignating clause (ii) as clause (iv);
                    (C) by inserting after clause (i) the following new 
                clauses:
                          ``(ii) for rate year 2011, 0.50 percentage 
                      point;
                          ``(iii) for each of the rate years beginning 
                      in 2012 and 2013, 0.1 percentage point; and''; and
                    (D) in clause (iv), as redesignated by subparagraph 
                (B), by striking ``2012'' and inserting ``2014''; and
            (2) in subparagraph (B), by striking ``(A)(ii)'' and 
        inserting ``(A)(iv)''.

    (c) Inpatient Rehabilitation Facilities.--Section 1886(j)(3)(D)(i) 
of the Social Security Act, as added by section 3401(d), is amended--
            (1) in subclause (I), by striking ``and'' at the end;
            (2) by redesignating subclause (II) as subclause (III);
            (3) by inserting after subclause (II) the following new 
        subclause:

[[Page 124 STAT. 949]]

                                    ``(II) for each of fiscal years 2012 
                                and 2013, 0.1 percentage point; and''; 
                                and
            (4) in subclause (III), as redesignated by paragraph (2), by 
        striking ``2012'' and inserting ``2014''.

    (d) Home Health Agencies.--Section 1895(b)(3)(B)(vi)(II) of such 
Act, as added by section 3401(e), <<NOTE: 42 USC 1395fff.>> is amended 
by striking ``and 2012'' and inserting ``, 2012, and 2013''.

    (e) Psychiatric Hospitals.--Section 1886(s)(3)(A) of the Social 
Security Act, as added by section 3401(f), <<NOTE: 42 USC 1395ww.>> is 
amended--
            (1) in clause (i), by striking ``and'' at the end;
            (2) by redesignating clause (ii) as clause (iii);
            (3) by inserting after clause (ii) the following new clause:
                          ``(ii) for each of the rate years beginning in 
                      2012 and 2013, 0.1 percentage point; and''; and
            (4) in clause (iii), as redesignated by paragraph (2), by 
        striking ``2012'' and inserting ``2014''.

    (f) Hospice Care.--Section 1814(i)(1)(C) of the Social Security Act 
(42 U.S.C. 1395f(i)(1)(C)), as amended by section 3401(g), is amended--
            (1) in clause (iv)(II), by striking ``0.5'' and inserting 
        ``0.3''; and
            (2) in clause (v), in the matter preceding subclause (I), by 
        striking ``0.5'' and inserting ``0.3''.

    (g) Outpatient Hospitals.--Section 1833(t)(3)(G)(i) of the Social 
Security Act, as added by section 3401(i), <<NOTE: 42 USC 1395l.>> is 
amended--
            (1) in subclause (I), by striking ``and'' at the end;
            (2) by redesignating subclause (II) as subclause (III);
            (3) by inserting after subclause (II) the following new 
        subclause:
                                    ``(II) for each of 2012 and 2013, 
                                0.1 percentage point; and''; and
            (4) in subclause (III), as redesignated by paragraph (2), by 
        striking ``2012'' and inserting ``2014''.

SEC. 10320. EXPANSION OF THE SCOPE OF, AND ADDITIONAL IMPROVEMENTS TO, 
            THE INDEPENDENT MEDICARE ADVISORY BOARD.

    (a) In General.--Section 1899A of the Social Security Act, as added 
by section 3403, <<NOTE: 42 USC 1395kkk.>> is amended--
            (1) in subsection (c)--
                    (A) in paragraph (1)(B), by adding at the end the 
                following new sentence: <<NOTE: Reports.>> ``In any year 
                (beginning with 2014) that the Board is not required to 
                submit a proposal under this section, the Board shall 
                submit to Congress an advisory report on matters related 
                to the Medicare program.'';
                    (B) in paragraph (2)(A)--
                          (i) in clause (iv), by inserting ``or the full 
                      premium subsidy under section 1860D-14(a)'' before 
                      the period at the end of the last sentence; and
                          (ii) by adding at the end the following new 
                      clause:
                          ``(vii) <<NOTE: Determination.>> If the Chief 
                      Actuary of the Centers for Medicare & Medicaid 
                      Services has made a determination described in 
                      subsection (e)(3)(B)(i)(II) in the determination 
                      year, the proposal shall be designed to help 
                      reduce the growth rate described in paragraph (8) 
                      while maintaining or enhancing beneficiary access 
                      to quality care under this title.'';

[[Page 124 STAT. 950]]

                    (C) in paragraph (2)(B)--
                          (i) in clause (v), by striking ``and'' at the 
                      end;
                          (ii) in clause (vi), by striking the period at 
                      the end and inserting ``; and''; and
                          (iii) by adding at the end the following new 
                      clause:
                          ``(vii) take into account the data and 
                      findings contained in the annual reports under 
                      subsection (n) in order to develop proposals that 
                      can most effectively promote the delivery of 
                      efficient, high quality care to Medicare 
                      beneficiaries.'';
                    (D) in paragraph (3)--
                          (i) in the heading, by striking ``Transmission 
                      of board proposal to president'' and inserting 
                      ``Submission of board proposal to congress and the 
                      president'';
                          (ii) in subparagraph (A)(i), by striking 
                      ``transmit a proposal under this section to the 
                      President'' and insert ``submit a proposal under 
                      this section to Congress and the President''; and
                          (iii) in subparagraph (A)(ii)--
                                    (I) in subclause (I), by inserting 
                                ``or'' at the end;
                                    (II) in subclause (II), by striking 
                                ``; or'' and inserting a period; and
                                    (III) by striking subclause (III);
                    (E) in paragraph (4)--
                          (i) by striking ``the Board under paragraph 
                      (3)(A)(i) or''; and
                          (ii) by striking ``immediately'' and inserting 
                      ``within 2 days'';
                    (F) in paragraph (5)--
                          (i) by striking ``to but'' and inserting 
                      ``but''; and
                          (ii) by inserting ``Congress and'' after 
                      ``submit a proposal to''; and
                    (G) in paragraph (6)(B)(i), by striking ``per 
                unduplicated enrollee'' and inserting ``(calculated as 
                the sum of per capita spending under each of parts A, B, 
                and D)'';
            (2) in subsection (d)--
                    (A) in paragraph (1)(A)--
                          (i) by inserting ``the Board or'' after ``a 
                      proposal is submitted by''; and
                          (ii) by inserting ``subsection (c)(3)(A)(i) 
                      or'' after ``the Senate under''; and
                    (B) in paragraph (2)(A), by inserting ``the Board 
                or'' after ``a proposal is submitted by'';
            (3) in subsection (e)--
                    (A) in paragraph (1), by inserting ``the Board or'' 
                after ``a proposal submitted by''; and
                    (B) in paragraph (3)--
                          (i) by striking ``Exception.--The Secretary 
                      shall not be required to implement the 
                      recommendations contained in a proposal submitted 
                      in a proposal year by'' and inserting 
                      ``Exceptions.--
                    ``(A) In general.--The Secretary shall not implement 
                the recommendations contained in a proposal submitted in 
                a proposal year by the Board or'';

[[Page 124 STAT. 951]]

                          (ii) by redesignating subparagraphs (A) and 
                      (B) as clauses (i) and (ii), respectively, and 
                      indenting appropriately; and
                          (iii) by adding at the end the following new 
                      subparagraph:
                    ``(B) Limited additional exception.--
                          ``(i) In general.--Subject to clause (ii), the 
                      Secretary shall not implement the recommendations 
                      contained in a proposal submitted by the Board or 
                      the President to Congress pursuant to this section 
                      in a proposal year (beginning with proposal year 
                      2019) if--
                                    ``(I) the Board was required to 
                                submit a proposal to Congress under this 
                                section in the year preceding the 
                                proposal year; and
                                    ``(II) <<NOTE: Determination.>> the 
                                Chief Actuary of the Centers for 
                                Medicare & Medicaid Services makes a 
                                determination in the determination year 
                                that the growth rate described in 
                                subsection (c)(8) exceeds the growth 
                                rate described in subsection 
                                (c)(6)(A)(i).
                          ``(ii) Limited additional exception may not be 
                      applied in two consecutive years.--This 
                      subparagraph shall not apply if the 
                      recommendations contained in a proposal submitted 
                      by the Board or the President to Congress pursuant 
                      to this section in the year preceding the proposal 
                      year were not required to be implemented by reason 
                      of this subparagraph.
                          ``(iii) No affect on requirement to submit 
                      proposals or for congressional consideration of 
                      proposals.--Clause (i) and (ii) shall not affect--
                                    ``(I) the requirement of the Board 
                                or the President to submit a proposal to 
                                Congress in a proposal year in 
                                accordance with the provisions of this 
                                section; or
                                    ``(II) Congressional consideration 
                                of a legislative proposal (described in 
                                subsection (c)(3)(B)(iv)) contained such 
                                a proposal in accordance with subsection 
                                (d).'';
            (4) in subsection (f)(3)(B)--
                    (A) by striking ``or advisory reports to Congress'' 
                and inserting ``, advisory reports, or advisory 
                recommendations''; and
                    (B) by inserting ``or produce the public report 
                under subsection (n)'' after ``this section''; and
            (5) by adding at the end the following new subsections:

    ``(n) Annual Public Report.--
            ``(1) In general.--Not later than July 1, 2014, and annually 
        thereafter, the Board shall produce a public report containing 
        standardized information on system-wide health care costs, 
        patient access to care, utilization, and quality-of-care that 
        allows for comparison by region, types of services, types of 
        providers, and both private payers and the program under this 
        title.
            ``(2) Requirements.--Each report produced pursuant to 
        paragraph (1) shall include information with respect to the 
        following areas:
                    ``(A) The quality and costs of care for the 
                population at the most local level determined practical 
                by the Board

[[Page 124 STAT. 952]]

                (with quality and costs compared to national benchmarks 
                and reflecting rates of change, taking into account 
                quality measures described in section 1890(b)(7)(B)).
                    ``(B) Beneficiary and consumer access to care, 
                patient and caregiver experience of care, and the cost-
                sharing or out-of-pocket burden on patients.
                    ``(C) Epidemiological shifts and demographic 
                changes.
                    ``(D) The proliferation, effectiveness, and 
                utilization of health care technologies, including 
                variation in provider practice patterns and costs.
                    ``(E) Any other areas that the Board determines 
                affect overall spending and quality of care in the 
                private sector.

    ``(o) Advisory Recommendations for Non-Federal Health Care 
Programs.--
            ``(1) In general.-- <<NOTE: Deadlines.>> Not later than 
        January 15, 2015, and at least once every two years thereafter, 
        the Board shall submit to Congress and the President 
        recommendations to slow the growth in national health 
        expenditures (excluding expenditures under this title and in 
        other Federal health care programs) while preserving or 
        enhancing quality of care, such as recommendations--
                    ``(A) that the Secretary or other Federal agencies 
                can implement administratively;
                    ``(B) that may require legislation to be enacted by 
                Congress in order to be implemented;
                    ``(C) that may require legislation to be enacted by 
                State or local governments in order to be implemented;
                    ``(D) that private sector entities can voluntarily 
                implement; and
                    ``(E) with respect to other areas determined 
                appropriate by the Board.
            ``(2) Coordination.--In making recommendations under 
        paragraph (1), the Board shall coordinate such recommendations 
        with recommendations contained in proposals and advisory reports 
        produced by the Board under subsection (c).
            ``(3) Available to public.--The Board shall make 
        recommendations submitted to Congress and the President under 
        this subsection available to the public.''.

    (b) Name Change.-- <<NOTE: 42 USC 1395kkk and note.>> Any reference 
in the provisions of, or amendments made by, section 3403 to the 
``Independent Medicare Advisory Board'' shall be deemed to be a 
reference to the ``Independent Payment Advisory Board''.

    (c) Rule of Construction.-- <<NOTE: 42 USC 1395kkk note.>> Nothing 
in the amendments made by this section shall preclude the Independent 
Medicare Advisory Board, as established under section 1899A of the 
Social Security Act (as added by section 3403), from solely using data 
from public or private sources to carry out the amendments made by 
subsection (a)(4).

SEC. 10321. REVISION TO COMMUNITY HEALTH TEAMS.

    Section 3502(c)(2)(A) <<NOTE: 42 USC 256a-1.>> is amended by 
inserting ``or other primary care providers'' after ``physicians''.

SEC. 10322. QUALITY REPORTING FOR PSYCHIATRIC HOSPITALS.

    (a) In General.--Section 1886(s) of the Social Security Act, as 
added by section 3401(f), <<NOTE: 42 USC 1395ww.>> is amended by adding 
at the end the following new paragraph:
            ``(4) Quality reporting.--

[[Page 124 STAT. 953]]

                    ``(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 psychiatric 
                      hospital or psychiatric unit 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 (2), 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 year.
                    ``(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 psychiatric 
                hospital and psychiatric unit 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 section 1890(a).
                          ``(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.-- 
                <<NOTE: Procedures.>> The Secretary shall establish 
                procedures for making data submitted under subparagraph 
                (C) available to the public. Such procedures shall 
                ensure that a psychiatric hospital and a psychiatric 
                unit has the opportunity to review the data that is to 
                be made public with respect to the hospital or unit 
                prior to such data being made 
                public. <<NOTE: Reports.>> The Secretary shall report 
                quality measures that relate to services furnished in 
                inpatient settings in psychiatric hospitals and

[[Page 124 STAT. 954]]

                psychiatric units on the Internet website of the Centers 
                for Medicare & Medicaid Services.''.

    (b) Conforming Amendment.--Section 1890(b)(7)(B)(i)(I) of the Social 
Security Act, as added by section 3014, <<NOTE: 42 USC 1395aaa.>> is 
amended by inserting ``1886(s)(4)(D),'' after ``1886(o)(2),''.

SEC. 10323. MEDICARE COVERAGE FOR INDIVIDUALS EXPOSED TO ENVIRONMENTAL 
            HEALTH HAZARDS.

    (a) In General.--Title XVIII of the Social Security Act (42 U.S.C. 
1395 et seq.) is amended by inserting after section 1881 the following 
new section:

``SEC. 1881A. <<NOTE: 42 USC 1395rr-1.>> MEDICARE COVERAGE FOR 
            INDIVIDUALS EXPOSED TO ENVIRONMENTAL HEALTH HAZARDS.

    ``(a) Deeming of Individuals as Eligible for Medicare Benefits.--
            ``(1) In general.--For purposes of eligibility for benefits 
        under this title, an individual determined under subsection (c) 
        to be an environmental exposure affected individual described in 
        subsection (e)(2) shall be deemed to meet the conditions 
        specified in section 226(a).
            ``(2) Discretionary deeming.--For purposes of eligibility 
        for benefits under this title, the Secretary may deem an 
        individual determined under subsection (c) to be an 
        environmental exposure affected individual described in 
        subsection (e)(3) to meet the conditions specified in section 
        226(a).
            ``(3) Effective date of coverage.--An Individual who is 
        deemed eligible for benefits under this title under paragraph 
        (1) or (2) shall be--
                    ``(A) entitled to benefits under the program under 
                Part A as of the date of such deeming; and
                    ``(B) eligible to enroll in the program under Part B 
                beginning with the month in which such deeming occurs.

    ``(b) Pilot Program for Care of Certain Individuals Residing in 
Emergency Declaration Areas.--
            ``(1) Program; purpose.--
                    ``(A) Primary pilot program.--The Secretary shall 
                establish a pilot program in accordance with this 
                subsection to provide innovative approaches to 
                furnishing comprehensive, coordinated, and cost-
                effective care under this title to individuals described 
                in paragraph (2)(A).
                    ``(B) Optional pilot programs.--The Secretary may 
                establish a separate pilot program, in accordance with 
                this subsection, with respect to each geographic area 
                subject to an emergency declaration (other than the 
                declaration of June 17, 2009), in order to furnish such 
                comprehensive, coordinated and cost-effective care to 
                individuals described in subparagraph (2)(B) who reside 
                in each such area.
            ``(2) Individual described.--For purposes of paragraph (1), 
        an individual described in this paragraph is an individual who 
        enrolls in part B, submits to the Secretary an application to 
        participate in the applicable pilot program under this 
        subsection, and--
                    ``(A) is an environmental exposure affected 
                individual described in subsection (e)(2) who resides in 
                or around the geographic area subject to an emergency 
                declaration made as of June 17, 2009; or

[[Page 124 STAT. 955]]

                    ``(B) is an environmental exposure affected 
                individual described in subsection (e)(3) who--
                          ``(i) is deemed under subsection (a)(2); and
                          ``(ii) meets such other criteria or conditions 
                      for participation in a pilot program under 
                      paragraph (1)(B) as the Secretary specifies.
            ``(3) Flexible benefits and services.--A pilot program under 
        this subsection may provide for the furnishing of benefits, 
        items, or services not otherwise covered or authorized under 
        this title, if the Secretary determines that furnishing such 
        benefits, items, or services will further the purposes of such 
        pilot program (as described in paragraph (1)).
            ``(4) Innovative reimbursement methodologies.--For purposes 
        of the pilot program under this subsection, the Secretary--
                    ``(A) shall develop and implement appropriate 
                methodologies to reimburse providers for furnishing 
                benefits, items, or services for which payment is not 
                otherwise covered or authorized under this title, if 
                such benefits, items, or services are furnished pursuant 
                to paragraph (3); and
                    ``(B) may develop and implement innovative 
                approaches to reimbursing providers for any benefits, 
                items, or services furnished under this subsection.
            ``(5) Limitation.--Consistent with section 1862(b), no 
        payment shall be made under the pilot program under this 
        subsection with respect to benefits, items, or services 
        furnished to an environmental exposure affected individual (as 
        defined in subsection (e)) to the extent that such individual is 
        eligible to receive such benefits, items, or services through 
        any other public or private benefits plan or legal agreement.
            ``(6) Waiver authority.--The Secretary may waive such 
        provisions of this title and title XI as are necessary to carry 
        out pilot programs under this subsection.
            ``(7) Funding.--For purposes of carrying out pilot programs 
        under this subsection, the Secretary shall provide for the 
        transfer, from the Federal Hospital Insurance Trust Fund under 
        section 1817 and the Federal Supplementary Medical Insurance 
        Trust Fund under section 1841, in such proportion as the 
        Secretary determines appropriate, of such sums as the Secretary 
        determines necessary, to the Centers for Medicare & Medicaid 
        Services Program Management Account.
            ``(8) Waiver of budget neutrality.--The Secretary shall not 
        require that pilot programs under this subsection be budget 
        neutral with respect to expenditures under this title.

    ``(c) Determinations.--
            ``(1) By the commissioner of social security.--For purposes 
        of this section, the Commissioner of Social Security, in 
        consultation with the Secretary, and using the cost allocation 
        method prescribed in section 201(g), shall determine whether 
        individuals are environmental exposure affected individuals.
            ``(2) By the secretary.--The Secretary shall determine 
        eligibility for pilot programs under subsection (b).

    ``(d) Emergency Declaration Defined.--For purposes of this section, 
the term `emergency declaration' means a declaration of a public health 
emergency under section 104(a) of the Comprehensive Environmental 
Response, Compensation, and Liability Act of 1980.

[[Page 124 STAT. 956]]

    ``(e) Environmental Exposure Affected Individual Defined.--
            ``(1) In general.--For purposes of this section, the term 
        `environmental exposure affected individual' means--
                    ``(A) an individual described in paragraph (2); and
                    ``(B) an individual described in paragraph (3).
            ``(2) Individual described.--
                    ``(A) In general.--An individual described in this 
                paragraph is any individual who--
                          ``(i) is diagnosed with 1 or more conditions 
                      described in subparagraph (B);
                          ``(ii) as demonstrated in such manner as the 
                      Secretary determines appropriate, has been present 
                      for an aggregate total of 6 months in the 
                      geographic area subject to an emergency 
                      declaration specified in subsection (b)(2)(A), 
                      during a period ending--
                                    ``(I) not less than 10 years prior 
                                to such diagnosis; and
                                    ``(II) prior to the implementation 
                                of all the remedial and removal actions 
                                specified in the Record of Decision for 
                                Operating Unit 4 and the Record of 
                                Decision for Operating Unit 7;
                          ``(iii) files an application for benefits 
                      under this title (or has an application filed on 
                      behalf of the individual), including pursuant to 
                      this section; and
                          ``(iv) is determined under this section to 
                      meet the criteria in this subparagraph.
                    ``(B) Conditions described.--For purposes of 
                subparagraph (A), the following conditions are described 
                in this subparagraph:
                          ``(i) Asbestosis, pleural thickening, or 
                      pleural plaques as established by--
                                    ``(I) interpretation by a `B Reader' 
                                qualified physician of a plain chest x-
                                ray or interpretation of a computed 
                                tomographic radiograph of the chest by a 
                                qualified physician, as determined by 
                                the Secretary; or
                                    ``(II) such other diagnostic 
                                standards as the Secretary specifies,
                      except that this clause shall not apply to pleural 
                      thickening or pleural plaques unless there are 
                      symptoms or conditions requiring medical treatment 
                      as a result of these diagnoses.
                          ``(ii) Mesothelioma, or malignancies of the 
                      lung, colon, rectum, larynx, stomach, esophagus, 
                      pharynx, or ovary, as established by--
                                    ``(I) pathologic examination of 
                                biopsy tissue;
                                    ``(II) cytology from 
                                bronchioalveolar lavage; or
                                    ``(III) such other diagnostic 
                                standards as the Secretary specifies.
                          ``(iii) Any other diagnosis which the 
                      Secretary, in consultation with the Commissioner 
                      of Social Security, determines is an asbestos-
                      related medical condition, as established by such 
                      diagnostic standards as the Secretary specifies.
            ``(3) Other individual described.--An individual described 
        in this paragraph is any individual who--

[[Page 124 STAT. 957]]

                    ``(A) is not an individual described in paragraph 
                (2);
                    ``(B) is diagnosed with a medical condition caused 
                by the exposure of the individual to a public health 
                hazard to which an emergency declaration applies, based 
                on such medical conditions, diagnostic standards, and 
                other criteria as the Secretary specifies;
                    ``(C) as demonstrated in such manner as the 
                Secretary determines appropriate, has been present for 
                an aggregate total of 6 months in the geographic area 
                subject to the emergency declaration involved, during a 
                period determined appropriate by the Secretary;
                    ``(D) files an application for benefits under this 
                title (or has an application filed on behalf of the 
                individual), including pursuant to this section; and
                    ``(E) is determined under this section to meet the 
                criteria in this paragraph.''.

    (b) Program for Early Detection of Certain Medical Conditions 
Related to Environmental Health Hazards.--Title XX of the Social 
Security Act (42 U.S.C. 1397 et seq.), as amended by section 5507, is 
amended by adding at the end the following:

``SEC. 2009. <<NOTE: 42 USC 1397h.>> PROGRAM FOR EARLY DETECTION OF 
            CERTAIN MEDICAL CONDITIONS RELATED TO ENVIRONMENTAL HEALTH 
            HAZARDS.

    ``(a) Program Establishment.--The Secretary shall establish a 
program in accordance with this section to make competitive grants to 
eligible entities specified in subsection (b) for the purpose of--
            ``(1) screening at-risk individuals (as defined in 
        subsection (c)(1)) for environmental health conditions (as 
        defined in subsection (c)(3)); and
            ``(2) developing and disseminating public information and 
        education concerning--
                    ``(A) the availability of screening under the 
                program under this section;
                    ``(B) the detection, prevention, and treatment of 
                environmental health conditions; and
                    ``(C) the availability of Medicare benefits for 
                certain individuals diagnosed with environmental health 
                conditions under section 1881A.

    ``(b) Eligible Entities.--
            ``(1) In general.--For purposes of this section, an eligible 
        entity is an entity described in paragraph (2) which submits an 
        application to the Secretary in such form and manner, and 
        containing such information and assurances, as the Secretary 
        determines appropriate.
            ``(2) Types of eligible entities.--The entities described in 
        this paragraph are the following:
                    ``(A) A hospital or community health center.
                    ``(B) A Federally qualified health center.
                    ``(C) A facility of the Indian Health Service.
                    ``(D) A National Cancer Institute-designated cancer 
                center.
                    ``(E) An agency of any State or local government.
                    ``(F) A nonprofit organization.
                    ``(G) Any other entity the Secretary determines 
                appropriate.

[[Page 124 STAT. 958]]

    ``(c) Definitions.--In this section:
            ``(1) At-risk individual.--The term `at-risk individual' 
        means an individual who--
                    ``(A)(i) as demonstrated in such manner as the 
                Secretary determines appropriate, has been present for 
                an aggregate total of 6 months in the geographic area 
                subject to an emergency declaration specified under 
                paragraph (2), during a period ending--
                          ``(I) not less than 10 years prior to the date 
                      of such individual's application under 
                      subparagraph (B); and
                          ``(II) prior to the implementation of all the 
                      remedial and removal actions specified in the 
                      Record of Decision for Operating Unit 4 and the 
                      Record of Decision for Operating Unit 7; or
                    ``(ii) meets such other criteria as the Secretary 
                determines appropriate considering the type of 
                environmental health condition at issue; and
                    ``(B) has submitted an application (or has an 
                application submitted on the individual's behalf), to an 
                eligible entity receiving a grant under this section, 
                for screening under the program under this section.
            ``(2) Emergency declaration.--The term `emergency 
        declaration' means a declaration of a public health emergency 
        under section 104(a) of the Comprehensive Environmental 
        Response, Compensation, and Liability Act of 1980.
            ``(3) Environmental health condition.--The term 
        `environmental health condition' means--
                    ``(A) asbestosis, pleural thickening, or pleural 
                plaques, as established by--
                          ``(i) interpretation by a `B Reader' qualified 
                      physician of a plain chest x-ray or interpretation 
                      of a computed tomographic radiograph of the chest 
                      by a qualified physician, as determined by the 
                      Secretary; or
                          ``(ii) such other diagnostic standards as the 
                      Secretary specifies;
                    ``(B) mesothelioma, or malignancies of the lung, 
                colon, rectum, larynx, stomach, esophagus, pharynx, or 
                ovary, as established by--
                          ``(i) pathologic examination of biopsy tissue;
                          ``(ii) cytology from bronchioalveolar lavage; 
                      or
                          ``(iii) such other diagnostic standards as the 
                      Secretary specifies; and
                    ``(C) any other medical condition which the 
                Secretary determines is caused by exposure to a 
                hazardous substance or pollutant or contaminant at a 
                Superfund site to which an emergency declaration 
                applies, based on such criteria and as established by 
                such diagnostic standards as the Secretary specifies.
            ``(4) Hazardous substance; pollutant; contaminant.--The 
        terms `hazardous substance', `pollutant', and `contaminant' have 
        the meanings given those terms in section 101 of the 
        Comprehensive Environmental Response, Compensation, and 
        Liability Act of 1980 (42 U.S.C. 9601).
            ``(5) Superfund site.--The term `Superfund site' means a 
        site included on the National Priorities List developed by the 
        President in accordance with section 105(a)(8)(B) of the

[[Page 124 STAT. 959]]

        Comprehensive Environmental Response, Compensation, and 
        Liability Act of 1980 (42 U.S.C. 9605(a)(8)(B)).

    ``(d) Health Coverage Unaffected.--Nothing in this section shall be 
construed to affect any coverage obligation of a governmental or private 
health plan or program relating to an at-risk individual.
    ``(e) Funding.--
            ``(1) In general.--Out of any funds in the Treasury not 
        otherwise appropriated, there are appropriated to the Secretary, 
        to carry out the program under this section--
                    ``(A) $23,000,000 for the period of fiscal years 
                2010 through 2014; and
                    ``(B) $20,000,000 for each 5-fiscal year period 
                thereafter.
            ``(2) Availability.--Funds appropriated under paragraph (1) 
        shall remain available until expended.

    ``(f) Nonapplication.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        preceding sections of this title shall not apply to grants 
        awarded under this section.
            ``(2) Limitations on use of grants.--Section 2005(a) shall 
        apply to a grant awarded under this section to the same extent 
        and in the same manner as such section applies to payments to 
        States under this title, except that paragraph (4) of such 
        section shall not be construed to prohibit grantees from 
        conducting screening for environmental health conditions as 
        authorized under this section.''.

SEC. 10324. PROTECTIONS FOR FRONTIER STATES.

    (a) Floor on Area Wage Index for Hospitals in Frontier States.--
            (1) In general.--Section 1886(d)(3)(E) of the Social 
        Security Act (42 U.S.C. 1395ww(d)(3)(E)) is amended--
                    (A) in clause (i), by striking ``clause (ii)'' and 
                inserting ``clause (ii) or (iii)''; and
                    (B) by adding at the end the following new clause:
                          ``(iii) Floor on area wage index for hospitals 
                      in frontier states.--
                                    ``(I) In general.--Subject to 
                                subclause (IV), for discharges occurring 
                                on or after October 1, 2010, the area 
                                wage index applicable under this 
                                subparagraph to any hospital which is 
                                located in a frontier State (as defined 
                                in subclause (II)) may not be less than 
                                1.00.
                                    ``(II) Frontier state defined.--In 
                                this clause, the term `frontier State' 
                                means a State in which at least 50 
                                percent of the counties in the State are 
                                frontier counties.
                                    ``(III) Frontier county defined.--In 
                                this clause, the term `frontier county' 
                                means a county in which the population 
                                per square mile is less than 6.
                                    ``(IV) Limitation.--This clause 
                                shall not apply to any hospital located 
                                in a State that receives a non-labor 
                                related share adjustment under paragraph 
                                (5)(H).''.

[[Page 124 STAT. 960]]

            (2) Waiving budget neutrality.--Section 1886(d)(3)(E) of the 
        Social Security Act (42 U.S.C. 1395ww(d)(3)(E)), as amended by 
        subsection (a), is amended in the third sentence by inserting 
        ``and the amendments made by section 10324(a)(1) of the Patient 
        Protection and Affordable Care Act'' after ``2003''.

    (b) Floor on Area Wage Adjustment Factor for Hospital Outpatient 
Department Services in Frontier States.--Section 1833(t) of the Social 
Security Act (42 U.S.C. 1395l(t)), as amended by section 3138, is 
amended--
            (1) in paragraph (2)(D), by striking ``the Secretary'' and 
        inserting ``subject to paragraph (19), the Secretary''; and
            (2) by adding at the end the following new paragraph:
            ``(19) Floor on area wage adjustment factor for hospital 
        outpatient department services in frontier states.--
                    ``(A) In general.--Subject to subparagraph (B), with 
                respect to covered OPD services furnished on or after 
                January 1, 2011, the area wage adjustment factor 
                applicable under the payment system established under 
                this subsection to any hospital outpatient department 
                which is located in a frontier State (as defined in 
                section 1886(d)(3)(E)(iii)(II)) may not be less than 
                1.00. The preceding sentence shall not be applied in a 
                budget neutral manner.
                    ``(B) Limitation.--This paragraph shall not apply to 
                any hospital outpatient department located in a State 
                that receives a non-labor related share adjustment under 
                section 1886(d)(5)(H).''.

    (c) Floor for Practice Expense Index for Physicians' Services 
Furnished in Frontier States.--Section 1848(e)(1) of the Social Security 
Act (42 U.S.C. 1395w-4(e)(1)), as amended by section 3102, is amended--
            (1) in subparagraph (A), by striking ``and (H)'' and 
        inserting ``(H), and (I)''; and
            (2) by adding at the end the following new subparagraph:
                    ``(I) Floor for practice expense index for services 
                furnished in frontier states.--
                          ``(i) In general.--Subject to clause (ii), for 
                      purposes of payment for services furnished in a 
                      frontier State (as defined in section 
                      1886(d)(3)(E)(iii)(II)) on or after January 1, 
                      2011, after calculating the practice expense index 
                      in subparagraph (A)(i), the Secretary shall 
                      increase any such index to 1.00 if such index 
                      would otherwise be less that 1.00. The preceding 
                      sentence shall not be applied in a budget neutral 
                      manner.
                          ``(ii) Limitation.--This subparagraph shall 
                      not apply to services furnished in a State that 
                      receives a non-labor related share adjustment 
                      under section 1886(d)(5)(H).''.

SEC. 10325. REVISION TO SKILLED NURSING FACILITY PROSPECTIVE PAYMENT 
            SYSTEM.

    (a) Temporary Delay of RUG-IV.-- <<NOTE: Implementation 
dates.>> Notwithstanding any other provision of law, the Secretary of 
Health and Human Services shall not, prior to October 1, 2011, implement 
Version 4 of the Resource Utilization Groups (in this subsection 
refereed to as ``RUG-IV'') published in the Federal Register on August 
11, 2009, entitled ``Prospective Payment System and Consolidated Billing 
for

[[Page 124 STAT. 961]]

Skilled Nursing Facilities for FY 2010; Minimum Data Set, Version 3.0 
for Skilled Nursing Facilities and Medicaid Nursing Facilities'' (74 
Fed. Reg. 40288). Beginning on October 1, 2010, the Secretary of Health 
and Human Services shall implement the change specific to therapy 
furnished on a concurrent basis that is a component of RUG-IV and 
changes to the lookback period to ensure that only those services 
furnished after admission to a skilled nursing facility are used as 
factors in determining a case mix classification under the skilled 
nursing facility prospective payment system under section 1888(e) of the 
Social Security Act (42 U.S.C. 1395yy(e)).

    (b) Construction.--Nothing in this section shall be interpreted as 
delaying the implementation of Version 3.0 of the Minimum Data Sets (MDS 
3.0) beyond the planned implementation date of October 1, 2010.

SEC. 10326. <<NOTE: 42 USC 1395b-1 note.>> PILOT TESTING PAY-FOR-
            PERFORMANCE PROGRAMS FOR CERTAIN MEDICARE PROVIDERS.

    (a) In General.-- <<NOTE: Deadline.>> Not later than January 1, 
2016, the Secretary of Health and Human Services (in this section 
referred to as the ``Secretary'') shall, for each provider described in 
subsection (b), conduct a separate pilot program under title XVIII of 
the Social Security Act to test the implementation of a value-based 
purchasing program for payments under such title for the provider.

    (b) Providers Described.--The providers described in this paragraph 
are the following:
            (1) Psychiatric hospitals (as described in clause (i) of 
        section 1886(d)(1)(B) of such Act (42 U.S.C. 1395ww(d)(1)(B))) 
        and psychiatric units (as described in the matter following 
        clause (v) of such section).
            (2) Long-term care hospitals (as described in clause (iv) of 
        such section).
            (3) Rehabilitation hospitals (as described in clause (ii) of 
        such section).
            (4) PPS-exempt cancer hospitals (as described in clause (v) 
        of such section).
            (5) Hospice programs (as defined in section 1861(dd)(2) of 
        such Act (42 U.S.C. 1395x(dd)(2))).

    (c) Waiver Authority.--The Secretary may waive such requirements of 
titles XI and XVIII of the Social Security Act as may be necessary 
solely for purposes of carrying out the pilot programs under this 
section.
    (d) No Additional Program Expenditures.--Payments under this section 
under the separate pilot program for value based purchasing (as 
described in subsection (a)) for each provider type described in 
paragraphs (1) through (5) of subsection (b) for applicable items and 
services under title XVIII of the Social Security Act for a year shall 
be established in a manner that does not result in spending more under 
each such value based purchasing program for such year than would 
otherwise be expended for such provider type for such year if the pilot 
program were not implemented, as estimated by the Secretary.
    (e) <<NOTE: Determinations.>> Expansion of Pilot Program.--The 
Secretary may, at any point after January 1, 2018, expand the duration 
and scope of a pilot program conducted under this subsection, to the 
extent determined appropriate by the Secretary, if--
            (1) the Secretary determines that such expansion is expected 
        to--

[[Page 124 STAT. 962]]

                    (A) reduce spending under title XVIII of the Social 
                Security Act without reducing the quality of care; or
                    (B) improve the quality of care and reduce spending;
            (2) <<NOTE: Certification.>> the Chief Actuary of the 
        Centers for Medicare & Medicaid Services certifies that such 
        expansion would reduce program spending under such title XVIII; 
        and
            (3) the Secretary determines that such expansion would not 
        deny or limit the coverage or provision of benefits under such 
        title XIII for Medicare beneficiaries.

SEC. 10327. IMPROVEMENTS TO THE PHYSICIAN QUALITY REPORTING SYSTEM.

    (a) In General.--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) Additional incentive payment.--
                    ``(A) In general.-- <<NOTE: Time period.>> For 2011 
                through 2014, if an eligible professional meets the 
                requirements described in subparagraph (B), the 
                applicable quality percent for such year, as described 
                in clauses (iii) and (iv) of paragraph (1)(B), shall be 
                increased by 0.5 percentage points.
                    ``(B) Requirements described.--In order to qualify 
                for the additional incentive payment described in 
                subparagraph (A), an eligible professional shall meet 
                the following requirements:
                          ``(i) The eligible professional shall--
                                    ``(I) satisfactorily submit data on 
                                quality measures for purposes of 
                                paragraph (1) for a year; and
                                    ``(II) have such data submitted on 
                                their behalf through a Maintenance of 
                                Certification Program (as defined in 
                                subparagraph (C)(i)) that meets--
                                            ``(aa) the criteria for a 
                                        registry (as described in 
                                        subsection (k)(4)); or
                                            ``(bb) an alternative form 
                                        and manner determined 
                                        appropriate by the Secretary.
                          ``(ii) The eligible professional, more 
                      frequently than is required to qualify for or 
                      maintain board certification status--
                                    ``(I) participates in such a 
                                Maintenance of Certification program for 
                                a year; and
                                    ``(II) successfully completes a 
                                qualified Maintenance of Certification 
                                Program practice assessment (as defined 
                                in subparagraph (C)(ii)) for such year.
                          ``(iii) A Maintenance of Certification program 
                      submits to the Secretary, on behalf of the 
                      eligible professional, information--
                                    ``(I) in a form and manner specified 
                                by the Secretary, that the eligible 
                                professional has successfully met the 
                                requirements of clause (ii) (which may 
                                be in the form of a structural measure);
                                    ``(II) if requested by the 
                                Secretary, on the survey of patient 
                                experience with care (as described in 
                                subparagraph (C)(ii)(II)); and
                                    ``(III) as the Secretary may 
                                require, on the methods, measures, and 
                                data used under the Maintenance of 
                                Certification Program and the

[[Page 124 STAT. 963]]

                                qualified Maintenance of Certification 
                                Program practice assessment.
                    ``(C) Definitions.--For purposes of this paragraph:
                          ``(i) The term `Maintenance of Certification 
                      Program' means a continuous assessment program, 
                      such as qualified American Board of Medical 
                      Specialties Maintenance of Certification program 
                      or an equivalent program (as determined by the 
                      Secretary), that advances quality and the lifelong 
                      learning and self-assessment of board certified 
                      specialty physicians by focusing on the 
                      competencies of patient care, medical knowledge, 
                      practice-based learning, interpersonal and 
                      communication skills and professionalism. Such a 
                      program shall include the following:
                                    ``(I) The program requires the 
                                physician to maintain a valid, 
                                unrestricted medical license in the 
                                United States.
                                    ``(II) The program requires a 
                                physician to participate in educational 
                                and self-assessment programs that 
                                require an assessment of what was 
                                learned.
                                    ``(III) The program requires a 
                                physician to demonstrate, through a 
                                formalized, secure examination, that the 
                                physician has the fundamental diagnostic 
                                skills, medical knowledge, and clinical 
                                judgment to provide quality care in 
                                their respective specialty.
                                    ``(IV) The program requires 
                                successful completion of a qualified 
                                Maintenance of Certification Program 
                                practice assessment as described in 
                                clause (ii).
                          ``(ii) The term `qualified Maintenance of 
                      Certification Program practice assessment' means 
                      an assessment of a physician's practice that--
                                    ``(I) includes an initial assessment 
                                of an eligible professional's practice 
                                that is designed to demonstrate the 
                                physician's use of evidence-based 
                                medicine;
                                    ``(II) includes a survey of patient 
                                experience with care; and
                                    ``(III) requires a physician to 
                                implement a quality improvement 
                                intervention to address a practice 
                                weakness identified in the initial 
                                assessment under subclause (I) and then 
                                to remeasure to assess performance 
                                improvement after such intervention.''.

    (b) Authority.--Section 3002(c) of this Act <<NOTE: 42 USC 1395w-4 
note.>> is amended by adding at the end the following new paragraph:
            ``(3) Authority.-- <<NOTE: Determination.>> For years after 
        2014, if the Secretary of Health and Human Services determines 
        it to be appropriate, the Secretary may incorporate 
        participation in a Maintenance of Certification Program and 
        successful completion of a qualified Maintenance of 
        Certification Program practice assessment into the composite of 
        measures of quality of care furnished pursuant to the physician 
        fee schedule payment modifier, as described in section 
        1848(p)(2) of the Social Security Act (42 U.S.C. 1395w-
        4(p)(2)).''.

[[Page 124 STAT. 964]]

    (c) Elimination of MA Regional Plan Stabilization Fund.--
            (1) In general.--Section 1858 of the Social Security Act (42 
        U.S.C. 1395w-27a) is amended by striking subsection (e).
            (2) <<NOTE: 42 USC 1395w-27a note.>> Transition.--Any amount 
        contained in the MA Regional Plan Stabilization Fund as of the 
        date of the enactment of this Act shall be transferred to the 
        Federal Supplementary Medical Insurance Trust Fund.

SEC. 10328. IMPROVEMENT IN PART D MEDICATION THERAPY MANAGEMENT (MTM) 
            PROGRAMS.

    (a) In General.--Section 1860D-4(c)(2) of the Social Security Act 
(42 U.S.C. 1395w-104(c)(2)) is amended--
            (1) by redesignating subparagraphs (C), (D), and (E) as 
        subparagraphs (E), (F), and (G), respectively; and
            (2) by inserting after subparagraph (B) the following new 
        subparagraphs:
                    ``(C) Required interventions.--For plan years 
                beginning on or after the date that is 2 years after the 
                date of the enactment of the Patient Protection and 
                Affordable Care Act, prescription drug plan sponsors 
                shall offer medication therapy management services to 
                targeted beneficiaries described in subparagraph (A)(ii) 
                that include, at a minimum, the following to increase 
                adherence to prescription medications or other goals 
                deemed necessary by the Secretary:
                          ``(i) An annual comprehensive medication 
                      review furnished person-to-person or using 
                      telehealth technologies (as defined by the 
                      Secretary) by a licensed pharmacist or other 
                      qualified provider. The comprehensive medication 
                      review--
                                    ``(I) shall include a review of the 
                                individual's medications and may result 
                                in the creation of a recommended 
                                medication action plan or other actions 
                                in consultation with the individual and 
                                with input from the prescriber to the 
                                extent necessary and practicable; and
                                    ``(II) shall include providing the 
                                individual with a written or printed 
                                summary of the results of the review.
                      The Secretary, in consultation with relevant 
                      stakeholders, shall develop a standardized format 
                      for the action plan under subclause (I) and the 
                      summary under subclause (II).
                          ``(ii) Follow-up interventions as warranted 
                      based on the findings of the annual medication 
                      review or the targeted medication enrollment and 
                      which may be provided person-to-person or using 
                      telehealth technologies (as defined by the 
                      Secretary).
                    ``(D) Assessment.--The prescription drug plan 
                sponsor shall have in place a process to assess, at 
                least on a quarterly basis, the medication use of 
                individuals who are at risk but not enrolled in the 
                medication therapy management program, including 
                individuals who have experienced a transition in care, 
                if the prescription drug plan sponsor has access to that 
                information.

[[Page 124 STAT. 965]]

                    ``(E) Automatic enrollment with ability to opt-
                out.--The prescription drug plan sponsor shall have in 
                place a process to--
                          ``(i) subject to clause (ii), automatically 
                      enroll targeted beneficiaries described in 
                      subparagraph (A)(ii), including beneficiaries 
                      identified under subparagraph (D), in the 
                      medication therapy management program required 
                      under this subsection; and
                          ``(ii) permit such beneficiaries to opt-out of 
                      enrollment in such program.''.

    (b) <<NOTE: 42 USC 1395w-104 note.>> Rule of Construction.--Nothing 
in this section shall limit the authority of the Secretary of Health and 
Human Services to modify or broaden requirements for a medication 
therapy management program under part D of title XVIII of the Social 
Security Act or to study new models for medication therapy management 
through the Center for Medicare and Medicaid Innovation under section 
1115A of such Act, as added by section 3021.

SEC. 10329. DEVELOPING METHODOLOGY TO ASSESS HEALTH PLAN VALUE.

    (a) Development.--The Secretary of Health and Human Services 
(referred to in this section as the ``Secretary''), in consultation with 
relevant stakeholders including health insurance issuers, health care 
consumers, employers, health care providers, and other entities 
determined appropriate by the Secretary, shall develop a methodology to 
measure health plan value. Such methodology shall take into 
consideration, where applicable--
            (1) the overall cost to enrollees under the plan;
            (2) the quality of the care provided for under the plan;
            (3) the efficiency of the plan in providing care;
            (4) the relative risk of the plan's enrollees as compared to 
        other plans;
            (5) the actuarial value or other comparative measure of the 
        benefits covered under the plan; and
            (6) other factors determined relevant by the Secretary.

    (b) Report.--Not later than 18 months after the date of enactment of 
this Act, the Secretary shall submit to Congress a report concerning the 
methodology developed under subsection (a).

SEC. 10330. MODERNIZING COMPUTER AND DATA SYSTEMS OF THE CENTERS FOR 
            MEDICARE & MEDICAID SERVICES TO SUPPORT IMPROVEMENTS IN CARE 
            DELIVERY.

    (a) In General.-- <<NOTE: Plan.>> The Secretary of Health and Human 
Services (in this section referred to as the ``Secretary'') shall 
develop a plan (and detailed budget for the resources needed to 
implement such plan) to modernize the computer and data systems of the 
Centers for Medicare & Medicaid Services (in this section referred to as 
``CMS'').

    (b) Considerations.--In developing the plan, the Secretary shall 
consider how such modernized computer system could--
            (1) in accordance with the regulations promulgated under 
        section 264(c) of the Health Insurance Portability and 
        Accountability Act of 1996, make available data in a reliable 
        and timely manner to providers of services and suppliers to 
        support their efforts to better manage and coordinate care 
        furnished to beneficiaries of CMS programs; and
            (2) support consistent evaluations of payment and delivery 
        system reforms under CMS programs.

[[Page 124 STAT. 966]]

    (c) Posting of Plan.-- <<NOTE: Deadline. Web posting.>> By not later 
than 9 months after the date of the enactment of this Act, the Secretary 
shall post on the website of the Centers for Medicare & Medicaid 
Services the plan described in subsection (a).

SEC. 10331. <<NOTE: 42 USC 1395w-5.>> PUBLIC REPORTING OF PERFORMANCE 
            INFORMATION.

    (a) <<NOTE: Deadline.>> In General.--
            (1) Development.-- <<NOTE: Web site.>> Not later than 
        January 1, 2011, the Secretary shall develop a Physician Compare 
        Internet website with information on physicians enrolled in the 
        Medicare program under section 1866(j) of the Social Security 
        Act (42 U.S.C. 1395cc(j)) and other eligible professionals who 
        participate in the Physician Quality Reporting Initiative under 
        section 1848 of such Act (42 U.S.C. 1395w-4).
            (2) Plan.-- <<NOTE: Time period.>> Not later than January 1, 
        2013, and with respect to reporting periods that begin no 
        earlier than January 1, 2012, the Secretary shall also implement 
        a plan for making publicly available through Physician Compare, 
        consistent with subsection (c), information on physician 
        performance that provides comparable information for the public 
        on quality and patient experience measures with respect to 
        physicians enrolled in the Medicare program under such section 
        1866(j). To the extent scientifically sound measures that are 
        developed consistent with the requirements of this section are 
        available, such information, to the extent practicable, shall 
        include--
                    (A) measures collected under the Physician Quality 
                Reporting Initiative;
                    (B) an assessment of patient health outcomes and the 
                functional status of patients;
                    (C) an assessment of the continuity and coordination 
                of care and care transitions, including episodes of care 
                and risk-adjusted resource use;
                    (D) an assessment of efficiency;
                    (E) an assessment of patient experience and patient, 
                caregiver, and family engagement;
                    (F) an assessment of the safety, effectiveness, and 
                timeliness of care; and
                    (G) other information as determined appropriate by 
                the Secretary.

    (b) Other Required Considerations.--In developing and implementing 
the plan described in subsection (a)(2), the Secretary shall, to the 
extent practicable, include--
            (1) processes to assure that data made public, either by the 
        Centers for Medicare & Medicaid Services or by other entities, 
        is statistically valid and reliable, including risk adjustment 
        mechanisms used by the Secretary;
            (2) processes by which a physician or other eligible 
        professional whose performance on measures is being publicly 
        reported has a reasonable opportunity, as determined by the 
        Secretary, to review his or her individual results before they 
        are made public;
            (3) processes by the Secretary to assure that the 
        implementation of the plan and the data made available on 
        Physician Compare provide a robust and accurate portrayal of a 
        physician's performance;
            (4) data that reflects the care provided to all patients 
        seen by physicians, under both the Medicare program and,

[[Page 124 STAT. 967]]

        to the extent practicable, other payers, to the extent such 
        information would provide a more accurate portrayal of physician 
        performance;
            (5) processes to ensure appropriate attribution of care when 
        multiple physicians and other providers are involved in the care 
        of a patient;
            (6) processes to ensure timely statistical performance 
        feedback is provided to physicians concerning the data reported 
        under any program subject to public reporting under this 
        section; and
            (7) implementation of computer and data systems of the 
        Centers for Medicare & Medicaid Services that support valid, 
        reliable, and accurate public reporting activities authorized 
        under this section.

    (c) Ensuring Patient Privacy.--The Secretary shall ensure that 
information on physician performance and patient experience is not 
disclosed under this section in a manner that violates sections 552 or 
552a of title 5, United States Code, with regard to the privacy of 
individually identifiable health information.
    (d) Feedback From Multi-stakeholder Groups.--The Secretary shall 
take into consideration input provided by multi-stakeholder groups, 
consistent with sections 1890(b)(7) and 1890A of the Social Security 
Act, as added by section 3014 of this Act, in selecting quality measures 
for use under this section.
    (e) Consideration of Transition to Value-based Purchasing.--In 
developing the plan under this subsection (a)(2), the Secretary shall, 
as the Secretary determines appropriate, consider the plan to transition 
to a value-based purchasing program for physicians and other 
practitioners developed under section 131 of the Medicare Improvements 
for Patients and Providers Act of 2008 (Public Law 110-275).
    (f) Report to Congress.--Not later than January 1, 2015, the 
Secretary shall submit to Congress a report on the Physician Compare 
Internet website developed under subsection (a)(1). Such report shall 
include information on the efforts of and plans made by the Secretary to 
collect and publish data on physician quality and efficiency and on 
patient experience of care in support of value-based purchasing and 
consumer choice, together with recommendations for such legislation and 
administrative action as the Secretary determines appropriate.
    (g) Expansion.--At any time before the date on which the report is 
submitted under subsection (f), the Secretary may expand (including 
expansion to other providers of services and suppliers under title XVIII 
of the Social Security Act) the information made available on such 
website.
    (h) Financial Incentives To Encourage Consumers To Choose High 
Quality Providers.-- <<NOTE: Deadline.>> The Secretary may establish a 
demonstration program, not later than January 1, 2019, to provide 
financial incentives to Medicare beneficiaries who are furnished 
services by high quality physicians, as determined by the Secretary 
based on factors in subparagraphs (A) through (G) of subsection (a)(2). 
In no case may Medicare beneficiaries be required to pay increased 
premiums or cost sharing or be subject to a reduction in benefits under 
title XVIII of the Social Security Act as a result of such demonstration 
program. The Secretary shall ensure that

[[Page 124 STAT. 968]]

any such demonstration program does not disadvantage those beneficiaries 
without reasonable access to high performing physicians or create 
financial inequities under such title.

    (i) Definitions.--In this section:
            (1) Eligible professional.--The term ``eligible 
        professional'' has the meaning given that term for purposes of 
        the Physician Quality Reporting Initiative under section 1848 of 
        the Social Security Act (42 U.S.C. 1395w-4).
            (2) Physician.--The term ``physician'' has the meaning given 
        that term in section 1861(r) of such Act (42 U.S.C. 1395x(r)).
            (3) Physician compare.--The term ``Physician Compare'' means 
        the Internet website developed under subsection (a)(1).
            (4) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.

SEC. 10332. AVAILABILITY OF MEDICARE DATA FOR PERFORMANCE MEASUREMENT.

    (a) In General.--Section 1874 of the Social Security Act (42 U.S.C. 
1395kk) is amended by adding at the end the following new subsection:
    ``(e) Availability of Medicare Data.--
            ``(1) In general.--Subject to paragraph (4), the Secretary 
        shall make available to qualified entities (as defined in 
        paragraph (2)) data described in paragraph (3) for the 
        evaluation of the performance of providers of services and 
        suppliers.
            ``(2) Qualified entities.--For purposes of this subsection, 
        the term `qualified entity' means a public or private entity 
        that--
                    ``(A) is qualified (as determined by the Secretary) 
                to use claims data to evaluate the performance of 
                providers of services and suppliers on measures of 
                quality, efficiency, effectiveness, and resource use; 
                and
                    ``(B) agrees to meet the requirements described in 
                paragraph (4) and meets such other requirements as the 
                Secretary may specify, such as ensuring security of 
                data.
            ``(3) Data described.--The data described in this paragraph 
        are standardized extracts (as determined by the Secretary) of 
        claims data under parts A, B, and D for items and services 
        furnished under such parts for one or more specified geographic 
        areas and time periods requested by a qualified entity. The 
        Secretary shall take such actions as the Secretary deems 
        necessary to protect the identity of individuals entitled to or 
        enrolled for benefits under such parts.
            ``(4) Requirements.--
                    ``(A) Fee.--Data described in paragraph (3) shall be 
                made available to a qualified entity under this 
                subsection at a fee equal to the cost of making such 
                data available. Any fee collected pursuant to the 
                preceding sentence shall be deposited into the Federal 
                Supplementary Medical Insurance Trust Fund under section 
                1841.
                    ``(B) Specification of uses and methodologies.--A 
                qualified entity requesting data under this subsection 
                shall--
                          ``(i) submit to the Secretary a description of 
                      the methodologies that such qualified entity will 
                      use to

[[Page 124 STAT. 969]]

                      evaluate the performance of providers of services 
                      and suppliers using such data;
                          ``(ii)(I) except as provided in subclause 
                      (II), if available, use standard measures, such as 
                      measures endorsed by the entity with a contract 
                      under section 1890(a) and measures developed 
                      pursuant to section 931 of the Public Health 
                      Service Act; or
                          ``(II) use alternative measures if the 
                      Secretary, in consultation with appropriate 
                      stakeholders, determines that use of such 
                      alternative measures would be more valid, 
                      reliable, responsive to consumer preferences, 
                      cost-effective, or relevant to dimensions of 
                      quality and resource use not addressed by such 
                      standard measures;
                          ``(iii) include data made available under this 
                      subsection with claims data from sources other 
                      than claims data under this title in the 
                      evaluation of performance of providers of services 
                      and suppliers;
                          ``(iv) only include information on the 
                      evaluation of performance of providers and 
                      suppliers in reports described in subparagraph 
                      (C);
                          ``(v) make available to providers of services 
                      and suppliers, upon their request, data made 
                      available under this subsection; and
                          ``(vi) prior to their release, submit to the 
                      Secretary the format of reports under subparagraph 
                      (C).
                    ``(C) Reports.--Any report by a qualified entity 
                evaluating the performance of providers of services and 
                suppliers using data made available under this 
                subsection shall--
                          ``(i) include an understandable description of 
                      the measures, which shall include quality measures 
                      and the rationale for use of other measures 
                      described in subparagraph (B)(ii)(II), risk 
                      adjustment methods, physician attribution methods, 
                      other applicable methods, data specifications and 
                      limitations, and the sponsors, so that consumers, 
                      providers of services and suppliers, health plans, 
                      researchers, and other stakeholders can assess 
                      such reports;
                          ``(ii) be made available confidentially, to 
                      any provider of services or supplier to be 
                      identified in such report, prior to the public 
                      release of such report, and provide an opportunity 
                      to appeal and correct errors;
                          ``(iii) only include information on a provider 
                      of services or supplier in an aggregate form as 
                      determined appropriate by the Secretary; and
                          ``(iv) <<NOTE: Public information.>> except as 
                      described in clause (ii), be made available to the 
                      public.
                    ``(D) Approval and limitation of uses.--The 
                Secretary shall not make data described in paragraph (3) 
                available to a qualified entity unless the qualified 
                entity agrees to release the information on the 
                evaluation of performance of providers of services and 
                suppliers. Such entity shall only use such data, and 
                information derived from such evaluation, for the 
                reports under subparagraph (C). Data released to a 
                qualified entity under this subsection shall not be 
                subject to discovery or admission as

[[Page 124 STAT. 970]]

                evidence in judicial or administrative proceedings 
                without consent of the applicable provider of services 
                or supplier.''.

    (b) <<NOTE: 42 USC 1395kk note.>> Effective Date.--The amendment 
made by subsection (a) shall take effect on January 1, 2012.

SEC. 10333. COMMUNITY-BASED COLLABORATIVE CARE NETWORKS.

    Part D of title III of the Public Health Service Act (42 U.S.C. 254b 
et seq.) is amended by adding at the end the following new subpart:

    ``Subpart XI--Community-Based Collaborative Care Network Program

``SEC. 340H. <<NOTE: 42 USC 256i.>> COMMUNITY-BASED COLLABORATIVE CARE 
            NETWORK PROGRAM.

    ``(a) In General.--The Secretary may award grants to eligible 
entities to support community-based collaborative care networks that 
meet the requirements of subsection (b).
    ``(b) Community-based Collaborative Care Networks.--
            ``(1) Description.--A community-based collaborative care 
        network (referred to in this section as a `network') shall be a 
        consortium of health care providers with a joint governance 
        structure (including providers within a single entity) that 
        provides comprehensive coordinated and integrated health care 
        services (as defined by the Secretary) for low-income 
        populations.
            ``(2) Required inclusion.--A network shall include the 
        following providers (unless such provider does not exist within 
        the community, declines or refuses to participate, or places 
        unreasonable conditions on their participation):
                    ``(A) A hospital that meets the criteria in section 
                1923(b)(1) of the Social Security Act; and
                    ``(B) All Federally qualified health centers (as 
                defined in section 1861(aa) of the Social Security Act 
                located in the community.
            ``(3) Priority.--In awarding grants, the Secretary shall 
        give priority to networks that include--
                    ``(A) the capability to provide the broadest range 
                of services to low-income individuals;
                    ``(B) the broadest range of providers that currently 
                serve a high volume of low-income individuals; and
                    ``(C) a county or municipal department of health.

    ``(c) Application.--
            ``(1) Application.--A network described in subsection (b) 
        shall submit an application to the Secretary.
            ``(2) Renewal.--In subsequent years, based on the 
        performance of grantees, the Secretary may provide renewal 
        grants to prior year grant recipients.

    ``(d) Use of Funds.--
            ``(1) Use by grantees.--Grant funds may be used for the 
        following activities:
                    ``(A) Assist low-income individuals to--
                          ``(i) access and appropriately use health 
                      services;
                          ``(ii) enroll in health coverage programs; and
                          ``(iii) obtain a regular primary care provider 
                      or a medical home.
                    ``(B) Provide case management and care management.

[[Page 124 STAT. 971]]

                    ``(C) Perform health outreach using neighborhood 
                health workers or through other means.
                    ``(D) Provide transportation.
                    ``(E) Expand capacity, including through telehealth, 
                after-hours services or urgent care.
                    ``(F) Provide direct patient care services.
            ``(2) Grant funds to hrsa grantees.--The Secretary may limit 
        the percent of grant funding that may be spent on direct care 
        services provided by grantees of programs administered by the 
        Health Resources and Services Administration or impose other 
        requirements on such grantees deemed necessary.

    ``(e) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be necessary for 
each of fiscal years 2011 through 2015.''.

SEC. 10334. MINORITY HEALTH.

    (a) Office of Minority Health.--
            (1) In general.--Section 1707 of the Public Health Service 
        Act (42 U.S.C. 300u-6) is amended--
                    (A) <<NOTE: Establishment.>> in subsection (a), by 
                striking ``within the Office of Public Health and 
                Science'' and all that follows through the end and 
                inserting ``. The Office of Minority Health as existing 
                on the date of enactment of the Patient Protection and 
                Affordable Care Act shall be transferred to the Office 
                of the Secretary in such manner that there is 
                established in the Office of the Secretary, the Office 
                of Minority Health, which shall be headed by the Deputy 
                Assistant Secretary for Minority Health who shall report 
                directly to the Secretary, and shall retain and 
                strengthen authorities (as in existence on such date of 
                enactment) for the purpose of improving minority health 
                and the quality of health care minorities receive, and 
                eliminating racial and ethnic 
                disparities. <<NOTE: Grants. Contracts. Memorandum.>> In 
                carrying out this subsection, the Secretary, acting 
                through the Deputy Assistant Secretary, shall award 
                grants, contracts, enter into memoranda of 
                understanding, cooperative, interagency, intra-agency 
                and other agreements with public and nonprofit private 
                entities, agencies, as well as Departmental and Cabinet 
                agencies and organizations, and with organizations that 
                are indigenous human resource providers in communities 
                of color to assure improved health status of racial and 
                ethnic minorities, and shall develop measures to 
                evaluate the effectiveness of activities aimed at 
                reducing health disparities and supporting the local 
                community. Such measures shall evaluate community 
                outreach activities, language services, workforce 
                cultural competence, and other areas as determined by 
                the Secretary.''; and
                    (B) by striking subsection (h) and inserting the 
                following:

    ``(h) Authorization of Appropriations.--For the purpose of carrying 
out this section, there are authorized to be appropriated such sums as 
may be necessary for each of fiscal years 2011 through 2016.''.
            (2) <<NOTE: 42 USC 300u-6 note.>> Transfer of functions.--
        There are transferred to the Office of Minority Health in the 
        office of the Secretary of Health and Human Services, all 
        duties, responsibilities, authorities, accountabilities, 
        functions, staff, funds, award

[[Page 124 STAT. 972]]

        mechanisms, and other entities under the authority of the Office 
        of Minority Health of the Public Health Service as in effect on 
        the date before the date of enactment of this Act, which shall 
        continue in effect according to the terms in effect on the date 
        before such date of enactment, until modified, terminated, 
        superseded, set aside, or revoked in accordance with law by the 
        President, the Secretary, a court of competent jurisdiction, or 
        by operation of law.
            (3) Reports.-- <<NOTE: 42 USC 300u-6 note.>> Not later than 
        1 year after the date of enactment of this section, and 
        biennially thereafter, the Secretary of Health and Human 
        Services shall prepare and submit to the appropriate committees 
        of Congress a report describing the activities carried out under 
        section 1707 of the Public Health Service Act (as amended by 
        this subsection) during the period for which the report is being 
        prepared. Not later than 1 year after the date of enactment of 
        this section, and biennially thereafter, the heads of each of 
        the agencies of the Department of Health and Human Services 
        shall submit to the Deputy Assistant Secretary for Minority 
        Health a report summarizing the minority health activities of 
        each of the respective agencies.

    (b) Establishment of Individual Offices of Minority Health Within 
the Department of Health and Human Services.--
            (1) In general.--Title XVII of the Public Health Service Act 
        (42 U.S.C. 300u et seq.) is amended by inserting after section 
        1707 the following section:

``SEC. 1707A. <<NOTE: 42 USC 300u-6a.>> INDIVIDUAL OFFICES OF MINORITY 
            HEALTH WITHIN THE DEPARTMENT.

    ``(a) In General.--The head of each agency specified in subsection 
(b)(1) shall establish within the agency an office to be known as the 
Office of Minority Health. <<NOTE: Appointment.>> The head of each such 
Office shall be appointed by the head of the agency within which the 
Office is established, and shall report directly to the head of the 
agency. The head of such agency shall carry out this section (as this 
section relates to the agency) acting through such Director.

    ``(b) Specified Agencies.--The agencies referred to in subsection 
(a) are the Centers for Disease Control and Prevention, the Health 
Resources and Services Administration, the Substance Abuse and Mental 
Health Services Administration, the Agency for Healthcare Research and 
Quality, the Food and Drug Administration, and the Centers for Medicare 
& Medicaid Services.
    ``(c) Director; Appointment.--Each Office of Minority Health 
established in an agency listed in subsection (a) shall be headed by a 
director, with documented experience and expertise in minority health 
services research and health disparities elimination.
    ``(d) References.--Except as otherwise specified, any reference in 
Federal law to an Office of Minority Health (in the Department of Health 
and Human Services) is deemed to be a reference to the Office of 
Minority Health in the Office of the Secretary.
    ``(e) Funding.--
            ``(1) Allocations.--Of the amounts appropriated for a 
        specified agency for a fiscal year, the Secretary must designate 
        an appropriate amount of funds for the purpose of carrying out 
        activities under this section through the minority health office 
        of the agency. In reserving an amount under the preceding

[[Page 124 STAT. 973]]

        sentence for a minority health office for a fiscal year, the 
        Secretary shall reduce, by substantially the same percentage, 
        the amount that otherwise would be available for each of the 
        programs of the designated agency involved.
            ``(2) Availability of funds for staffing.--The purposes for 
        which amounts made available under paragraph may be expended by 
        a minority health office include the costs of employing staff 
        for such office.''.
            (2) <<NOTE: 42 USC 300u-6a note.>> No new regulatory 
        authority.--Nothing in this subsection and the amendments made 
        by this subsection may be construed as establishing regulatory 
        authority or modifying any existing regulatory authority.
            (3) <<NOTE: 42 USC 300u-6a note.>> Limitation on 
        termination.--Notwithstanding any other provision of law, a 
        Federal office of minority health or Federal appointive position 
        with primary responsibility over minority health issues that is 
        in existence in an office of agency of the Department of Health 
        and Human Services on the date of enactment of this section 
        shall not be terminated, reorganized, or have any of its power 
        or duties transferred unless such termination, reorganization, 
        or transfer is approved by an Act of Congress.

    (c) Redesignation of National Center on Minority Health and Health 
Disparities.--
            (1) Redesignation.--Title IV of the Public Health Service 
        Act (42 U.S.C. 281 et seq.) is amended--
                    (A) by redesignating subpart 6 of part E as subpart 
                20;
                    (B) by transferring subpart 20, as so redesignated, 
                to part C of such title IV;
                    (C) by inserting subpart 20, as so redesignated, 
                after subpart 19 of such part C; and
                    (D) in subpart 20, as so redesignated--
                          (i) by redesignating <<NOTE: 42 USC 285t--
                      285t-3.>> sections 485E through 485H as sections 
                      464z-3 through 464z-6, respectively;
                          (ii) <<NOTE: 42 USC 285t.>> by striking 
                      ``National Center on Minority Health and Health 
                      Disparities'' each place such term appears and 
                      inserting ``National Institute on Minority Health 
                      and Health Disparities''; and
                          (iii) <<NOTE: 42 USC 285t--285t-3.>> by 
                      striking ``Center'' each place such term appears 
                      and inserting ``Institute''.
            (2) Purpose of institute; duties.--Section 464z-3 of the 
        Public Health Service Act, as so redesignated, <<NOTE: 42 USC 
        285t.>> is amended--
                    (A) in subsection (h)(1), by striking ``research 
                endowments at centers of excellence under section 736.'' 
                and inserting the following: ``research endowments--
            ``(1) at centers of excellence under section 736; and
            ``(2) at centers of excellence under section 464z-4.'';
                    (B) in subsection (h)(2)(A), by striking ``average'' 
                and inserting ``median''; and
                    (C) by adding at the end the following:

    ``(h) Interagency Coordination.--The Director of the Institute, as 
the primary Federal officials with responsibility for coordinating all 
research and activities conducted or supported by the National 
Institutes of Health on minority health and health disparities, shall 
plan, coordinate, review and evaluate research and other activities 
conducted or supported by the Institutes and Centers of the National 
Institutes of Health.''.

[[Page 124 STAT. 974]]

            (3) Technical and conforming amendments.--
                    (A) Section 401(b)(24) of the Public Health Service 
                Act (42 U.S.C. 281(b)(24)) is amended by striking 
                ``Center'' and inserting ``Institute''.
                    (B) Subsection (d)(1) of section 903 of the Public 
                Health Service Act (42 U.S.C. 299a-1(d)(1)) is amended 
                by striking ``section 485E'' and inserting ``section 
                464z-3''.

SEC. 10335. TECHNICAL CORRECTION TO THE HOSPITAL VALUE-BASED PURCHASING 
            PROGRAM.

    Section 1886(o)(2)A) of the Social Security Act, as added by section 
3001, <<NOTE: 42 USC 1395ww.>> is amended, in the first sentence, by 
inserting ``, other than measures of readmissions,'' after ``shall 
select measures''.

SEC. 10336. GAO STUDY AND REPORT ON MEDICARE BENEFICIARY ACCESS TO HIGH-
            QUALITY DIALYSIS SERVICES.

    (a) Study.--
            (1) In general.--The Comptroller General of the United 
        States shall conduct a study on the impact on Medicare 
        beneficiary access to high-quality dialysis services of 
        including specified oral drugs that are furnished to such 
        beneficiaries for the treatment of end stage renal disease in 
        the bundled prospective payment system under section 1881(b)(14) 
        of the Social Security Act (42 U.S.C. 1395rr(b)(14)) (pursuant 
        to the proposed rule published by the Secretary of Health and 
        Human Services in the Federal Register on September 29, 2009 (74 
        Fed. Reg. 49922 et seq.)). Such study shall include an analysis 
        of--
                    (A) the ability of providers of services and renal 
                dialysis facilities to furnish specified oral drugs or 
                arrange for the provision of such drugs;
                    (B) the ability of providers of services and renal 
                dialysis facilities to comply, if necessary, with 
                applicable State laws (such as State pharmacy licensure 
                requirements) in order to furnish specified oral drugs;
                    (C) whether appropriate quality measures exist to 
                safeguard care for Medicare beneficiaries being 
                furnished specified oral drugs by providers of services 
                and renal dialysis facilities; and
                    (D) other areas determined appropriate by the 
                Comptroller General.
            (2) Specified oral drug defined.--For purposes of paragraph 
        (1), the term ``specified oral drug'' means a drug or biological 
        for which there is no injectable equivalent (or other non-oral 
        form of administration).

    (b) Report.--Not later than 1 year after the date of the enactment 
of this Act, the Comptroller General of the United States shall submit 
to Congress a report containing the results of the study conducted under 
subsection (a), together with recommendations for such legislation and 
administrative action as the Comptroller General determines appropriate.

               Subtitle D--Provisions Relating to Title IV

SEC. 10401. AMENDMENTS TO SUBTITLE A.

    (a) Section 4001(h)(4) and (5) of this Act <<NOTE: 42 USC 300u-
10.>> is amended by striking ``2010'' each place such appears and 
inserting ``2020''.

    (b) Section 4002(c) of this Act <<NOTE: 42 USC 300u-11.>> is 
amended--

[[Page 124 STAT. 975]]

            (1) by striking ``research and health screenings'' and 
        inserting ``research, health screenings, and initiatives''; and
            (2) by striking ``for Preventive'' and inserting ``Regarding 
        Preventive''.

    (c) Section 4004(a)(4) of this Act <<NOTE: 42 USC 300u-12.>> is 
amended by striking ``a Gateway'' and inserting ``an Exchange''.

SEC. 10402. AMENDMENTS TO SUBTITLE B.

    (a) Section 399Z-1(a)(1(A) of the Public Health Service Act, as 
added by section 4101(b) of this Act, <<NOTE: 42 USC 280n-5.>> is 
amended by inserting ``and vision'' after ``oral''.

    (b) Section 1861(hhh)(4)(G) of the Social Security Act, as added by 
section 4103(b), <<NOTE: 42 USC 1395k.>> is amended to read as follows:
                    ``(G) A beneficiary shall be eligible to receive 
                only an initial preventive physical examination (as 
                defined under subsection (ww)(1)) during the 12-month 
                period after the date that the beneficiary's coverage 
                begins under part B and shall be eligible to receive 
                personalized prevention plan services under this 
                subsection each year thereafter provided that the 
                beneficiary has not received either an initial 
                preventive physical examination or personalized 
                prevention plan services within the preceding 12-month 
                period.''.

SEC. 10403. AMENDMENTS TO SUBTITLE C.

    Section 4201 of this Act <<NOTE: 42 USC 300u-13.>> is amended--
            (1) in subsection (a), by adding before the period the 
        following: ``, with not less than 20 percent of such grants 
        being awarded to rural and frontier areas'';
            (2) in subsection (c)(2)(B)(vii), by striking ``both urban 
        and rural areas'' and inserting ``urban, rural, and frontier 
        areas''; and
            (3) in subsection (f), by striking ``each fiscal years'' and 
        inserting ``each of fiscal year''.

SEC. 10404. AMENDMENTS TO SUBTITLE D.

    Section 399MM(2) of the Public Health Service Act, as added by 
section 4303 of this Act, <<NOTE: 42 USC 280l.>> is amended by striking 
``by ensuring'' and inserting ``and ensuring''.

SEC. 10405. AMENDMENTS TO SUBTITLE E.

    Subtitle E of title IV of this Act is amended by striking section 
4401.

SEC. 10406. AMENDMENT RELATING TO WAIVING COINSURANCE FOR PREVENTIVE 
            SERVICES.

    Section 4104(b) of this Act is amended to read as follows:
    ``(b) Payment and Elimination of Coinsurance in All Settings.--
Section 1833(a)(1) of the Social Security Act (42 U.S.C. 1395l(a)(1)), 
as amended by section 4103(c)(1), is amended--
            ``(1) in subparagraph (T), by inserting `(or 100 percent if 
        such services are recommended with a grade of A or B by the 
        United States Preventive Services Task Force for any indication 
        or population and are appropriate for the individual)' after `80 
        percent';
            ``(2) in subparagraph (W)--

[[Page 124 STAT. 976]]

                    ``(A) in clause (i), by inserting `(if such 
                subparagraph were applied, by substituting ``100 
                percent'' for ``80 percent'')' after `subparagraph (D)'; 
                and
                    ``(B) in clause (ii), by striking `80 percent' and 
                inserting `100 percent';
            ``(3) by striking `and' before `(X)'; and
            ``(4) by inserting before the semicolon at the end the 
        following: `, and (Y) with respect to preventive services 
        described in subparagraphs (A) and (B) of section 1861(ddd)(3) 
        that are appropriate for the individual and, in the case of such 
        services described in subparagraph (A), are recommended with a 
        grade of A or B by the United States Preventive Services Task 
        Force for any indication or population, the amount paid shall be 
        100 percent of (i) except as provided in clause (ii), the lesser 
        of the actual charge for the services or the amount determined 
        under the fee schedule that applies to such services under this 
        part, and (ii) in the case of such services that are covered OPD 
        services (as defined in subsection (t)(1)(B)), the amount 
        determined under subsection (t)'.''.

SEC. 10407. <<NOTE: Catalyst to Better Diabetes Care Act of 2009. 42 USC 
            247b-9g.>> BETTER DIABETES CARE.

    (a) Short Title.--This section may be cited as the ``Catalyst to 
Better Diabetes Care Act of 2009''.
    (b) National Diabetes Report Card.--
            (1) In general.--The Secretary, in collaboration with the 
        Director of the Centers for Disease Control and Prevention 
        (referred to in this section as the ``Director''), shall prepare 
        on a biennial basis a national diabetes report card (referred to 
        in this section as a ``Report Card'') and, to the extent 
        possible, for each State.
            (2) Contents.--
                    (A) In general.--Each Report Card shall include 
                aggregate health outcomes related to individuals 
                diagnosed with diabetes and prediabetes including--
                          (i) preventative care practices and quality of 
                      care;
                          (ii) risk factors; and
                          (iii) outcomes.
                    (B) Updated reports.--Each Report Card that is 
                prepared after the initial Report Card shall include 
                trend analysis for the Nation and, to the extent 
                possible, for each State, for the purpose of--
                          (i) tracking progress in meeting established 
                      national goals and objectives for improving 
                      diabetes care, costs, and prevalence (including 
                      Healthy People 2010); and
                          (ii) informing policy and program development.
            (3) <<NOTE: Public information. Web 
        posting.>> Availability.--The Secretary, in collaboration with 
        the Director, shall make each Report Card publicly available, 
        including by posting the Report Card on the Internet.

    (c) Improvement of Vital Statistics Collection.--
            (1) In general.--The Secretary, acting through the Director 
        of the Centers for Disease Control and Prevention and in 
        collaboration with appropriate agencies and States, shall--
                    (A) promote the education and training of physicians 
                on the importance of birth and death certificate data 
                and how to properly complete these documents, including 
                the

[[Page 124 STAT. 977]]

                collection of such data for diabetes and other chronic 
                diseases;
                    (B) encourage State adoption of the latest standard 
                revisions of birth and death certificates; and
                    (C) work with States to re-engineer their vital 
                statistics systems in order to provide cost-effective, 
                timely, and accurate vital systems data.
            (2) Death certificate additional language.--In carrying out 
        this subsection, the Secretary may promote improvements to the 
        collection of diabetes mortality data, including the addition of 
        a question for the individual certifying the cause of death 
        regarding whether the deceased had diabetes.

    (d) Study on Appropriate Level of Diabetes Medical Education.--
            (1) In general.--The Secretary shall, in collaboration with 
        the Institute of Medicine and appropriate associations and 
        councils, conduct a study of the impact of diabetes on the 
        practice of medicine in the United States and the 
        appropriateness of the level of diabetes medical education that 
        should be required prior to licensure, board certification, and 
        board recertification.
            (2) Report.--Not later than 2 years after the date of the 
        enactment of this Act, the Secretary shall submit a report on 
        the study under paragraph (1) to the Committees on Ways and 
        Means and Energy and Commerce of the House of Representatives 
        and the Committees on Finance and Health, Education, Labor, and 
        Pensions of the Senate.

    (e) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be necessary.

SEC. 10408. GRANTS FOR SMALL BUSINESSES TO PROVIDE COMPREHENSIVE 
            WORKPLACE WELLNESS PROGRAMS.

    (a) Establishment.--The Secretary shall award grants to eligible 
employers to provide their employees with access to comprehensive 
workplace wellness programs (as described under subsection (c)).
    (b) Scope.--
            (1) Duration.--The grant program established under this 
        section shall be conducted for a 5-year period.
            (2) Eligible employer.-- <<NOTE: Definition.>> The term 
        ``eligible employer'' means an employer (including a non-profit 
        employer) that--
                    (A) employs less than 100 employees who work 25 
                hours or greater per week; and
                    (B) does not provide a workplace wellness program as 
                of the date of enactment of this Act.

    (c) Comprehensive Workplace Wellness Programs.--
            (1) Criteria.--The Secretary shall develop program criteria 
        for comprehensive workplace wellness programs under this section 
        that are based on and consistent with evidence-based research 
        and best practices, including research and practices as provided 
        in the Guide to Community Preventive Services, the Guide to 
        Clinical Preventive Services, and the National Registry for 
        Effective Programs.
            (2) Requirements.--A comprehensive workplace wellness 
        program shall be made available by an eligible employer to all 
        employees and include the following components:

[[Page 124 STAT. 978]]

                    (A) Health awareness initiatives (including health 
                education, preventive screenings, and health risk 
                assessments).
                    (B) Efforts to maximize employee engagement 
                (including mechanisms to encourage employee 
                participation).
                    (C) Initiatives to change unhealthy behaviors and 
                lifestyle choices (including counseling, seminars, 
                online programs, and self-help materials).
                    (D) Supportive environment efforts (including 
                workplace policies to encourage healthy lifestyles, 
                healthy eating, increased physical activity, and 
                improved mental health).

    (d) Application.--An eligible employer desiring to participate in 
the grant program under this section shall submit an application to the 
Secretary, in such manner and containing such information as the 
Secretary may require, which shall include a proposal for a 
comprehensive workplace wellness program that meet the criteria and 
requirements described under subsection (c).
    (e) Authorization of Appropriation.--For purposes of carrying out 
the grant program under this section, there is authorized to be 
appropriated $200,000,000 for the period of fiscal years 2011 through 
2015. Amounts appropriated pursuant to this subsection shall remain 
available until expended.

SEC. 10409. <<NOTE: Cures Acceleration Network Act of 2009. 42 USC 201 
            note.>> CURES ACCELERATION NETWORK.

    (a) Short Title.--This section may be cited as the ``Cures 
Acceleration Network Act of 2009''.
    (b) Requirement for the Director of NIH To Establish a Cures 
Acceleration Network.--Section 402(b) of the Public Health Service Act 
(42 U.S.C. 282(b)) is amended--
            (1) in paragraph (22), by striking ``and'' at the end;
            (2) in paragraph (23), by striking the period and inserting 
        ``; and''; and
            (3) by inserting after paragraph (23), the following:
            ``(24) implement the Cures Acceleration Network described in 
        section 402C.''.

    (c) Accepting Gifts To Support the Cures Acceleration Network.--
Section 499(c)(1) of the Public Health Service Act (42 U.S.C. 
290b(c)(1)) is amended by adding at the end the following:
                    ``(E) The Cures Acceleration Network described in 
                section 402C.''.

    (d) Establishment of the Cures Acceleration Network.--Part A of 
title IV of the Public Health Service Act is amended by inserting after 
section 402B (42 U.S.C. 282b) the following:

``SEC. 402C. <<NOTE: 42 USC 282d.>> CURES ACCELERATION NETWORK.

    ``(a) Definitions.--In this section:
            ``(1) Biological product.--The term `biological product' has 
        the meaning given such term in section 351 of the Public Health 
        Service Act.
            ``(2) Drug; device.--The terms `drug' and `device' have the 
        meanings given such terms in section 201 of the Federal Food, 
        Drug, and Cosmetic Act.
            ``(3) High need cure.--The term `high need cure' means a 
        drug (as that term is defined by section 201(g)(1) of the 
        Federal Food, Drug, and Cosmetic Act, biological product (as 
        that term is defined by section 262(i)), or device (as that term 
        is defined by section 201(h) of the Federal Food, Drug, and

[[Page 124 STAT. 979]]

        Cosmetic Act) that, in the determination of the Director of 
        NIH--
                    ``(A) is a priority to diagnose, mitigate, prevent, 
                or treat harm from any disease or condition; and
                    ``(B) for which the incentives of the commercial 
                market are unlikely to result in its adequate or timely 
                development.
            ``(4) Medical product.--The term `medical product' means a 
        drug, device, biological product, or product that is a 
        combination of drugs, devices, and biological products.

    ``(b) Establishment of the Cures Acceleration Network.--Subject to 
the appropriation of funds as described in subsection (g), there is 
established within the Office of the Director of NIH a program to be 
known as the Cures Acceleration Network (referred to in this section as 
`CAN'), which shall--
            ``(1) be under the direction of the Director of NIH, taking 
        into account the recommendations of a CAN Review Board (referred 
        to in this section as the `Board'), described in subsection (d); 
        and
            ``(2) <<NOTE: Grants. Contracts.>> award grants and 
        contracts to eligible entities, as described in subsection (e), 
        to accelerate the development of high need cures, including 
        through the development of medical products and behavioral 
        therapies.

    ``(c) Functions.--The functions of the CAN are to--
            ``(1) conduct and support revolutionary advances in basic 
        research, translating scientific discoveries from bench to 
        bedside;
            ``(2) award grants and contracts to eligible entities to 
        accelerate the development of high need cures;
            ``(3) provide the resources necessary for government 
        agencies, independent investigators, research organizations, 
        biotechnology companies, academic research institutions, and 
        other entities to develop high need cures;
            ``(4) reduce the barriers between laboratory discoveries and 
        clinical trials for new therapies; and
            ``(5) facilitate review in the Food and Drug Administration 
        for the high need cures funded by the CAN, through activities 
        that may include--
                    ``(A) the facilitation of regular and ongoing 
                communication with the Food and Drug Administration 
                regarding the status of activities conducted under this 
                section;
                    ``(B) ensuring that such activities are coordinated 
                with the approval requirements of the Food and Drug 
                Administration, with the goal of expediting the 
                development and approval of countermeasures and 
                products; and
                    ``(C) connecting interested persons with additional 
                technical assistance made available under section 565 of 
                the Federal Food, Drug, and Cosmetic Act.

    ``(d) CAN Board.--
            ``(1) Establishment.--There is established a Cures 
        Acceleration Network Review Board (referred to in this section 
        as the `Board'), which shall advise the Director of NIH on the 
        conduct of the activities of the Cures Acceleration Network.
            ``(2) Membership.--
                    ``(A) In general.--
                          ``(i) Appointment.--The Board shall be 
                      comprised of 24 members who are appointed by the 
                      Secretary and who serve at the pleasure of the 
                      Secretary.

[[Page 124 STAT. 980]]

                          ``(ii) Chairperson and vice chairperson.--The 
                      Secretary shall designate, from among the 24 
                      members appointed under clause (i), one 
                      Chairperson of the Board (referred to in this 
                      section as the `Chairperson') and one Vice 
                      Chairperson.
                    ``(B) Terms.--
                          ``(i) In general.--Each member shall be 
                      appointed to serve a 4-year term, except that any 
                      member appointed to fill a vacancy occurring prior 
                      to the expiration of the term for which the 
                      member's predecessor was appointed shall be 
                      appointed for the remainder of such term.
                          ``(ii) Consecutive appointments; maximum 
                      terms.--A member may be appointed to serve not 
                      more than 3 terms on the Board, and may not serve 
                      more than 2 such terms consecutively.
                    ``(C) Qualifications.--
                          ``(i) In general.--The Secretary shall appoint 
                      individuals to the Board based solely upon the 
                      individual's established record of distinguished 
                      service in one of the areas of expertise described 
                      in clause (ii). Each individual appointed to the 
                      Board shall be of distinguished achievement and 
                      have a broad range of disciplinary interests.
                          ``(ii) Expertise.--The Secretary shall select 
                      individuals based upon the following requirements:
                                    ``(I) For each of the fields of--
                                            ``(aa) basic research;
                                            ``(bb) medicine;
                                            ``(cc) biopharmaceuticals;
                                            ``(dd) discovery and 
                                        delivery of medical products;
                                            ``(ee) bioinformatics and 
                                        gene therapy;
                                            ``(ff) medical 
                                        instrumentation; and
                                            ``(gg) regulatory review and 
                                        approval of medical products,
                                the Secretary shall select at least 1 
                                individual who is eminent in such 
                                fields.
                                    ``(II) At least 4 individuals shall 
                                be recognized leaders in professional 
                                venture capital or private equity 
                                organizations and have demonstrated 
                                experience in private equity investing.
                                    ``(III) At least 8 individuals shall 
                                represent disease advocacy 
                                organizations.
            ``(3) Ex-officio members.--
                    ``(A) Appointment.--In addition to the 24 Board 
                members described in paragraph (2), the Secretary shall 
                appoint as ex-officio members of the Board--
                          ``(i) a representative of the National 
                      Institutes of Health, recommended by the Secretary 
                      of the Department of Health and Human Services;
                          ``(ii) a representative of the Office of the 
                      Assistant Secretary of Defense for Health Affairs, 
                      recommended by the Secretary of Defense;

[[Page 124 STAT. 981]]

                          ``(iii) a representative of the Office of the 
                      Under Secretary for Health for the Veterans Health 
                      Administration, recommended by the Secretary of 
                      Veterans Affairs;
                          ``(iv) a representative of the National 
                      Science Foundation, recommended by the Chair of 
                      the National Science Board; and
                          ``(v) a representative of the Food and Drug 
                      Administration, recommended by the Commissioner of 
                      Food and Drugs.
                    ``(B) Terms.--Each ex-officio member shall serve a 
                3-year term on the Board, except that the Chairperson 
                may adjust the terms of the initial ex-officio members 
                in order to provide for a staggered term of appointment 
                for all such members.
            ``(4) Responsibilities of the board and the director of 
        nih.--
                    ``(A) Responsibilities of the board.--
                          ``(i) In general.-- <<NOTE: Recommenda- 
                      tions.>> The Board shall advise, and provide 
                      recommendations to, the Director of NIH with 
                      respect to--
                                    ``(I) policies, programs, and 
                                procedures for carrying out the duties 
                                of the Director of NIH under this 
                                section; and
                                    ``(II) significant barriers to 
                                successful translation of basic science 
                                into clinical application (including 
                                issues under the purview of other 
                                agencies and departments).
                          ``(ii) Report.--In the case that the Board 
                      identifies a significant barrier, as described in 
                      clause (i)(II), the Board shall submit to the 
                      Secretary a report regarding such barrier.
                    ``(B) Responsibilities of the director of nih.--With 
                respect to each recommendation provided by the Board 
                under subparagraph (A)(i), the Director of NIH shall 
                respond in writing to the Board, indicating whether such 
                Director will implement such recommendation. In the case 
                that the Director of NIH indicates a recommendation of 
                the Board will not be implemented, such Director shall 
                provide an explanation of the reasons for not 
                implementing such recommendation.
            ``(5) Meetings.--
                    ``(A) In general.--The Board shall meet 4 times per 
                calendar year, at the call of the Chairperson.
                    ``(B) Quorum; requirements; limitations.--
                          ``(i) Quorum.--A quorum shall consist of a 
                      total of 13 members of the Board, excluding ex-
                      officio members, with diverse representation as 
                      described in clause (iii).
                          ``(ii) Chairperson or vice chairperson.--Each 
                      meeting of the Board shall be attended by either 
                      the Chairperson or the Vice Chairperson.
                          ``(iii) Diverse representation.--At each 
                      meeting of the Board, there shall be not less than 
                      one scientist, one representative of a disease 
                      advocacy organization, and one representative of a 
                      professional venture capital or private equity 
                      organization.

[[Page 124 STAT. 982]]

            ``(6) Compensation and travel expenses.--
                    ``(A) Compensation.--Members shall receive 
                compensation at a rate to be fixed by the Chairperson 
                but not to exceed a rate equal to the daily equivalent 
                of the annual rate of basic pay prescribed for level IV 
                of the Executive Schedule under section 5315 of title 5, 
                United States Code, for each day (including travel time) 
                during which the member is engaged in the performance of 
                the duties of the Board. All members of the Board who 
                are officers or employees of the United States shall 
                serve without compensation in addition to that received 
                for their services as officers or employees of the 
                United States.
                    ``(B) Travel expenses.--Members of the Board shall 
                be allowed travel expenses, including per diem in lieu 
                of subsistence, at rates authorized for persons employed 
                intermittently by the Federal Government under section 
                5703(b) of title 5, United States Code, while away from 
                their homes or regular places of business in the 
                performance of services for the Board.

    ``(e) Grant Program.--
            ``(1) Supporting innovation.-- <<NOTE: Contracts.>> To carry 
        out the purposes described in this section, the Director of NIH 
        shall award contracts, grants, or cooperative agreements to the 
        entities described in paragraph (2), to--
                    ``(A) promote innovation in technologies supporting 
                the advanced research and development and production of 
                high need cures, including through the development of 
                medical products and behavioral therapies.
                    ``(B) accelerate the development of high need cures, 
                including through the development of medical products, 
                behavioral therapies, and biomarkers that demonstrate 
                the safety or effectiveness of medical products; or
                    ``(C) help the award recipient establish protocols 
                that comply with Food and Drug Administration standards 
                and otherwise permit the recipient to meet regulatory 
                requirements at all stages of development, 
                manufacturing, review, approval, and safety surveillance 
                of a medical product.
            ``(2) Eligible entities.--To receive assistance under 
        paragraph (1), an entity shall--
                    ``(A) be a public or private entity, which may 
                include a private or public research institution, an 
                institution of higher education, a medical center, a 
                biotechnology company, a pharmaceutical company, a 
                disease advocacy organization, a patient advocacy 
                organization, or an academic research institution;
                    ``(B) submit an application containing--
                          ``(i) a detailed description of the project 
                      for which the entity seeks such grant or contract;
                          ``(ii) a timetable for such project;
                          ``(iii) an assurance that the entity will 
                      submit--
                                    ``(I) interim reports describing the 
                                entity's--
                                            ``(aa) progress in carrying 
                                        out the project; and
                                            ``(bb) compliance with all 
                                        provisions of this section and 
                                        conditions of receipt of such 
                                        grant or contract; and

[[Page 124 STAT. 983]]

                                    ``(II) a final report at the 
                                conclusion of the grant period, 
                                describing the outcomes of the project; 
                                and
                          ``(iv) a description of the protocols the 
                      entity will follow to comply with Food and Drug 
                      Administration standards and regulatory 
                      requirements at all stages of development, 
                      manufacturing, review, approval, and safety 
                      surveillance of a medical product; and
                    ``(C) provide such additional information as the 
                Director of NIH may require.
            ``(3) Awards.--
                    ``(A) The cures acceleration partnership awards.--
                          ``(i) Initial award amount.--Each award under 
                      this subparagraph shall be not more than 
                      $15,000,000 per project for the first fiscal year 
                      for which the project is funded, which shall be 
                      payable in one payment.
                          ``(ii) Funding in subsequent fiscal years.--An 
                      eligible entity receiving an award under clause 
                      (i) may apply for additional funding for such 
                      project by submitting to the Director of NIH the 
                      information required under subparagraphs (B) and 
                      (C) of paragraph (2). The Director may fund a 
                      project of such eligible entity in an amount not 
                      to exceed $15,000,000 for a fiscal year subsequent 
                      to the initial award under clause (i).
                          ``(iii) Matching funds.-- <<NOTE: Waiver 
                      authority.>> As a condition for receiving an award 
                      under this subsection, an eligible entity shall 
                      contribute to the project non-Federal funds in the 
                      amount of $1 for every $3 awarded under clauses 
                      (i) and (ii), except that the Director of NIH may 
                      waive or modify such matching requirement in any 
                      case where the Director determines that the goals 
                      and objectives of this section cannot adequately 
                      be carried out unless such requirement is waived.
                    ``(B) The cures acceleration grant awards.--
                          ``(i) Initial award amount.--Each award under 
                      this subparagraph shall be not more than 
                      $15,000,000 per project for the first fiscal year 
                      for which the project is funded, which shall be 
                      payable in one payment.
                          ``(ii) Funding in subsequent fiscal years.--An 
                      eligible entity receiving an award under clause 
                      (i) may apply for additional funding for such 
                      project by submitting to the Board the information 
                      required under subparagraphs (B) and (C) of 
                      paragraph (2). The Director of NIH may fund a 
                      project of such eligible entity in an amount not 
                      to exceed $15,000,000 for a fiscal year subsequent 
                      to the initial award under clause (i).
                    ``(C) The cures acceleration flexible research 
                awards.-- <<NOTE: Determination.>> If the Director of 
                NIH determines that the goals and objectives of this 
                section cannot adequately be carried out through a 
                contract, grant, or cooperative agreement, the Director 
                of NIH shall have flexible research authority to use 
                other transactions to fund projects in accordance with 
                the terms and conditions of this section. Awards made 
                under such flexible research authority for a fiscal year 
                shall not exceed 20 percent of the total funds 
                appropriated under subsection (g)(1) for such fiscal 
                year.

[[Page 124 STAT. 984]]

            ``(4) Suspension of awards for defaults, noncompliance with 
        provisions and plans, and diversion of funds; repayment of 
        funds.--The Director of NIH may suspend the award to any entity 
        upon noncompliance by such entity with provisions and plans 
        under this section or diversion of funds.
            ``(5) Audits.--The Director of NIH may enter into agreements 
        with other entities to conduct periodic audits of the projects 
        funded by grants or contracts awarded under this subsection.
            ``(6) Closeout procedures.--At the end of a grant or 
        contract period, a recipient shall follow the closeout 
        procedures under section 74.71 of title 45, Code of Federal 
        Regulations (or any successor regulation).
            ``(7) Review.--A determination by the Director of NIH as to 
        whether a drug, device, or biological product is a high need 
        cure (for purposes of subsection (a)(3)) shall not be subject to 
        judicial review.

    ``(f) Competitive Basis of Awards.--Any grant, cooperative 
agreement, or contract awarded under this section shall be awarded on a 
competitive basis.
    ``(g) Authorization of Appropriations.--
            ``(1) In general.--For purposes of carrying out this 
        section, there are authorized to be appropriated $500,000,000 
        for fiscal year 2010, and such sums as may be necessary for 
        subsequent fiscal years. Funds appropriated under this section 
        shall be available until expended.
            ``(2) Limitation on use of funds otherwise appropriated.--No 
        funds appropriated under this Act, other than funds appropriated 
        under paragraph (1), may be allocated to the Cures Acceleration 
        Network.''.

SEC. 10410. <<NOTE: Establishing a Network of Health-Advancing National 
            Centers of Excellence for Depression Act of 2009. 42 USC 201 
            note.>> CENTERS OF EXCELLENCE FOR DEPRESSION.

    (a) Short Title.--This section may be cited as the ``Establishing a 
Network of Health-Advancing National Centers of Excellence for 
Depression Act of 2009'' or the ``ENHANCED Act of 2009''.
    (b) Centers of Excellence for Depression.--Subpart 3 of part B of 
title V of the Public Health Service Act (42 U.S.C. 290bb et seq.) is 
amended by inserting after section 520A the following:

``SEC. 520B. <<NOTE: 42 USC 290bb-33.>> NATIONAL CENTERS OF EXCELLENCE 
            FOR DEPRESSION.

    ``(a) Depressive Disorder Defined.--In this section, the term 
`depressive disorder' means a mental or brain disorder relating to 
depression, including major depression, bipolar disorder, and related 
mood disorders.
    ``(b) Grant Program.--
            ``(1) In general.--The Secretary, acting through the 
        Administrator, shall award grants on a competitive basis to 
        eligible entities to establish national centers of excellence 
        for depression (referred to in this section as `Centers'), which 
        shall engage in activities related to the treatment of 
        depressive disorders.
            ``(2) Allocation of awards.-- <<NOTE: Deadlines.>> If the 
        funds authorized under subsection (f) are appropriated in the 
        amounts provided for under such subsection, the Secretary shall 
        allocate such amounts so that--

[[Page 124 STAT. 985]]

                    ``(A) not later than 1 year after the date of 
                enactment of the ENHANCED Act of 2009, not more than 20 
                Centers may be established; and
                    ``(B) not later than September 30, 2016, not more 
                than 30 Centers may be established.
            ``(3) Grant period.--
                    ``(A) In general.--A grant awarded under this 
                section shall be for a period of 5 years.
                    ``(B) Renewal.--A grant awarded under subparagraph 
                (A) may be renewed, on a competitive basis, for 1 
                additional 5-year period, at the discretion of the 
                Secretary. In determining whether to renew a grant, the 
                Secretary shall consider the report cards issued under 
                subsection (e)(2).
            ``(4) Use of funds.--Grant funds awarded under this 
        subsection shall be used for the establishment and ongoing 
        activities of the recipient of such funds.
            ``(5) Eligible entities.--
                    ``(A) Requirements.--To be eligible to receive a 
                grant under this section, an entity shall--
                          ``(i) be an institution of higher education or 
                      a public or private nonprofit research 
                      institution; and
                          ``(ii) submit an application to the Secretary 
                      at such time and in such manner as the Secretary 
                      may require, as described in subparagraph (B).
                    ``(B) Application.--An application described in 
                subparagraph (A)(ii) shall include--
                          ``(i) evidence that such entity--
                                    ``(I) provides, or is capable of 
                                coordinating with other entities to 
                                provide, comprehensive health services 
                                with a focus on mental health services 
                                and subspecialty expertise for 
                                depressive disorders;
                                    ``(II) collaborates with other 
                                mental health providers, as necessary, 
                                to address co-occurring mental 
                                illnesses;
                                    ``(III) is capable of training 
                                health professionals about mental 
                                health; and
                          ``(ii) such other information, as the 
                      Secretary may require.
                    ``(C) Priorities.--In awarding grants under this 
                section, the Secretary shall give priority to eligible 
                entities that meet 1 or more of the following criteria:
                          ``(i) Demonstrated capacity and expertise to 
                      serve the targeted population.
                          ``(ii) Existing infrastructure or expertise to 
                      provide appropriate, evidence-based and culturally 
                      and linguistically competent services.
                          ``(iii) A location in a geographic area with 
                      disproportionate numbers of underserved and at-
                      risk populations in medically underserved areas 
                      and health professional shortage areas.
                          ``(iv) Proposed innovative approaches for 
                      outreach to initiate or expand services.
                          ``(v) Use of the most up-to-date science, 
                      practices, and interventions available.
                          ``(vi) Demonstrated capacity to establish 
                      cooperative and collaborative agreements with 
                      community mental health centers and other 
                      community entities

[[Page 124 STAT. 986]]

                      to provide mental health, social, and human 
                      services to individuals with depressive disorders.
            ``(6) National coordinating center.--
                    ``(A) In general.-- <<NOTE: Designation.>> The 
                Secretary, acting through the Administrator, shall 
                designate 1 recipient of a grant under this section to 
                be the coordinating center of excellence for depression 
                (referred to in this section as the `coordinating 
                center'). The Secretary shall select such coordinating 
                center on a competitive basis, based upon the 
                demonstrated capacity of such center to perform the 
                duties described in subparagraph (C).
                    ``(B) Application.--A Center that has been awarded a 
                grant under paragraph (1) may apply for designation as 
                the coordinating center by submitting an application to 
                the Secretary at such time, in such manner, and 
                containing such information as the Secretary may 
                require.
                    ``(C) Duties.--The coordinating center shall--
                          ``(i) develop, administer, and coordinate the 
                      network of Centers under this section;
                          ``(ii) oversee and coordinate the national 
                      database described in subsection (d);
                          ``(iii) lead a strategy to disseminate the 
                      findings and activities of the Centers through 
                      such database; and
                          ``(iv) serve as a liaison with the 
                      Administration, the National Registry of Evidence-
                      based Programs and Practices of the 
                      Administration, and any Federal interagency or 
                      interagency forum on mental health.
            ``(7) 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.

    ``(c) Activities of the Centers.--Each Center shall carry out the 
following activities:
            ``(1) General activities.--Each Center shall--
                    ``(A) integrate basic, clinical, or health services 
                interdisciplinary research and practice in the 
                development, implementation, and dissemination of 
                evidence-based interventions;
                    ``(B) involve a broad cross-section of stakeholders, 
                such as researchers, clinicians, consumers, families of 
                consumers, and voluntary health organizations, to 
                develop a research agenda and disseminate findings, and 
                to provide support in the implementation of evidence-
                based practices;
                    ``(C) provide training and technical assistance to 
                mental health professionals, and engage in and 
                disseminate translational research with a focus on 
                meeting the needs of individuals with depressive 
                disorders; and

[[Page 124 STAT. 987]]

                    ``(D) educate policy makers, employers, community 
                leaders, and the public about depressive disorders to 
                reduce stigma and raise awareness of treatments.
            ``(2) Improved treatment standards, clinical guidelines, 
        diagnostic protocols, and care coordination practice.--Each 
        Center shall collaborate with other Centers in the network to--
                    ``(A) develop and implement treatment standards, 
                clinical guidelines, and protocols that emphasize 
                primary prevention, early intervention, treatment for, 
                and recovery from, depressive disorders;
                    ``(B) foster communication with other providers 
                attending to co-occurring physical health conditions 
                such as cardiovascular, diabetes, cancer, and substance 
                abuse disorders;
                    ``(C) leverage available community resources, 
                develop and implement improved self-management programs, 
                and, when appropriate, involve family and other 
                providers of social support in the development and 
                implementation of care plans; and
                    ``(D) use electronic health records and telehealth 
                technology to better coordinate and manage, and improve 
                access to, care, as determined by the coordinating 
                center.
            ``(3) Translational research through collaboration of 
        centers and community-based organizations.--Each Center shall--
                    ``(A) demonstrate effective use of a public-private 
                partnership to foster collaborations among members of 
                the network and community-based organizations such as 
                community mental health centers and other social and 
                human services providers;
                    ``(B) expand interdisciplinary, translational, and 
                patient-oriented research and treatment; and
                    ``(C) coordinate with accredited academic programs 
                to provide ongoing opportunities for the professional 
                and continuing education of mental health providers.

    ``(d) National Database.--
            ``(1) In general.--The coordinating center shall establish 
        and maintain a national, publicly available database to improve 
        prevention programs, evidence-based interventions, and disease 
        management programs for depressive disorders, using data 
        collected from the Centers, as described in paragraph (2).
            ``(2) Data collection.--Each Center shall submit data 
        gathered at such center, as appropriate, to the coordinating 
        center regarding--
                    ``(A) the prevalence and incidence of depressive 
                disorders;
                    ``(B) the health and social outcomes of individuals 
                with depressive disorders;
                    ``(C) the effectiveness of interventions designed, 
                tested, and evaluated;
                    ``(D) other information, as the Secretary may 
                require.
            ``(3) Submission of data to the administrator.--The 
        coordinating center shall submit to the Administrator the data 
        and financial information gathered under paragraph (2).
            ``(4) Publication using data from the database.--A Center, 
        or an individual affiliated with a Center, may publish

[[Page 124 STAT. 988]]

        findings using the data described in paragraph (2) only if such 
        center submits such data to the coordinating center, as required 
        under such paragraph.

    ``(e) Establishment of Standards; Report Cards and Recommendations; 
Third Party Review.--
            ``(1) Establishment of standards.--The Secretary, acting 
        through the Administrator, shall establish performance standards 
        for--
                    ``(A) each Center; and
                    ``(B) the network of Centers as a whole.
            ``(2) Report cards.--The Secretary, acting through the 
        Administrator, shall--
                    ``(A) for each Center, not later than 3 years after 
                the date on which such center of excellence is 
                established and annually thereafter, issue a report card 
                to the coordinating center to rate the performance of 
                such Center; and
                    ``(B) not later than 3 years after the date on which 
                the first grant is awarded under subsection (b)(1) and 
                annually thereafter, issue a report card to Congress to 
                rate the performance of the network of centers of 
                excellence as a whole.
            ``(3) Recommendations.--Based upon the report cards 
        described in paragraph (2), the Secretary shall, not later than 
        September 30, 2015--
                    ``(A) make recommendations to the Centers regarding 
                improvements such centers shall make; and
                    ``(B) make recommendations to Congress for expanding 
                the Centers to serve individuals with other types of 
                mental disorders.
            ``(4) Third party review.--Not later than 3 years after the 
        date on which the first grant is awarded under subsection (b)(1) 
        and annually thereafter, the Secretary shall arrange for an 
        independent third party to conduct an evaluation of the network 
        of Centers to ensure that such centers are meeting the goals of 
        this section.

    ``(f) Authorization of Appropriations.--
            ``(1) In general.--To carry out this section, there are 
        authorized to be appropriated--
                    ``(A) $100,000,000 for each of the fiscal years 2011 
                through 2015; and
                    ``(B) $150,000,000 for each of the fiscal years 2016 
                through 2020.
            ``(2) Allocation of funds authorized.-- 
        <<NOTE: Determination.>> Of the amount appropriated under 
        paragraph (1) for a fiscal year, the Secretary shall determine 
        the allocation of each Center receiving a grant under this 
        section, but in no case may the allocation be more than 
        $5,000,000, except that the Secretary may allocate not more than 
        $10,000,000 to the coordinating center.''.

SEC. 10411. <<NOTE: Congenital Heart Futures Act. 42 USC 201 
            note.>> PROGRAMS RELATING TO CONGENITAL HEART DISEASE.

    (a) Short Title.--This subtitle may be cited as the ``Congenital 
Heart Futures Act''.
    (b) Programs Relating to Congenital Heart Disease.--
            (1) National congenital heart disease surveillance system.--
        Part P of title III of the Public Health Service Act (42 U.S.C. 
        280g et seq.), as amended by section 5405, is further amended by 
        adding at the end the following:

[[Page 124 STAT. 989]]

``SEC. 399V-2. <<NOTE: 42 USC 280g-13.>> NATIONAL CONGENITAL HEART 
            DISEASE SURVEILLANCE SYSTEM.

    ``(a) In General.--The Secretary, acting through the Director of the 
Centers for Disease Control and Prevention, may--
            ``(1) enhance and expand infrastructure to track the 
        epidemiology of congenital heart disease and to organize such 
        information into a nationally-representative, population-based 
        surveillance system that compiles data concerning actual 
        occurrences of congenital heart disease, to be known as the 
        `National Congenital Heart Disease Surveillance System'; or
            ``(2) award a grant to one eligible entity to undertake the 
        activities described in paragraph (1).

    ``(b) Purpose.--The purpose of the Congenital Heart Disease 
Surveillance System shall be to facilitate further research into the 
types of health services patients use and to identify possible areas for 
educational outreach and prevention in accordance with standard 
practices of the Centers for Disease Control and Prevention.
    ``(c) Content.--The Congenital Heart Disease Surveillance System--
            ``(1) may include information concerning the incidence and 
        prevalence of congenital heart disease in the United States;
            ``(2) may be used to collect and store data on congenital 
        heart disease, including data concerning--
                    ``(A) demographic factors associated with congenital 
                heart disease, such as age, race, ethnicity, sex, and 
                family history of individuals who are diagnosed with the 
                disease;
                    ``(B) risk factors associated with the disease;
                    ``(C) causation of the disease;
                    ``(D) treatment approaches; and
                    ``(E) outcome measures, such that analysis of the 
                outcome measures will allow derivation of evidence-based 
                best practices and guidelines for congenital heart 
                disease patients; and
            ``(3) may ensure the collection and analysis of longitudinal 
        data related to individuals of all ages with congenital heart 
        disease, including infants, young children, adolescents, and 
        adults of all ages.

    ``(d) Public Access.--The Congenital Heart Disease Surveillance 
System shall be made available to the public, as appropriate, including 
congenital heart disease researchers.
    ``(e) Patient Privacy.--The Secretary shall ensure that the 
Congenital Heart Disease Surveillance System is maintained in a manner 
that complies with the regulations promulgated under section 264 of the 
Health Insurance Portability and Accountability Act of 1996.
    ``(f) Eligibility for Grant.--To be eligible to receive a grant 
under subsection (a)(2), an entity shall--
            ``(1) be a public or private nonprofit entity with 
        specialized experience in congenital heart disease; and
            ``(2) submit to the Secretary an application at such time, 
        in such manner, and containing such information as the Secretary 
        may require.''.
            (2) Congenital heart disease research.--Subpart 2 of part C 
        of title IV of the Public Health Service Act (42 U.S.C. 285b et 
        seq.) is amended by adding at the end the following:

[[Page 124 STAT. 990]]

``SEC. 425. <<NOTE: 42 USC 285b-8.>> CONGENITAL HEART DISEASE.

    ``(a) In General.--The Director of the Institute may expand, 
intensify, and coordinate research and related activities of the 
Institute with respect to congenital heart disease, which may include 
congenital heart disease research with respect to--
            ``(1) causation of congenital heart disease, including 
        genetic causes;
            ``(2) long-term outcomes in individuals with congenital 
        heart disease, including infants, children, teenagers, adults, 
        and elderly individuals;
            ``(3) diagnosis, treatment, and prevention;
            ``(4) studies using longitudinal data and retrospective 
        analysis to identify effective treatments and outcomes for 
        individuals with congenital heart disease; and
            ``(5) identifying barriers to life-long care for individuals 
        with congenital heart disease.

    ``(b) Coordination of Research Activities.--The Director of the 
Institute may coordinate research efforts related to congenital heart 
disease among multiple research institutions and may develop research 
networks.
    ``(c) Minority and Medically Underserved Communities.--In carrying 
out the activities described in this section, the Director of the 
Institute shall consider the application of such research and other 
activities to minority and medically underserved communities.''.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out the amendments made by this section such sums 
as may be necessary for each of fiscal years 2011 through 2015.

SEC. 10412. AUTOMATED DEFIBRILLATION IN ADAM'S MEMORY ACT.

    Section 312 of the Public Health Service Act (42 U.S.C. 244) is 
amended--
            (1) in subsection (c)(6), after ``clearinghouse'' insert ``, 
        that shall be administered by an organization that has 
        substantial expertise in pediatric education, pediatric 
        medicine, and electrophysiology and sudden death,''; and
            (2) in the first sentence of subsection (e), by striking 
        ``fiscal year 2003'' and all that follows through ``2006'' and 
        inserting ``for each of fiscal years 2003 through 2014''.

SEC. 10413. <<NOTE: Young Women's Breast Health Education and Awareness 
            Requires Learning Young Act of 2009. 42 USC 201 
            note.>> YOUNG WOMEN'S BREAST HEALTH AWARENESS AND SUPPORT OF 
            YOUNG WOMEN DIAGNOSED WITH BREAST CANCER.

    (a) Short Title.--This section may be cited as the ``Young Women's 
Breast Health Education and Awareness Requires Learning Young Act of 
2009'' or the ``EARLY Act''.
    (b) Amendment.--Title III of the Public Health Service Act (42 
U.S.C. 241 et seq.), as amended by this Act, is further amended by 
adding at the end the following:

[[Page 124 STAT. 991]]

         ``PART V--PROGRAMS RELATING TO BREAST HEALTH AND CANCER

``SEC. 399NN. <<NOTE: 42 USC 280m.>> YOUNG WOMEN'S BREAST HEALTH 
            AWARENESS AND SUPPORT OF YOUNG WOMEN DIAGNOSED WITH BREAST 
            CANCER.

    ``(a) Public Education Campaign.--
            ``(1) In general.--The Secretary, acting through the 
        Director of the Centers for Disease Control and Prevention, 
        shall conduct a national evidence-based education campaign to 
        increase awareness of young women's knowledge regarding--
                    ``(A) breast health in young women of all racial, 
                ethnic, and cultural backgrounds;
                    ``(B) breast awareness and good breast health 
                habits;
                    ``(C) the occurrence of breast cancer and the 
                general and specific risk factors in women who may be at 
                high risk for breast cancer based on familial, racial, 
                ethnic, and cultural backgrounds such as Ashkenazi 
                Jewish populations;
                    ``(D) evidence-based information that would 
                encourage young women and their health care professional 
                to increase early detection of breast cancers; and
                    ``(E) the availability of health information and 
                other resources for young women diagnosed with breast 
                cancer.
            ``(2) Evidence-based, age appropriate messages.--The 
        campaign shall provide evidence-based, age-appropriate messages 
        and materials as developed by the Centers for Disease Control 
        and Prevention and the Advisory Committee established under 
        paragraph (4).
            ``(3) Media campaign.-- <<NOTE: Grants.>> In conducting the 
        education campaign under paragraph (1), the Secretary shall 
        award grants to entities to establish national multimedia 
        campaigns oriented to young women that may include advertising 
        through television, radio, print media, billboards, posters, all 
        forms of existing and especially emerging social networking 
        media, other Internet media, and any other medium determined 
        appropriate by the Secretary.
            ``(4) Advisory committee.--
                    ``(A) Establishment.-- <<NOTE: Deadline.>> Not later 
                than 60 days after the date of the enactment of this 
                section, the Secretary, acting through the Director of 
                the Centers for Disease Control and Prevention, shall 
                establish an advisory committee to assist in creating 
                and conducting the education campaigns under paragraph 
                (1) and subsection (b)(1).
                    ``(B) Membership.-- <<NOTE: Appointment.>> The 
                Secretary, acting through the Director of the Centers 
                for Disease Control and Prevention, shall appoint to the 
                advisory committee under subparagraph (A) such members 
                as deemed necessary to properly advise the Secretary, 
                and shall include organizations and individuals with 
                expertise in breast cancer, disease prevention, early 
                detection, diagnosis, public health, social marketing, 
                genetic screening and counseling, treatment, 
                rehabilitation, palliative care, and survivorship in 
                young women.

    ``(b) Health Care Professional Education Campaign.--The Secretary, 
acting through the Director of the Centers for Disease

[[Page 124 STAT. 992]]

Control and Prevention, and in consultation with the Administrator of 
the Health Resources and Services Administration, shall conduct an 
education campaign among physicians and other health care professionals 
to increase awareness--
            ``(1) of breast health, symptoms, and early diagnosis and 
        treatment of breast cancer in young women, including specific 
        risk factors such as family history of cancer and women that may 
        be at high risk for breast cancer, such as Ashkenazi Jewish 
        population;
            ``(2) on how to provide counseling to young women about 
        their breast health, including knowledge of their family cancer 
        history and importance of providing regular clinical breast 
        examinations;
            ``(3) concerning the importance of discussing healthy 
        behaviors, and increasing awareness of services and programs 
        available to address overall health and wellness, and making 
        patient referrals to address tobacco cessation, good nutrition, 
        and physical activity;
            ``(4) on when to refer patients to a health care provider 
        with genetics expertise;
            ``(5) on how to provide counseling that addresses long-term 
        survivorship and health concerns of young women diagnosed with 
        breast cancer; and
            ``(6) on when to provide referrals to organizations and 
        institutions that provide credible health information and 
        substantive assistance and support to young women diagnosed with 
        breast cancer.

    ``(c) Prevention Research Activities.--The Secretary, acting 
through--
            ``(1) the Director of the Centers for Disease Control and 
        Prevention, shall conduct prevention research on breast cancer 
        in younger women, including--
                    ``(A) behavioral, survivorship studies, and other 
                research on the impact of breast cancer diagnosis on 
                young women;
                    ``(B) formative research to assist with the 
                development of educational messages and information for 
                the public, targeted populations, and their families 
                about breast health, breast cancer, and healthy 
                lifestyles;
                    ``(C) testing and evaluating existing and new social 
                marketing strategies targeted at young women; and
                    ``(D) surveys of health care providers and the 
                public regarding knowledge, attitudes, and practices 
                related to breast health and breast cancer prevention 
                and control in high-risk populations; and
            ``(2) the Director of the National Institutes of Health, 
        shall conduct research to develop and validate new screening 
        tests and methods for prevention and early detection of breast 
        cancer in young women.

    ``(d) Support for Young Women Diagnosed With Breast Cancer.--
            ``(1) In general.-- <<NOTE: Grants.>> The Secretary shall 
        award grants to organizations and institutions to provide health 
        information from credible sources and substantive assistance 
        directed to young women diagnosed with breast cancer and pre-
        neoplastic breast diseases.

[[Page 124 STAT. 993]]

            ``(2) Priority.--In making grants under paragraph (1), the 
        Secretary shall give priority to applicants that deal 
        specifically with young women diagnosed with breast cancer and 
        pre-neoplastic breast disease.

    ``(e) No Duplication of Effort.--In conducting an education campaign 
or other program under subsections (a), (b), (c), or (d), the Secretary 
shall avoid duplicating other existing Federal breast cancer education 
efforts.
    ``(f) Measurement; Reporting.--The Secretary, acting through the 
Director of the Centers for Disease Control and Prevention, shall--
            ``(1) measure--
                    ``(A) young women's awareness regarding breast 
                health, including knowledge of family cancer history, 
                specific risk factors and early warning signs, and young 
                women's proactive efforts at early detection;
                    ``(B) the number or percentage of young women 
                utilizing information regarding lifestyle interventions 
                that foster healthy behaviors;
                    ``(C) the number or percentage of young women 
                receiving regular clinical breast exams; and
                    ``(D) the number or percentage of young women who 
                perform breast self exams, and the frequency of such 
                exams, before the implementation of this section;
            ``(2) not less than every 3 years, measure the impact of 
        such activities; and
            ``(3) submit reports to the Congress on the results of such 
        measurements.

    ``(g) Definition.--In this section, the term `young women' means 
women 15 to 44 years of age.
    ``(h) Authorization of Appropriations.--To carry out subsections 
(a), (b), (c)(1), and (d), there are authorized to be appropriated 
$9,000,000 for each of the fiscal years 2010 through 2014.''.

               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.

    (a) Section 5101 of this Act <<NOTE: 42 USC 294q.>> is amended--
            (1) in subsection (c)(2)(B)(i)(II), by inserting ``, 
        including representatives of small business and self-employed 
        individuals'' after ``employers'';
            (2) in subsection (d)(4)(A)--
                    (A) by redesignating clause (iv) as clause (v); and
                    (B) by inserting after clause (iii) the following:
                          ``(iv) An analysis of, and recommendations 
                      for, eliminating the barriers to entering and 
                      staying in primary care, including provider 
                      compensation.''; and
            (3) in subsection (i)(2)(B), by inserting ``optometrists, 
        ophthalmologists,'' after ``occupational therapists,''.

    (b) Subtitle B of title V of this Act is amended by adding at the 
end the following:

[[Page 124 STAT. 994]]

``SEC. 5104. INTERAGENCY TASK FORCE TO ASSESS AND IMPROVE ACCESS TO 
            HEALTH CARE IN THE STATE OF ALASKA.

    ``(a) Establishment.--There is established a task force to be known 
as the `Interagency Access to Health Care in Alaska Task Force' 
(referred to in this section as the `Task Force').
    ``(b) Duties.--The Task Force shall--
            ``(1) assess access to health care for beneficiaries of 
        Federal health care systems in Alaska; and
            ``(2) develop a strategy for the Federal Government to 
        improve delivery of health care to Federal beneficiaries in the 
        State of Alaska.

    ``(c) Membership.-- <<NOTE: Deadline.>> The Task Force shall be 
comprised of Federal members who shall be appointed, not later than 45 
days after the date of enactment of this Act, as follows:
            ``(1) The Secretary of Health and Human Services shall 
        appoint one representative of each of the following:
                    ``(A) The Department of Health and Human Services.
                    ``(B) The Centers for Medicare and Medicaid 
                Services.
                    ``(C) The Indian Health Service.
            ``(2) The Secretary of Defense shall appoint one 
        representative of the TRICARE Management Activity.
            ``(3) The Secretary of the Army shall appoint one 
        representative of the Army Medical Department.
            ``(4) The Secretary of the Air Force shall appoint one 
        representative of the Air Force, from among officers at the Air 
        Force performing medical service functions.
            ``(5) The Secretary of Veterans Affairs shall appoint one 
        representative of each of the following:
                    ``(A) The Department of Veterans Affairs.
                    ``(B) The Veterans Health Administration.
            ``(6) The Secretary of Homeland Security shall appoint one 
        representative of the United States Coast Guard.

    ``(d) Chairperson.--One chairperson of the Task Force shall be 
appointed by the Secretary at the time of appointment of members under 
subsection (c), selected from among the members appointed under 
paragraph (1).
    ``(e) Meetings.--The Task Force shall meet at the call of the 
chairperson.
    ``(f) Report.--Not later than 180 days after the date of enactment 
of this Act, the Task Force shall submit to Congress a report detailing 
the activities of the Task Force and containing the findings, 
strategies, recommendations, policies, and initiatives developed 
pursuant to the duty described in subsection (b)(2). In preparing such 
report, the Task Force shall consider completed and ongoing efforts by 
Federal agencies to improve access to health care in the State of 
Alaska.
    ``(g) Termination.--The Task Force shall be terminated on the date 
of submission of the report described in subsection (f).''.
    (c) Section 399V of the Public Health Service Act, as added by 
section 5313, <<NOTE: 42 USC 280g-11.>> is amended--
            (1) in subsection (b)(4), by striking ``identify, educate, 
        refer, and enroll'' and inserting ``identify and refer''; and
            (2) in subsection (k)(1), by striking ``, as defined by the 
        Department of Labor as Standard Occupational Classification [21-
        1094]''.

[[Page 124 STAT. 995]]

    (d) Section 738(a)(3) of the Public Health Service Act (42 U.S.C. 
293b(a)(3)) is amended by inserting ``schools offering physician 
assistant education programs,'' after ``public health,''.
    (e) Subtitle D of title V of this Act is amended by adding at the 
end the following:

``SEC. 5316. <<NOTE: 42 USC 296j-1.>> DEMONSTRATION GRANTS FOR FAMILY 
            NURSE PRACTITIONER TRAINING PROGRAMS.

    ``(a) Establishment of Program.--The Secretary of Health and Human 
Services (referred to in this section as the `Secretary') shall 
establish a training demonstration program for family nurse 
practitioners (referred to in this section as the `program') to employ 
and provide 1-year training for nurse practitioners who have graduated 
from a nurse practitioner program for careers as primary care providers 
in Federally qualified health centers (referred to in this section as 
`FQHCs') and nurse-managed health clinics (referred to in this section 
as `NMHCs').
    ``(b) Purpose.--The purpose of the program is to enable each grant 
recipient to--
            ``(1) provide new nurse practitioners with clinical training 
        to enable them to serve as primary care providers in FQHCs and 
        NMHCs;
            ``(2) train new nurse practitioners to work under a model of 
        primary care that is consistent with the principles set forth by 
        the Institute of Medicine and the needs of vulnerable 
        populations; and
            ``(3) create a model of FQHC and NMHC training for nurse 
        practitioners that may be replicated nationwide.

    ``(c) Grants.--The Secretary shall award 3-year grants to eligible 
entities that meet the requirements established by the Secretary, for 
the purpose of operating the nurse practitioner primary care programs 
described in subsection (a) in such entities.
    ``(d) Eligible Entities.--To be eligible to receive a grant under 
this section, an entity shall--
            ``(1)(A) be a FQHC as defined in section 1861(aa) of the 
        Social Security Act (42 U.S.C. 1395x(aa)); or
            ``(B) be a nurse-managed health clinic, as defined in 
        section 330A-1 of the Public Health Service Act (as added by 
        section 5208 of this Act); and
            ``(2) submit to the Secretary an application at such time, 
        in such manner, and containing such information as the Secretary 
        may require.

    ``(e) Priority in Awarding Grants.--In awarding grants under this 
section, the Secretary shall give priority to eligible entities that--
            ``(1) demonstrate sufficient infrastructure in size, scope, 
        and capacity to undertake the requisite training of a minimum of 
        3 nurse practitioners per year, and to provide to each awardee 
        12 full months of full-time, paid employment and benefits 
        consistent with the benefits offered to other full-time 
        employees of such entity;
            ``(2) will assign not less than 1 staff nurse practitioner 
        or physician to each of 4 precepted clinics;
            ``(3) will provide to each awardee specialty rotations, 
        including specialty training in prenatal care and women's 
        health, adult and child psychiatry, orthopedics, geriatrics, and 
        at least 3 other high-volume, high-burden specialty areas;

[[Page 124 STAT. 996]]

            ``(4) provide sessions on high-volume, high-risk health 
        problems and have a record of training health care professionals 
        in the care of children, older adults, and underserved 
        populations; and
            ``(5) collaborate with other safety net providers, schools, 
        colleges, and universities that provide health professions 
        training.

    ``(f) Eligibility of Nurse Practitioners.--
            ``(1) In general.--To be eligible for acceptance to a 
        program funded through a grant awarded under this section, an 
        individual shall--
                    ``(A) be licensed or eligible for licensure in the 
                State in which the program is located as an advanced 
                practice registered nurse or advanced practice nurse and 
                be eligible or board-certified as a family nurse 
                practitioner; and
                    ``(B) demonstrate commitment to a career as a 
                primary care provider in a FQHC or in a NMHC.
            ``(2) Preference.--In selecting awardees under the program, 
        each grant recipient shall give preference to bilingual 
        candidates that meet the requirements described in paragraph 
        (1).
            ``(3) Deferral of certain service.--The starting date of 
        required service of individuals in the National Health Service 
        Corps Service program under title II of the Public Health 
        Service Act (42 U.S.C. 202 et seq.) who receive training under 
        this section shall be deferred until the date that is 22 days 
        after the date of completion of the program.

    ``(g) Grant Amount.--Each grant awarded under this section shall be 
in an amount not to exceed $600,000 per year. A grant recipient may 
carry over funds from 1 fiscal year to another without obtaining 
approval from the Secretary.
    ``(h) Technical Assistance Grants.--The Secretary may award 
technical assistance grants to 1 or more FQHCs or NMHCs that have 
demonstrated expertise in establishing a nurse practitioner residency 
training program. Such technical assistance grants shall be for the 
purpose of providing technical assistance to other recipients of grants 
under subsection (c).
    ``(i) Authorization of Appropriations.--To carry out this section, 
there is authorized to be appropriated such sums as may be necessary for 
each of fiscal years 2011 through 2014.''.
    (f)(1) Section 399W of the Public Health Service Act, as added by 
section 5405, <<NOTE: 42 USC 280g-12.>> is redesignated as section 399V-
1.

    (2) Section 399V-1 of the Public Health Service Act, as so 
redesignated, is amended in subsection (b)(2)(A) by striking ``and the 
departments of 1 or more health professions schools in the State that 
train providers in primary care'' and inserting ``and the departments 
that train providers in primary care in 1 or more health professions 
schools in the State''.
    (3) Section 934 of the Public Health Service Act, as added by 
section 3501, <<NOTE: 42 USC 299b-34.>> is amended by striking ``399W'' 
each place such term appears and inserting ``399V-1''.

    (4) Section 935(b) of the Public Health Service Act, as added by 
section 3503, <<NOTE: 42 USC 299b-35.>> is amended by striking ``399W'' 
and inserting ``399V-1''.

    (g) Part P of title III of the Public Health Service Act 42 U.S.C. 
280g et seq.), as amended by section 10411, is amended by adding at the 
end the following:

[[Page 124 STAT. 997]]

``SEC. 399V-3. <<NOTE: 42 USC 280g-14.>> NATIONAL DIABETES PREVENTION 
            PROGRAM.

    ``(a) In General.--The Secretary, acting through the Director of the 
Centers for Disease Control and Prevention, shall establish a national 
diabetes prevention program (referred to in this section as the 
`program') targeted at adults at high risk for diabetes in order to 
eliminate the preventable burden of diabetes.
    ``(b) Program Activities.--The program described in subsection (a) 
shall include--
            ``(1) a grant program for community-based diabetes 
        prevention program model sites;
            ``(2) a program within the Centers for Disease Control and 
        Prevention to determine eligibility of entities to deliver 
        community-based diabetes prevention services;
            ``(3) a training and outreach program for lifestyle 
        intervention instructors; and
            ``(4) evaluation, monitoring and technical assistance, and 
        applied research carried out by the Centers for Disease Control 
        and Prevention.

    ``(c) Eligible Entities.--To be eligible for a grant under 
subsection (b)(1), an entity shall be a State or local health 
department, a tribal organization, a national network of community-based 
non-profits focused on health and wellbeing, an academic institution, or 
other entity, as the Secretary determines.
    ``(d) Authorization of Appropriations.--For the purpose of carrying 
out this section, there are authorized to be appropriated such sums as 
may be necessary for each of fiscal years 2010 through 2014.''.
    (h) The provisions of, and amendment made by, section 5501(c) of 
this Act <<NOTE: Repeals. 42 USC 1395w-4.>> are repealed.

    (i)(1) The provisions of, and amendments made by, section 5502 of 
this Act <<NOTE: 42 USC 1395m, 1395x and note. 42 USC 1395x.>> are 
repealed.

    (2)(A) Section 1861(aa)(3)(A) of the Social Security Act (42 U.S.C. 
1395w(aa)(3)(A)) is amended to read as follows:
            ``(A) services of the type described in subparagraphs (A) 
        through (C) of paragraph (1) and preventive services (as defined 
        in section 1861(ddd)(3)); and''.

    (B) <<NOTE: Applicability. 42 USC 1395x note.>> The amendment made 
by subparagraph (A) shall apply to services furnished on or after 
January 1, 2011.

    (3)(A) Section 1834 of the Social Security Act (42 U.S.C. 1395m), as 
amended by section 4105, is amended by adding at the end the following 
new subsection:
    ``(o) Development and Implementation of Prospective Payment 
System.--
            ``(1) Development.--
                    ``(A) In general.--The Secretary shall develop a 
                prospective payment system for payment for Federally 
                qualified health center services furnished by Federally 
                qualified health centers under this title. Such system 
                shall include a process for appropriately describing the 
                services furnished by Federally qualified health centers 
                and shall establish payment rates for specific payment 
                codes based on such appropriate descriptions of 
                services. Such system shall be established to take into 
                account the type, intensity, and duration of services 
                furnished by Federally qualified health centers. Such 
                system may include adjustments, including geographic 
                adjustments, determined appropriate by the Secretary.

[[Page 124 STAT. 998]]

                    ``(B) Collection of data and evaluation.-- 
                <<NOTE: Deadline.>> By not later than January 1, 2011, 
                the Secretary shall require Federally qualified health 
                centers to submit to the Secretary such information as 
                the Secretary may require in order to develop and 
                implement the prospective payment system under this 
                subsection, including the reporting of services using 
                HCPCS codes.
            ``(2) Implementation.--
                    ``(A) In general.--Notwithstanding section 
                1833(a)(3)(A), the Secretary shall provide, for cost 
                reporting periods beginning on or after October 1, 2014, 
                for payments of prospective payment rates for Federally 
                qualified health center services furnished by Federally 
                qualified health centers under this title in accordance 
                with the prospective payment system developed by the 
                Secretary under paragraph (1).
                    ``(B) Payments.--
                          ``(i) Initial payments.--The Secretary shall 
                      implement such prospective payment system so that 
                      the estimated aggregate amount of prospective 
                      payment rates (determined prior to the application 
                      of section 1833(a)(1)(Z)) under this title for 
                      Federally qualified health center services in the 
                      first year that such system is implemented is 
                      equal to 100 percent of the estimated amount of 
                      reasonable costs (determined without the 
                      application of a per visit payment limit or 
                      productivity screen and prior to the application 
                      of section 1866(a)(2)(A)(ii)) that would have 
                      occurred for such services under this title in 
                      such year if the system had not been implemented.
                          ``(ii) Payments in subsequent years.--Payment 
                      rates in years after the year of implementation of 
                      such system shall be the payment rates in the 
                      previous year increased--
                                    ``(I) in the first year after 
                                implementation of such system, by the 
                                percentage increase in the MEI (as 
                                defined in section 1842(i)(3)) for the 
                                year involved; and
                                    ``(II) in subsequent years, by the 
                                percentage increase in a market basket 
                                of Federally qualified health center 
                                goods and services as promulgated 
                                through regulations, or if such an index 
                                is not available, by the percentage 
                                increase in the MEI (as defined in 
                                section 1842(i)(3)) for the year 
                                involved.
                    ``(C) Preparation for pps implementation.--
                Notwithstanding any other provision of law, the 
                Secretary may establish and implement by program 
                instruction or otherwise the payment codes to be used 
                under the prospective payment system under this 
                section.''.

    (B) Section 1833(a)(1) of the Social Security Act (42 U.S.C. 
1395l(a)(1)), as amended by section 4104, is amended--
            (i) by striking ``and'' before ``(Y)''; and
            (ii) by inserting before the semicolon at the end the 
        following: ``, and (Z) with respect to Federally qualified 
        health center services for which payment is made under section 
        1834(o), the amounts paid shall be 80 percent of the lesser

[[Page 124 STAT. 999]]

        of the actual charge or the amount determined under such 
        section''.

    (C) Section 1833(a) of the Social Security Act (42 U.S.C. 1395l(a)) 
is amended--
            (i) in paragraph (3)(B)(i)--
                    (I) by inserting ``(I)'' after ``otherwise been 
                provided''; and
                    (II) by inserting ``, or (II) in the case of such 
                services furnished on or after the implementation date 
                of the prospective payment system under section 1834(o), 
                under such section (calculated as if `100 percent' were 
                substituted for `80 percent' in such section) for such 
                services if the individual had not been so enrolled'' 
                after ``been so enrolled''; and
            (ii) by adding at the end the following flush sentence:
        ``Paragraph (3)(A) shall not apply to Federally qualified health 
        center services furnished on or after the implementation date of 
        the prospective payment system under section 1834(0).''.

    (j) Section 5505 <<NOTE: 42 USC 1395ww note.>> is amended by adding 
at the end the following new subsection:

    ``(d) Application.--The amendments made by this section shall not be 
applied in a manner that requires reopening of any settled cost reports 
as to which there is not a jurisdictionally proper appeal pending as of 
the date of the enactment of this Act on the issue of payment for 
indirect costs of medical education under section 1886(d)(5)(B) of the 
Social Security Act (42 U.S.C. 1395ww(d)(5)(B)) or for direct graduate 
medical education costs under section 1886(h) of such Act (42 U.S.C. 
1395ww(h)).''.
    (k) Subtitle G of title V of this Act is amended by adding at the 
end the following:

``SEC. 5606. <<NOTE: 42 USC 254b-1.>> STATE GRANTS TO HEALTH CARE 
            PROVIDERS WHO PROVIDE SERVICES TO A HIGH PERCENTAGE OF 
            MEDICALLY UNDERSERVED POPULATIONS OR OTHER SPECIAL 
            POPULATIONS.

    ``(a) In General.--A State may award grants to health care providers 
who treat a high percentage, as determined by such State, of medically 
underserved populations or other special populations in such State.
    ``(b) Source of Funds.--A grant program established by a State under 
subsection (a) may not be established within a department, agency, or 
other entity of such State that administers the Medicaid program under 
title XIX of the Social Security Act (42 U.S.C. 1396 et seq.), and no 
Federal or State funds allocated to such Medicaid program, the Medicare 
program under title XVIII of the Social Security Act (42 U.S.C. 1395 et 
seq.), or the TRICARE program under chapter 55 of title 10, United 
States Code, may be used to award grants or to pay administrative costs 
associated with a grant program established under subsection (a).''.
    (l) Part C of title VII of the Public Health Service Act (42 U.S.C. 
293k et seq.) is amended--
            (1) after the part heading, by inserting the following:

               ``Subpart I--Medical Training Generally'';

        and
            (2) by inserting at the end the following:

[[Page 124 STAT. 1000]]

            ``Subpart II--Training in Underserved Communities

``SEC. 749B. <<NOTE: 42 USC 293m.>> RURAL PHYSICIAN TRAINING GRANTS.

    ``(a) In General.--The Secretary, acting through the Administrator 
of the Health Resources and Services Administration, shall establish a 
grant program for the purposes of assisting eligible entities in 
recruiting students most likely to practice medicine in underserved 
rural communities, providing rural-focused training and experience, and 
increasing the number of recent allopathic and osteopathic medical 
school graduates who practice in underserved rural communities.
    ``(b) Eligible Entities.--In order to be eligible to receive a grant 
under this section, an entity shall--
            ``(1) be a school of allopathic or osteopathic medicine 
        accredited by a nationally recognized accrediting agency or 
        association approved by the Secretary for this purpose, or any 
        combination or consortium of such schools; and
            ``(2) submit an application to the Secretary that includes a 
        certification that such entity will use amounts provided to the 
        institution as described in subsection (d)(1).

    ``(c) Priority.--In awarding grant funds under this section, the 
Secretary shall give priority to eligible entities that--
            ``(1) demonstrate a record of successfully training 
        students, as determined by the Secretary, who practice medicine 
        in underserved rural communities;
            ``(2) demonstrate that an existing academic program of the 
        eligible entity produces a high percentage, as determined by the 
        Secretary, of graduates from such program who practice medicine 
        in underserved rural communities;
            ``(3) demonstrate rural community institutional 
        partnerships, through such mechanisms as matching or 
        contributory funding, documented in-kind services for 
        implementation, or existence of training partners with 
        interprofessional expertise in community health center training 
        locations or other similar facilities; or
            ``(4) submit, as part of the application of the entity under 
        subsection (b), a plan for the long-term tracking of where the 
        graduates of such entity practice medicine.

    ``(d) Use of Funds.--
            ``(1) Establishment.--An eligible entity receiving a grant 
        under this section shall use the funds made available under such 
        grant to establish, improve, or expand a rural-focused training 
        program (referred to in this section as the `Program') meeting 
        the requirements described in this subsection and to carry out 
        such program.
            ``(2) Structure of program.--An eligible entity shall--
                    ``(A) enroll no fewer than 10 students per class 
                year into the Program; and
                    ``(B) develop criteria for admission to the Program 
                that gives priority to students--
                          ``(i) who have originated from or lived for a 
                      period of 2 or more years in an underserved rural 
                      community; and
                          ``(ii) who express a commitment to practice 
                      medicine in an underserved rural community.

[[Page 124 STAT. 1001]]

            ``(3) Curricula.--The Program shall require students to 
        enroll in didactic coursework and clinical experience 
        particularly applicable to medical practice in underserved rural 
        communities, including--
                    ``(A) clinical rotations in underserved rural 
                communities, and in applicable specialties, or other 
                coursework or clinical experience deemed appropriate by 
                the Secretary; and
                    ``(B) in addition to core school curricula, 
                additional coursework or training experiences focused on 
                medical issues prevalent in underserved rural 
                communities.
            ``(4) Residency placement assistance.--Where available, the 
        Program shall assist all students of the Program in obtaining 
        clinical training experiences in locations with postgraduate 
        programs offering residency training opportunities in 
        underserved rural communities, or in local residency training 
        programs that support and train physicians to practice in 
        underserved rural communities.
            ``(5) Program student cohort support.--The Program shall 
        provide and require all students of the Program to participate 
        in group activities designed to further develop, maintain, and 
        reinforce the original commitment of such students to practice 
        in an underserved rural community.

    ``(e) Annual Reporting.--An eligible entity receiving a grant under 
this section shall submit an annual report to the Secretary on the 
success of the Program, based on criteria the Secretary determines 
appropriate, including the residency program selection of graduating 
students who participated in the Program.
    ``(f) Regulations.-- <<NOTE: Deadline.>> Not later than 60 days 
after the date of enactment of this section, the Secretary shall by 
regulation define `underserved rural community' for purposes of this 
section.

    ``(g) Supplement Not Supplant.--Any eligible entity receiving funds 
under this section shall use such funds to supplement, not supplant, any 
other Federal, State, and local funds that would otherwise be expended 
by such entity to carry out the activities described in this section.
    ``(h) Maintenance of Effort.--With respect to activities for which 
funds awarded under this section are to be expended, the entity shall 
agree to maintain expenditures of non-Federal amounts for such 
activities at a level that is not less than the level of such 
expenditures maintained by the entity for the fiscal year preceding the 
fiscal year for which the entity receives a grant under this section.
    ``(i) Authorization of Appropriations.--There are authorized to be 
appropriated $4,000,000 for each of the fiscal years 2010 through 
2013.''.
    (m)(1) Section 768 of the Public Health Service Act (42 U.S.C. 295c) 
is amended to read as follows:

``SEC. 768. PREVENTIVE MEDICINE AND PUBLIC HEALTH TRAINING GRANT 
            PROGRAM.

    ``(a) Grants. <<NOTE: Contracts.>> --The Secretary, acting through 
the Administrator of the Health Resources and Services Administration 
and in consultation with the Director of the Centers for Disease Control 
and Prevention, shall award grants to, or enter into contracts with, 
eligible entities to provide training to graduate medical residents in 
preventive medicine specialties.

[[Page 124 STAT. 1002]]

    ``(b) Eligibility.--To be eligible for a grant or contract under 
subsection (a), an entity shall be--
            ``(1) an accredited school of public health or school of 
        medicine or osteopathic medicine;
            ``(2) an accredited public or private nonprofit hospital;
            ``(3) a State, local, or tribal health department; or
            ``(4) a consortium of 2 or more entities described in 
        paragraphs (1) through (3).

    ``(c) Use of Funds.--Amounts received under a grant or contract 
under this section shall be used to--
            ``(1) plan, develop (including the development of 
        curricula), operate, or participate in an accredited residency 
        or internship program in preventive medicine or public health;
            ``(2) defray the costs of practicum experiences, as required 
        in such a program; and
            ``(3) establish, maintain, or improve--
                    ``(A) academic administrative units (including 
                departments, divisions, or other appropriate units) in 
                preventive medicine and public health; or
                    ``(B) programs that improve clinical teaching in 
                preventive medicine and public health.

    ``(d) Report.--The Secretary shall submit to the Congress an annual 
report on the program carried out under this section.''.
            (2) Section 770(a) of the Public Health Service Act (42 
        U.S.C. 295e(a)) is amended to read as follows:

    ``(a) In General.--For the purpose of carrying out this subpart, 
there is authorized to be appropriated $43,000,000 for fiscal year 2011, 
and such sums as may be necessary for each of the fiscal years 2012 
through 2015.''.
    (n)(1) Subsection (i) of section 331 of the Public Health Service 
Act (42 U.S.C. 254d) of the Public Health Service Act is amended--
            (A) in paragraph (1), by striking ``In carrying out subpart 
        III'' and all that follows through the period and inserting ``In 
        carrying out subpart III, the Secretary may, in accordance with 
        this subsection, issue waivers to individuals who have entered 
        into a contract for obligated service under the Scholarship 
        Program or the Loan Repayment Program under which the 
        individuals are authorized to satisfy the requirement of 
        obligated service through providing clinical practice that is 
        half time.'';
            (B) in paragraph (2)--
                    (i) in subparagraphs (A)(ii) and (B), by striking 
                ``less than full time'' each place it appears and 
                inserting ``half time'';
                    (ii) in subparagraphs (C) and (F), by striking 
                ``less than full-time service'' each place it appears 
                and inserting ``half-time service''; and
                    (iii) by amending subparagraphs (D) and (E) to read 
                as follows:
            ``(D) the entity and the Corps member agree in writing that 
        the Corps member will perform half-time clinical practice;
            ``(E) the Corps member agrees in writing to fulfill all of 
        the service obligations under section 338C through half-time 
        clinical practice and either--
                    ``(i) double the period of obligated service that 
                would otherwise be required; or

[[Page 124 STAT. 1003]]

                    ``(ii) in the case of contracts entered into under 
                section 338B, accept a minimum service obligation of 2 
                years with an award amount equal to 50 percent of the 
                amount that would otherwise be payable for full-time 
                service; and''; and
            (C) in paragraph (3), by striking ``In evaluating a 
        demonstration project described in paragraph (1)'' and inserting 
        ``In evaluating waivers issued under paragraph (1)''.

    (2) Subsection (j) of section 331 of the Public Health Service Act 
(42 U.S.C. 254d) is amended by adding at the end the following:
            ``(5) <<NOTE: Definitions.>> The terms `full time' and 
        `full-time' mean a minimum of 40 hours per week in a clinical 
        practice, for a minimum of 45 weeks per year.
            ``(6) The terms `half time' and `half-time' mean a minimum 
        of 20 hours per week (not to exceed 39 hours per week) in a 
        clinical practice, for a minimum of 45 weeks per year.''.

    (3) Section 337(b)(1) of the Public Health Service Act (42 U.S.C. 
254j(b)(1)) is amended by striking ``Members may not be reappointed to 
the Council.''.
    (4) Section 338B(g)(2)(A) of the Public Health Service Act (42 
U.S.C. 254l-1(g)(2)(A)) is amended by striking ``$35,000'' and inserting 
``$50,000, plus, beginning with fiscal year 2012, an amount determined 
by the Secretary on an annual basis to reflect inflation,''.
    (5) Subsection (a) of section 338C of the Public Health Service Act 
(42 U.S.C. 254m), as amended by section 5508, is amended--
            (A) by striking the second sentence and inserting the 
        following: ``The Secretary may treat teaching as clinical 
        practice for up to 20 percent of such period of obligated 
        service.''; and
            (B) by adding at the end the following: ``Notwithstanding 
        the preceding sentence, with respect to a member of the Corps 
        participating in the teaching health centers graduate medical 
        education program under section 340H, for the purpose of 
        calculating time spent in full-time clinical practice under this 
        section, up to 50 percent of time spent teaching by such member 
        may be counted toward his or her service obligation.''.

SEC. 10502. INFRASTRUCTURE TO EXPAND ACCESS TO CARE.

    (a) Appropriation.--There are authorized to be appropriated, and 
there are appropriated to the Department of Health and Human Services, 
$100,000,000 for fiscal year 2010, to remain available for obligation 
until September 30, 2011, to be used for debt service on, or direct 
construction or renovation of, a health care facility that provides 
research, inpatient tertiary care, or outpatient clinical services. Such 
facility shall be affiliated with an academic health center at a public 
research university in the United States that contains a State's sole 
public academic medical and dental school.
    (b) Requirement.-- <<NOTE: Certification.>> Amount appropriated 
under subsection (a) may only be made available by the Secretary of 
Health and Human Services upon the receipt of an application from the 
Governor of a State that certifies that--
            (1) the new health care facility is critical for the 
        provision of greater access to health care within the State;
            (2) such facility is essential for the continued financial 
        viability of the State's sole public medical and dental school 
        and its academic health center;
            (3) the request for Federal support represents not more than 
        40 percent of the total cost of the proposed new facility; and

[[Page 124 STAT. 1004]]

            (4) the State has established a dedicated funding mechanism 
        to provide all remaining funds necessary to complete the 
        construction or renovation of the proposed facility.

SEC. 10503. <<NOTE: 42 USC 254b-2.>> COMMUNITY HEALTH CENTERS AND THE 
            NATIONAL HEALTH SERVICE CORPS FUND.

    (a) Purpose.--It is the purpose of this section to establish a 
Community Health Center Fund (referred to in this section as the ``CHC 
Fund''), to be administered through the Office of the Secretary of the 
Department of Health and Human Services to provide for expanded and 
sustained national investment in community health centers under section 
330 of the Public Health Service Act and the National Health Service 
Corps.
    (b) Funding.--There is authorized to be appropriated, and there is 
appropriated, out of any monies in the Treasury not otherwise 
appropriated, to the CHC Fund--
            (1) to be transferred to the Secretary of Health and Human 
        Services to provide enhanced funding for the community health 
        center program under section 330 of the Public Health Service 
        Act--
                    (A) $700,000,000 for fiscal year 2011;
                    (B) $800,000,000 for fiscal year 2012;
                    (C) $1,000,000,000 for fiscal year 2013;
                    (D) $1,600,000,000 for fiscal year 2014; and
                    (E) $2,900,000,000 for fiscal year 2015; and
            (2) to be transferred to the Secretary of Health and Human 
        Services to provide enhanced funding for the National Health 
        Service Corps--
                    (A) $290,000,000 for fiscal year 2011;
                    (B) $295,000,000 for fiscal year 2012;
                    (C) $300,000,000 for fiscal year 2013;
                    (D) $305,000,000 for fiscal year 2014; and
                    (E) $310,000,000 for fiscal year 2015.

    (c) Construction.-- <<NOTE: Appropriation authorization.>> There is 
authorized to be appropriated, and there is appropriated, out of any 
monies in the Treasury not otherwise appropriated, $1,500,000,000 to be 
available for fiscal years 2011 through 2015 to be used by the Secretary 
of Health and Human Services for the construction and renovation of 
community health centers.

    (d) Use of Fund.--The Secretary of Health and Human Services shall 
transfer amounts in the CHC Fund to accounts within the Department of 
Health and Human Services to increase funding, over the fiscal year 2008 
level, for community health centers and the National Health Service 
Corps.
    (e) Availability.--Amounts appropriated under subsections (b) and 
(c) shall remain available until expended.

SEC. 10504. <<NOTE: 42 USC 256 note.>> DEMONSTRATION PROJECT TO PROVIDE 
            ACCESS TO AFFORDABLE CARE.

    (a) In General.-- <<NOTE: Deadline.>> Not later than 6 months after 
the date of enactment of this Act, the Secretary of Health and Human 
Services (referred to in this section as the ``Secretary''), acting 
through the Health Resources and Services Administration, shall 
establish a 3 year demonstration project in up to 10 States to provide 
access to comprehensive health care services to the uninsured at reduced 
fees. <<NOTE: Evaluation.>> The Secretary shall evaluate the feasibility 
of expanding the project to additional States.

[[Page 124 STAT. 1005]]

    (b) Eligibility.--To be eligible to participate in the demonstration 
project, an entity shall be a State-based, nonprofit, public-private 
partnership that provides access to comprehensive health care services 
to the uninsured at reduced fees. Each State in which a participant 
selected by the Secretary is located shall receive not more than 
$2,000,000 to establish and carry out the project for the 3-year 
demonstration period.
    (c) Authorization.--There is authorized to be appropriated such sums 
as may be necessary to carry out this section.

               Subtitle F--Provisions Relating to Title VI

SEC. 10601. REVISIONS TO LIMITATION ON MEDICARE EXCEPTION TO THE 
            PROHIBITION ON CERTAIN PHYSICIAN REFERRALS FOR HOSPITALS.

    (a) In General.--Section 1877(i) of the Social Security Act, as 
added by section 6001(a), <<NOTE: 42 USC 1395nn.>> is amended--
            (1) in paragraph (1)(A)(i), by striking ``February 1, 2010'' 
        and inserting ``August 1, 2010''; and
            (2) in paragraph (3)(A)--
                    (A) in clause (iii), by striking ``August 1, 2011'' 
                and inserting ``February 1, 2012''; and
                    (B) in clause (iv), by striking ``July 1, 2011'' and 
                inserting ``January 1, 2012''.

    (b) Conforming Amendment.--Section 6001(b)(2) <<NOTE: 42 USC 1395nn 
note.>> of this Act is amended by striking ``November 1, 2011'' and 
inserting ``May 1, 2012''.

SEC. 10602. CLARIFICATIONS TO PATIENT-CENTERED OUTCOMES RESEARCH.

    Section 1181 of the Social Security Act (as added by section 
6301) <<NOTE: 42 USC 1320e.>> is amended--
            (1) in subsection (d)(2)(B)--
                    (A) in clause (ii)(IV)--
                          (i) by inserting ``, as described in 
                      subparagraph (A)(ii),'' after ``original 
                      research''; and
                          (ii) by inserting ``, as long as the 
                      researcher enters into a data use agreement with 
                      the Institute for use of the data from the 
                      original research, as appropriate'' after 
                      ``publication''; and
                    (B) by amending clause (iv) to read as follows:
                          ``(iv) Subsequent use of the data.--The 
                      Institute shall not allow the subsequent use of 
                      data from original research in work-for-hire 
                      contracts with individuals, entities, or 
                      instrumentalities that have a financial interest 
                      in the results, unless approved under a data use 
                      agreement with the Institute.'';
            (2) in subsection (d)(8)(A)(iv), by striking ``not be 
        construed as mandates for'' and inserting ``do not include''; 
        and
            (3) in subsection (f)(1)(C), by amending clause (ii) to read 
        as follows:
                          ``(ii) 7 members representing physicians and 
                      providers, including 4 members representing 
                      physicians (at least 1 of whom is a surgeon), 1 
                      nurse, 1 State-licensed integrative health care 
                      practitioner, and 1 representative of a 
                      hospital.''.

[[Page 124 STAT. 1006]]

SEC. 10603. STRIKING PROVISIONS RELATING TO INDIVIDUAL PROVIDER 
            APPLICATION FEES.

    (a) In General.--Section 1866(j)(2)(C) of the Social Security Act, 
as added by section 6401(a), <<NOTE: 42 USC 1395cc.>> is amended--
            (1) by striking clause (i);
            (2) by redesignating clauses (ii) through (iv), 
        respectively, as clauses (i) through (iii); and
            (3) in clause (i), as redesignated by paragraph (2), by 
        striking ``clause (iii)'' and inserting ``clause (ii)''.

    (b) Technical Correction.--Section 6401(a)(2) of this Act is amended 
to read as follows:
            ``(2) by redesignating paragraph (2) as paragraph (8); 
        and''.

SEC. 10604. TECHNICAL CORRECTION TO SECTION 6405.

    Paragraphs (1) and (2) of section 6405(b) are amended to read as 
follows:
            ``(1) Part a.--Section 1814(a)(2) of the Social Security Act 
        ( <<NOTE: 42 USC 1395f.>> 42 U.S.C. 1395(a)(2)) is amended in 
        the matter preceding subparagraph (A) by inserting `, or, in the 
        case of services described in subparagraph (C), a physician 
        enrolled under section 1866(j),' after `in collaboration with a 
        physician,'.
            ``(2) Part b.--Section 1835(a)(2) of the Social Security Act 
        (42 U.S.C. 1395n(a)(2)) is amended in the matter preceding 
        subparagraph (A) by inserting `, or, in the case of services 
        described in subparagraph (A), a physician enrolled under 
        section 1866(j),' after `a physician'.''.

SEC. 10605. CERTAIN OTHER PROVIDERS PERMITTED TO CONDUCT FACE TO FACE 
            ENCOUNTER FOR HOME HEALTH SERVICES.

    (a) Part A.--Section 1814(a)(2)(C) of the Social Security Act (42 
U.S.C. 1395f(a)(2)(C)), as amended by section 6407(a)(1), is amended by 
inserting ``, or a nurse practitioner or clinical nurse specialist (as 
those terms are defined in section 1861(aa)(5)) who is working in 
collaboration with the physician in accordance with State law, or a 
certified nurse-midwife (as defined in section 1861(gg)) as authorized 
by State law, or a physician assistant (as defined in section 
1861(aa)(5)) under the supervision of the physician,'' after ``himself 
or herself''.
    (b) Part B.--Section 1835(a)(2)(A)(iv) of the Social Security Act, 
as added by section 6407(a)(2), is amended by inserting ``, or a nurse 
practitioner or clinical nurse specialist (as those terms are defined in 
section 1861(aa)(5)) who is working in collaboration with the physician 
in accordance with State law, or a certified nurse-midwife (as defined 
in section 1861(gg)) as authorized by State law, or a physician 
assistant (as defined in section 1861(aa)(5)) under the supervision of 
the physician,'' after ``must document that the physician''.

SEC. 10606. HEALTH CARE FRAUD ENFORCEMENT.

    (a) <<NOTE: 28 USC 994 note.>> Fraud Sentencing Guidelines.--
            (1) Definition.--In this subsection, the term ``Federal 
        health care offense'' has the meaning given that term in section 
        24 of title 18, United States Code, as amended by this Act.
            (2) Review and amendments.--Pursuant to the authority under 
        section 994 of title 28, United States Code, and in accordance 
        with this subsection, the United States Sentencing Commission 
        shall--

[[Page 124 STAT. 1007]]

                    (A) review the Federal Sentencing Guidelines and 
                policy statements applicable to persons convicted of 
                Federal health care offenses;
                    (B) amend the Federal Sentencing Guidelines and 
                policy statements applicable to persons convicted of 
                Federal health care offenses involving Government health 
                care programs to provide that the aggregate dollar 
                amount of fraudulent bills submitted to the Government 
                health care program shall constitute prima facie 
                evidence of the amount of the intended loss by the 
                defendant; and
                    (C) amend the Federal Sentencing Guidelines to 
                provide--
                          (i) a 2-level increase in the offense level 
                      for any defendant convicted of a Federal health 
                      care offense relating to a Government health care 
                      program which involves a loss of not less than 
                      $1,000,000 and less than $7,000,000;
                          (ii) a 3-level increase in the offense level 
                      for any defendant convicted of a Federal health 
                      care offense relating to a Government health care 
                      program which involves a loss of not less than 
                      $7,000,000 and less than $20,000,000;
                          (iii) a 4-level increase in the offense level 
                      for any defendant convicted of a Federal health 
                      care offense relating to a Government health care 
                      program which involves a loss of not less than 
                      $20,000,000; and
                          (iv) if appropriate, otherwise amend the 
                      Federal Sentencing Guidelines and policy 
                      statements applicable to persons convicted of 
                      Federal health care offenses involving Government 
                      health care programs.
            (3) Requirements.--In carrying this subsection, the United 
        States Sentencing Commission shall--
                    (A) ensure that the Federal Sentencing Guidelines 
                and policy statements--
                          (i) reflect the serious harms associated with 
                      health care fraud and the need for aggressive and 
                      appropriate law enforcement action to prevent such 
                      fraud; and
                          (ii) provide increased penalties for persons 
                      convicted of health care fraud offenses in 
                      appropriate circumstances;
                    (B) consult with individuals or groups representing 
                health care fraud victims, law enforcement officials, 
                the health care industry, and the Federal judiciary as 
                part of the review described in paragraph (2);
                    (C) ensure reasonable consistency with other 
                relevant directives and with other guidelines under the 
                Federal Sentencing Guidelines;
                    (D) account for any aggravating or mitigating 
                circumstances that might justify exceptions, including 
                circumstances for which the Federal Sentencing 
                Guidelines, as in effect on the date of enactment of 
                this Act, provide sentencing enhancements;
                    (E) make any necessary conforming changes to the 
                Federal Sentencing Guidelines; and
                    (F) ensure that the Federal Sentencing Guidelines 
                adequately meet the purposes of sentencing.

[[Page 124 STAT. 1008]]

    (b) Intent Requirement for Health Care Fraud.--Section 1347 of title 
18, United States Code, is amended--
            (1) by inserting ``(a)'' before ``Whoever knowingly''; and
            (2) by adding at the end the following:

    ``(b) With respect to violations of this section, a person need not 
have actual knowledge of this section or specific intent to commit a 
violation of this section.''.
    (c) Health Care Fraud Offense.--Section 24(a) of title 18, United 
States Code, is amended--
            (1) in paragraph (1), by striking the semicolon and 
        inserting ``or section 1128B of the Social Security Act (42 
        U.S.C. 1320a-7b); or''; and
            (2) in paragraph (2)--
                    (A) by inserting ``1349,'' after ``1343,''; and
                    (B) by inserting ``section 301 of the Federal Food, 
                Drug, and Cosmetic Act (21 U.S.C. 331), or section 501 
                of the Employee Retirement Income Security Act of 1974 
                (29 U.S.C. 1131),'' after ``title,''.

    (d) Subpoena Authority Relating to Health Care.--
            (1) Subpoenas under the health insurance portability and 
        accountability act of 1996.--Section 1510(b) of title 18, United 
        States Code, is amended--
                    (A) in paragraph (1), by striking ``to the grand 
                jury''; and
                    (B) in paragraph (2)--
                          (i) in subparagraph (A), by striking ``grand 
                      jury subpoena'' and inserting ``subpoena for 
                      records''; and
                          (ii) in the matter following subparagraph (B), 
                      by striking ``to the grand jury''.
            (2) Subpoenas under the civil rights of institutionalized 
        persons act.--The Civil Rights of Institutionalized Persons Act 
        (42 U.S.C. 1997 et seq.) is amended by inserting after section 3 
        the following:

``SEC. 3A. <<NOTE: 42 USC 1997a-1.>> SUBPOENA AUTHORITY.

    ``(a) Authority.--The Attorney General, or at the direction of the 
Attorney General, any officer or employee of the Department of Justice 
may require by subpoena access to any institution that is the subject of 
an investigation under this Act and to any document, record, material, 
file, report, memorandum, policy, procedure, investigation, video or 
audio recording, or quality assurance report relating to any institution 
that is the subject of an investigation under this Act to determine 
whether there are conditions which deprive persons residing in or 
confined to the institution of any rights, privileges, or immunities 
secured or protected by the Constitution or laws of the United States.
    ``(b) Issuance and Enforcement of Subpoenas.--
            ``(1) Issuance.--Subpoenas issued under this section--
                    ``(A) shall bear the signature of the Attorney 
                General or any officer or employee of the Department of 
                Justice as designated by the Attorney General; and
                    ``(B) shall be served by any person or class of 
                persons designated by the Attorney General or a 
                designated officer or employee for that purpose.
            ``(2) Enforcement.--In the case of contumacy or failure to 
        obey a subpoena issued under this section, the United States 
        district court for the judicial district in which the 
        institution

[[Page 124 STAT. 1009]]

        is located may issue an order requiring compliance. Any failure 
        to obey the order of the court may be punished by the court as a 
        contempt that court.

    ``(c) Protection of Subpoenaed Records and Information.--Any 
document, record, material, file, report, memorandum, policy, procedure, 
investigation, video or audio recording, or quality assurance report or 
other information obtained under a subpoena issued under this section--
            ``(1) may not be used for any purpose other than to protect 
        the rights, privileges, or immunities secured or protected by 
        the Constitution or laws of the United States of persons who 
        reside, have resided, or will reside in an institution;
            ``(2) may not be transmitted by or within the Department of 
        Justice for any purpose other than to protect the rights, 
        privileges, or immunities secured or protected by the 
        Constitution or laws of the United States of persons who reside, 
        have resided, or will reside in an institution; and
            ``(3) shall be redacted, obscured, or otherwise altered if 
        used in any publicly available manner so as to prevent the 
        disclosure of any personally identifiable information.''.

SEC. 10607. STATE DEMONSTRATION PROGRAMS TO EVALUATE ALTERNATIVES TO 
            CURRENT MEDICAL TORT LITIGATION.

    Part P of title III of the Public Health Service Act (42 U.S.C. 280g 
et seq.), as amended by this Act, is further amended by adding at the 
end the following:

``SEC. 399V-4. <<NOTE: Grants. 42 USC 280g-15.>> STATE DEMONSTRATION 
            PROGRAMS TO EVALUATE ALTERNATIVES TO CURRENT MEDICAL TORT 
            LITIGATION.

    ``(a) In General.--The Secretary is authorized to award 
demonstration grants to States for the development, implementation, and 
evaluation of alternatives to current tort litigation for resolving 
disputes over injuries allegedly caused by health care providers or 
health care organizations. In awarding such grants, the Secretary shall 
ensure the diversity of the alternatives so funded.
    ``(b) Duration.--The Secretary may award grants under subsection (a) 
for a period not to exceed 5 years.
    ``(c) Conditions for Demonstration Grants.--
            ``(1) Requirements.--Each State desiring a grant under 
        subsection (a) shall develop an alternative to current tort 
        litigation that--
                    ``(A) allows for the resolution of disputes over 
                injuries allegedly caused by health care providers or 
                health care organizations; and
                    ``(B) promotes a reduction of health care errors by 
                encouraging the collection and analysis of patient 
                safety data related to disputes resolved under 
                subparagraph (A) by organizations that engage in efforts 
                to improve patient safety and the quality of health 
                care.
            ``(2) Alternative to current tort litigation.--Each State 
        desiring a grant under subsection (a) shall demonstrate how the 
        proposed alternative described in paragraph (1)(A)--
                    ``(A) makes the medical liability system more 
                reliable by increasing the availability of prompt and 
                fair resolution of disputes;
                    ``(B) encourages the efficient resolution of 
                disputes;
                    ``(C) encourages the disclosure of health care 
                errors;

[[Page 124 STAT. 1010]]

                    ``(D) enhances patient safety by detecting, 
                analyzing, and helping to reduce medical errors and 
                adverse events;
                    ``(E) improves access to liability insurance;
                    ``(F) fully informs patients about the differences 
                in the alternative and current tort litigation;
                    ``(G) provides patients the ability to opt out of or 
                voluntarily withdraw from participating in the 
                alternative at any time and to pursue other options, 
                including litigation, outside the alternative;
                    ``(H) would not conflict with State law at the time 
                of the application in a way that would prohibit the 
                adoption of an alternative to current tort litigation; 
                and
                    ``(I) would not limit or curtail a patient's 
                existing legal rights, ability to file a claim in or 
                access a State's legal system, or otherwise abrogate a 
                patient's ability to file a medical malpractice claim.
            ``(3) Sources of compensation.--Each State desiring a grant 
        under subsection (a) shall identify the sources from and methods 
        by which compensation would be paid for claims resolved under 
        the proposed alternative to current tort litigation, which may 
        include public or private funding sources, or a combination of 
        such sources. Funding methods shall to the extent practicable 
        provide financial incentives for activities that improve patient 
        safety.
            ``(4) Scope.--
                    ``(A) In general.--Each State desiring a grant under 
                subsection (a) shall establish a scope of jurisdiction 
                (such as Statewide, designated geographic region, a 
                designated area of health care practice, or a designated 
                group of health care providers or health care 
                organizations) for the proposed alternative to current 
                tort litigation that is sufficient to evaluate the 
                effects of the alternative. No scope of jurisdiction 
                shall be established under this paragraph that is based 
                on a health care payer or patient population.
                    ``(B) Notification of patients.--A State shall 
                demonstrate how patients would be notified that they are 
                receiving health care services that fall within such 
                scope, and the process by which they may opt out of or 
                voluntarily withdraw from participating in the 
                alternative. The decision of the patient whether to 
                participate or continue participating in the alternative 
                process shall be made at any time and shall not be 
                limited in any way.
            ``(5) Preference in awarding demonstration grants.--In 
        awarding grants under subsection (a), the Secretary shall give 
        preference to States--
                    ``(A) that have developed the proposed alternative 
                through substantive consultation with relevant 
                stakeholders, including patient advocates, health care 
                providers and health care organizations, attorneys with 
                expertise in representing patients and health care 
                providers, medical malpractice insurers, and patient 
                safety experts;
                    ``(B) that make proposals that are likely to enhance 
                patient safety by detecting, analyzing, and helping to 
                reduce medical errors and adverse events; and
                    ``(C) that make proposals that are likely to improve 
                access to liability insurance.

    ``(d) Application.--

[[Page 124 STAT. 1011]]

            ``(1) In general.--Each State desiring a grant under 
        subsection (a) shall submit to the Secretary an application, at 
        such time, in such manner, and containing such information as 
        the Secretary may require.
            ``(2) Review panel.--
                    ``(A) In general.-- <<NOTE: Establishment.>> In 
                reviewing applications under paragraph (1), the 
                Secretary shall consult with a review panel composed of 
                relevant experts appointed by the Comptroller General.
                    ``(B) Composition.--
                          ``(i) Nominations.--The Comptroller General 
                      shall solicit nominations from the public for 
                      individuals to serve on the review panel.
                          ``(ii) Appointment.--The Comptroller General 
                      shall appoint, at least 9 but not more than 13, 
                      highly qualified and knowledgeable individuals to 
                      serve on the review panel and shall ensure that 
                      the following entities receive fair representation 
                      on such panel:
                                    ``(I) Patient advocates.
                                    ``(II) Health care providers and 
                                health care organizations.
                                    ``(III) Attorneys with expertise in 
                                representing patients and health care 
                                providers.
                                    ``(IV) Medical malpractice insurers.
                                    ``(V) State officials.
                                    ``(VI) Patient safety experts.
                    ``(C) Chairperson.--The Comptroller General, or an 
                individual within the Government Accountability Office 
                designated by the Comptroller General, shall be the 
                chairperson of the review panel.
                    ``(D) Availability of information.--The Comptroller 
                General shall make available to the review panel such 
                information, personnel, and administrative services and 
                assistance as the review panel may reasonably require to 
                carry out its duties.
                    ``(E) Information from agencies.--The review panel 
                may request directly from any department or agency of 
                the United States any information that such panel 
                considers necessary to carry out its duties. To the 
                extent consistent with applicable laws and regulations, 
                the head of such department or agency shall furnish the 
                requested information to the review panel.

    ``(e) Reports.--
            ``(1) By state.--Each State receiving a grant under 
        subsection (a) shall submit to the Secretary an annual report 
        evaluating the effectiveness of activities funded with grants 
        awarded under such subsection. Such report shall, at a minimum, 
        include the impact of the activities funded on patient safety 
        and on the availability and price of medical liability 
        insurance.
            ``(2) By secretary.--The Secretary shall submit to Congress 
        an annual compendium of the reports submitted under paragraph 
        (1) and an analysis of the activities funded under subsection 
        (a) that examines any differences that result from such 
        activities in terms of the quality of care, number and nature of 
        medical errors, medical resources used, length of

[[Page 124 STAT. 1012]]

        time for dispute resolution, and the availability and price of 
        liability insurance.

    ``(f) Technical Assistance.--
            ``(1) In general.--The Secretary shall provide technical 
        assistance to the States applying for or awarded grants under 
        subsection (a).
            ``(2) Requirements.--Technical assistance under paragraph 
        (1) shall include--
                    ``(A) guidance on non-economic damages, including 
                the consideration of individual facts and circumstances 
                in determining appropriate payment, guidance on 
                identifying avoidable injuries, and guidance on 
                disclosure to patients of health care errors and adverse 
                events; and
                    ``(B) the development, in consultation with States, 
                of common definitions, formats, and data collection 
                infrastructure for States receiving grants under this 
                section to use in reporting to facilitate aggregation 
                and analysis of data both within and between States.
            ``(3) Use of common definitions, formats, and data 
        collection infrastructure.--States not receiving grants under 
        this section may also use the common definitions, formats, and 
        data collection infrastructure developed under paragraph (2)(B).

    ``(g) Evaluation.--
            ``(1) In general.-- 
        <<NOTE: Contracts. Deadlines. Reports.>> The Secretary, in 
        consultation with the review panel established under subsection 
        (d)(2), shall enter into a contract with an appropriate research 
        organization to conduct an overall evaluation of the 
        effectiveness of grants awarded under subsection (a) and to 
        annually prepare and submit a report to Congress. Such an 
        evaluation shall begin not later than 18 months following the 
        date of implementation of the first program funded by a grant 
        under subsection (a).
            ``(2) Contents.--The evaluation under paragraph (1) shall 
        include--
                    ``(A) an analysis of the effects of the grants 
                awarded under subsection (a) with regard to the measures 
                described in paragraph (3);
                    ``(B) for each State, an analysis of the extent to 
                which the alternative developed under subsection (c)(1) 
                is effective in meeting the elements described in 
                subsection (c)(2);
                    ``(C) a comparison among the States receiving grants 
                under subsection (a) of the effectiveness of the various 
                alternatives developed by such States under subsection 
                (c)(1);
                    ``(D) a comparison, considering the measures 
                described in paragraph (3), of States receiving grants 
                approved under subsection (a) and similar States not 
                receiving such grants; and
                    ``(E) a comparison, with regard to the measures 
                described in paragraph (3), of--
                          ``(i) States receiving grants under subsection 
                      (a);
                          ``(ii) States that enacted, prior to the date 
                      of enactment of the Patient Protection and 
                      Affordable Care Act, any cap on non-economic 
                      damages; and
                          ``(iii) States that have enacted, prior to the 
                      date of enactment of the Patient Protection and 
                      Affordable Care Act, a requirement that the 
                      complainant obtain

[[Page 124 STAT. 1013]]

                      an opinion regarding the merit of the claim, 
                      although the substance of such opinion may have no 
                      bearing on whether the complainant may proceed 
                      with a case.
            ``(3) Measures.--The evaluations under paragraph (2) shall 
        analyze and make comparisons on the basis of--
                    ``(A) the nature and number of disputes over 
                injuries allegedly caused by health care providers or 
                health care organizations;
                    ``(B) the nature and number of claims in which tort 
                litigation was pursued despite the existence of an 
                alternative under subsection (a);
                    ``(C) the disposition of disputes and claims, 
                including the length of time and estimated costs to all 
                parties;
                    ``(D) the medical liability environment;
                    ``(E) health care quality;
                    ``(F) patient safety in terms of detecting, 
                analyzing, and helping to reduce medical errors and 
                adverse events;
                    ``(G) patient and health care provider and 
                organization satisfaction with the alternative under 
                subsection (a) and with the medical liability 
                environment; and
                    ``(H) impact on utilization of medical services, 
                appropriately adjusted for risk.
            ``(4) Funding.--The Secretary shall reserve 5 percent of the 
        amount appropriated in each fiscal year under subsection (k) to 
        carry out this subsection.

    ``(h) MedPAC and MACPAC Reports.--
            ``(1) MedPAC.--The Medicare Payment Advisory Commission 
        shall conduct an independent review of the alternatives to 
        current tort litigation that are implemented under grants under 
        subsection (a) to determine the impact of such alternatives on 
        the Medicare program under title XVIII of the Social Security 
        Act, and its beneficiaries.
            ``(2) MACPAC.--The Medicaid and CHIP Payment and Access 
        Commission shall conduct an independent review of the 
        alternatives to current tort litigation that are implemented 
        under grants under subsection (a) to determine the impact of 
        such alternatives on the Medicaid or CHIP programs under titles 
        XIX and XXI of the Social Security Act, and their beneficiaries.
            ``(3) Reports.--Not later than December 31, 2016, the 
        Medicare Payment Advisory Commission and the Medicaid and CHIP 
        Payment and Access Commission shall each submit to Congress a 
        report that includes the findings and recommendations of each 
        respective Commission based on independent reviews conducted 
        under paragraphs (1) and (2), including an analysis of the 
        impact of the alternatives reviewed on the efficiency and 
        effectiveness of the respective programs.

    ``(i) Option To Provide for Initial Planning Grants.--Of the funds 
appropriated pursuant to subsection (k), the Secretary may use a portion 
not to exceed $500,000 per State to provide planning grants to such 
States for the development of demonstration project applications meeting 
the criteria described in subsection (c). In selecting States to receive 
such planning grants, the Secretary shall give preference to those 
States in which State law at the time of the application would not 
prohibit the adoption of an alternative to current tort litigation.
    ``(j) Definitions.--In this section:

[[Page 124 STAT. 1014]]

            ``(1) Health care services.--The term `health care services' 
        means any services provided by a health care provider, or by any 
        individual working under the supervision of a health care 
        provider, that relate to--
                    ``(A) the diagnosis, prevention, or treatment of any 
                human disease or impairment; or
                    ``(B) the assessment of the health of human beings.
            ``(2) Health care organization.--The term `health care 
        organization' means any individual or entity which is obligated 
        to provide, pay for, or administer health benefits under any 
        health plan.
            ``(3) Health care provider.--The term `health care provider' 
        means any individual or entity--
                    ``(A) licensed, registered, or certified under 
                Federal or State laws or regulations to provide health 
                care services; or
                    ``(B) required to be so licensed, registered, or 
                certified but that is exempted by other statute or 
                regulation.

    ``(k) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section, $50,000,000 for the 5-fiscal 
year period beginning with fiscal year 2011.
    ``(l) Current State Efforts To Establish Alternative To Tort 
Litigation.--Nothing in this section shall be construed to limit any 
prior, current, or future efforts of any State to establish any 
alternative to tort litigation.
    ``(m) Rule of Construction.--Nothing in this section shall be 
construed as limiting states' authority over or responsibility for their 
state justice systems.''.

SEC. 10608. EXTENSION OF MEDICAL MALPRACTICE COVERAGE TO FREE CLINICS.

    (a) In General.--Section 224(o)(1) of the Public Health Service Act 
(42 U.S.C. 233(o)(1)) is amended by inserting after ``to an individual'' 
the following: ``, or an officer, governing board member, employee, or 
contractor of a free clinic shall in providing services for the free 
clinic,''.
    (b) <<NOTE: 42 USC 233 note.>> Effective Date.--The amendment made 
by this section shall take effect on the date of enactment of this Act 
and apply to any act or omission which occurs on or after that date.

SEC. 10609. <<NOTE: Drugs and drug abuse.>> LABELING CHANGES.

    Section 505(j) of the Federal Food, Drug, and Cosmetic Act (21 
U.S.C. 355(j)) is amended by adding at the end the following:
    ``(10)(A) <<NOTE: Deadlines.>> If the proposed labeling of a drug 
that is the subject of an application under this subsection differs from 
the listed drug due to a labeling revision described under clause (i), 
the drug that is the subject of such application shall, notwithstanding 
any other provision of this Act, be eligible for approval and shall not 
be considered misbranded under section 502 if--
            ``(i) the application is otherwise eligible for approval 
        under this subsection but for expiration of patent, an 
        exclusivity period, or of a delay in approval described in 
        paragraph (5)(B)(iii), and a revision to the labeling of the 
        listed drug has been approved by the Secretary within 60 days of 
        such expiration;
            ``(ii) the labeling revision described under clause (i) does 
        not include a change to the `Warnings' section of the labeling;

[[Page 124 STAT. 1015]]

            ``(iii) the sponsor of the application under this subsection 
        agrees to submit revised labeling of the drug that is the 
        subject of such application not later than 60 days after the 
        notification of any changes to such labeling required by the 
        Secretary; and
            ``(iv) such application otherwise meets the applicable 
        requirements for approval under this subsection.

    ``(B) <<NOTE: Determination.>> If, after a labeling revision 
described in subparagraph (A)(i), the Secretary determines that the 
continued presence in interstate commerce of the labeling of the listed 
drug (as in effect before the revision described in subparagraph (A)(i)) 
adversely impacts the safe use of the drug, no application under this 
subsection shall be eligible for approval with such labeling.''.

              Subtitle G--Provisions Relating to Title VIII

SEC. 10801. PROVISIONS RELATING TO TITLE VIII.

    (a) Title XXXII of the Public Health Service Act, as added by 
section 8002(a)(1), is amended--
            (1) in section 3203 <<NOTE: 42 USC 300ll-2.>> --
                    (A) in subsection (a)(1), by striking subparagraph 
                (E);
                    (B) in subsection (b)(1)(C)(i), by striking ``for 
                enrollment'' and inserting ``for reenrollment''; and
                    (C) in subsection (c)(1), by striking ``, as part of 
                their automatic enrollment in the CLASS program,''; and
            (2) in section 3204 <<NOTE: 42 USC 300ll-3.>> --
                    (A) in subsection (c)(2), by striking subparagraph 
                (A) and inserting the following:
                    ``(A) receives wages or income on which there is 
                imposed a tax under section 3101(a) or 3201(a) of the 
                Internal Revenue Code of 1986; or'';
                    (B) in subsection (d), by striking ``subparagraph 
                (B) or (C) of subsection (c)(1)'' and inserting 
                ``subparagraph (A) or (B) of subsection (c)(2)'';
                    (C) in subsection (e)(2)(A), by striking 
                ``subparagraph (A)'' and inserting ``paragraph (1)''; 
                and
                    (D) in subsection (g)(1), by striking ``has elected 
                to waive enrollment'' and inserting ``has not 
                enrolled''.

    (b) Section 8002 of this Act is amended in the heading for 
subsection (d), by striking ``Information on Supplemental Coverage'' and 
inserting ``CLASS Program Information''.
    (c) Section 6021(d)(2)(A)(iv) of the Deficit Reduction Act of 2005, 
as added by section 8002(d) of this Act, <<NOTE: 42 USC 1396p note.>> is 
amended by striking ``and coverage available'' and all that follows 
through ``that program,''.

               Subtitle H--Provisions Relating to Title IX

SEC. 10901. MODIFICATIONS TO EXCISE TAX ON HIGH COST EMPLOYER-SPONSORED 
            HEALTH COVERAGE.

    (a) Longshore Workers Treated as Employees Engaged in High-risk 
Professions.--Paragraph (3) of section 4980I(f) of the Internal Revenue 
Code of 1986, as added by section 9001 of this Act, <<NOTE: 26 USC 
4980I.>> is amended by inserting ``individuals whose primary

[[Page 124 STAT. 1016]]

work is longshore work (as defined in section 258(b) of the Immigration 
and Nationality Act (8 U.S.C. 1288(b)), determined without regard to 
paragraph (2) thereof),'' before ``and individuals engaged in the 
construction, mining''.

    (b) Exemption From High-cost Insurance Tax Includes Certain 
Additional Excepted Benefits.--Clause (i) of section 4980I(d)(1)(B) of 
the Internal Revenue Code of 1986, as added by section 9001 of this Act, 
is amended by striking ``section 9832(c)(1)(A)'' and inserting ``section 
9832(c)(1) (other than subparagraph (G) thereof)''.
    (c) <<NOTE: 26 USC 4980I note.>> Effective Date.--The amendments 
made by this section shall apply to taxable years beginning after 
December 31, 2012.

SEC. 10902. INFLATION ADJUSTMENT OF LIMITATION ON HEALTH FLEXIBLE 
            SPENDING ARRANGEMENTS UNDER CAFETERIA PLANS.

    (a) In General.--Subsection (i) of section 125 of the Internal 
Revenue Code of 1986, as added by section 9005 of this Act, <<NOTE: 26 
USC 125.>> is amended to read as follows:

    ``(i) Limitation on Health Flexible Spending Arrangements.--
            ``(1) In general.--For purposes of this section, if a 
        benefit is provided under a cafeteria plan through employer 
        contributions to a health flexible spending arrangement, such 
        benefit shall not be treated as a qualified benefit unless the 
        cafeteria plan provides that an employee may not elect for any 
        taxable year to have salary reduction contributions in excess of 
        $2,500 made to such arrangement.
            ``(2) Adjustment for inflation.-- <<NOTE: Effective 
        date.>> In the case of any taxable year beginning after December 
        31, 2011, the dollar amount in paragraph (1) shall be increased 
        by an amount equal to--
                    ``(A) such amount, multiplied by
                    ``(B) the cost-of-living adjustment determined under 
                section 1(f)(3) for the calendar year in which such 
                taxable year begins by substituting `calendar year 2010' 
                for `calendar year 1992' in subparagraph (B) thereof.
        If any increase determined under this paragraph is not a 
        multiple of $50, such increase shall be rounded to the next 
        lowest multiple of $50.''.

    (b) <<NOTE: 26 USC 125 note.>> Effective Date.--The amendment made 
by this section shall apply to taxable years beginning after December 
31, 2010.

SEC. 10903. MODIFICATION OF LIMITATION ON CHARGES BY CHARITABLE 
            HOSPITALS.

    (a) In General.--Subparagraph (A) of section 501(r)(5) of the 
Internal Revenue Code of 1986, as added by section 9007 of this 
Act, <<NOTE: 26 USC 501.>> is amended by striking ``the lowest amounts 
charged'' and inserting ``the amounts generally billed''.

    (b) <<NOTE: 26 USC 501 note.>> Effective Date.--The amendment made 
by this section shall apply to taxable years beginning after the date of 
the enactment of this Act.

SEC. 10904. MODIFICATION OF ANNUAL FEE ON MEDICAL DEVICE MANUFACTURERS 
            AND IMPORTERS.

    (a) In General.--Section 9009 of this Act <<NOTE: 26 USC 4001 note 
prec.>> is amended--
            (1) by striking ``2009'' in subsection (a)(1) and inserting 
        ``2010'',

[[Page 124 STAT. 1017]]

            (2) by inserting ``($3,000,000,000 after 2017)'' after 
        ``$2,000,000,000'', and
            (3) by striking ``2008'' in subsection (i) and inserting 
        ``2009''.

    (b) <<NOTE: 26 USC 4001 note prec.>> Effective Date.--The amendments 
made by this section shall take effect as if included in the enactment 
of section 9009.

SEC. 10905. <<NOTE: 26 USC 4001 note prec.>> MODIFICATION OF ANNUAL FEE 
            ON HEALTH INSURANCE PROVIDERS.

    (a) Determination of Fee Amount.--Subsection (b) of section 9010 of 
this Act is amended to read as follows:
    ``(b) Determination of Fee Amount.--
            ``(1) In general.--With respect to each covered entity, the 
        fee under this section for any calendar year shall be equal to 
        an amount that bears the same ratio to the applicable amount 
        as--
                    ``(A) the covered entity's net premiums written with 
                respect to health insurance for any United States health 
                risk that are taken into account during the preceding 
                calendar year, bears to
                    ``(B) the aggregate net premiums written with 
                respect to such health insurance of all covered entities 
                that are taken into account during such preceding 
                calendar year.
            ``(2) Amounts taken into account.--For purposes of paragraph 
        (1), the net premiums written with respect to health insurance 
        for any United States health risk that are taken into account 
        during any calendar year with respect to any covered entity 
        shall be determined in accordance with the following table:

 
  ``With respect to a covered entity's    The percentage of net premiums
    net premiums written during the        written that are taken into
        calendar year that are:                    account is:
 
  Not more than $25,000,000............  0 percent
  More than $25,000,000 but not more     50 percent
   than $50,000,000.
  More than $50,000,000................  100 percent.
 

            ``(3) Secretarial determination.--The Secretary shall 
        calculate the amount of each covered entity's fee for any 
        calendar year under paragraph (1). In calculating such amount, 
        the Secretary shall determine such covered entity's net premiums 
        written with respect to any United States health risk on the 
        basis of reports submitted by the covered entity under 
        subsection (g) and through the use of any other source of 
        information available to the Secretary.''.

    (b) Applicable Amount.--Subsection (e) of section 9010 of this Act 
is amended to read as follows:
    ``(e) Applicable Amount.--For purposes of subsection (b)(1), the 
applicable amount shall be determined in accordance with the following 
table:

``Calendar year                          Applicable amount
  2011.................................  $2,000,000,000
  2012.................................  $4,000,000,000

[[Page 124 STAT. 1018]]

 
  2013.................................  $7,000,000,000
  2014, 2015 and 2016..................  $9,000,000,000
  2017 and thereafter..................  $10,000,000,000.''.
 

    (c) Exemption From Annual Fee on Health Insurance for Certain 
Nonprofit Entities.--Section 9010(c)(2) of this Act is amended by 
striking ``or'' at the end of subparagraph (A), by striking the period 
at the end of subparagraph (B) and inserting a comma, and by adding at 
the end the following new subparagraphs:
                    ``(C) any entity--
                          ``(i)(I) which is incorporated as, is a wholly 
                      owned subsidiary of, or is a wholly owned 
                      affiliate of, a nonprofit corporation under a 
                      State law, or
                          ``(II) which is described in section 501(c)(4) 
                      of the Internal Revenue Code of 1986 and the 
                      activities of which consist of providing 
                      commercial-type insurance (within the meaning of 
                      section 501(m) of such Code),
                          ``(ii) the premium rate increases of which are 
                      regulated by a State authority,
                          ``(iii) which, as of the date of the enactment 
                      of this section, acts as the insurer of last 
                      resort in the State and is subject to State 
                      guarantee issue requirements, and
                          ``(iv) for which the medical loss ratio 
                      (determined in a manner consistent with the 
                      determination of such ratio under section 
                      2718(b)(1)(A) of the Public Health Service Act) 
                      with respect to the individual insurance market 
                      for such entity for the calendar year is not less 
                      than 100 percent,
                    ``(D) any entity--
                          ``(i)(I) which is incorporated as a nonprofit 
                      corporation under a State law, or
                          ``(II) which is described in section 501(c)(4) 
                      of the Internal Revenue Code of 1986 and the 
                      activities of which consist of providing 
                      commercial-type insurance (within the meaning of 
                      section 501(m) of such Code), and
                          ``(ii) for which the medical loss ratio (as so 
                      determined)--
                                    ``(I) with respect to each of the 
                                individual, small group, and large group 
                                insurance markets for such entity for 
                                the calendar year is not less than 90 
                                percent, and
                                    ``(II) with respect to all such 
                                markets for such entity for the calendar 
                                year is not less than 92 percent, or
                    ``(E) any entity--
                          ``(i) which is a mutual insurance company,
                          ``(ii) which for the period reported on the 
                      2008 Accident and Health Policy Experience Exhibit 
                      of the National Association of Insurance 
                      Commissioners had--
                                    ``(I) a market share of the insured 
                                population of a State of at least 40 but 
                                not more than 60 percent, and

[[Page 124 STAT. 1019]]

                                    ``(II) with respect to all markets 
                                described in subparagraph (D)(ii)(I), a 
                                medical loss ratio of not less than 90 
                                percent, and
                          ``(iii) with respect to annual payment dates 
                      in calendar years after 2011, for which the 
                      medical loss ratio (determined in a manner 
                      consistent with the determination of such ratio 
                      under section 2718(b)(1)(A) of the Public Health 
                      Service Act) with respect to all such markets for 
                      such entity for the preceding calendar year is not 
                      less than 89 percent (except that with respect to 
                      such annual payment date for 2012, the calculation 
                      under 2718(b)(1)(B)(ii) of such Act is determined 
                      by reference to the previous year, and with 
                      respect to such annual payment date for 2013, such 
                      calculation is determined by reference to the 
                      average for the previous 2 years).''.

    (d) Certain Insurance Exempted From Fee.--Paragraph (3) of section 
9010(h) of this Act is amended to read as follows:
            ``(3) Health insurance.--The term `health insurance' shall 
        not include--
                    ``(A) any insurance coverage described in paragraph 
                (1)(A) or (3) of section 9832(c) of the Internal Revenue 
                Code of 1986,
                    ``(B) any insurance for long-term care, or
                    ``(C) any medicare supplemental health insurance (as 
                defined in section 1882(g)(1) of the Social Security 
                Act).''.

    (e) Anti-avoidance Guidance.--Subsection (i) of section 9010 of this 
Act is amended by inserting ``and shall prescribe such regulations as 
are necessary or appropriate to prevent avoidance of the purposes of 
this section, including inappropriate actions taken to qualify as an 
exempt entity under subsection (c)(2)'' after ``section''.
    (f) Conforming Amendments.--
            (1) Section 9010(a)(1) of this Act is amended by striking 
        ``2009'' and inserting ``2010''.
            (2) Section 9010(c)(2)(B) of this Act is amended by striking 
        ``(except'' and all that follows through ``1323)''.
            (3) Section 9010(c)(3) of this Act is amended by adding at 
        the end the following new sentence: ``If any entity described in 
        subparagraph (C)(i)(I), (D)(i)(I), or (E)(i) of paragraph (2) is 
        treated as a covered entity by reason of the application of the 
        preceding sentence, the net premiums written with respect to 
        health insurance for any United States health risk of such 
        entity shall not be taken into account for purposes of this 
        section.''.
            (4) Section 9010(g)(1) of this Act is amended by striking 
        ``and third party administration agreement fees''.
            (5) Section 9010(j) of this Act is amended--
                    (A) by striking ``2008'' and inserting ``2009'', and
                    (B) by striking ``, and any third party 
                administration agreement fees received after such 
                date''.

    (g) Effective Date.--The amendments made by this section shall take 
effect as if included in the enactment of section 9010.

[[Page 124 STAT. 1020]]

SEC. 10906. MODIFICATIONS TO ADDITIONAL HOSPITAL INSURANCE TAX ON HIGH-
            INCOME TAXPAYERS.

    (a) FICA.--Section 3101(b)(2) of the Internal Revenue Code of 1986, 
as added by section 9015(a)(1) of this Act, <<NOTE: 26 USC 3101.>> is 
amended by striking ``0.5 percent'' and inserting ``0.9 percent''.

    (b) SECA.--Section 1401(b)(2)(A) of the Internal Revenue Code of 
1986, as added by section 9015(b)(1) of this Act, <<NOTE: 26 USC 
1401.>> is amended by striking ``0.5 percent'' and inserting ``0.9 
percent''.

    (c) <<NOTE: 26 USC 1401 note.>> Effective Date.--The amendments made 
by this section shall apply with respect to remuneration received, and 
taxable years beginning, after December 31, 2012.

SEC. 10907. EXCISE TAX ON INDOOR TANNING SERVICES IN LIEU OF ELECTIVE 
            COSMETIC MEDICAL PROCEDURES.

    (a) <<NOTE: 26 USC 5000B and note.>> In General.--The provisions of, 
and amendments made by, section 9017 of this Act are hereby deemed null, 
void, and of no effect.

    (b) Excise Tax on Indoor Tanning Services.--Subtitle D of the 
Internal Revenue Code of 1986, as amended by this Act, is amended by 
adding at the end the following new chapter:

                     ``CHAPTER 49--COSMETIC SERVICES

``Sec. 5000B. Imposition of tax on indoor tanning services.

``SEC. 5000B. <<NOTE: 26 USC 5000B.>> IMPOSITION OF TAX ON INDOOR 
            TANNING SERVICES.

    ``(a) In General.--There is hereby imposed on any indoor tanning 
service a tax equal to 10 percent of the amount paid for such service 
(determined without regard to this section), whether paid by insurance 
or otherwise.
    ``(b) Indoor Tanning Service.-- <<NOTE: Definitions.>> For purposes 
of this section--
            ``(1) In general.--The term `indoor tanning service' means a 
        service employing any electronic product designed to incorporate 
        1 or more ultraviolet lamps and intended for the irradiation of 
        an individual by ultraviolet radiation, with wavelengths in air 
        between 200 and 400 nanometers, to induce skin tanning.
            ``(2) Exclusion of phototherapy services.--Such term does 
        not include any phototherapy service performed by a licensed 
        medical professional.

    ``(c) Payment of Tax.--
            ``(1) In general.--The tax imposed by this section shall be 
        paid by the individual on whom the service is performed.
            ``(2) Collection.-- <<NOTE: Deadline.>> Every person 
        receiving a payment for services on which a tax is imposed under 
        subsection (a) shall collect the amount of the tax from the 
        individual on whom the service is performed and remit such tax 
        quarterly to the Secretary at such time and in such manner as 
        provided by the Secretary.
            ``(3) Secondary liability.--Where any tax imposed by 
        subsection (a) is not paid at the time payments for indoor 
        tanning services are made, then to the extent that such tax is 
        not collected, such tax shall be paid by the person who performs 
        the service.''.

    (c) Clerical Amendment.--The table of chapter for subtitle D of the 
Internal Revenue Code of 1986, as amended by this Act, is amended by 
inserting after the item relating to chapter 48 the following new item:

[[Page 124 STAT. 1021]]

                   ``Chapter 49--Cosmetic Services''.

    (d) <<NOTE: 26 USC 5000B note.>> Effective Date.--The amendments 
made by this section shall apply to services performed on or after July 
1, 2010.

SEC. 10908. EXCLUSION FOR ASSISTANCE PROVIDED TO PARTICIPANTS IN STATE 
            STUDENT LOAN REPAYMENT PROGRAMS FOR CERTAIN HEALTH 
            PROFESSIONALS.

    (a) In General.--Paragraph (4) of section 108(f) of the Internal 
Revenue Code of 1986 <<NOTE: 26 USC 108.>> is amended to read as 
follows:
            ``(4) Payments under national health service corps loan 
        repayment program and certain state loan repayment programs.--In 
        the case of an individual, gross income shall not include any 
        amount received under section 338B(g) of the Public Health 
        Service Act, under a State program described in section 338I of 
        such Act, or under any other State loan repayment or loan 
        forgiveness program that is intended to provide for the 
        increased availability of health care services in underserved or 
        health professional shortage areas (as determined by such 
        State).''.

    (b) <<NOTE: 26 USC 108 note.>> Effective Date.--The amendment made 
by this section shall apply to amounts received by an individual in 
taxable years beginning after December 31, 2008.

SEC. 10909. EXPANSION OF ADOPTION CREDIT AND ADOPTION ASSISTANCE 
            PROGRAMS.

    (a) Increase in Dollar Limitation.--
            (1) Adoption credit.--
                    (A) In general.--Paragraph (1) of section 23(b) of 
                the Internal Revenue Code of 1986 <<NOTE: 26 USC 
                23.>> (relating to dollar limitation) is amended by 
                striking ``$10,000'' and inserting ``$13,170''.
                    (B) Child with special needs.--Paragraph (3) of 
                section 23(a) of such Code (relating to $10,000 credit 
                for adoption of child with special needs regardless of 
                expenses) is amended--
                          (i) in the text by striking ``$10,000'' and 
                      inserting ``$13,170'', and
                          (ii) in the heading by striking ``$10,000'' 
                      and inserting ``$13,170''.
                    (C) Conforming amendment to inflation adjustment.--
                Subsection (h) of section 23 of such Code (relating to 
                adjustments for inflation) is amended to read as 
                follows:

    ``(h) <<NOTE: Effective dates.>> Adjustments for Inflation.--
            ``(1) Dollar limitations.--In the case of a taxable year 
        beginning after December 31, 2010, each of the dollar amounts in 
        subsections (a)(3) and (b)(1) shall be increased by an amount 
        equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined under 
                section 1(f)(3) for the calendar year in which the 
                taxable year begins, determined by substituting 
                `calendar year 2009' for `calendar year 1992' in 
                subparagraph (B) thereof.
        If any amount as increased under the preceding sentence is not a 
        multiple of $10, such amount shall be rounded to the nearest 
        multiple of $10.
            ``(2) Income limitation.--In the case of a taxable year 
        beginning after December 31, 2002, the dollar amount in 
        subsection (b)(2)(A)(i) shall be increased by an amount equal 
        to--

[[Page 124 STAT. 1022]]

                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined under 
                section 1(f)(3) for the calendar year in which the 
                taxable year begins, determined by substituting 
                `calendar year 2001' for `calendar year 1992' in 
                subparagraph (B) thereof.
        If any amount as increased under the preceding sentence is not a 
        multiple of $10, such amount shall be rounded to the nearest 
        multiple of $10.''.
            (2) Adoption assistance programs.--
                    (A) In general.--Paragraph (1) of section 137(b) of 
                the Internal Revenue Code of 1986 <<NOTE: 26 USC 
                137.>> (relating to dollar limitation) is amended by 
                striking ``$10,000'' and inserting ``$13,170''.
                    (B) Child with special needs.--Paragraph (2) of 
                section 137(a) of such Code (relating to $10,000 
                exclusion for adoption of child with special needs 
                regardless of expenses) is amended--
                          (i) in the text by striking ``$10,000'' and 
                      inserting ``$13,170'', and
                          (ii) in the heading by striking ``$10,000'' 
                      and inserting ``$13,170''.
                    (C) Conforming amendment to inflation adjustment.--
                Subsection (f) of section 137 of such Code (relating to 
                adjustments for inflation) is amended to read as 
                follows:

    ``(f) <<NOTE: Effective dates.>> Adjustments for Inflation.--
            ``(1) Dollar limitations.--In the case of a taxable year 
        beginning after December 31, 2010, each of the dollar amounts in 
        subsections (a)(2) and (b)(1) shall be increased by an amount 
        equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined under 
                section 1(f)(3) for the calendar year in which the 
                taxable year begins, determined by substituting 
                `calendar year 2009' for `calendar year 1992' in 
                subparagraph (B) thereof.
        If any amount as increased under the preceding sentence is not a 
        multiple of $10, such amount shall be rounded to the nearest 
        multiple of $10.
            ``(2) Income limitation.--In the case of a taxable year 
        beginning after December 31, 2002, the dollar amount in 
        subsection (b)(2)(A) shall be increased by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined under 
                section 1(f)(3) for the calendar year in which the 
                taxable year begins, determined by substituting 
                `calendar year 2001' for `calendar year 1992' in 
                subparagraph thereof.
        If any amount as increased under the preceding sentence is not a 
        multiple of $10, such amount shall be rounded to the nearest 
        multiple of $10.''.

    (b) Credit Made Refundable.--
            (1) Credit moved to subpart relating to refundable 
        credits.--The Internal Revenue Code of 1986 is amended--
                    (A) by redesignating section 23, <<NOTE: 26 USC 
                36C.>> as amended by subsection (a), as section 36C, and
                    (B) by moving section 36C (as so redesignated) from 
                subpart A of part IV of subchapter A of chapter 1 to the 
                location immediately before section 37 in subpart C of 
                part IV of subchapter A of chapter 1.

[[Page 124 STAT. 1023]]

            (2) Conforming amendments.--
                    (A) Section 24(b)(3)(B) of such Code <<NOTE: 26 USC 
                24.>> is amended by striking ``23,''.
                    (B) Section 25(e)(1)(C) of such Code <<NOTE: 26 USC 
                25.>> is amended by striking ``23,'' both places it 
                appears.
                    (C) Section 25A(i)(5)(B) of such Code <<NOTE: 26 USC 
                25A.>> is amended by striking ``23, 25D,'' and inserting 
                ``25D''.
                    (D) Section 25B(g)(2) of such Code <<NOTE: 26 USC 
                25B.>> is amended by striking ``23,''.
                    (E) Section 26(a)(1) of such Code <<NOTE: 26 USC 
                26.>> is amended by striking ``23,''.
                    (F) Section 30(c)(2)(B)(ii) of such Code <<NOTE: 26 
                USC 30.>> is amended by striking ``23, 25D,'' and 
                inserting ``25D''.
                    (G) Section 30B(g)(2)(B)(ii) of such Code <<NOTE: 26 
                USC 30B.>> is amended by striking ``23,''.
                    (H) Section 30D(c)(2)(B)(ii) of such Code <<NOTE: 26 
                USC 30D.>> is amended by striking ``sections 23 and'' 
                and inserting ``section''.
                    (I) Section 36C of such Code, <<NOTE: 26 USC 
                36C.>> as so redesignated, is amended--
                          (i) by striking paragraph (4) of subsection 
                      (b), and
                          (ii) by striking subsection (c).
                    (J) Section 137 of such Code <<NOTE: 26 USC 
                137.>> is amended--
                          (i) by striking ``section 23(d)'' in 
                      subsection (d) and inserting ``section 36C(d)'', 
                      and
                          (ii) by striking ``section 23'' in subsection 
                      (e) and inserting ``section 36C''.
                    (K) Section 904(i) of such Code <<NOTE: 26 USC 
                904.>> is amended by striking ``23,''.
                    (L) Section 1016(a)(26) <<NOTE: 26 USC 1016.>> is 
                amended by striking ``23(g)'' and inserting ``36C(g)''.
                    (M) Section 1400C(d) of such Code <<NOTE: 26 USC 
                1400C.>> is amended by striking ``23,''.
                    (N) Section 6211(b)(4)(A) of such Code <<NOTE: 26 
                USC 6211.>> is amended by inserting ``36C,'' before 
                ``53(e)''.
                    (O) The table of sections for subpart A of part IV 
                of subchapter A of chapter 1 of such Code of 1986 is 
                amended by striking the item relating to section 23.
                    (P) Paragraph (2) of section 1324(b) of title 31, 
                United States Code, as amended by this Act, is amended 
                by inserting ``36C,'' after ``36B,''.
                    (Q) The table of sections for subpart C of part IV 
                of subchapter A of chapter 1 of the Internal Revenue 
                Code of 1986, as amended by this Act, is amended by 
                inserting after the item relating to section 36B the 
                following new item:

``Sec. 36C. Adoption expenses.''.

    (c) <<NOTE: 26 USC 1 note.>> Application and Extension of EGTRRA 
Sunset.--Notwithstanding section 901 of the Economic Growth and Tax 
Relief Reconciliation Act of 2001, such section shall apply to the 
amendments made by this section and the amendments made by section 202 
of such Act by substituting ``December 31, 2011'' for ``December 31, 
2010'' in subsection (a)(1) thereof.

[[Page 124 STAT. 1024]]

    (d) Effective Date.--The amendments <<NOTE: 26 USC 1 note.>>  made 
by this section shall apply to taxable years beginning after December 
31, 2009.

    Approved March 23, 2010.

LEGISLATIVE HISTORY--H.R. 3590:
---------------------------------------------------------------------------

CONGRESSIONAL RECORD:
                                                        Vol. 155 (2009):
                                    Oct. 7, 8, considered and passed 
                                        House.
                                    Nov. 21, 30, Dec. 1-10, 13, 15, 16, 
                                        19-24, considered and passed 
                                        Senate, amended.
                                                        Vol. 156 (2010):
                                    Mar. 21, House concurred in Senate 
                                        amendments.
DAILY COMPILATION OF PRESIDENTIAL DOCUMENTS (2010):
            Mar. 23, Presidential remarks.

                                  <all>
