[From the U.S. Government Printing Office via GPO Access]
[DOCID: h3590pp.txt]
[Public Print]
December 24, 2009
Ordered to be printed as passed
In the Senate of the United States,
December 24, 2009.
Resolved, That the bill from the House of Representatives (H.R.
3590) entitled ``An Act to amend the Internal Revenue Code of 1986 to
modify the first-time homebuyers credit in the case of members of the
Armed Forces and certain other Federal employees, and for other
purposes.'', do pass with the following
AMENDMENTS:
Strike out all after the enacting clause and insert:
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Patient Protection
and Affordable Care Act''.
(b) Table of Contents.--The table of contents of this Act is as
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.
``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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 as sections
2725 through 2728, respectively;
(3) by redesignating sections 2711 through 2713 as sections
2731 through 2733, respectively;
(4) by redesignating sections 2721 through 2723 as sections
2735 through 2737, respectively; and
(5) by inserting after section 2702, the following:
``Subpart II--Improving Coverage
``SEC. 2711. 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. 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. 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 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. 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. DEVELOPMENT AND UTILIZATION OF UNIFORM EXPLANATION OF
COVERAGE DOCUMENTS AND STANDARDIZED DEFINITIONS.
``(a) In General.--Not later than 12 months after the date of
enactment of the Patient Protection and Affordable Care Act, the
Secretary shall develop standards for use by a group health plan and a
health insurance issuer offering group or individual health insurance
coverage, in compiling and providing to enrollees a summary of benefits
and coverage explanation that accurately describes the benefits and
coverage under the applicable plan or coverage. In developing such
standards, the Secretary shall consult with the National Association of
Insurance Commissioners (referred to in this section as the `NAIC'), a
working group composed of representatives of health insurance-related
consumer advocacy organizations, health insurance issuers, health care
professionals, patient advocates including those representing
individuals with limited English proficiency, and other qualified
individuals.
``(b) Requirements.--The standards for the summary of benefits and
coverage developed under subsection (a) shall provide for the
following:
``(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 than 24 months after the date
of enactment of the Patient Protection and Affordable Care Act,
each entity described in paragraph (3) shall provide, prior to
any enrollment restriction, a summary of benefits and coverage
explanation pursuant to the standards developed by the
Secretary under subsection (a) to--
``(A) an applicant at the time of application;
``(B) an enrollee prior to the time of enrollment
or reenrollment, as applicable; and
``(C) a policyholder or certificate holder at the
time of issuance of the policy or delivery of the
certificate.
``(2) Compliance.--An entity described in paragraph (3) is
deemed to be in compliance with this section if the summary of
benefits and coverage described in subsection (a) is provided
in paper or electronic form.
``(3) Entities in general.--An entity described in this
paragraph is--
``(A) a health insurance issuer (including a group
health plan that is not a self-insured plan) offering
health insurance coverage within the United States; or
``(B) in the case of a self-insured group health
plan, the plan sponsor or designated administrator of
the plan (as such terms are defined in section 3(16) of
the Employee Retirement Income Security Act of 1974).
``(4) Notice of modifications.--If a group health plan or
health insurance issuer makes any material modification in any
of the terms of the plan or coverage involved (as defined for
purposes of section 102 of the Employee Retirement Income
Security Act of 1974) that is not reflected in the most
recently provided summary of benefits and coverage, the plan or
issuer shall provide notice of such modification to enrollees
not later than 60 days prior to the date on which such
modification will become effective.
``(e) Preemption.--The standards developed under subsection (a)
shall preempt any related State standards that require a summary of
benefits and coverage that provides less information to consumers than
that required to be provided under this section, as determined by the
Secretary.
``(f) Failure To Provide.--An entity described in subsection (d)(3)
that willfully fails to provide the information required under this
section shall be subject to a fine of not more than $1,000 for each
such failure. Such failure with respect to each enrollee shall
constitute a separate offense for purposes of this subsection.
``(g) Development of Standard Definitions.--
``(1) In general.--The Secretary shall, by regulation,
provide for the development of standards for the definitions of
terms used in health insurance coverage, including the
insurance-related terms described in paragraph (2) and the
medical terms described in paragraph (3).
``(2) Insurance-related terms.--The insurance-related terms
described in this paragraph are premium, deductible, co-
insurance, co-payment, out-of-pocket limit, preferred provider,
non-preferred provider, out-of-network co-payments, UCR (usual,
customary and reasonable) fees, excluded services, grievance
and appeals, and such other terms as the Secretary determines
are important to define so that consumers may compare health
insurance coverage and understand the terms of their coverage.
``(3) Medical terms.--The medical terms described in this
paragraph are hospitalization, hospital outpatient care,
emergency room care, physician services, prescription drug
coverage, durable medical equipment, home health care, skilled
nursing care, rehabilitation services, hospice services,
emergency medical transportation, and such other terms as the
Secretary determines are important to define so that consumers
may compare the medical benefits offered by health insurance
and understand the extent of those medical benefits (or
exceptions to those benefits).
``SEC. 2716. 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. 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.--
``(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 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 DOWN THE COST OF HEALTH CARE COVERAGE.
``(a) Clear Accounting for Costs.--A health insurance issuer
offering group or individual health insurance coverage shall, with
respect to each plan year, submit to the Secretary a report concerning
the percentage of total premium revenue that such coverage expends--
``(1) on reimbursement for clinical services provided to
enrollees under such coverage;
``(2) for activities that improve health care quality; and
``(3) on all other non-claims costs, including an
explanation of the nature of such costs, and excluding State
taxes and licensing or regulatory fees.
The Secretary shall make reports received under this section available
to the public on the Internet website of the Department of Health and
Human Services.
``(b) Ensuring That Consumers Receive Value for Their Premium
Payments.--
``(1) Requirement to provide value for premium payments.--A
health insurance issuer offering group or individual health
insurance coverage shall, with respect to each plan year,
provide an annual rebate to each enrollee under such coverage,
on a pro rata basis, in an amount that is equal to the amount
by which premium revenue expended by the issuer on activities
described in subsection (a)(3) exceeds--
``(A) with respect to a health insurance issuer
offering coverage in the group market, 20 percent, or
such lower percentage as a State may by regulation
determine; or
``(B) with respect to a health insurance issuer
offering coverage in the individual market, 25 percent,
or such lower percentage as a State may by regulation
determine, except that such percentage shall be
adjusted to the extent the Secretary determines that
the application of such percentage with a State may
destabilize the existing individual market in such
State.
``(2) Consideration in setting percentages.--In determining
the percentages under paragraph (1), a State shall seek to
ensure adequate participation by health insurance issuers,
competition in the health insurance market in the State, and
value for consumers so that premiums are used for clinical
services and quality improvements.
``(3) Termination.--The provisions of this subsection shall
have no force or effect after December 31, 2013.
``(c) Standard Hospital Charges.--Each hospital operating within
the United States shall for each year establish (and update) and make
public (in accordance with guidelines developed by the Secretary) a
list of the hospital's standard charges for items and services provided
by the hospital, including for diagnosis-related groups established
under section 1886(d)(4) of the Social Security Act.
``(d) Definitions.--The Secretary, in consultation with the
National Association of Insurance Commissions, shall establish uniform
definitions for the activities reported under subsection (a).
``SEC. 2719. 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;
``(2) provide notice to enrollees, in a culturally and
linguistically appropriate manner, of available internal and
external appeals processes, and the availability of any
applicable office of health insurance consumer assistance or
ombudsman established under section 2793 to assist such
enrollees with the appeals processes;
``(3) allow an enrollee to review their file, to present
evidence and testimony as part of the appeals process, and to
receive continued coverage pending the outcome of the appeals
process; and
``(4) provide an external review process for such plans and
issuers that, at a minimum, includes the consumer protections
set forth in the Uniform External Review Model Act promulgated
by the National Association of Insurance Commissioners and is
binding on such plans.''.
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. HEALTH INSURANCE CONSUMER INFORMATION.
``(a) In General.--The Secretary shall award grants to States to
enable such States (or the Exchanges operating in such States) to
establish, expand, or provide support for--
``(1) offices of health insurance consumer assistance; or
``(2) health insurance ombudsman programs.
``(b) Eligibility.--
``(1) In general.--To be eligible to receive a grant, a
State shall designate an independent office of health insurance
consumer assistance, or an ombudsman, that, directly or in
coordination with State health insurance regulators and
consumer assistance organizations, receives and responds to
inquiries and complaints concerning health insurance coverage
with respect to Federal health insurance requirements and under
State law.
``(2) Criteria.--A State that receives a grant under this
section shall comply with criteria established by the Secretary
for carrying out activities under such grant.
``(c) Duties.--The office of health insurance consumer assistance
or health insurance ombudsman shall--
``(1) assist with the filing of complaints and appeals,
including filing appeals with the internal appeal or grievance
process of the group health plan or health insurance issuer
involved and providing information about the external appeal
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.
``(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. ENSURING THAT CONSUMERS GET VALUE FOR THEIR DOLLARS.
``(a) Initial Premium Review Process.--
``(1) In general.--The Secretary, in conjunction with
States, shall establish a process for the annual review,
beginning with the 2010 plan year and subject to subsection
(b)(2)(A), of unreasonable increases in premiums for health
insurance coverage.
``(2) Justification and disclosure.--The process
established under paragraph (1) shall require health insurance
issuers to submit to the Secretary and the relevant State a
justification for an unreasonable premium increase prior to the
implementation of the increase. Such issuers shall prominently
post such information on their Internet websites. The Secretary
shall ensure the public disclosure of information on such
increases and justifications for all health insurance issuers.
``(b) Continuing Premium Review Process.--
``(1) Informing secretary of premium increase patterns.--As
a condition of receiving a grant under subsection (c)(1), a
State, through its Commissioner of Insurance, shall--
``(A) provide the Secretary with information about
trends in premium increases in health insurance
coverage in premium rating areas in the State; and
``(B) make recommendations, as appropriate, to the
State Exchange about whether particular health
insurance issuers should be excluded from participation
in the Exchange based on a pattern or practice of
excessive or unjustified premium increases.
``(2) Monitoring by secretary of premium increases.--
``(A) In general.--Beginning with plan years
beginning in 2014, the Secretary, in conjunction with
the States and consistent with the provisions of
subsection (a)(2), shall monitor premium increases of
health insurance coverage offered through an Exchange
and outside of an Exchange.
``(B) Consideration in opening exchange.--In
determining under section 1312(f)(2)(B) of the Patient
Protection and Affordable Care Act whether to offer
qualified health plans in the large group market
through an Exchange, the State shall take into account
any excess of premium growth outside of the Exchange as
compared to the rate of such growth inside the
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. 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.
Subtitle B--Immediate Actions to Preserve and Expand Coverage
SEC. 1101. IMMEDIATE ACCESS TO INSURANCE FOR UNINSURED INDIVIDUALS WITH
A PREEXISTING CONDITION.
(a) In General.--Not later than 90 days after the date of enactment
of this Act, the Secretary shall establish a temporary high risk health
insurance pool program to provide health insurance coverage for
eligible individuals during the period beginning on the date on which
such program is established and ending on January 1, 2014.
(b) Administration.--
(1) In general.--The Secretary may carry out the program
under this section directly or through contracts to eligible
entities.
(2) Eligible entities.--To be eligible for a contract under
paragraph (1), an entity shall--
(A) be a State or nonprofit private entity;
(B) submit to the Secretary an application at such
time, in such manner, and containing such information
as the Secretary may require; and
(C) agree to utilize contract funding to establish
and administer a qualified high risk pool for eligible
individuals.
(3) Maintenance of effort.--To be eligible to enter into a
contract with the Secretary under this subsection, a State
shall agree not to reduce the annual amount the State expended
for the operation of one or more State high risk pools during
the year preceding the year in which such contract is entered
into.
(c) Qualified High Risk Pool.--
(1) In general.--Amounts made available under this section
shall be used to establish a qualified high risk pool that
meets the requirements of paragraph (2).
(2) Requirements.--A qualified high risk pool meets the
requirements of this paragraph if such pool--
(A) provides to all eligible individuals health
insurance coverage that does not impose any preexisting
condition exclusion with respect to such coverage;
(B) provides health insurance coverage--
(i) in which the issuer's share of the
total allowed costs of benefits provided under
such coverage is not less than 65 percent of
such costs; and
(ii) that has an out of pocket limit not
greater than the applicable amount described in
section 223(c)(2) of the Internal Revenue Code
of 1986 for the year involved, except that the
Secretary may modify such limit if necessary to
ensure the pool meets the actuarial value limit
under clause (i);
(C) ensures that with respect to the premium rate
charged for health insurance coverage offered to
eligible individuals through the high risk pool, such
rate shall--
(i) except as provided in clause (ii), vary
only as provided for under section 2701 of the
Public Health Service Act (as amended by this
Act and notwithstanding the date on which such
amendments take effect);
(ii) vary on the basis of age by a factor
of not greater than 4 to 1; and
(iii) be established at a standard rate for
a standard population; and
(D) meets any other requirements determined
appropriate by the Secretary.
(d) Eligible Individual.--An individual shall be deemed to be an
eligible individual for purposes of this section if such individual--
(1) is a citizen or national of the United States or is
lawfully present in the United States (as determined in
accordance with section 1411);
(2) has not been covered under creditable coverage (as
defined in section 2701(c)(1) of the Public Health Service Act
as in effect on the date of enactment of this Act) during the
6-month period prior to the date on which such individual is
applying for coverage through the high risk pool; and
(3) has a pre-existing condition, as determined in a manner
consistent with guidance issued by the Secretary.
(e) Protection Against Dumping Risk by Insurers.--
(1) In general.--The Secretary shall establish criteria for
determining whether health insurance issuers and employment-
based health plans have discouraged an individual from
remaining enrolled in prior coverage based on that individual's
health status.
(2) Sanctions.--An issuer or employment-based health plan
shall be responsible for reimbursing the program under this
section for the medical expenses incurred by the program for an
individual who, based on criteria established by the Secretary,
the Secretary finds was encouraged by the issuer to disenroll
from health benefits coverage prior to enrolling in coverage
through the program. The criteria shall include at least the
following circumstances:
(A) In the case of prior coverage obtained through
an employer, the provision by the employer, group
health plan, or the issuer of money or other financial
consideration for disenrolling from the coverage.
(B) In the case of prior coverage obtained directly
from an issuer or under an employment-based health
plan--
(i) the provision by the issuer or plan of
money or other financial consideration for
disenrolling from the coverage; or
(ii) in the case of an individual whose
premium for the prior coverage exceeded the
premium required by the program (adjusted based
on the age factors applied to the prior
coverage)--
(I) the prior coverage is a policy
that is no longer being actively
marketed (as defined by the Secretary)
by the issuer; or
(II) the prior coverage is a policy
for which duration of coverage form
issue or health status are factors that
can be considered in determining
premiums at renewal.
(3) Construction.--Nothing in this subsection shall be
construed as constituting exclusive remedies for violations of
criteria established under paragraph (1) or as preventing
States from applying or enforcing such paragraph or other
provisions under law with respect to health insurance issuers.
(f) Oversight.--The Secretary shall establish--
(1) an appeals process to enable individuals to appeal a
determination under this section; and
(2) procedures to protect against waste, fraud, and abuse.
(g) Funding; Termination of Authority.--
(1) In general.--There is appropriated to the Secretary,
out of any moneys in the Treasury not otherwise appropriated,
$5,000,000,000 to pay claims against (and the administrative
costs of) the high risk pool under this section that are in
excess of the amount of premiums collected from eligible
individuals enrolled in the high risk pool. Such funds shall be
available without fiscal year limitation.
(2) Insufficient funds.--If the Secretary estimates for any
fiscal year that the aggregate amounts available for the
payment of the expenses of the high risk pool will be less than
the actual amount of such expenses, the Secretary shall make
such adjustments as are necessary to eliminate such deficit.
(3) Termination of authority.--
(A) In general.--Except as provided in subparagraph
(B), coverage of eligible individuals under a high risk
pool in a State shall terminate on January 1, 2014.
(B) Transition to exchange.--The Secretary shall
develop procedures to provide for the transition of
eligible individuals enrolled in health insurance
coverage offered through a high risk pool established
under this section into qualified health plans offered
through an Exchange. Such procedures shall ensure that
there is no lapse in coverage with respect to the
individual and may extend coverage after the
termination of the risk pool involved, if the Secretary
determines necessary to avoid such a lapse.
(4) Limitations.--The Secretary has the authority to stop
taking applications for participation in the program under this
section to comply with the funding limitation provided for in
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. REINSURANCE FOR EARLY RETIREES.
(a) Administration.--
(1) In general.--Not later than 90 days after the date of
enactment of this Act, the Secretary shall establish a
temporary reinsurance program to provide reimbursement to
participating employment-based plans for a portion of the cost
of providing health insurance coverage to early retirees (and
to the eligible spouses, surviving spouses, and dependents of
such retirees) during the period beginning on the date on which
such program is established and ending on January 1, 2014.
(2) Reference.--In this section:
(A) Health benefits.--The term ``health benefits''
means medical, surgical, hospital, prescription drug,
and such other benefits as shall be determined by the
Secretary, whether self-funded, or delivered through
the purchase of insurance or otherwise.
(B) Employment-based plan.--The term ``employment-
based plan'' means a group health benefits plan that--
(i) is--
(I) maintained by one or more
current or former employers (including
without limitation any State or local
government or political subdivision
thereof), employee organization, a
voluntary employees' beneficiary
association, or a committee or board of
individuals appointed to administer
such plan; or
(II) a multiemployer plan (as
defined in section 3(37) of the
Employee Retirement Income Security Act
of 1974); and
(ii) provides health benefits to early
retirees.
(C) Early retirees.--The term ``early retirees''
means individuals who are age 55 and older but are not
eligible for coverage under title XVIII of the Social
Security Act, and who are not active employees of an
employer maintaining, or currently contributing to, the
employment-based plan or of any employer that has made
substantial contributions to fund such 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 by the Secretary.
(c) Payments.--
(1) Submission of claims.--
(A) In general.--A participating employment-based
plan shall submit claims for reimbursement to the
Secretary which shall contain documentation of the
actual costs of the items and services for which each
claim is being submitted.
(B) Basis for claims.--Claims submitted under
subparagraph (A) shall be based on the actual amount
expended by the participating employment-based plan
involved within the plan year for the health benefits
provided to an early retiree or the spouse, surviving
spouse, or dependent of such retiree. In determining
the amount of a claim for purposes of this subsection,
the participating employment-based plan shall take into
account any negotiated price concessions (such as
discounts, direct or indirect subsidies, rebates, and
direct or indirect remunerations) obtained by such plan
with respect to such health benefit. For purposes of
determining the amount of any such claim, the costs
paid by the early retiree or the retiree's spouse,
surviving spouse, or dependent in the form of
deductibles, co-payments, or co-insurance shall be
included in the amounts paid by the participating
employment-based plan.
(2) Program payments.--If the Secretary determines that a
participating employment-based plan has submitted a valid claim
under paragraph (1), the Secretary shall reimburse such plan
for 80 percent of that portion of the costs attributable to
such claim that exceed $15,000, subject to the limits contained
in paragraph (3).
(3) Limit.--To be eligible for reimbursement under the
program, a claim submitted by a participating employment-based
plan shall not be less than $15,000 nor greater than $90,000.
Such amounts shall be adjusted each fiscal year based on the
percentage increase in the Medical Care Component of the
Consumer Price Index for all urban consumers (rounded to the
nearest multiple of $1,000) for the year involved.
(4) Use of payments.--Amounts paid to a participating
employment-based plan under this subsection shall be used to
lower costs for the plan. Such payments may be used to reduce
premium costs for an entity described in subsection
(a)(2)(B)(i) or to reduce premium contributions, co-payments,
deductibles, co-insurance, or other out-of-pocket costs for
plan participants. Such payments shall not be used as general
revenues for an entity described in subsection (a)(2)(B)(i).
The Secretary shall develop a mechanism to monitor the
appropriate use of such payments by such entities.
(5) Payments not treated as income.--Payments received
under this subsection shall not be included in determining the
gross income of an entity described in subsection (a)(2)(B)(i)
that is maintaining or currently contributing to a
participating employment-based plan.
(6) Appeals.--The Secretary shall establish--
(A) an appeals process to permit participating
employment-based plans to appeal a determination of the
Secretary with respect to claims submitted under this
section; and
(B) procedures to protect against fraud, waste, and
abuse under the program.
(d) Audits.--The Secretary shall conduct annual audits of claims
data submitted by participating employment-based plans under this
section to ensure that such plans are in compliance with the
requirements of this section.
(e) Funding.--There is appropriated to the Secretary, out of any
moneys in the Treasury not otherwise appropriated, $5,000,000,000 to
carry out the program under this section. Such funds shall be available
without fiscal year limitation.
(f) Limitation.--The Secretary has the authority to stop taking
applications for participation in the program based on the availability
of funding under subsection (e).
SEC. 1103. IMMEDIATE 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 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.--
(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:
``(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 Secretary shall adopt
operating rules under this subsection, by regulation in
accordance with subparagraph (C), following
consideration of the operating rules developed by the
non-profit entity described in paragraph (2) and the
recommendation submitted by the National Committee on
Vital and Health Statistics under paragraph (3)(E) and
having ensured consultation with providers.
``(B) Adoption requirements; effective dates.--
``(i) Eligibility for a health plan and
health claim status.--The set of operating
rules for eligibility for a health plan and
health claim status transactions shall be
adopted not later than July 1, 2011, in a
manner ensuring that such operating rules are
effective not later than January 1, 2013, and
may allow for the use of a machine readable
identification card.
``(ii) Electronic funds transfers and
health care payment and remittance advice.--The
set of operating rules for electronic funds
transfers and health care payment and
remittance advice transactions shall--
``(I) allow for automated
reconciliation of the electronic
payment with the remittance advice; and
``(II) be adopted not later than
July 1, 2012, in a manner ensuring that
such operating rules are effective not
later than January 1, 2014.
``(iii) Health claims or equivalent
encounter information, enrollment and
disenrollment in a health plan, health plan
premium payments, referral certification and
authorization.--The set of operating rules for
health claims or equivalent encounter
information, enrollment and disenrollment in a
health plan, health plan premium payments, and
referral certification and authorization
transactions shall be adopted not later than
July 1, 2014, in a manner ensuring that such
operating rules are effective not later than
January 1, 2016.
``(C) Expedited rulemaking.--The Secretary shall
promulgate an interim final rule applying any standard
or operating rule recommended by the National Committee
on Vital and Health Statistics pursuant to paragraph
(3). The Secretary shall accept and consider public
comments on any interim final rule published under this
subparagraph for 60 days after the date of such
publication.
``(h) Compliance.--
``(1) Health plan certification.--
``(A) Eligibility for a health plan, health claim
status, electronic funds transfers, health care payment
and remittance advice.--Not later than December 31,
2013, a health plan shall file a statement with the
Secretary, in such form as the Secretary may require,
certifying that the data and information systems for
such plan are in compliance with any applicable
standards (as described under paragraph (7) of section
1171) and associated operating rules (as described
under paragraph (9) of such section) for electronic
funds transfers, eligibility for a health plan, health
claim status, and health care payment and remittance
advice, respectively.
``(B) Health claims or equivalent encounter
information, enrollment and disenrollment in a health
plan, health plan premium payments, health claims
attachments, referral certification and
authorization.--Not later than December 31, 2015, a
health plan shall file a statement with the Secretary,
in such form as the Secretary may require, certifying
that the data and information systems for such plan are
in compliance with any applicable standards and
associated operating rules for health claims or
equivalent encounter information, 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
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 health plan (including
entities described under paragraph (3)) shall file a
statement with the Secretary, in such form as the
Secretary may require, certifying that the data and
information systems for such plan are in compliance
with any applicable revised standards and associated
operating rules under this subsection for any interim
final rule promulgated by the Secretary under
subsection (i) that--
``(i) amends any standard or operating rule
described under paragraph (1) of this
subsection; or
``(ii) establishes a standard (as described
under subsection (a)(1)(B)) or associated
operating rules (as described under subsection
(i)(5)) for any other financial and
administrative transactions.
``(B) Date of compliance.--A health plan shall
comply with such requirements not later than the
effective date of the applicable standard or operating
rule.
``(6) Audits of health plans.--The Secretary shall conduct
periodic audits to ensure that health plans (including entities
described under paragraph (3)) are in compliance with any
standards and operating rules that are described under
paragraph (1) or subsection (i)(5).
``(i) Review and Amendment of Standards and Operating Rules.--
``(1) Establishment.--Not later than January 1, 2014, the
Secretary shall establish a review committee (as described
under paragraph (4)).
``(2) Evaluations and reports.--
``(A) Hearings.--Not later than April 1, 2014, and
not less than biennially thereafter, the Secretary,
acting through the review committee, shall conduct
hearings to evaluate and review the adopted standards
and operating rules established under this section.
``(B) Report.--Not later than July 1, 2014, and not
less than biennially thereafter, the review committee
shall provide recommendations for updating and
improving such standards and operating rules. The
review committee shall recommend a single set of
operating rules per transaction standard and maintain
the goal of creating as much uniformity as possible in
the implementation of the electronic standards.
``(3) Interim final rulemaking.--
``(A) In general.--Any recommendations to amend
adopted standards and operating rules that have been
approved by the review committee and reported to the
Secretary under paragraph (2)(B) shall be adopted by
the Secretary through promulgation of an interim final
rule not later than 90 days after receipt of the
committee's report.
``(B) Public comment.--
``(i) Public comment period.--The Secretary
shall accept and consider public comments on
any interim final rule published under this
paragraph for 60 days after the date of such
publication.
``(ii) Effective date.--The effective date
of any amendment to existing standards or
operating rules that is adopted through an
interim final rule published under this
paragraph shall be 25 months following the
close of such public comment period.
``(4) Review committee.--
``(A) Definition.--For the purposes of this
subsection, the term `review committee' means a
committee chartered by or within the Department of
Health and Human services that has been designated by
the Secretary to carry out this subsection, including--
``(i) the National Committee on Vital and
Health Statistics; or
``(ii) any appropriate committee as
determined by the 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 later than April 1, 2014,
and annually thereafter, the Secretary shall assess a
penalty fee (as determined under subparagraph (B))
against a health plan that has failed to meet the
requirements under subsection (h) with respect to
certification and documentation of compliance with--
``(i) the standards and associated
operating rules described under paragraph (1)
of such subsection; and
``(ii) a standard (as described under
subsection (a)(1)(B)) and associated operating
rules (as described under subsection (i)(5))
for any other financial and administrative
transactions.
``(B) Fee amount.--Subject to subparagraphs (C),
(D), and (E), the Secretary shall assess a penalty fee
against a health plan in the amount of $1 per covered
life until certification is complete. The penalty shall
be assessed per person covered by the plan for which
its data systems for major medical policies are not in
compliance and shall be imposed against the health plan
for each day that the plan is not in compliance with
the requirements under subsection (h).
``(C) Additional penalty for misrepresentation.--A
health plan that knowingly provides inaccurate or
incomplete information in a statement of certification
or documentation of compliance under subsection (h)
shall be subject to a penalty fee that is double the
amount that would otherwise be imposed under this
subsection.
``(D) Annual fee increase.--The amount of the
penalty fee imposed under this subsection shall be
increased on an annual basis by the annual percentage
increase in total national health care expenditures, as
determined by the Secretary.
``(E) Penalty limit.--A penalty fee assessed
against a health plan under this subsection shall not
exceed, on an annual basis--
``(i) an amount equal to $20 per covered
life under such plan; or
``(ii) an amount equal to $40 per covered
life under the plan if such plan has knowingly
provided inaccurate or incomplete information
(as described under subparagraph (C)).
``(F) Determination of covered individuals.--The
Secretary shall determine the number of covered lives
under a health plan based upon the most recent
statements and filings that have been submitted by such
plan to the Securities and Exchange 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 later than August 1, 2014, and
annually thereafter, the Secretary of the Treasury
shall provide notice to each health plan that has been
assessed a penalty fee by the Secretary under this
subsection. Such notice shall include the amount of the
penalty fee assessed by the Secretary and the due date
for payment of such fee to the Secretary of the
Treasury (as described in subparagraph (C)).
``(C) Payment due date.--Payment by a health plan
for a penalty fee assessed under this subsection shall
be made to the Secretary of the Treasury not later than
November 1, 2014, and annually thereafter.
``(D) Unpaid penalty fees.--Any amount of a penalty
fee assessed against a health plan under this
subsection for which payment has not been made by the
due date provided under subparagraph (C) shall be--
``(i) increased by the interest accrued on
such amount, as determined pursuant to the
underpayment rate established under section
6621 of the Internal Revenue Code of 1986; 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 of Rules.--
(1) Unique health plan identifier.--The Secretary shall
promulgate a final rule to establish a unique health plan
identifier (as described in section 1173(b) of the Social
Security Act (42 U.S.C. 1320d-2(b))) based on the input of the
National Committee on Vital and Health Statistics. The
Secretary may do so on an interim final basis and such rule
shall be effective not later than October 1, 2012.
(2) Electronic funds transfer.--The Secretary shall
promulgate a final rule to establish a standard for electronic
funds transfers (as described in section 1173(a)(2)(J) of the
Social Security Act, as added by subsection (b)(2)(A)). The
Secretary may do so on an interim final basis and shall adopt
such standard not later than January 1, 2012, in a manner
ensuring that such standard is 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 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;
(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. 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 transferring such section (as amended by
subparagraph (A)) so as to appear after the section 2703 added
by paragraph (4);
(3)(A) in section 2702 (42 U.S.C. 300gg-1)--
(i) by striking the section heading and all that
follows through subsection (a);
(ii) in subsection (b)--
(I) by striking ``health insurance issuer
offering health insurance coverage in
connection with a group health plan'' each
place that such appears and inserting ``health
insurance issuer offering group or individual
health insurance coverage''; and
(II) in paragraph (2)(A)--
(aa) by inserting ``or individual''
after ``employer''; and
(bb) by inserting ``or individual
health coverage, as the case may be''
before the semicolon; and
(iii) in subsection (e)--
(I) by striking ``(a)(1)(F)'' and inserting
``(a)(6)'';
(II) by striking ``2701'' and inserting
``2704''; and
(III) by striking ``2721(a)'' and inserting
``2735(a)''; and
(B) by transferring such section (as amended by
subparagraph (A)) to appear after section 2705(a) as
added by paragraph (4); and
(4) by inserting after the subpart heading (as added by
paragraph (1)) the following:
``SEC. 2701. FAIR 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 age bands.--The Secretary, in
consultation with the National Association of Insurance
Commissioners, shall define the permissible age bands for
rating purposes under paragraph (1)(A)(iii).
``(4) Application of variations based on age or tobacco
use.--With respect to family coverage under a group health plan
or health insurance coverage, the rating variations permitted
under clauses (iii) and (iv) of paragraph (1)(A) shall be
applied based on the portion of the premium that is
attributable to each family member covered under the plan or
coverage.
``(5) Special rule for large group market.--If a State
permits health insurance issuers that offer coverage in the
large group market in the State to offer such coverage through
the State Exchange (as provided for under section 1312(f)(2)(B)
of the Patient Protection and Affordable Care Act), the
provisions of this subsection shall apply to all coverage
offered in such market in the State.
``SEC. 2702. GUARANTEED 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 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 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 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 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.
``(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 later than July 1, 2014, the
Secretary, in consultation with the Secretary of the Treasury
and the Secretary of Labor, shall establish a 10-State
demonstration project under which participating States shall
apply the provisions of subsection (j) to programs of health
promotion offered by a health insurance issuer that offers
health insurance coverage in the individual market in such
State.
``(2) Expansion of demonstration project.--If the
Secretary, in consultation with the Secretary of the Treasury
and the Secretary of Labor, determines that the demonstration
project described in paragraph (1) is effective, such
Secretaries may, beginning on July 1, 2017 expand such
demonstration project to include additional participating
States.
``(3) Requirements.--
``(A) Maintenance of coverage.--The Secretary, in
consultation with the Secretary of the Treasury and the
Secretary of Labor, shall not approve the participation
of a State in the demonstration project under this
section unless the Secretaries determine that the
State's project is designed in a manner that--
``(i) will not result in any decrease in
coverage; and
``(ii) will not increase the cost to the
Federal Government in providing credits under
section 36B of the Internal Revenue Code of
1986 or cost-sharing assistance under section
1402 of the Patient Protection and Affordable
Care Act.
``(B) Other requirements.--States that participate
in the demonstration project under this subsection--
``(i) may permit premium discounts or
rebates or the modification of otherwise
applicable copayments or deductibles for
adherence to, or participation in, a reasonably
designed program of health promotion and
disease prevention;
``(ii) shall ensure that requirements of
consumer protection are met in programs of
health promotion in the individual market;
``(iii) shall require verification from
health insurance issuers that offer health
insurance coverage in the individual market of
such State that premium discounts--
``(I) do not create undue burdens
for individuals insured in the
individual market;
``(II) do not lead to cost
shifting; and
``(III) are not a subterfuge for
discrimination;
``(iv) shall ensure that consumer data is
protected in accordance with the requirements
of section 264(c) of the Health Insurance
Portability and Accountability Act of 1996 (42
U.S.C. 1320d-2 note); and
``(v) shall ensure and demonstrate to the
satisfaction of the Secretary that the
discounts or other rewards provided under the
project reflect the expected level of
participation in the wellness program involved
and the anticipated effect the program will
have on utilization or medical claim costs.
``(m) Report.--
``(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 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 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.
``SEC. 2707. COMPREHENSIVE 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 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 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).
(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 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. 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 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;
(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 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.
(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 Secretary shall ensure that
the scope of the essential health benefits under
paragraph (1) is equal to the scope of benefits
provided under a typical employer plan, as determined
by the Secretary. To inform this determination, the
Secretary of Labor shall conduct a survey of employer-
sponsored coverage to determine the benefits typically
covered by employers, including multiemployer plans,
and provide a report on such survey to the Secretary.
(B) Certification.--In defining the essential
health benefits described in paragraph (1), and in
revising the benefits under paragraph (4)(H), the
Secretary shall submit a report to the appropriate
committees of Congress containing a certification from
the Chief Actuary of the Centers for Medicare &
Medicaid Services that such essential health benefits
meet the limitation described in paragraph (2).
(3) Notice and hearing.--In defining the essential health
benefits described in paragraph (1), and in revising the
benefits under paragraph (4)(H), the Secretary shall provide
notice and an opportunity for public comment.
(4) Required elements for consideration.--In defining the
essential health benefits under paragraph (1), the Secretary
shall--
(A) ensure that such essential health benefits
reflect an appropriate balance among the categories
described in such subsection, so that benefits are not
unduly weighted toward any category;
(B) not make coverage decisions, determine
reimbursement rates, establish incentive programs, or
design benefits in ways that discriminate against
individuals because of their age, disability, or
expected length of life;
(C) take into account the health care needs of
diverse segments of the population, including women,
children, persons with disabilities, and other groups;
(D) ensure that health benefits established as
essential not be subject to denial to individuals
against their wishes on the basis of the individuals'
age or expected length of life or of the individuals'
present or predicted disability, degree of medical
dependency, or quality of life;
(E) provide that a qualified health plan shall not
be treated as providing coverage for the essential
health benefits described in paragraph (1) unless the
plan provides that--
(i) coverage for emergency department
services will be provided without imposing any
requirement under the plan for prior
authorization of services or any limitation on
coverage where the provider of services does
not have a contractual relationship with the
plan for the providing of services that is more
restrictive than the requirements or
limitations that apply to emergency department
services received from providers who do have
such a contractual relationship with the plan;
and
(ii) if such services are provided out-of-
network, the cost-sharing requirement
(expressed as a copayment amount or coinsurance
rate) is the same requirement that would apply
if such services were provided in-network;
(F) provide that if a plan described in section
1311(b)(2)(B)(ii) (relating to stand-alone dental
benefits plans) is offered through an Exchange, another
health plan offered through such Exchange shall not
fail to be treated as a qualified health plan solely
because the plan does not offer coverage of benefits
offered through the stand-alone plan that are otherwise
required under paragraph (1)(J); and
(G) periodically review the essential health
benefits under paragraph (1), and provide a report to
Congress and the public that contains--
(i) an assessment of whether enrollees are
facing any difficulty accessing needed services
for reasons of coverage or cost;
(ii) an assessment of whether the essential
health benefits needs to be modified or updated
to account for changes in medical evidence or
scientific advancement;
(iii) information on how the essential
health benefits will be modified to address any
such gaps in access or changes in the evidence
base;
(iv) an assessment of the potential of
additional or expanded benefits to increase
costs and the interactions between the addition
or expansion of benefits and reductions in
existing benefits to meet actuarial limitations
described in paragraph (2); and
(H) periodically update the essential health
benefits under paragraph (1) to address any gaps in
access to coverage or changes in the evidence base the
Secretary identifies in the review conducted under
subparagraph (G).
(5) Rule of construction.--Nothing in this title shall be
construed to prohibit a health plan from providing benefits in
excess of the essential health benefits described in this
subsection.
(c) Requirements Relating to Cost-Sharing.--
(1) Annual limitation on cost-sharing.--
(A) 2014.--The cost-sharing incurred under a health
plan with respect to self-only coverage or coverage
other than self-only coverage for a plan year beginning
in 2014 shall not exceed the dollar amounts in effect
under section 223(c)(2)(A)(ii) of the Internal Revenue
Code of 1986 for self-only and family coverage,
respectively, for taxable years beginning in 2014.
(B) 2015 and later.--In the case of any plan year
beginning in a calendar year after 2014, the limitation
under this paragraph shall--
(i) in the case of self-only coverage, be
equal to the dollar amount under subparagraph
(A) for self-only coverage for plan years
beginning in 2014, increased by an amount equal
to the product of that amount and the premium
adjustment percentage under paragraph (4) for
the calendar year; and
(ii) in the case of other coverage, twice
the amount in effect under clause (i).
If the amount of any increase under clause (i) is not a
multiple of $50, such increase shall be rounded to the
next lowest multiple of $50.
(2) Annual limitation on deductibles for employer-sponsored
plans.--
(A) In general.--In the case of a health plan
offered in the small group market, the deductible under
the plan shall not exceed--
(i) $2,000 in the case of a plan covering a
single individual; and
(ii) $4,000 in the case of any other plan.
The amounts under clauses (i) and (ii) may be increased
by the maximum amount of reimbursement which is
reasonably available to a participant under a flexible
spending arrangement described in section 106(c)(2) of
the Internal Revenue Code of 1986 (determined without
regard to any salary reduction arrangement).
(B) Indexing of limits.--In the case of any plan
year beginning in a calendar year after 2014--
(i) the dollar amount under subparagraph
(A)(i) shall be increased by an amount equal to
the product of that amount and the premium
adjustment percentage under paragraph (4) for
the calendar year; and
(ii) the dollar amount under subparagraph
(A)(ii) shall be increased to an amount equal
to twice the amount in effect under
subparagraph (A)(i) for plan years beginning in
the calendar year, determined after application
of clause (i).
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.
(B) Exceptions.--Such term does not include
premiums, balance billing amounts for non-network
providers, or spending for non-covered services.
(4) Premium adjustment percentage.--For purposes of
paragraphs (1)(B)(i) and (2)(B)(i), the premium adjustment
percentage for any calendar year is the percentage (if any) by
which the average per capita premium for health insurance
coverage in the United States for the preceding calendar year
(as estimated by the Secretary no later than October 1 of such
preceding calendar year) exceeds such average per capita
premium for 2013 (as determined by the Secretary).
(d) Levels of Coverage.--
(1) Levels of coverage defined.--The levels of coverage
described in this subsection are as follows:
(A) Bronze level.--A plan in the bronze level shall
provide a level of coverage that is designed to provide
benefits that are actuarially equivalent to 60 percent
of the full actuarial value of the benefits provided
under the plan.
(B) Silver level.--A plan in the silver level shall
provide 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.--The Secretary shall develop
guidelines to provide for a de minimis variation in the
actuarial valuations used in determining the level of coverage
of a plan to account for differences in actuarial estimates.
(4) Plan reference.--In this title, any reference to a
bronze, silver, gold, or platinum plan shall be treated as a
reference to a qualified health plan providing a bronze,
silver, gold, or platinum level of coverage, as the case may
be.
(e) Catastrophic Plan.--
(1) In general.--A health plan not providing a bronze,
silver, gold, or platinum level of coverage shall be treated as
meeting the requirements of subsection (d) with respect to any
plan year if--
(A) the only individuals who are eligible to enroll
in the plan are individuals described in paragraph (2);
and
(B) the plan provides--
(i) except as provided in clause (ii), the
essential health benefits determined under
subsection (b), except that the plan provides
no benefits for any plan year until the
individual has incurred cost-sharing expenses
in an amount equal to the annual limitation in
effect under subsection (c)(1) for the plan
year (except as provided for in section 2713);
and
(ii) coverage for at least three primary
care visits.
(2) Individuals eligible for enrollment.--An individual is
described in this paragraph for any plan year if the
individual--
(A) has not attained the age of 30 before the
beginning of the plan year; or
(B) has a certification in effect for any plan year
under this title that the individual is exempt from the
requirement under section 5000A of the Internal Revenue
Code of 1986 by reason of--
(i) section 5000A(e)(1) of such Code
(relating to individuals without affordable
coverage); or
(ii) section 5000A(e)(5) of such Code
(relating to individuals with hardships).
(3) Restriction to individual market.--If a health
insurance issuer offers a health plan described in this
subsection, the issuer may only offer the plan in the
individual market.
(f) Child-only Plans.--If a qualified health plan is offered
through the Exchange in any level of coverage specified under
subsection (d), the issuer shall also offer that plan through the
Exchange in that level as a plan in which the only enrollees are
individuals who, as of the beginning of a plan year, have not attained
the age of 21, and such plan shall be treated as a qualified health
plan.
SEC. 1303. 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
(ii) the issuer of a qualified health plan
shall determine whether or not the plan
provides coverage of services described in
subparagraph (B)(i) or (B)(ii) as part of such
benefits for the plan year.
(B) Abortion services.--
(i) Abortions for which public funding is
prohibited.--The services described in this
clause are abortions for which the expenditure
of Federal funds appropriated for the
Department of Health and Human Services is not
permitted, based on the law as in effect as of
the date that is 6 months before the beginning
of the plan year involved.
(ii) Abortions for which public funding is
allowed.--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 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) Actuarial value of optional service coverage.--
(i) In general.--The Secretary shall
estimate the basic per enrollee, per month
cost, determined on an average actuarial basis,
for including coverage under a qualified health
plan of the services described in paragraph
(1)(B)(i).
(ii) Considerations.--In making such
estimate, the Secretary--
(I) may take into account the
impact on overall costs of the
inclusion of such coverage, but may not
take into account any cost reduction
estimated to result from such services,
including prenatal care, delivery, or
postnatal care;
(II) shall estimate such costs as
if such coverage were included for the
entire population covered; and
(III) may not estimate such a cost
at less than $1 per enrollee, per
month.
(3) Provider conscience protections.--No individual health
care provider or health care facility may be discriminated
against because of a willingness or an unwillingness, if doing
so is contrary to the religious or moral beliefs of the
provider or facility, to provide, pay for, provide coverage of,
or refer for abortions.
(b) Application of State and Federal Laws Regarding Abortion.--
(1) No preemption of state laws regarding abortion.--
Nothing in this Act shall be construed to preempt or otherwise
have any effect on State laws regarding the prohibition of (or
requirement of) coverage, funding, or procedural requirements
on abortions, including parental notification or consent for
the performance of an abortion on a minor.
(2) No effect on federal laws regarding abortion.--
(A) In general.--Nothing in this Act shall be
construed to have any effect on Federal laws
regarding--
(i) conscience protection;
(ii) willingness or refusal to provide
abortion; and
(iii) discrimination on the basis of the
willingness or refusal to provide, pay for,
cover, or refer for abortion or to provide or
participate in training to provide 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. 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 (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;
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.
PART II--CONSUMER CHOICES AND INSURANCE COMPETITION THROUGH HEALTH
BENEFIT EXCHANGES
SEC. 1311. AFFORDABLE CHOICES OF HEALTH BENEFIT PLANS.
(a) Assistance to States to Establish American Health Benefit
Exchanges.--
(1) Planning and establishment grants.--There shall be
appropriated to the Secretary, out of any moneys in the
Treasury not otherwise appropriated, an amount necessary to
enable the Secretary to make awards, not later than 1 year
after the date of enactment of this Act, to States in the
amount specified in paragraph (2) for the uses described in
paragraph (3).
(2) Amount specified.--For each fiscal year, the Secretary
shall determine the total amount that the Secretary will make
available to each State for grants under this subsection.
(3) Use of funds.--A State shall use amounts awarded under
this subsection for activities (including planning activities)
related to establishing an American Health Benefit Exchange, as
described in subsection (b).
(4) Renewability of grant.--
(A) In general.--Subject to subsection (d)(4), the
Secretary may renew a grant awarded under paragraph (1)
if the State recipient of such grant--
(i) is making progress, as determined by
the Secretary, toward--
(I) establishing an Exchange; and
(II) implementing the reforms
described in subtitles A and C (and the
amendments made by such subtitles); and
(ii) is meeting such other benchmarks as
the Secretary may establish.
(B) Limitation.--No grant shall be awarded under
this subsection after January 1, 2015.
(5) Technical assistance to facilitate participation in
shop exchanges.--The Secretary shall provide technical
assistance to States to facilitate the participation of
qualified small businesses in such States in SHOP Exchanges.
(b) American Health Benefit Exchanges.--
(1) In general.--Each State shall, not later than January
1, 2014, establish an American Health Benefit Exchange
(referred to in this title as an ``Exchange'') for the State
that--
(A) facilitates the purchase of qualified health
plans;
(B) provides for the establishment of a Small
Business Health Options Program (in this title referred
to as a ``SHOP Exchange'') that is designed to assist
qualified employers in the State who are small
employers in facilitating the enrollment of their
employees in qualified health plans offered in the
small group market in the State; and
(C) meets the requirements of subsection (d).
(2) Merger of individual and shop exchanges.--A State may
elect to provide only one Exchange in the State for providing
both Exchange and SHOP Exchange services to both qualified
individuals and qualified small employers, but only if the
Exchange has adequate resources to assist such individuals and
employers.
(c) Responsibilities of the Secretary.--
(1) In general.--The Secretary shall, by regulation,
establish criteria for the certification of health plans as
qualified health plans. Such criteria shall require that, to be
certified, a plan shall, at a minimum--
(A) meet marketing requirements, and not employ
marketing practices or benefit designs that have the
effect of discouraging the enrollment in such plan by
individuals with significant health needs;
(B) ensure a sufficient choice of providers (in a
manner consistent with applicable network adequacy
provisions under section 2702(c) of the Public Health
Service Act), and provide information to enrollees and
prospective enrollees on the availability of in-network
and out-of-network providers;
(C) include within health insurance plan networks
those essential community providers, where available,
that serve predominately low-income, medically-
underserved individuals, such as health care providers
defined in section 340B(a)(4) of the Public Health
Service Act and providers described in section
1927(c)(1)(D)(i)(IV) of the Social Security Act as set
forth by section 221 of Public Law 111-8, except that
nothing in this subparagraph shall be construed to
require any health plan to provide coverage for any
specific medical procedure;
(D)(i) be accredited with respect to local
performance on clinical quality measures such as the
Healthcare Effectiveness Data and Information Set,
patient experience ratings on a standardized Consumer
Assessment of Healthcare Providers and Systems survey,
as well as consumer access, utilization management,
quality assurance, provider credentialing, complaints
and appeals, network adequacy and access, and patient
information programs by any entity recognized by the
Secretary for the accreditation of health insurance
issuers or plans (so long as any such entity has
transparent and rigorous methodological and scoring
criteria); or
(ii) receive such accreditation within a period
established by an Exchange for such accreditation that
is applicable to all qualified health plans;
(E) implement a quality improvement strategy
described in subsection (g)(1);
(F) utilize a uniform enrollment form that
qualified individuals and qualified employers may use
(either electronically or on paper) in enrolling in
qualified health plans offered through such Exchange,
and that takes into account criteria that the National
Association of Insurance Commissioners develops and
submits to the Secretary;
(G) utilize the standard format established for
presenting health benefits plan options; and
(H) provide information to enrollees and
prospective enrollees, and to each Exchange in which
the plan is offered, on any quality measures for health
plan performance endorsed under section 399JJ of the
Public Health Service Act, as applicable.
(2) Rule of construction.--Nothing in paragraph (1)(C)
shall be construed to require a qualified health plan to
contract with a provider described in such paragraph if such
provider refuses to accept the generally applicable payment
rates of such plan.
(3) Rating system.--The Secretary shall develop a rating
system that would rate qualified health plans offered through
an Exchange in each benefits level on the basis of the relative
quality and price. The Exchange shall include the quality
rating in the information provided to individuals and employers
through the Internet portal established under paragraph (4).
(4) Enrollee satisfaction system.--The Secretary shall
develop an enrollee satisfaction survey system that would
evaluate the level of enrollee satisfaction with qualified
health plans offered through an Exchange, for each such
qualified health plan that had more than 500 enrollees in the
previous year. The Exchange shall include enrollee satisfaction
information in the information provided to individuals and
employers through the Internet portal established under
paragraph (5) in a manner that allows individuals to easily
compare enrollee satisfaction levels between comparable 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) an initial open enrollment, as determined by
the Secretary (such determination to be made not later
than July 1, 2012);
(B) annual open enrollment periods, as determined
by the Secretary for calendar years after the initial
enrollment period;
(C) special enrollment periods specified in section
9801 of the Internal Revenue Code of 1986 and other
special enrollment periods under circumstances similar
to such periods under part D of title XVIII of the
Social Security Act; and
(D) special monthly enrollment periods for Indians
(as defined in section 4 of the Indian Health Care
Improvement Act).
(d) Requirements.--
(1) In general.--An Exchange shall be a governmental agency
or nonprofit entity that is established by a State.
(2) Offering of coverage.--
(A) In general.--An Exchange shall make available
qualified health plans to qualified individuals and
qualified employers.
(B) Limitation.--
(i) In general.--An Exchange may not make
available any health plan that is not a
qualified health plan.
(ii) Offering of stand-alone dental
benefits.--Each Exchange within a State shall
allow an issuer of a plan that only provides
limited scope dental benefits meeting the
requirements of section 9832(c)(2)(A) of the
Internal Revenue Code of 1986 to offer the plan
through the Exchange (either separately or in
conjunction with a qualified health plan) if
the plan provides pediatric dental benefits
meeting the requirements of section
1302(b)(1)(J)).
(3) Rules relating to additional required benefits.--
(A) In general.--Except as provided in subparagraph
(B), an Exchange may make available a qualified health
plan notwithstanding any provision of law that may
require benefits other than the essential health
benefits specified under section 1302(b).
(B) States may require additional benefits.--
(i) In general.--Subject to the
requirements of clause (ii), a State may
require that a qualified health plan offered in
such State offer benefits in addition to the
essential health benefits specified under
section 1302(b).
(ii) State must assume cost.--A State shall
make payments to or on behalf of an individual
eligible for the premium tax credit under
section 36B of the Internal Revenue Code of
1986 and any cost-sharing reduction under
section 1402 to defray the cost to the
individual of any additional benefits described
in clause (i) which are not eligible for such
credit or reduction under section 36B(b)(3)(D)
of such Code and section 1402(c)(4).
(4) Functions.--An Exchange shall, at a minimum--
(A) implement procedures for the certification,
recertification, and decertification, consistent with
guidelines developed by the Secretary under subsection
(c), of health plans as qualified health plans;
(B) provide for the operation of a toll-free
telephone hotline to respond to requests for
assistance;
(C) maintain an Internet website through which
enrollees and prospective enrollees of qualified health
plans may obtain standardized comparative information
on such plans;
(D) assign a rating to each qualified health plan
offered through such Exchange in accordance with the
criteria developed by the Secretary under subsection
(c)(3);
(E) utilize a standardized format for presenting
health benefits plan options in the Exchange, including
the use of the uniform outline of coverage established
under section 2715 of the Public Health Service Act;
(F) in accordance with section 1413, inform
individuals of eligibility requirements for the
medicaid program under title XIX of the Social Security
Act, the CHIP program under title XXI of such Act, or
any applicable State or local public program and if
through screening of the application by the Exchange,
the Exchange determines that such individuals are
eligible for any such program, enroll such individuals
in such program;
(G) establish and make available by electronic
means a calculator to determine the actual cost of
coverage after the application of any premium tax
credit under section 36B of the Internal Revenue Code
of 1986 and any cost-sharing reduction under section
1402;
(H) subject to section 1411, grant a certification
attesting that, for purposes of the individual
responsibility penalty under section 5000A of the
Internal Revenue Code of 1986, an individual is exempt
from the individual requirement or from the penalty
imposed by such section because--
(i) there is no affordable qualified health
plan available through the Exchange, or the
individual's employer, covering the individual;
or
(ii) the individual meets the requirements
for any other such exemption from the
individual responsibility requirement or
penalty;
(I) transfer to the Secretary of the Treasury--
(i) a list of the individuals who are
issued a certification under subparagraph (H),
including the name and taxpayer identification
number of each individual;
(ii) the name and taxpayer identification
number of each individual who was an employee
of an employer but who was determined to be
eligible for the premium tax credit under
section 36B of the Internal Revenue Code of
1986 because--
(I) the employer did not provide
minimum essential 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.--
(A) No federal funds for continued operations.--In
establishing an Exchange under this section, the State
shall ensure that such Exchange is self-sustaining
beginning on January 1, 2015, including allowing the
Exchange to charge assessments or user fees to
participating health insurance issuers, or to otherwise
generate funding, to support its 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.--An Exchange shall publish the
average costs of licensing, regulatory fees, and any other
payments required by the Exchange, and the administrative costs
of such Exchange, on an Internet website to educate consumers
on such costs. Such information shall also include monies lost
to waste, fraud, and abuse.
(e) Certification.--
(1) In general.--An Exchange may certify a health plan as a
qualified health plan if--
(A) such health plan meets the requirements for
certification as promulgated by the Secretary under
subsection (c)(1); and
(B) the Exchange determines that making available
such health plan through such Exchange is in the
interests of qualified individuals and qualified
employers in the State or States in which such Exchange
operates, except that the Exchange may not exclude a
health plan--
(i) on the basis that such plan is a fee-
for-service plan;
(ii) through the imposition of premium
price controls; 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. Such plans shall prominently
post such information on their websites. The Exchange may take
this information, and the information and the recommendations
provided to the Exchange by the State under section 2794(b)(1)
of the Public Health Service Act (relating to patterns or
practices of excessive or unjustified premium increases), into
consideration when determining whether to make such health plan
available through the Exchange. The Exchange shall take into
account any excess of premium growth outside the Exchange 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.--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;
(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.--The guidelines developed under paragraph
(2) shall require the periodic reporting to the applicable
Exchange of the activities that a qualified health plan has
conducted to implement a strategy described in paragraph (1).
(h) Quality Improvement.--
(1) Enhancing patient safety.--Beginning on January 1,
2015, a qualified health plan may contract with--
(A) a hospital with greater than 50 beds only if
such hospital--
(i) utilizes a patient safety evaluation
system as described in part C of title IX of
the Public Health Service Act; and
(ii) implements a mechanism to ensure that
each patient receives a comprehensive program
for hospital discharge that includes patient-
centered education and counseling,
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) In general.--An Exchange shall establish a program
under which it awards grants to entities described in paragraph
(2) to carry out the duties described in paragraph (3).
(2) Eligibility.--
(A) In general.--To be eligible to receive a grant
under paragraph (1), an entity shall demonstrate to the
Exchange involved that the entity has existing
relationships, or could readily establish
relationships, with employers and employees, consumers
(including uninsured and underinsured consumers), or
self-employed individuals likely to be qualified to
enroll in a qualified health plan.
(B) Types.--Entities described in subparagraph (A)
may include trade, industry, and professional
associations, commercial fishing industry
organizations, ranching and farming organizations,
community and consumer-focused nonprofit groups,
chambers of commerce, unions, small business
development centers, other licensed insurance agents
and brokers, and other entities that--
(i) are capable of carrying out the duties
described in 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.--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.
SEC. 1312. 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
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.--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:
(A) In general.--The term ``qualified individual''
means, with respect to an Exchange, an individual who--
(i) is seeking to enroll in a qualified
health plan in the individual market offered
through the Exchange; and
(ii) resides in the State that established
the Exchange (except with respect to
territorial agreements under section 1312(f)).
(B) Incarcerated individuals excluded.--An
individual shall not be treated as a qualified
individual if, at the time of enrollment, the
individual is incarcerated, other than incarceration
pending the disposition of charges.
(2) Qualified employer.--In this title:
(A) In general.--The term ``qualified employer''
means a small employer that elects to make all full-
time employees of such employer eligible for 1 or more
qualified health plans offered in the small group
market through an Exchange that offers qualified health
plans.
(B) Extension to large groups.--
(i) In general.--Beginning in 2017, each
State may allow issuers of health insurance
coverage in the large group market in the State
to offer qualified health plans in such market
through an Exchange. Nothing in this
subparagraph shall be construed as requiring
the issuer to offer such plans through an
Exchange.
(ii) Large employers eligible.--If a State
under clause (i) allows issuers to offer
qualified health plans in the large group
market through an Exchange, the term
``qualified employer'' shall include a large
employer that elects to make all full-time
employees of such employer eligible for 1 or
more qualified health plans offered in the
large group market through the Exchange.
(3) Access limited to lawful residents.--If an individual
is not, or is not reasonably expected to be for the entire
period for which enrollment is sought, a citizen or national of
the United States or an alien lawfully present in the United
States, the individual shall not be treated as a qualified
individual and may not be covered under a qualified health plan
in the individual market that is offered through an Exchange.
SEC. 1313. FINANCIAL INTEGRITY.
(a) Accounting for Expenditures.--
(1) In general.--An Exchange shall keep an accurate
accounting of all activities, receipts, and expenditures and
shall annually submit to the Secretary a report concerning such
accountings.
(2) Investigations.--The Secretary, in coordination with
the Inspector General of the Department of Health and Human
Services, may investigate the affairs of an Exchange, may
examine the properties and records of an Exchange, and may
require periodic reports in relation to activities undertaken
by an Exchange. An Exchange shall fully cooperate in any
investigation conducted under this paragraph.
(3) Audits.--An Exchange shall be subject to annual audits
by the Secretary.
(4) Pattern of abuse.--If the Secretary determines that an
Exchange or a State has engaged in serious misconduct with
respect to compliance with the requirements of, or carrying out
of activities required under, this title, the Secretary may
rescind from payments otherwise due to such State involved
under this or any other Act administered by the Secretary an
amount not to exceed 1 percent of such payments per year until
corrective actions are taken by the State that are determined
to be adequate by the 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.--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.--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.
PART III--STATE FLEXIBILITY RELATING TO EXCHANGES
SEC. 1321. STATE FLEXIBILITY IN OPERATION AND ENFORCEMENT OF EXCHANGES
AND RELATED REQUIREMENTS.
(a) Establishment of Standards.--
(1) In general.--The Secretary shall, as soon as
practicable after the date of enactment of this Act, issue
regulations setting standards for meeting the requirements
under this title, and the amendments made by this title, with
respect to--
(A) the establishment and operation of Exchanges
(including SHOP Exchanges);
(B) the offering of qualified health plans through
such Exchanges;
(C) the establishment of the reinsurance and risk
adjustment programs under part V; and
(D) such other requirements as the Secretary
determines appropriate.
The preceding sentence shall not apply to standards for
requirements under subtitles A and C (and the amendments made
by such subtitles) for which the Secretary issues regulations
under the Public Health Service Act.
(2) Consultation.--In issuing the regulations under
paragraph (1), the Secretary shall consult with the National
Association of Insurance Commissioners and its members and with
health insurance issuers, consumer organizations, and such
other individuals as the Secretary selects in a manner designed
to ensure balanced representation among interested parties.
(b) State Action.--Each State that elects, at such time and in such
manner as the Secretary may prescribe, to apply the requirements
described in subsection (a) shall, not later than January 1, 2014,
adopt and have in effect--
(1) the Federal standards established under subsection (a);
or
(2) a State law or regulation that the Secretary determines
implements the standards within the State.
(c) Failure To Establish Exchange or Implement Requirements.--
(1) In general.--If--
(A) a State is not an electing State under
subsection (b); or
(B) the Secretary determines, on or before January
1, 2013, that an electing State--
(i) will not have any required Exchange
operational by January 1, 2014; or
(ii) has not taken the actions the
Secretary determines necessary to implement--
(I) the other requirements set
forth in the standards under subsection
(a); or
(II) the requirements set forth in
subtitles A and C and the amendments
made by such subtitles;
the Secretary shall (directly or through agreement with a not-
for-profit entity) establish and operate such Exchange within
the State and the Secretary shall take such actions as are
necessary to implement such other requirements.
(2) Enforcement authority.--The provisions of section
2736(b) of the Public Health Services Act shall apply to the
enforcement under paragraph (1) of requirements of subsection
(a)(1) (without regard to any limitation on the application of
those provisions to group health plans).
(d) No Interference With State Regulatory Authority.--Nothing in
this title shall be construed to preempt any State law that does not
prevent the application of the provisions of this title.
(e) Presumption for Certain State-Operated Exchanges.--
(1) In general.--In the case of a State operating an
Exchange before January 1, 2010, and which has insured a
percentage of its population not less than the percentage of
the population projected to be covered nationally after the
implementation of this Act, that seeks to operate an Exchange
under this section, the Secretary shall presume that such
Exchange meets the standards under this section unless the
Secretary determines, after completion of the process
established under paragraph (2), that the Exchange does not
comply with such standards.
(2) Process.--The Secretary shall establish a process to
work with a State described in paragraph (1) to provide
assistance necessary to assist the State's Exchange in coming
into compliance with the standards for approval under this
section.
SEC. 1322. 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 issuer in each
State, except that nothing in this clause shall
prohibit the Secretary from funding the
establishment of multiple qualified nonprofit
health insurance issuers in any State if the
funding is sufficient to do so.
(B) States without issuers in program.--If no
health insurance issuer applies to be a qualified
nonprofit health insurance issuer within a State, the
Secretary may use amounts appropriated under this
section for the awarding of grants to encourage the
establishment of a qualified nonprofit health insurance
issuer within the State or the expansion of a qualified
nonprofit health insurance issuer from another State to
the State.
(C) Agreement.--
(i) In general.--The Secretary shall
require any person receiving a loan or grant
under the CO-OP program to enter into an
agreement with the Secretary which requires
such person to meet (and to continue to meet)--
(I) any requirement under this
section for such person to be treated
as a qualified nonprofit health
insurance issuer; and
(II) any requirements contained in
the agreement for such person to
receive such loan or grant.
(ii) Restrictions on use of federal
funds.--The agreement shall include a
requirement that no portion of the funds made
available by any loan or grant under this
section may be used--
(I) for carrying on propaganda, or
otherwise attempting, to influence
legislation; or
(II) for marketing.
Nothing in this clause shall be construed to
allow a person to take any action prohibited by
section 501(c)(29) of the Internal Revenue Code
of 1986.
(iii) Failure to meet requirements.--If the
Secretary determines that a person has failed
to meet any requirement described in clause (i)
or (ii) and has failed to correct such failure
within a reasonable period of time of when the
person first knows (or reasonably should have
known) of such failure, such person shall repay
to the Secretary an amount equal to the sum
of--
(I) 110 percent of the aggregate
amount of loans and grants received
under this section; plus
(II) interest on the aggregate
amount of loans and grants received
under this section for the period the
loans or grants were outstanding.
The Secretary shall notify the Secretary of the
Treasury of any determination under this
section of a failure that results in the
termination of an issuer's tax-exempt status
under section 501(c)(29) of such Code.
(D) Time for awarding loans and grants.--The
Secretary shall not later than July 1, 2013, award the
loans and grants under the CO-OP program and begin the
distribution of amounts awarded under such loans and
grants.
(3) Advisory board.--
(A) In general.--The advisory board under this
paragraph shall consist of 15 members appointed by the
Comptroller General of the United States from among
individuals with qualifications described in section
1805(c)(2) of the Social 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.--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.--The term ``qualified nonprofit health
insurance issuer'' means a health insurance issuer that is an
organization--
(A) that is organized under State law as a
nonprofit, member corporation;
(B) substantially all of the activities of which
consist of the issuance of qualified health plans in
the individual and small group markets in each State in
which it is licensed to issue such plans; and
(C) that meets the other requirements of this
subsection.
(2) Certain organizations prohibited.--An organization
shall not be treated as a qualified nonprofit health insurance
issuer if--
(A) the organization or a related entity (or any
predecessor of either) was a health insurance issuer on
July 16, 2009; or
(B) the organization is sponsored by a State or
local government, any political subdivision thereof, or
any instrumentality of such government or political
subdivision.
(3) Governance requirements.--An organization shall not be
treated as a qualified nonprofit health insurance issuer
unless--
(A) the governance of the organization is subject
to a majority vote of its members;
(B) its governing documents incorporate ethics and
conflict of interest standards protecting against
insurance industry involvement and interference; and
(C) as provided in regulations promulgated by the
Secretary, the organization is required to operate with
a strong consumer focus, including timeliness,
responsiveness, and accountability to members.
(4) Profits inure to benefit of members.--An organization
shall 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 the extent that such section 5
applies to unfair methods of competition.
(e) Limitation on Participation.--No representative of any Federal,
State, or local government (or of any political subdivision or
instrumentality thereof), and no representative of a person described
in subsection (c)(2)(A), may serve on the board of directors of a
qualified nonprofit health insurance issuer or with a private
purchasing council established under subsection (d).
(f) Limitations on Secretary.--
(1) In general.--The Secretary shall not--
(A) participate in any negotiations between 1 or
more qualified nonprofit health insurance issuers (or a
private purchasing council established under subsection
(d)) and any health care facilities or providers,
including any drug manufacturer, pharmacy, or hospital;
and
(B) establish or maintain a price structure for
reimbursement of any health benefits covered by such
issuers.
(2) Competition.--Nothing in this section shall be
construed as authorizing the Secretary to interfere with the
competitive nature of providing health benefits through
qualified nonprofit health insurance issuers.
(g) Appropriations.--There are hereby appropriated, out of any
funds in the Treasury not otherwise appropriated, $6,000,000,000 to
carry out this section.
(h) Tax Exemption for Qualified Nonprofit Health Insurance
Issuer.--
(1) In general.--Section 501(c) of the Internal Revenue
Code of 1986 (relating to list of exempt organizations) is
amended by 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.--Subparagraph (A)
shall apply to an organization only if--
``(i) the organization has given notice to
the Secretary, in such manner as the Secretary
may by regulations prescribe, that it is
applying for recognition of its status under
this paragraph,
``(ii) except as provided in section
1322(c)(4) of the Patient Protection and
Affordable Care Act, no part of the net
earnings of which inures to the benefit of any
private shareholder or individual,
``(iii) no substantial part of the
activities of which is carrying on propaganda,
or otherwise attempting, to influence
legislation, and
``(iv) the organization does not
participate in, or intervene in (including the
publishing or distributing of statements), any
political campaign on behalf of (or in
opposition to) any candidate for public
office.''.
(2) Additional reporting requirement.--Section 6033 of such
Code (relating to returns by exempt organizations) is amended
by redesignating subsection (m) as subsection (n) and by
inserting after subsection (l) the following:
``(m) Additional Information Required From CO-OP Insurers.--An
organization described in section 501(c)(29) shall include on the
return required under subsection (a) the following information:
``(1) The amount of the reserves required by each State in
which the organization is licensed to issue qualified health
plans.
``(2) The amount of reserves on hand.''.
(3) Application of tax on excess benefit transactions.--
Section 4958(e)(1) of such Code (defining applicable tax-exempt
organization) is amended by striking ``paragraph (3) or (4)''
and inserting ``paragraph (3), (4), or (29)''.
(i) GAO Study and Report.--
(1) Study.--The Comptroller General of the General
Accountability Office shall conduct an ongoing study on
competition and market concentration in the health insurance
market in the United States after the implementation of the
reforms in such market under the provisions of, and the
amendments made by, this Act. Such study shall include an
analysis of new issuers of health insurance in such market.
(2) Report.--The Comptroller General shall, not later than
December 31 of each even-numbered year (beginning with 2014),
report to the appropriate committees of the Congress the
results of the study conducted under paragraph (1), including
any recommendations for administrative or legislative changes
the Comptroller General determines necessary or appropriate to
increase competition in the health insurance market.
SEC. 1323. 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 in
States that elect to opt out as provided for in subsection
(a)(3)), health care coverage that provides value, choice,
competition, and stability of affordable, high quality coverage
throughout the United States.
(2) Community health insurance option.--In this section,
the term ``community health insurance option'' means health
insurance coverage that--
(A) except as specifically provided for in this
section, complies with the requirements for being a
qualified health 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.--A State shall make
payments to or on behalf of an eligible individual to
defray the cost of any additional benefits described in
subparagraph (B).
(E) Ensuring access to all services.--Nothing in
this Act shall prohibit an individual enrolled in a
community health insurance option from paying out-of-
pocket the full cost of any item or service not
included as an essential health benefit or otherwise
covered as a benefit by a health plan. Nothing in
subparagraph (B) shall prohibit any type of medical
provider from accepting an out-of-pocket payment from
an individual enrolled in a community health insurance
option for a service otherwise not included as an
essential health benefit.
(F) Protecting access to end of life care.--A
community health insurance option offered under this
section shall be prohibited from limiting access to end
of life care.
(4) Cost sharing.--A community health insurance option
shall offer coverage at each of the levels of coverage
described in section 1302(d).
(5) Premiums.--
(A) Premiums sufficient to cover costs.--The
Secretary shall establish geographically adjusted
premium rates in an amount sufficient to cover expected
costs (including claims and administrative costs) using
methods in general use by qualified 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) Solvency.--The Secretary shall establish a
Federal solvency standard to be applied with respect to
a community health insurance option. A community health
insurance option shall also be subject to the solvency
standard of each State in which such community health
insurance option is offered.
(B) Minimum required.--In establishing the standard
described under subparagraph (A), the Secretary shall
require a reserve fund that shall be equal to at least
the dollar value of the incurred but not reported
claims of a community health insurance option.
(C) Consumer protections.--The consumer protection
laws of a State shall apply to a community health
insurance option.
(8) Requirements established in partnership with insurance
commissioners.--
(A) In general.--The Secretary, in collaboration
with the National Association of Insurance
Commissioners (in this paragraph referred to as the
``NAIC''), may promulgate regulations to establish
additional requirements for a community health
insurance option.
(B) Applicability.--Any requirement promulgated
under subparagraph (A) shall be applicable to such
option beginning 90 days after the date on which the
regulation involved becomes final.
(c) Start-up Fund.--
(1) Establishment of fund.--
(A) In general.--There is established in the
Treasury of the United States a trust fund to be known
as the ``Health Benefit Plan Start-Up Fund'' (referred
to in this section as the ``Start-Up Fund''), that
shall consist of such amounts as may be appropriated or
credited to the Start-Up Fund as provided for in this
subsection to provide loans for the initial operations
of a community health insurance option. Such amounts
shall remain available until expended.
(B) Funding.--There is hereby appropriated to the
Start-Up Fund, out of any moneys in the Treasury not
otherwise appropriated an amount requested by the
Secretary of Health and Human Services as necessary
to--
(i) pay the start-up costs associated with
the initial operations of a community health
insurance option; and
(ii) pay the costs of making payments on
claims submitted during the period that is not
more than 90 days from the date on which such
option is offered.
(2) Use of start-up fund.--The Secretary shall use amounts
contained in the Start-Up Fund to make payments (subject to the
repayment requirements in paragraph (4)) for the purposes
described in paragraph (1)(B).
(3) Pass through of rebates.--The Secretary may establish
procedures for reducing the amount of payments to a contracting
administrator to take into account any rebates or price
concessions.
(4) Repayment.--
(A) In general.--A community health insurance
option shall be required to repay the Secretary of the
Treasury (on such terms as the Secretary may require)
for any payments made under paragraph (1)(B) by the
date that is not later than 9 years after the date on
which the payment is made. The Secretary may require
the payment of interest with respect to such repayments
at rates that do not exceed the market interest rate
(as determined by the Secretary).
(B) Sanctions in case of for-profit conversion.--In
any case in which the Secretary enters into a contract
with a qualified entity for the offering of a community
health insurance option and such entity is determined
to be a for-profit entity by the Secretary, such entity
shall be--
(i) immediately liable to the Secretary for
any payments received by such entity from the
Start-Up Fund; 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) 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''.
(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) Limitation.--A contract may not be renewed under this
subsection unless the Secretary determines that the contracting
administrator has met performance requirements established by
the Secretary in the areas described in paragraph (7)(B).
(5) Audits.--The Inspector General shall conduct periodic
audits with respect to contracting administrators under this
subsection to ensure that the administrator involved is in
compliance with this section.
(6) Revocation.--A contract awarded under this subsection
shall be revoked by the Secretary, upon the recommendation of
the Inspector General, only after notice to the contracting
administrator involved and an opportunity for a hearing. The
Secretary may revoke such contract if the Secretary determines
that such administrator has engaged in fraud, deception, waste,
abuse of power, negligence, mismanagement of taxpayer dollars,
or gross mismanagement. An entity that has had a contract
revoked under this paragraph shall not be qualified to enter
into a subsequent contract under this subsection.
(7) Fee for administration.--
(A) In general.--The Secretary shall pay the
contracting administrator a fee for the management,
administration, and delivery of the benefits under this
section.
(B) Requirement for high quality administration.--
The Secretary may increase the fee described in
subparagraph (A) by not more than 10 percent, or reduce
the fee described in subparagraph (A) by not more than
50 percent, based on the extent to which the
contracting administrator, in the determination of the
Secretary, meets performance requirements established
by the Secretary, in at least the following areas:
(i) Maintaining low premium costs and low
cost sharing requirements, provided that such
requirements are consistent with section 1302.
(ii) Reducing administrative costs and
promoting administrative simplification for
beneficiaries.
(iii) Promoting high quality clinical care.
(iv) Providing high quality customer
service to 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.--If there is a community health
insurance option solvency warning under paragraph (2)
made in a year, the President shall submit to Congress,
within the 15-day period beginning on the date of the
budget submission to Congress under section 1105(a) of
title 31, United States Code, for the succeeding year,
proposed legislation to respond to such warning.
(B) Procedure.--In the case of a legislative
proposal submitted by the President pursuant to
subparagraph (A), such proposal shall be considered by
Congress using the same procedures described under
sections 803 and 804 of the Medicare Prescription Drug,
Improvement, and Modernization Act of 2003 that shall
be used for a medicare funding warning.
(g) Marketing Parity.--In a facility controlled by the Federal
Government, or by a State, where marketing or promotional materials
related to a community health insurance option are made available to
the public, making available marketing or promotional materials
relating to private health insurance plans shall not be prohibited.
Such materials include informational pamphlets, guidebooks, enrollment
forms, or other materials determined reasonable for display.
(h) Authorization of Appropriations.--There is authorized to be
appropriated such sums as may be necessary to carry out this section.
SEC. 1324. 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. 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
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.--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.
(B) Health and resource differences.--Consideration
of, and the making of suitable allowances for,
differences in health care needs of enrollees and
differences in local availability of, and access to,
health care providers. Nothing in this subparagraph
shall be construed as allowing discrimination on the
basis of pre-existing conditions or other health
status-related factors.
(C) Managed care.--Contracting with managed care
systems, or with systems that offer as many of the
attributes of managed care as are feasible in the local
health care market.
(D) Performance measures.--Establishing specific
performance measures and standards for issuers of
standard health plans that focus on quality of care and
improved health outcomes, requiring such plans to
report to the State with respect to the measures and
standards, and making the performance and quality
information available to enrollees in a useful form.
(3) Enhanced availability.--
(A) Multiple plans.--A State shall, to the maximum
extent feasible, seek to make multiple standard health
plans available to eligible individuals within a State
to ensure individuals have a choice of such plans.
(B) Regional compacts.--A State may negotiate a
regional compact with other States to include coverage
of eligible individuals in all such States in
agreements with issuers of standard health plans.
(4) Coordination with other state programs.--A State shall
seek to coordinate the administration of, and provision of
benefits under, its program under this section with the State
medicaid program under title XIX of the Social Security Act,
the State child health plan under title XXI of such Act, and
other State-administered health programs to maximize the
efficiency of such programs and to improve the continuity of
care.
(d) Transfer of Funds to States.--
(1) In general.--If the Secretary determines that a State
electing the application of this section meets the requirements
of the program established under subsection (a), the Secretary
shall transfer to the State for each fiscal year for which 1 or
more standard health plans are operating within the State the
amount determined under paragraph (3).
(2) Use of funds.--A State shall establish a trust for the
deposit of the amounts received under paragraph (1) and amounts
in the trust fund shall only be used to reduce the premiums and
cost-sharing of, or to provide additional benefits for,
eligible individuals enrolled in standard health plans within
the State. Amounts in the trust fund, and expenditures of such
amounts, shall not be included in determining the amount of any
non-Federal funds for purposes of meeting any matching or
expenditure requirement of any federally-funded program.
(3) Amount of payment.--
(A) Secretarial determination.--
(i) In general.--The amount determined
under this paragraph for any fiscal year is the
amount the Secretary determines is equal to 85
percent of the premium tax credits under
section 36B of the Internal Revenue Code of
1986, and the cost-sharing reductions under
section 1402, that would have been provided for
the fiscal year to eligible individuals
enrolled in standard health plans in the State
if such eligible individuals were allowed to
enroll in qualified health plans through an
Exchange established under this subtitle.
(ii) Specific requirements.--The Secretary
shall make the determination under clause (i)
on a per enrollee basis and shall take into
account all relevant factors necessary to
determine the value of the premium tax credits
and cost-sharing reductions that would have
been provided to eligible individuals described
in clause (i), including the age and income of
the enrollee, whether the enrollment is for
self-only or family coverage, geographic
differences in average spending for health care
across rating areas, the health status of the
enrollee for purposes of determining risk
adjustment payments and reinsurance payments
that would have been made if the enrollee had
enrolled in a qualified health plan through an
Exchange, and whether any reconciliation of the
credit or cost-sharing reductions would have
occurred if the enrollee had been so enrolled.
This determination shall take into
consideration the experience of other States
with respect to participation in an Exchange
and such credits and reductions provided to
residents of the other States, with a special
focus on enrollees with income below 200
percent of poverty.
(iii) Certification.--The Chief Actuary of
the Centers for Medicare & Medicaid Services,
in consultation with the Office of Tax Analysis
of the Department of the Treasury, shall
certify whether the methodology used to make
determinations under this subparagraph, and
such determinations, meet the requirements of
clause (ii). Such certifications shall be based
on sufficient data from the State and from
comparable States about their experience with
programs created by this Act.
(B) Corrections.--The Secretary shall adjust the
payment for any fiscal year to reflect any error in the
determinations under subparagraph (A) for any preceding
fiscal year.
(4) Application of special rules.--The provisions of
section 1303 shall apply to a State basic health program, and
to standard health plans offered through such program, in the
same manner as such rules apply to qualified health plans.
(e) Eligible Individual.--
(1) In general.--In this section, the term ``eligible
individual'' means, with respect to any State, an individual--
(A) who a resident of the State who is not eligible
to enroll in the State's medicaid program under title
XIX of the Social Security Act for benefits that at a
minimum consist of the essential health benefits
described in section 1302(b);
(B) whose household income exceeds 133 percent but
does not exceed 200 percent of the poverty line for the
size of the family involved;
(C) who is not eligible for minimum essential
coverage (as defined in section 5000A(f) of the
Internal Revenue Code of 1986) or is eligible for an
employer-sponsored plan that is not affordable coverage
(as determined under section 5000A(e)(2) of such Code);
and
(D) who has not attained age 65 as of the beginning
of the plan year.
Such term shall not include any individual who is not a
qualified individual under section 1312 who is eligible to be
covered by a qualified health plan offered through an Exchange.
(2) Eligible individuals may not use exchange.--An eligible
individual shall not be treated as a qualified individual under
section 1312 eligible for enrollment in a qualified health plan
offered through an Exchange established under section 1311.
(f) Secretarial Oversight.--The Secretary shall each year conduct a
review of each State program to ensure compliance with the requirements
of this section, including ensuring that the State program meets--
(1) eligibility verification requirements for participation
in the program;
(2) the requirements for use of Federal funds received by
the program; and
(3) the quality and performance standards under this
section.
(g) Standard Health Plan Offerors.--A State may provide that
persons eligible to offer standard health plans under a basic health
program established under this section may include a licensed health
maintenance organization, a licensed health insurance insurer, or a
network of health care providers established to offer services under
the program.
(h) Definitions.--Any term used in this section which is also used
in section 36B of the Internal Revenue Code of 1986 shall have the
meaning given such term by such section.
SEC. 1332. WAIVER FOR STATE INNOVATION.
(a) Application.--
(1) In general.--A State may apply to the Secretary for the
waiver of all or any requirements described in paragraph (2)
with respect to health insurance coverage within that State for
plan years beginning on or after January 1, 2017. Such
application 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).
(2) Requirements.--The requirements described in this
paragraph with respect to health insurance coverage within the
State for plan years beginning on or after January 1, 2014, are
as follows:
(A) Part I of subtitle D.
(B) Part II of subtitle D.
(C) Section 1402.
(D) Sections 36B, 4980H, and 5000A of the Internal
Revenue Code of 1986.
(3) Pass through of funding.--With respect to a State
waiver under paragraph (1), under which, due to the structure
of the State plan, individuals and small employers in the State
would not qualify for the premium tax credits, cost-sharing
reductions, or small business credits under sections 36B of the
Internal Revenue Code of 1986 or under part I of subtitle E for
which they would otherwise be eligible, the Secretary shall
provide for an alternative means by which the aggregate amount
of such credits or reductions that would have been paid on
behalf of participants in the Exchanges established under this
title had the State not received such waiver, shall be paid to
the State for purposes of implementing the State plan under the
waiver. Such amount shall be determined annually by the
Secretary, taking into consideration the experience of other
States with respect to participation in an Exchange and credits
and reductions provided under such provisions to residents of
the other States.
(4) Waiver consideration and transparency.--
(A) In general.--An application for a waiver under
this section shall be considered by the Secretary in
accordance with the regulations described in
subparagraph (B).
(B) Regulations.--Not later than 180 days after the
date of enactment of this Act, the Secretary shall
promulgate regulations relating to waivers under this
section that provide--
(i) a process for public notice and comment
at the State level, including public hearings,
sufficient to ensure a meaningful level of
public input;
(ii) a process for the submission of an
application that ensures the disclosure of--
(I) the provisions of law that the
State involved seeks to waive; and
(II) the specific plans of the
State to ensure that the waiver will be
in compliance with subsection (b);
(iii) a process for providing public notice
and comment after the application is received
by the Secretary, that is sufficient to ensure
a meaningful level of public input and that
does not impose requirements that are in
addition to, or duplicative of, requirements
imposed under the Administrative Procedures
Act, or requirements that are unreasonable or
unnecessarily burdensome with respect to State
compliance;
(iv) a process for the submission to the
Secretary of periodic reports by the State
concerning the implementation of the program
under the waiver; and
(v) a process for the periodic evaluation
by the Secretary of the program under the
waiver.
(C) Report.--The Secretary shall annually report to
Congress concerning actions taken by the Secretary with
respect to applications for waivers under this section.
(5) Coordinated waiver process.--The Secretary shall
develop a process for coordinating and consolidating the State
waiver processes applicable under the provisions of this
section, and the existing waiver processes applicable under
titles XVIII, XIX, and XXI of the Social Security Act, and any
other Federal law relating to the provision of health care
items or services. Such process shall permit a State to submit
a single application for a waiver under any or all of such
provisions.
(6) Definition.--In this section, the term ``Secretary''
means--
(A) the Secretary of Health and Human Services with
respect to waivers relating to the provisions described
in subparagraph (A) through (C) of paragraph (2); and
(B) the Secretary of the Treasury with respect to
waivers relating to the provisions described in
paragraph (2)(D).
(b) Granting of Waivers.--
(1) In general.--The Secretary may grant a request for a
waiver under subsection (a)(1) only if the Secretary determines
that the State plan--
(A) will provide coverage that is at least as
comprehensive as the coverage defined in section
1302(b) and offered through Exchanges established under
this title as certified by Office of the Actuary of the
Centers for Medicare & Medicaid Services based on
sufficient data from the State and from comparable
States about their experience with programs created by
this Act and the provisions of this Act that would be
waived;
(B) will provide coverage and cost sharing
protections against excessive out-of-pocket spending
that are at least as affordable as the provisions of
this title would provide;
(C) will provide coverage to at least a comparable
number of its residents as the provisions of this title
would provide; 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) 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.--The Secretary shall make a
determination under subsection (a)(1) not later than 180 days
after the receipt of an application from a State under such
subsection.
(2) Effect of determination.--
(A) Granting of waivers.--If the Secretary
determines to grant a waiver under subsection (a)(1),
the Secretary shall notify the State involved of such
determination and the terms and effectiveness of such
waiver.
(B) Denial of waiver.--If the Secretary determines
a waiver should not be granted under subsection (a)(1),
the Secretary shall notify the State involved, and the
appropriate committees of Congress of such
determination and the reasons therefore.
(e) Term of Waiver.--No waiver under this section may extend over a
period of longer than 5 years unless the State requests continuation of
such waiver, and such request shall be deemed granted unless the
Secretary, within 90 days after the date of its submission to the
Secretary, either denies such request in writing or informs the State
in writing with respect to any additional information which is needed
in order to make a final determination with respect to the request.
SEC. 1333. PROVISIONS RELATING TO OFFERING OF PLANS IN MORE THAN ONE
STATE.
(a) Health Care Choice Compacts.--
(1) In general.--Not later than July 1, 2013, the Secretary
shall, in consultation with the National Association of
Insurance Commissioners, issue regulations for the creation of
health care choice compacts under which 2 or more States may
enter into an agreement under which--
(A) 1 or more qualified health plans could be
offered in the individual markets in all such States
but, except as provided in subparagraph (B), only be
subject to the laws and regulations of the State in
which the plan was written or issued;
(B) the issuer of any qualified health plan to
which the compact applies--
(i) would continue to be subject to market
conduct, unfair trade practices, network
adequacy, and consumer protection standards
(including standards relating to rating),
including addressing disputes as to the
performance of the contract, of the State in
which the purchaser resides;
(ii) would be required to be licensed in
each State in which it offers the plan under
the compact or to submit to the jurisdiction of
each such State with regard to the standards
described in clause (i) (including allowing
access to records as if the insurer were
licensed in the State); and
(iii) must clearly notify consumers that
the policy may not be subject to all the laws
and regulations of the State in which the
purchaser resides.
(2) State authority.--A State may not enter into an
agreement under this subsection unless the State enacts a law
after the date of the enactment of this title that specifically
authorizes the State to enter into such agreements.
(3) Approval of compacts.--The Secretary may approve
interstate health care choice compacts under paragraph (1) only
if the Secretary determines that such health care choice
compact--
(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) 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;
(D) the issuer determines the premiums for the plan
in any State on the basis of the rating rules in effect
in that State for the rating areas in which it is
offered;
(E) the issuer offers the nationwide qualified
health plan in at least 60 percent of the participating
States in the first year in which the plan is offered,
65 percent of such States in the second year, 70
percent of such States in the third year, 75 percent of
such States in the fourth year, and 80 percent of such
States in the fifth and subsequent years;
(F) the issuer shall offer the plan in
participating States across the country, in all
geographic regions, and in all States that have adopted
adjusted community rating before the date of enactment
of this Act; and
(G) the issuer clearly notifies consumers that the
policy may not contain some benefits otherwise mandated
for plans in the State in which the purchaser resides
and provides a detailed statement of the benefits
offered and the benefit differences in that State, in
accordance with rules promulgated by the Secretary.
(4) Form review for nationwide plans.--Notwithstanding any
contrary provision of State law, at least 3 months before any
nationwide qualified health plan is offered, the issuer shall
file all nationwide qualified health plan forms with the
regulator in each participating State in which the plan will be
offered. An issuer may appeal the disapproval of a nationwide
qualified health plan form to the Secretary.
(5) Applicable rules.--The Secretary shall, in consultation
with the National Association of Insurance Commissioners, issue
rules for the offering of nationwide qualified health plans
under this subsection. Nationwide qualified health plans may be
offered only after such rules have taken effect.
(6) Coverage.--The Secretary shall provide that the health
benefits coverage provided to an individual through a
nationwide qualified health plan under this subsection shall
include at least the essential benefits package described in
section 1302.
(7) State law mandating benefit coverage by a health
benefits plan.--For the purposes of this subsection, a State
law mandating benefit coverage by a health plan is a law that
mandates health insurance coverage or the offer of health
insurance coverage for specific health services or specific
diseases. A law that mandates health insurance coverage or
reimbursement for services provided by certain classes of
providers of health care services, or a law that mandates that
certain classes of individuals must be covered as a group or as
dependents, is not a State law mandating benefit coverage by a
health benefits plan.
PART V--REINSURANCE AND RISK ADJUSTMENT
SEC. 1341. TRANSITIONAL REINSURANCE PROGRAM FOR INDIVIDUAL AND SMALL
GROUP MARKETS IN EACH STATE.
(a) In General.--Each State shall, not later than January 1, 2014--
(1) include in the Federal standards or State law or
regulation the State adopts and has in effect under section
1321(b) the provisions described in subsection (b); and
(2) establish (or enter into a contract with) 1 or more
applicable reinsurance entities to carry out the reinsurance
program under this section.
(b) Model Regulation.--
(1) In general.--In establishing the Federal standards
under section 1321(a), the Secretary, in consultation with the
National Association of Insurance Commissioners (the ``NAIC''),
shall include provisions that enable States to establish and
maintain a program under which--
(A) health insurance issuers, and third party
administrators on behalf of group health plans, are
required to make payments to an applicable reinsurance
entity for any plan year beginning in the 3-year period
beginning January 1, 2014 (as specified in paragraph
(3); and
(B) the applicable reinsurance entity collects
payments under subparagraph (A) and uses amounts so
collected to make reinsurance payments to health
insurance issuers described in subparagraph (A) that
cover high risk individuals in the individual market
(excluding grandfathered health plans) for any plan
year beginning in such 3-year period.
(2) High-risk individual; payment amounts.--The Secretary
shall include the following in the provisions under paragraph
(1):
(A) Determination of high-risk individuals.--The
method by which individuals will be identified as high
risk individuals for purposes of the reinsurance
program established under this section. Such method
shall provide for identification of individuals as
high-risk individuals on the basis of--
(i) a list of at least 50 but not more than
100 medical conditions that are identified as
high-risk conditions and that may be based on
the identification of diagnostic and procedure
codes that are indicative of individuals with
pre-existing, high-risk conditions; or
(ii) any other comparable objective method
of identification recommended by the American
Academy of Actuaries.
(B) Payment amount.--The formula for determining
the amount of payments that will be paid to health
insurance issuers described in paragraph (1)(A) that
insure high-risk individuals. Such formula shall
provide for the equitable allocation of available funds
through reconciliation and may be designed--
(i) to provide a schedule of payments that
specifies the amount that will be paid for each
of the conditions identified under subparagraph
(A); or
(ii) to use any other comparable method for
determining payment amounts that is recommended
by the American Academy of Actuaries and that
encourages the use of care coordination and
care management programs for high risk
conditions.
(3) Determination of required contributions.--
(A) In general.--The Secretary shall include in the
provisions under paragraph (1) the method for
determining the amount each health insurance issuer and
group health plan described in paragraph (1)(A)
contributing to the reinsurance program under this
section is required to contribute under such paragraph
for each plan year beginning in the 36-month period
beginning January 1, 2014. The contribution amount for
any plan year may be based on the percentage of revenue
of each issuer and the total costs of providing
benefits to enrollees in self-insured plans or on a
specified amount per enrollee and may be required to be
paid in advance or periodically throughout the 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) amounts remaining unexpended as of December,
2016, may be used to make payments under any
reinsurance program of a State in the individual market
in effect in the 2-year period beginning on January 1,
2017.
Notwithstanding the preceding sentence, any contribution
amounts described in paragraph (3)(B)(iv) shall be deposited
into the general fund of the Treasury of the United States and
may not be used for the program established under this section.
(c) Applicable Reinsurance Entity.--For purposes of this section--
(1) In general.--The term ``applicable reinsurance entity''
means a not-for-profit organization--
(A) the purpose of which is to help stabilize
premiums for coverage in the individual and small group
markets in a State during the first 3 years of
operation of an Exchange for such markets within the
State when the risk of adverse selection related to new
rating rules and market changes is greatest; and
(B) the duties of which shall be to carry out the
reinsurance program under this section by coordinating
the funding and operation of the risk-spreading
mechanisms designed to implement the reinsurance
program.
(2) State discretion.--A State may have more than 1
applicable reinsurance entity to carry out the reinsurance
program under this section within the State and 2 or more
States may enter into agreements to provide for an applicable
reinsurance entity to carry out such program in all such
States.
(3) Entities are tax-exempt.--An applicable reinsurance
entity established under this section shall be exempt from
taxation under chapter 1 of the Internal Revenue Code of 1986.
The preceding sentence shall not apply to the tax imposed by
section 511 such Code (relating to tax on unrelated business
taxable income of an exempt organization).
(d) Coordination With State High-risk Pools.--The State shall
eliminate or modify any State high-risk pool to the extent necessary to
carry out the reinsurance program established under this section. The
State may coordinate the State high-risk pool with such program to the
extent not inconsistent with the provisions of this section.
SEC. 1342. 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.
(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. 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 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. 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.--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
``(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 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--
``(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 respect to
the plan exceeds 9.8 percent of the
applicable taxpayer's household income.
This clause shall also apply to an individual
who is eligible to enroll in the plan by reason
of a relationship the individual bears to the
employee.
``(ii) Coverage must provide minimum
value.--Except as provided in clause (iii), an
employee shall not be treated as eligible for
minimum essential coverage if such coverage
consists of an eligible employer-sponsored plan
(as defined in section 5000A(f)(2)) and the
plan's share of the total allowed costs of
benefits provided under the plan is less than
60 percent of such costs.
``(iii) Employee or family must not be
covered under employer plan.--Clauses (i) and
(ii) shall not apply if the employee (or any
individual described in the last sentence of
clause (i)) is covered under the eligible
employer-sponsored plan or the grandfathered
health plan.
``(iv) Indexing.--In the case of plan years
beginning in any calendar year after 2014, the
Secretary shall adjust the 9.8 percent under
clause (i)(II) in the same manner as the
percentages are adjusted under subsection
(b)(3)(A)(ii).
``(3) Definitions and other rules.--
``(A) Qualified health plan.--The term `qualified
health plan' has the meaning given such term by section
1301(a) of the Patient Protection and Affordable Care
Act, except that such term shall not include a
qualified health plan which is a catastrophic plan
described in section 1302(e) of such Act.
``(B) Grandfathered health plan.--The term
`grandfathered health plan' has the meaning given such
term by section 1251 of the Patient Protection and
Affordable Care Act.
``(d) Terms Relating to Income and Families.--For purposes of this
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--
``(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.--The Secretary of Health and
Human Services, in consultation with the Secretary, shall
prescribe rules setting forth the methods by which calculations
of family size and household income are made for purposes of
this subsection. Such rules shall be designed to ensure that
the least burden is placed on individuals enrolling in
qualified health plans through an Exchange and taxpayers
eligible for the credit allowable under this 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 is amended by adding at the end the following new
subsection:
``(g) Credit for Health Insurance Premiums.--No deduction shall be
allowed for the portion of the premiums paid by the taxpayer for
coverage of 1 or more individuals under a qualified health plan which
is equal to the amount of the credit determined for the taxable year
under section 36B(a) with respect to such premiums.''.
(c) Study on Affordable Coverage.--
(1) Study and report.--
(A) In general.--Not later than 5 years after the
date of the enactment of this Act, the Comptroller
General shall conduct a study on the affordability of
health insurance coverage, including--
(i) the impact of the tax credit for
qualified health insurance coverage of
individuals under section 36B of the Internal
Revenue Code of 1986 and the tax credit for
employee health insurance expenses of small
employers under section 45R of such Code on
maintaining and expanding the health insurance
coverage of individuals;
(ii) the availability of affordable health
benefits plans, including a study of whether
the percentage of household income used for
purposes of section 36B(c)(2)(C) of the
Internal Revenue Code of 1986 (as added by this
section) is the appropriate level for
determining whether employer-provided coverage
is affordable for an employee and whether such
level may be lowered without significantly
increasing the costs to the Federal Government
and reducing employer-provided coverage; and
(iii) the ability of individuals to
maintain essential health benefits coverage (as
defined in section 5000A(f) of the Internal
Revenue Code of 1986).
(B) Report.--The Comptroller General shall submit
to the appropriate committees of Congress a report on
the study conducted under subparagraph (A), together
with legislative recommendations relating to the
matters studied under such subparagraph.
(2) Appropriate committees of congress.--In this
subsection, the term ``appropriate committees of Congress''
means the Committee on Ways and Means, the Committee on
Education and Labor, and the Committee on Energy and Commerce
of the House of Representatives and the Committee on Finance
and the Committee on Health, Education, Labor and Pensions of
the Senate.
(d) Conforming Amendments.--
(1) Paragraph (2) of section 1324(b) of title 31, United
States Code, is amended by inserting ``36B,'' after ``36A,''.
(2) The table of sections for subpart C of part IV of
subchapter A of chapter 1 of the Internal Revenue Code of 1986
is amended by inserting after the item relating to section 36A
the following new item:
``Sec. 36B. Refundable credit for coverage under a qualified health
plan.''.
(e) Effective Date.--The amendments made by this section shall
apply to taxable years ending after December 31, 2013.
SEC. 1402. 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) the Secretary shall notify the issuer of the plan of
such eligibility; and
(2) the issuer shall reduce the cost-sharing under the plan
at the level and in the manner specified in subsection (c).
(b) Eligible Insured.--In this section, the term ``eligible
insured'' means an individual--
(1) who enrolls in a qualified health plan in the silver
level of coverage in the individual market offered through an
Exchange; 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
Secretary shall establish procedures under which the issuer of
a qualified health plan to which this section applies shall
further reduce cost-sharing under the plan in a manner
sufficient to--
(A) in the case of an eligible insured whose
household income is not less than 100 percent but not
more than 150 percent of the poverty line for a family
of the size involved, increase the plan's share of the
total allowed costs of benefits provided under the plan
to 90 percent of such costs; 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) 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 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) Secretarial authority.--The Secretary, in consultation
with the Secretary of the Treasury, shall prescribe rules
setting forth the methods by which calculations of family size
and household income are made for purposes of this subsection.
Such rules shall be designed to ensure that the least burden is
placed on individuals enrolling in qualified health plans
through an Exchange and taxpayers eligible for the credit
allowable under this section.
(f) Definitions and Special Rules.--In this section:
(1) In general.--Any term used in this section which is
also used in section 36B of the Internal Revenue Code of 1986
shall have the meaning given such term by such section.
(2) Limitations on reduction.--No cost-sharing reduction
shall be allowed under this section with respect to coverage
for any month unless the month is a coverage month with respect
to which a credit is allowed to the insured (or an applicable
taxpayer on behalf of the insured) under section 36B of such
Code.
(3) Data used for eligibility.--Any determination under
this section shall be made on the basis of the taxable year for
which the advance determination is made under section 1412 and
not the taxable year for which the credit under section 36B of
such Code is allowed.
Subpart B--Eligibility Determinations
SEC. 1411. 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.
(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.
(B) In the case of an individual seeking exemption
based on the lack of affordable coverage or the
individual's status as a taxpayer with household income
less than 100 percent of the poverty line, the
information described in paragraphs (3) and (4), as
applicable.
(c) Verification of Information Contained in Records of Specific
Federal Officials.--
(1) Information transferred to secretary.--An Exchange
shall submit the information provided by an applicant under
subsection (b) to the Secretary for verification in accordance
with the requirements of this subsection and subsection (d).
(2) Citizenship or immigration status.--
(A) Commissioner of social security.--The Secretary
shall submit to the Commissioner of Social Security the
following information for a determination as to whether
the information provided is consistent with the
information in the records of the Commissioner:
(i) The name, date of birth, and social
security number of each individual for whom
such information was provided under subsection
(b)(2).
(ii) The attestation of an individual that
the individual is a citizen.
(B) Secretary of homeland security.--
(i) In general.--In the case of an
individual--
(I) who attests that the individual
is an alien lawfully present in the
United States; or
(II) who attests that the
individual is a citizen but with
respect to whom the Commissioner of
Social Security has notified the
Secretary under subsection (e)(3) that
the attestation is inconsistent with
information in the records maintained
by the Commissioner;
the Secretary shall submit to the Secretary of
Homeland Security the information described in
clause (ii) for a determination as to whether
the information provided is consistent with the
information in the records of the Secretary of
Homeland Security.
(ii) Information.--The information
described in clause (ii) is the following:
(I) The name, date of birth, and
any identifying information with
respect to the individual's immigration
status provided under subsection
(b)(2).
(II) The attestation that the
individual is an alien lawfully present
in the United States or in the case of
an individual described in clause
(i)(II), the attestation that the
individual is a citizen.
(3) Eligibility for tax credit and cost-sharing
reduction.--The Secretary shall submit the information
described in subsection (b)(3)(A) provided under paragraph (3),
(4), or (5) of subsection (b) to the Secretary of the Treasury
for verification of household income and family size for
purposes of eligibility.
(4) Methods.--
(A) In general.--The Secretary, in consultation
with the Secretary of the Treasury, the Secretary of
Homeland Security, and the Commissioner of Social
Security, shall provide that verifications and
determinations under this subsection shall be done--
(i) through use of an on-line system or
otherwise for the electronic submission of, and
response to, the information submitted under
this subsection with respect to an applicant;
or
(ii) by determining the consistency of the
information submitted with the information
maintained in the records of the Secretary of
the Treasury, the Secretary of Homeland
Security, or the Commissioner of Social
Security through such other method as is
approved by the Secretary.
(B) Flexibility.--The Secretary may modify the
methods used under the program established by this
section for the Exchange and verification of
information if the Secretary determines such
modifications would reduce the administrative costs and
burdens on the applicant, including allowing an
applicant to request the Secretary of the Treasury to
provide the information described in paragraph (3)
directly to the Exchange or to the Secretary. The
Secretary shall not make any such modification unless
the Secretary determines that any applicable
requirements under this section and section 6103 of the
Internal Revenue Code of 1986 with respect to the
confidentiality, disclosure, maintenance, or use of
information will be met.
(d) Verification by Secretary.--In the case of information provided
under subsection (b) that is not required under subsection (c) to be
submitted to another person for verification, the Secretary shall
verify the accuracy of such information in such manner as the Secretary
determines appropriate, including delegating responsibility for
verification to the Exchange.
(e) Actions Relating to Verification.--
(1) In general.--Each person to whom the Secretary provided
information under subsection (c) shall report to the Secretary
under the method established under subsection (c)(4) the
results of its verification and the Secretary shall notify the
Exchange of such results. Each person to whom the Secretary
provided information under subsection (d) shall report to the
Secretary in such manner as the Secretary determines
appropriate.
(2) Verification.--
(A) Eligibility for enrollment and premium tax
credits and cost-sharing reductions.--If information
provided by an applicant under paragraphs (1), (2),
(3), and (4) of subsection (b) is verified under
subsections (c) and (d)--
(i) the individual's eligibility to enroll
through the Exchange and to apply for premium
tax credits and cost-sharing reductions shall
be satisfied; and
(ii) the Secretary shall, if applicable,
notify the Secretary of the Treasury under
section 1412(c) of the amount of any advance
payment to be made.
(B) Exemption from individual responsibility.--If
information provided by an applicant under subsection
(b)(5) is verified under subsections (c) and (d), the
Secretary shall issue the certification of exemption
described in section 1311(d)(4)(H).
(3) Inconsistencies involving attestation of citizenship or
lawful presence.--If the information provided by any applicant
under subsection (b)(2) is inconsistent with information in the
records maintained by the Commissioner of Social Security or
Secretary of Homeland Security, whichever is applicable, the
applicant's eligibility will be determined in the same manner
as an individual's eligibility under the medicaid program is
determined under section 1902(ee) of the Social Security Act
(as in effect on January 1, 2010).
(4) Inconsistencies involving other information.--
(A) In general.--If the information provided by an
applicant under subsection (b) (other than subsection
(b)(2)) is inconsistent with information in the records
maintained by persons under subsection (c) or is not
verified under subsection (d), the Secretary shall
notify the Exchange and the Exchange shall take the
following actions:
(i) Reasonable effort.--The Exchange shall
make a reasonable effort to identify and
address the causes of such inconsistency,
including through typographical or other
clerical errors, by contacting the applicant to
confirm the accuracy of the information, and by
taking such additional actions as the
Secretary, through regulation or other
guidance, may identify.
(ii) Notice and opportunity to correct.--In
the case the inconsistency or inability to
verify is not resolved under subparagraph (A),
the Exchange shall--
(I) notify the applicant of such
fact;
(II) provide the applicant an
opportunity to either present
satisfactory documentary evidence or
resolve the inconsistency with the
person verifying the information under
subsection (c) or (d) during the 90-day
period beginning the date on which the
notice required under subclause (I) is
sent to the applicant.
The Secretary may extend the 90-day period
under subclause (II) for enrollments occurring
during 2014.
(B) Specific actions not involving citizenship or
lawful presence.--
(i) In general.--Except as provided in
paragraph (3), the Exchange shall, during any
period before the close of the period under
subparagraph (A)(ii)(II), make any
determination under paragraphs (2), (3), and
(4) of subsection (a) on the basis of the
information contained on the application.
(ii) Eligibility or amount of credit or
reduction.--If an inconsistency involving the
eligibility for, or amount of, any premium tax
credit or cost-sharing reduction is unresolved
under this subsection as of the close of the
period under subparagraph (A)(ii)(II), the
Exchange shall notify the applicant of the
amount (if any) of the credit or reduction that
is determined on the basis of the records
maintained by persons under subsection (c).
(iii) Employer affordability.--If the
Secretary notifies an Exchange that an enrollee
is eligible for a premium tax credit under
section 36B of such Code or cost-sharing
reduction under section 1402 because the
enrollee's (or related individual's) employer
does not provide minimum essential coverage
through an employer-sponsored plan or that the
employer does provide that coverage but it is
not affordable coverage, the Exchange shall
notify the employer of such fact and that the
employer may be liable for the payment assessed
under section 4980H of such Code.
(iv) Exemption.--In any case where the
inconsistency involving, or inability to
verify, information provided under subsection
(b)(5) is not resolved as of the close of the
period under subparagraph (A)(ii)(II), the
Exchange shall notify an applicant that no
certification of exemption from any requirement
or payment under section 5000A of such Code
will be issued.
(C) Appeals process.--The Exchange shall also
notify each person receiving notice under this
paragraph of the appeals processes established under
subsection (f).
(f) Appeals and Redeterminations.--
(1) In general.--The Secretary, in consultation with the
Secretary of the Treasury, the Secretary of Homeland Security,
and the Commissioner of Social Security, shall establish
procedures by which the Secretary or one of such other Federal
officers--
(A) hears and makes decisions with respect to
appeals of any determination under subsection (e); and
(B) redetermines eligibility on a periodic basis in
appropriate circumstances.
(2) Employer liability.--
(A) In general.--The Secretary shall establish a
separate appeals process for employers who are notified
under subsection (e)(4)(C) that the employer may be
liable for a tax imposed by section 4980H of the
Internal Revenue Code of 1986 with respect to an
employee because of a determination that the employer
does not provide minimum essential coverage through an
employer-sponsored plan or that the employer does
provide that coverage but it is not affordable coverage
with respect to an employee. Such process shall provide
an employer the opportunity to--
(i) present information to the Exchange for
review of the determination either by the
Exchange or the person making the
determination, including evidence of the
employer-sponsored plan and employer
contributions to the plan; and
(ii) have access to the data used to make
the determination to the extent allowable by
law.
Such process shall be in addition to any rights of
appeal the employer may have under subtitle F of such
Code.
(B) Confidentiality.--Notwithstanding any provision
of this title (or the amendments made by this title) or
section 6103 of the Internal Revenue Code of 1986, an
employer shall not be entitled to any taxpayer return
information with respect to an employee for purposes of
determining whether the employer is subject to the
penalty under section 4980H of such Code with respect
to the employee, except that--
(i) the employer may be notified as to the
name of an employee and whether or not the
employee's income is above or below the
threshold by which the affordability of an
employer's health insurance coverage is
measured; and
(ii) this subparagraph shall not apply to
an employee who provides a waiver (at such time
and in such manner as the Secretary may
prescribe) authorizing an employer to have
access to the employee's taxpayer return
information.
(g) Confidentiality of Applicant Information.--
(1) In general.--An applicant for insurance coverage or for
a premium tax credit or cost-sharing reduction shall be
required to provide only the information strictly necessary to
authenticate identity, determine eligibility, and determine the
amount of the credit or reduction.
(2) Receipt of information.--Any person who receives
information provided by an applicant under subsection (b)
(whether directly or by another person at the request of the
applicant), or receives information from a Federal agency under
subsection (c), (d), or (e), shall--
(A) use the information only for the purposes of,
and to the extent necessary in, ensuring the efficient
operation of the Exchange, including verifying the
eligibility of an individual to enroll through an
Exchange or to claim a premium tax credit or cost-
sharing reduction or the amount of the credit or
reduction; and
(B) not disclose the information to any other
person except as provided in this section.
(h) Penalties.--
(1) False or fraudulent information.--
(A) Civil penalty.--
(i) In general.--If--
(I) any person fails to provides
correct information under subsection
(b); and
(II) such failure is attributable
to negligence or disregard of any rules
or regulations of the Secretary,
such person shall be subject, in addition to
any other penalties that may be prescribed by
law, to a civil penalty of not more than
$25,000 with respect to any failures involving
an application for a plan year. For purposes of
this subparagraph, the terms ``negligence'' and
``disregard'' shall have the same meanings as
when used in section 6662 of the Internal
Revenue Code of 1986.
(ii) Reasonable cause exception.--No
penalty shall be imposed under clause (i) if
the Secretary determines that there was a
reasonable cause for the failure and that the
person acted in good faith.
(B) Knowing and willful violations.--Any person who
knowingly and willfully provides false or fraudulent
information under subsection (b) shall be subject, in
addition to any other penalties that may be prescribed
by law, to a civil penalty of not more than $250,000.
(2) Improper use or disclosure of information.--Any person
who knowingly and willfully uses or discloses information in
violation of subsection (g) shall be subject, in addition to
any other penalties that may be prescribed by law, to a civil
penalty of not more than $25,000.
(3) Limitations on liens and levies.--The Secretary (or, if
applicable, the Attorney General of the United States) shall
not--
(A) file notice of lien with respect to any
property of a person by reason of any failure to pay
the penalty imposed by this subsection; or
(B) levy on any such property with respect to such
failure.
(i) Study of Administration of Employer Responsibility.--
(1) In general.--The Secretary of Health and Human Services
shall, in consultation with the Secretary of the Treasury,
conduct a study of the procedures that are necessary to ensure
that in the administration of this title and section 4980H of
the Internal Revenue Code of 1986 (as added by section 1513)
that the following rights are protected:
(A) The rights of employees to preserve their right
to confidentiality of their taxpayer return information
and their right to enroll in a qualified health plan
through an Exchange if an employer does not provide
affordable coverage.
(B) The rights of employers to adequate due process
and access to information necessary to accurately
determine any payment assessed on employers.
(2) Report.--Not later than January 1, 2013, the Secretary
of Health and Human Services shall report the results of the
study conducted under paragraph (1), including any
recommendations for legislative changes, to the Committees on
Finance and Health, Education, Labor and Pensions of the Senate
and the Committees of Education and Labor and Ways and Means of
the House of Representatives.
SEC. 1412. 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) 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--
(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) Payment of Premium Tax Credits and Cost-sharing Reductions.--
(1) In general.--The Secretary shall notify the Secretary
of the Treasury and the Exchange through which the individual
is enrolling of the advance determination under section 1411.
(2) Premium tax credit.--
(A) In general.--The Secretary of the Treasury
shall make the advance payment under this section of
any premium tax credit allowed under section 36B of the
Internal Revenue Code of 1986 to the issuer of a
qualified health plan on a monthly basis (or such other
periodic basis as the Secretary may provide).
(B) Issuer responsibilities.--An issuer of a
qualified health plan receiving an advance payment with
respect to an individual enrolled in the plan shall--
(i) reduce the premium charged the insured
for any period by the amount of the advance
payment for the period;
(ii) notify the Exchange and the Secretary
of such reduction;
(iii) include with each billing statement
the amount by which the premium for the plan
has been reduced by reason of the advance
payment; and
(iv) in the case of any nonpayment of
premiums by the insured--
(I) notify the Secretary of such
nonpayment; and
(II) allow a 3-month grace period
for nonpayment of premiums before
discontinuing coverage.
(3) Cost-sharing reductions.--The Secretary shall also
notify the Secretary of the Treasury and the Exchange under
paragraph (1) if an advance payment of the cost-sharing
reductions under section 1402 is to be made to the issuer of
any qualified health plan with respect to any individual
enrolled in the plan. The Secretary of the Treasury shall make
such advance payment at such time and in such amount as the
Secretary specifies in the notice.
(d) No Federal Payments for Individuals Not Lawfully Present.--
Nothing in this subtitle or the amendments made by this subtitle allows
Federal payments, credits, or cost-sharing reductions for individuals
who are not lawfully present in the United States.
(e) State Flexibility.--Nothing in this subtitle or the amendments
made by this subtitle shall be construed to prohibit a State from
making payments to or on behalf of an individual for coverage under a
qualified health plan offered through an Exchange that are in addition
to any credits or cost-sharing reductions allowable to the individual
under this subtitle and such amendments.
SEC. 1413. STREAMLINING OF PROCEDURES FOR ENROLLMENT THROUGH AN
EXCHANGE AND STATE MEDICAID, CHIP, AND HEALTH SUBSIDY
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;
(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.
(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.
SEC. 1414. DISCLOSURES TO CARRY OUT ELIGIBILITY REQUIREMENTS FOR
CERTAIN PROGRAMS.
(a) Disclosure of Taxpayer Return Information and Social Security
Numbers.--
(1) Taxpayer return information.--Subsection (l) of section
6103 of the Internal Revenue Code of 1986 is amended by adding
at the end the following new paragraph:
``(21) Disclosure of return information to carry out
eligibility requirements for certain programs.--
``(A) In general.--The Secretary, upon written
request from the Secretary of Health and Human
Services, shall disclose to officers, employees, and
contractors of the Department of Health and Human
Services return information of any taxpayer whose
income is relevant in determining any premium tax
credit under section 36B or any cost-sharing reduction
under section 1402 of the Patient Protection and
Affordable Care Act or eligibility for participation in
a State medicaid program under title XIX of the Social
Security Act, a State's children's health insurance
program under title XXI of the Social Security Act, or
a basic health program under section 1331 of Patient
Protection and Affordable Care Act. Such return
information shall be limited to--
``(i) taxpayer identity information with
respect to such taxpayer,
``(ii) the filing status of such taxpayer,
``(iii) the number of individuals for whom
a deduction is allowed under section 151 with
respect to the taxpayer (including the taxpayer
and the taxpayer's spouse),
``(iv) the modified gross income (as
defined in section 36B) of such taxpayer and
each of the other individuals included under
clause (iii) who are required to file a return
of tax imposed by chapter 1 for the taxable
year,
``(v) such other information as is
prescribed by the Secretary by regulation as
might indicate whether the taxpayer is eligible
for such credit or reduction (and the amount
thereof), and
``(vi) the taxable year with respect to
which the preceding information relates or, if
applicable, the fact that such information is
not available.
``(B) Information to exchange and state agencies.--
The Secretary of Health and Human Services may disclose
to an Exchange established under the Patient Protection
and Affordable Care Act or its contractors, or to a
State agency administering a State program described in
subparagraph (A) or its contractors, any inconsistency
between the information provided by the Exchange or
State agency to the Secretary and the information
provided to the Secretary under subparagraph (A).
``(C) Restriction on use of disclosed
information.--Return information disclosed under
subparagraph (A) or (B) may be used by officers,
employees, and contractors of the Department of Health
and Human Services, an Exchange, or a State agency only
for the purposes of, and to the extent necessary in--
``(i) establishing eligibility for
participation in the Exchange, and verifying
the appropriate amount of, any credit or
reduction described in subparagraph (A),
``(ii) determining eligibility for
participation in the State programs described
in subparagraph (A).''.
(2) Social security numbers.--Section 205(c)(2)(C) of the
Social Security Act is amended by adding at the end the
following new clause:
``(x) The Secretary of Health and Human
Services, and the Exchanges established under
section 1311 of the Patient Protection and
Affordable Care Act, are authorized to collect
and use the names and social security account
numbers of individuals as required to
administer the provisions of, and the
amendments made by, the such Act.''.
(b) Confidentiality and Disclosure.--Paragraph (3) of section
6103(a) of such Code is amended by striking ``or (20)'' and inserting
``(20), or (21)''.
(c) Procedures and Recordkeeping Related to Disclosures.--Paragraph
(4) of section 6103(p) of such Code is amended--
(1) by inserting ``, or any entity described in subsection
(l)(21),'' after ``or (20)'' in the matter preceding
subparagraph (A),
(2) by inserting ``or any entity described in subsection
(l)(21),'' after ``or (o)(1)(A)'' in subparagraph (F)(ii), and
(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. 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-related
credits) is amended by inserting after section 45Q the following:
``SEC. 45R. EMPLOYEE HEALTH INSURANCE EXPENSES OF SMALL EMPLOYERS.
``(a) General Rule.--For purposes of section 38, in the case of an
eligible small employer, the small employer health insurance credit
determined under this section for any taxable year in the credit period
is the amount determined under subsection (b).
``(b) Health Insurance Credit Amount.--Subject to subsection (c),
the amount determined under this subsection with respect to any
eligible small employer is equal to 50 percent (35 percent in the case
of a tax-exempt eligible small employer) of the lesser of--
``(1) the aggregate amount of nonelective contributions the
employer made on behalf of its employees during the taxable
year under the arrangement described in subsection (d)(4) for
premiums for qualified health plans offered by the employer to
its employees through an Exchange, or
``(2) the aggregate amount of nonelective contributions
which the employer would have made during the taxable year
under the arrangement if each employee taken into account under
paragraph (1) had enrolled in a qualified health plan which had
a premium equal to the average premium (as determined by the
Secretary of Health and Human Services) for the small group
market in the rating area in which the employee enrolls for
coverage.
``(c) Phaseout of Credit Amount Based on Number of Employees and
Average Wages.--The amount of the credit determined under subsection
(b) without regard to this subsection shall be reduced (but not below
zero) by the sum of the following amounts:
``(1) Such amount multiplied by a fraction the numerator of
which is the total number of full-time equivalent employees of
the employer in excess of 10 and the denominator of which is
15.
``(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.
Such number shall be rounded to the next lowest whole
number if not otherwise a whole number.
``(B) Excess hours not counted.--If an employee
works in excess of 2,080 hours of service during any
taxable year, such excess shall not be taken into
account under subparagraph (A).
``(C) Hours of service.--The Secretary, in
consultation with the Secretary of Labor, shall
prescribe such regulations, rules, and guidance as may
be necessary to determine the hours of service of an
employee, including rules for the application of this
paragraph to employees who are not compensated on an
hourly basis.
``(3) Average annual wages.--
``(A) In general.--The average annual wages of an
eligible small employer for any taxable year is the
amount determined by dividing--
``(i) the aggregate amount of wages which
were paid by the employer to employees during
the taxable year, by
``(ii) the number of full-time equivalent
employees of the employee determined under
paragraph (2) for the taxable 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.
``(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) Other rules.--Rules similar to the rules of
subsections (c), (d), and (e) of section 52 shall
apply.
``(f) Credit Made Available to Tax-exempt Eligible Small
Employers.--
``(1) In general.--In the case of a tax-exempt eligible
small employer, there shall be treated as a credit allowable
under subpart C (and not allowable under this subpart) the
lesser of--
``(A) the amount of the credit determined under
this section with respect to such employer, or
``(B) the amount of the payroll taxes of the
employer during the calendar year in which the taxable
year begins.
``(2) Tax-exempt eligible small employer.--For purposes of
this section, the term `tax-exempt eligible small employer'
means an eligible small employer which is any organization
described in section 501(c) which is exempt from taxation under
section 501(a).
``(3) Payroll taxes.--For purposes of this subsection--
``(A) In general.--The term `payroll taxes' means--
``(i) amounts required to be withheld from
the employees of the tax-exempt eligible small
employer under section 3401(a),
``(ii) amounts required to be withheld from
such employees under section 3101(b), and
``(iii) amounts of the taxes imposed on the
tax-exempt eligible small employer under
section 3111(b).
``(B) Special rule.--A rule similar to the rule of
section 24(d)(2)(C) shall apply for purposes of
subparagraph (A).
``(g) Application of Section for Calendar Years 2011, 2012, and
2013.--In the case of any taxable year beginning in 2011, 2012, or
2013, the following modifications to this section shall apply in
determining the amount of the credit under subsection (a):
``(1) No credit period required.--The credit shall be
determined without regard to whether the taxable year is in a
credit period and for purposes of applying this section to
taxable years beginning after 2013, no credit period shall be
treated as beginning with a taxable year beginning before 2014.
``(2) Amount of credit.--The amount of the credit
determined under subsection (b) shall be determined--
``(A) by substituting `35 percent (25 percent in
the case of a tax-exempt eligible small employer)' for
`50 percent (35 percent in the case of a tax-exempt
eligible small employer)',
``(B) by reference to an eligible small employer's
nonelective contributions for premiums paid for health
insurance coverage (within the meaning of section
9832(b)(1)) of an employee, and
``(C) by substituting for the average premium
determined under subsection (b)(2) the amount the
Secretary of Health and Human Services determines is
the average premium for the small group market in the
State in which the employer is offering health
insurance coverage (or for such area within the State
as is specified by the Secretary).
``(3) Contribution arrangement.--An arrangement shall not
fail to meet the requirements of subsection (d)(4) solely
because it provides for the offering of insurance outside of an
Exchange.
``(h) Insurance Definitions.--Any term used in this section which
is also used in the Public Health Service Act or subtitle A of title I
of the Patient Protection and Affordable Care Act shall have the
meaning given such term by such Act or subtitle.
``(i) Regulations.--The Secretary shall prescribe such regulations
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 (relating to current year business
credit) is amended by striking ``plus'' at the end of paragraph (34),
by striking the period at the end of paragraph (35) and inserting ``,
plus'', and by inserting after paragraph (35) the following:
``(36) the small employer health insurance credit
determined under section 45R.''.
(c) Credit Allowed Against Alternative Minimum Tax.--Section
38(c)(4)(B) of the Internal Revenue Code of 1986 (defining specified
credits) is amended by redesignating clauses (vi), (vii), and (viii) as
clauses (vii), (viii), and (ix), respectively, and by inserting after
clause (v) the following new clause:
``(vi) the credit determined under section
45R,''.
(d) Disallowance of Deduction for Certain Expenses for Which Credit
Allowed.--
(1) In general.--Section 280C of the Internal Revenue Code
of 1986 (relating to disallowance of deduction for certain
expenses for which credit allowed), as amended by section
1401(b), is amended by adding at the end the following new
subsection:
``(h) Credit for Employee Health Insurance Expenses of Small
Employers.--No deduction shall be allowed for that portion of the
premiums for qualified health plans (as defined in section 1301(a) of
the Patient Protection and Affordable Care Act), or for health
insurance coverage in the case of taxable years beginning in 2011,
2012, or 2013, paid by an employer which is equal to the amount of the
credit determined under section 45R(a) with respect to the premiums.''.
(2) Deduction for expiring credits.--Section 196(c) of such
Code is amended by striking ``and'' at the end of paragraph
(12), by striking the period at the end of paragraph (13) and
inserting ``, and'', and by adding at the end the following new
paragraph:
``(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) 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. 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).
(2) Effects on the national economy and interstate
commerce.--The effects described in this paragraph are the
following:
(A) The requirement regulates activity that is
commercial and economic in nature: economic and
financial decisions about how and when health care is
paid for, and when health insurance is purchased.
(B) Health insurance and health care services are a
significant part of the national economy. National
health spending is projected to increase from
$2,500,000,000,000, or 17.6 percent of the economy, in
2009 to $4,700,000,000,000 in 2019. Private health
insurance spending is projected to be $854,000,000,000
in 2009, and pays for medical supplies, drugs, and
equipment that are shipped in interstate commerce.
Since most health insurance is sold by national or
regional health insurance companies, health insurance
is sold in interstate commerce and claims payments flow
through interstate commerce.
(C) The requirement, together with the other
provisions of this Act, will add millions of new
consumers to the health insurance market, increasing
the supply of, and demand for, health care services.
According to the Congressional Budget Office, the
requirement will increase the number and share of
Americans who are insured.
(D) The requirement achieves near-universal
coverage by building upon and strengthening the private
employer-based health insurance system, which covers
176,000,000 Americans nationwide. In Massachusetts, a
similar requirement has strengthened private employer-
based coverage: despite the economic downturn, the
number of workers offered employer-based coverage has
actually increased.
(E) Half of all personal bankruptcies are caused in
part by medical expenses. By significantly increasing
health insurance coverage, the requirement, together
with the other provisions of this Act, will improve
financial security for families.
(F) Under the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1001 et seq.), the Public Health
Service Act (42 U.S.C. 201 et seq.), and this Act, the
Federal Government has a significant role in regulating
health insurance which is in interstate commerce.
(G) Under sections 2704 and 2705 of the Public
Health Service Act (as added by section 1201 of this
Act), if there were no requirement, many individuals
would wait to purchase health insurance until they
needed care. By significantly increasing health
insurance coverage, the requirement, together with the
other provisions of this Act, will minimize this
adverse selection and broaden the health insurance risk
pool to include healthy individuals, which will lower
health insurance premiums. The requirement is essential
to creating effective health insurance markets in which
improved health insurance products that are guaranteed
issue and do not exclude coverage of pre-existing
conditions can be sold.
(H) Administrative costs for private health
insurance, which were $90,000,000,000 in 2006, are 26
to 30 percent of premiums in the current individual and
small group markets. By significantly increasing health
insurance coverage and the size of purchasing pools,
which will increase economies of scale, the
requirement, together with the other provisions of this
Act, will significantly reduce administrative costs and
lower health insurance premiums. The requirement is
essential to creating effective health insurance
markets that do not require underwriting and eliminate
its associated administrative costs.
(3) Supreme court ruling.--In United States v. South-
Eastern Underwriters Association (322 U.S. 533 (1944)), the
Supreme Court of the United States ruled that insurance is
interstate commerce subject to Federal regulation.
(b) In General.--Subtitle D of the Internal Revenue Code of 1986 is
amended by adding at the end the following new chapter:
``CHAPTER 48--MAINTENANCE OF MINIMUM ESSENTIAL COVERAGE
``Sec. 5000A. Requirement to maintain minimum essential coverage.
``SEC. 5000A. REQUIREMENT TO MAINTAIN MINIMUM ESSENTIAL COVERAGE.
``(a) Requirement To Maintain Minimum Essential Coverage.--An
applicable individual shall for each month beginning after 2013 ensure
that the individual, and any dependent of the individual who is an
applicable individual, is covered under minimum essential coverage for
such month.
``(b) Shared Responsibility Payment.--
``(1) In general.--If an applicable individual fails to
meet the requirement of subsection (a) for 1 or more months
during any calendar year beginning after 2013, then, except as
provided in subsection (d), there is hereby imposed a penalty
with respect to the individual in the amount determined under
subsection (c).
``(2) Inclusion with return.--Any penalty imposed by this
section with respect to any month shall be included with a
taxpayer's return under chapter 1 for the taxable year which
includes such month.
``(3) Payment of penalty.--If an individual with respect to
whom a penalty is imposed by this section for any month--
``(A) is a dependent (as defined in section 152) of
another taxpayer for the other taxpayer's taxable year
including such month, such other taxpayer shall be
liable for such penalty, or
``(B) files a joint return for the taxable year
including such month, such individual and the spouse of
such individual shall be jointly liable for such
penalty.
``(c) Amount of Penalty.--
``(1) In general.--The penalty determined under this
subsection for any month with respect to any individual is an
amount equal to \1/12\ of the applicable dollar amount for the
calendar year.
``(2) Dollar limitation.--The amount of the penalty imposed
by this section on any taxpayer for any taxable year with
respect to all individuals for whom the taxpayer is liable
under subsection (b)(3) shall not exceed an amount equal to 300
percent the applicable dollar amount (determined without regard
to paragraph (3)(C)) for the calendar year with or within which
the taxable year 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.--
``(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.--
``(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) Required contribution.--For purposes of this
paragraph, the term `required contribution' means--
``(i) in the case of an individual eligible
to purchase minimum essential coverage
consisting of coverage through an eligible-
employer-sponsored plan, the portion of the
annual premium which would be paid by the
individual (without regard to whether paid
through salary reduction or otherwise) for
self-only coverage, or
``(ii) in the case of an individual
eligible only to purchase minimum essential
coverage described in subsection (f)(1)(C), the
annual premium for the lowest cost bronze plan
available in the individual market through the
Exchange in the State in the rating area in
which the individual resides (without regard to
whether the individual purchased a qualified
health plan through the Exchange), reduced by
the amount of the credit allowable under
section 36B for the taxable year (determined as
if the individual was covered by a qualified
health plan offered through the Exchange for
the entire taxable year).
``(C) Special rules for individuals related to
employees.--For purposes of subparagraph (B)(i), if an
applicable individual is eligible for minimum essential
coverage through an employer by reason of a
relationship to an employee, the determination shall be
made by reference to the affordability of the coverage
to the employee.
``(D) Indexing.--In the case of plan years
beginning in any calendar year after 2014, subparagraph
(A) shall be applied by substituting for `8 percent'
the percentage the Secretary of Health and Human
Services determines reflects the excess of the rate of
premium growth between the preceding calendar year and
2013 over the rate of income growth for such period.
``(2) Taxpayers with income under 100 percent of poverty
line.--Any applicable individual for any month during a
calendar year if the individual's household income for the
taxable year described in section 1412(b)(1)(B) of the Patient
Protection and Affordable Care Act is less than 100 percent of
the poverty line for the size of the family involved
(determined in the same manner as under subsection (b)(4)).
``(3) Members of indian tribes.--Any applicable individual
for any month during which the individual is a member of an
Indian tribe (as defined in section 45A(c)(6)).
``(4) Months during short coverage gaps.--
``(A) In general.--Any month the last day of which
occurred during a period in which the applicable
individual was not covered by minimum essential
coverage for a continuous period of less than 3 months.
``(B) Special rules.--For purposes of applying this
paragraph--
``(i) the length of a continuous period
shall be determined without regard to the
calendar years in which months in such period
occur,
``(ii) if a continuous period is greater
than the period allowed under subparagraph (A),
no exception shall be provided under this
paragraph for any month in the period, and
``(iii) if there is more than 1 continuous
period described in subparagraph (A) covering
months in a calendar year, the exception
provided by this paragraph shall only apply to
months in the first of such periods.
The Secretary shall prescribe rules for the collection
of the penalty imposed by this section in cases where
continuous periods include months in more than 1
taxable year.
``(5) Hardships.--Any applicable individual who for any
month is determined by the Secretary of Health and Human
Services under section 1311(d)(4)(H) to have suffered a
hardship with respect to the capability to obtain coverage
under a qualified health plan.
``(f) Minimum Essential Coverage.--For purposes of this section--
``(1) In general.--The term `minimum essential coverage'
means any of the following:
``(A) Government sponsored programs.--Coverage
under--
``(i) the Medicare program under part A of
title XVIII of the Social Security Act,
``(ii) the Medicaid program under title XIX
of the Social Security Act,
``(iii) the CHIP program under title XXI of
the Social Security Act,
``(iv) the TRICARE for Life program,
``(v) the veteran's health care program
under chapter 17 of title 38, United States
Code, or
``(vi) a health plan under section 2504(e)
of title 22, United States Code (relating to
Peace Corps volunteers).
``(B) Employer-sponsored plan.--Coverage under an
eligible employer-sponsored plan.
``(C) Plans in the individual market.--Coverage
under a health plan offered in the individual market
within a State.
``(D) Grandfathered health plan.--Coverage under a
grandfathered health plan.
``(E) Other coverage.--Such other health benefits
coverage, such as a State health benefits risk pool, as
the Secretary of Health and Human Services, in
coordination with the Secretary, recognizes for
purposes of this subsection.
``(2) Eligible employer-sponsored plan.--The term `eligible
employer-sponsored plan' means, with respect to any employee, a
group health plan or group health insurance coverage offered by
an employer to the employee which is--
``(A) a governmental plan (within the meaning of
section 2791(d)(8) of the Public Health Service Act),
or
``(B) any other plan or coverage offered in the
small or large group market within a State.
Such term shall include a grandfathered health plan described
in paragraph (1)(D) offered in a group market.
``(3) Excepted benefits not treated as minimum essential
coverage.--The term `minimum essential coverage' shall not
include health insurance coverage which consists of coverage of
excepted benefits--
``(A) described in paragraph (1) of subsection (c)
of section 2791 of the Public Health Service Act; or
``(B) described in paragraph (2), (3), or (4) of
such subsection if the benefits are provided under a
separate policy, certificate, or contract of insurance.
``(4) Individuals residing outside united states or
residents of territories.--Any applicable individual shall be
treated as having minimum essential coverage for any month--
``(A) if such month occurs during any period
described in subparagraph (A) or (B) of section
911(d)(1) which is applicable to the individual, or
``(B) if such individual is a bona fide resident of
any possession of the United States (as determined
under section 937(a)) for such month.
``(5) Insurance-related terms.--Any term used in this
section which is also used in title I of the Patient Protection
and Affordable Care Act shall have the same meaning as when
used in such title.
``(g) Administration and Procedure.--
``(1) In general.--The penalty provided by this section
shall be paid upon notice and demand by the Secretary, and
except as provided in paragraph (2), shall be assessed and
collected in the same manner as an assessable penalty under
subchapter B of chapter 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) Effective Date.--The amendments made by this section shall
apply to taxable years ending after December 31, 2013.
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. REPORTING OF HEALTH INSURANCE COVERAGE.
``(a) In General.--Every person who provides minimum essential
coverage to an individual during a calendar year shall, at such time as
the Secretary may prescribe, make a return described in subsection (b).
``(b) Form and Manner of Return.--
``(1) In general.--A return is described in this subsection
if such return--
``(A) is in such form as the Secretary may
prescribe, and
``(B) contains--
``(i) the name, address and TIN of the
primary insured and the name and TIN of each
other individual obtaining coverage under the
policy,
``(ii) the dates during which such
individual was covered under minimum essential
coverage during the calendar year,
``(iii) in the case of minimum essential
coverage which consists of health insurance
coverage, information concerning--
``(I) whether or not the coverage
is a qualified health plan offered
through an Exchange established under
section 1311 of the Patient Protection
and Affordable Care Act, and
``(II) in the case of a qualified
health plan, the amount (if any) of any
advance payment under section 1412 of
the Patient Protection and Affordable
Care Act of any cost-sharing reduction
under section 1402 of such Act or of
any premium tax credit under section
36B with respect to such coverage, and
``(iv) such other information as the
Secretary may require.
``(2) Information relating to employer-provided coverage.--
If minimum essential coverage provided to an individual under
subsection (a) consists of health insurance coverage of a
health insurance issuer provided through a group health plan of
an employer, a return described in this subsection shall
include--
``(A) the name, address, and employer
identification number of the employer maintaining the
plan,
``(B) the portion of the premium (if any) required
to be paid by the employer, and
``(C) if the health insurance coverage is a
qualified health plan in the small group market offered
through an Exchange, such other information as the
Secretary may require for administration of the credit
under section 45R (relating to credit for employee
health insurance expenses of small employers).
``(c) Statements To Be Furnished to Individuals With Respect to
Whom Information Is Reported.--
``(1) In general.--Every person required to make a return
under subsection (a) shall furnish to each individual whose
name is required to be set forth in such return a written
statement showing--
``(A) the name and address of the person required
to make such return and the phone number of the
information contact for such person, and
``(B) the information required to be shown on the
return with respect to such individual.
``(2) Time for furnishing statements.--The written
statement required under paragraph (1) shall be furnished on or
before January 31 of the year following the calendar year for
which the return under subsection (a) was required to be made.
``(d) Coverage Provided by Governmental Units.--In the case of
coverage provided by any governmental unit or any agency or
instrumentality thereof, the officer or employee who enters into the
agreement to provide such coverage (or the person appropriately
designated for purposes of this section) shall make the returns and
statements required by this section.
``(e) Minimum Essential Coverage.--For purposes of this section,
the term `minimum essential coverage' has the meaning given such term
by section 5000A(f).''.
(b) Assessable Penalties.--
(1) Subparagraph (B) of section 6724(d)(1) of the Internal
Revenue Code of 1986 (relating to definitions) is amended by
striking ``or'' at the end of clause (xxii), by striking
``and'' at the end of clause (xxiii) and inserting ``or'', and
by inserting after clause (xxiii) the following new clause:
``(xxiv) section 6055 (relating to returns
relating to information regarding health
insurance coverage), and''.
(2) Paragraph (2) of section 6724(d) of such Code is
amended by striking ``or'' at the end of subparagraph (EE), by
striking the period at the end of subparagraph (FF) and
inserting ``, or'' and by inserting after subparagraph (FF) the
following new subparagraph:
``(GG) section 6055(c) (relating to statements
relating to information regarding health insurance
coverage).''.
(c) Notification of Nonenrollment.--Not later than June 30 of each
year, the Secretary of the Treasury, acting through the Internal
Revenue Service and in consultation with the Secretary of Health and
Human Services, shall send a notification to each individual who files
an individual income tax return and who is not enrolled in minimum
essential coverage (as defined in section 5000A of the Internal Revenue
Code of 1986). Such notification shall contain information on the
services available through the Exchange operating in the State in which
such individual resides.
(d) Conforming Amendment.--The table of subparts for part III of
subchapter A of chapter 61 of such Code is amended by inserting after
the item relating to subpart C the following new item:
``subpart d--information regarding health insurance coverage''.
(e) 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. 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. NOTICE TO EMPLOYEES.
``(a) In General.--In accordance with regulations promulgated by
the Secretary, an employer to which this Act applies, shall provide to
each employee at the time of hiring (or with respect to current
employees, not later than March 1, 2013), written notice--
``(1) informing the employee of the existence of an
Exchange, including a description of the services provided by
such Exchange, and the manner in which the employee may contact
the Exchange to request assistance;
``(2) if the employer plan's share of the total allowed
costs of benefits provided under the plan is less than 60
percent of such costs, that the employee may be eligible for a
premium tax credit under section 36B of the Internal Revenue
Code of 1986 and a cost sharing reduction under section 1402 of
the Patient Protection and Affordable Care Act if the employee
purchases a qualified health plan through the Exchange; and
``(3) if the employee purchases a qualified health plan
through the Exchange, the employee will lose the employer
contribution (if any) to any health benefits plan offered by
the employer and that all or a portion of such contribution may
be excludable from income for Federal income tax purposes.
``(b) Effective Date.--Subsection (a) shall take effect with
respect to employers in a State beginning on March 1, 2013.''.
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. 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 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.
``(3) Applicable premium tax credit and cost-sharing
reduction.--The term `applicable premium tax credit and cost-
sharing reduction' means--
``(A) any premium tax credit allowed under section
36B,
``(B) any cost-sharing reduction under section 1402
of the Patient Protection and Affordable Care Act, and
``(C) any advance payment of such credit or
reduction under section 1412 of such Act.
``(4) Full-time employee.--
``(A) In general.--The term `full-time employee'
means an employee who is employed on average at least
30 hours of service per week.
``(B) Hours of service.--The Secretary, in
consultation 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..--The Secretary shall
prescribe rules, regulations, or guidance for the repayment of
any assessable payment (including interest) if such payment is
based on the allowance or payment of an applicable premium tax
credit or cost-sharing reduction with respect to an employee,
such allowance or payment is subsequently disallowed, and the
assessable payment would not have been required to be made but
for such allowance or payment.''.
(b) Clerical Amendment.--The table of sections for chapter 43 of
such Code is amended by adding at the end the following new item:
``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). 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) 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. 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) if the employer certifies that the employer
did offer to its full-time employees (and their
dependents) the opportunity to so enroll--
``(i) the length of any waiting period (as
defined in section 2701(b)(4) of the Public
Health Service Act) with respect to such
coverage,
``(ii) the months during the calendar year
for which coverage under the plan was
available,
``(iii) the monthly premium for the lowest
cost option in each of the enrollment
categories under the plan, and
``(iv) the applicable large employer's
share of the total allowed costs of benefits
provided under the plan,
``(D) the number of full-time employees for each
month during the calendar year,
``(E) the name, address, and TIN of each full-time
employee during the calendar year and the months (if
any) during which such employee (and any dependents)
were covered under any such health benefits plans, and
``(F) such other information as the Secretary may
require.
``(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, is amended by striking ``or'' at the end of
clause (xxiii), by striking ``and'' at the end of clause (xxiv)
and inserting ``or'', and by inserting after clause (xxiv) the
following new clause:
``(xxv) section 6056 (relating to returns
relating to large employers required to report
on health insurance coverage), and''.
(2) Paragraph (2) of section 6724(d) of such Code, as so
amended, is amended by striking ``or'' at the end of
subparagraph (FF), by striking the period at the end of
subparagraph (GG) and inserting ``, or'' and by inserting after
subparagraph (GG) the 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) 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 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) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2013.
Subtitle G--Miscellaneous Provisions
SEC. 1551. 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. TRANSPARENCY IN GOVERNMENT.
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).
SEC. 1553. 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) 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. 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.
SEC. 1555. 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) 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. 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). 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.
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. 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. 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. 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.
(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. HEALTH INFORMATION TECHNOLOGY ENROLLMENT STANDARDS AND
PROTOCOLS.
``(a) In General.--
``(1) Standards and protocols.--Not later than 180 days
after the date of enactment of this title, the Secretary, in
consultation with the HIT Policy Committee and the HIT
Standards Committee, shall develop interoperable and secure
standards and protocols that facilitate enrollment of
individuals in Federal and State health and human services
programs, as determined by the Secretary.
``(2) Methods.--The Secretary shall facilitate enrollment
in such programs through methods determined appropriate by the
Secretary, which shall include providing individuals and third
parties authorized by such individuals and their designees
notification of eligibility and verification of eligibility
required under such programs.
``(b) Content.--The standards and protocols for electronic
enrollment in the Federal and State programs described in subsection
(a) shall allow for the following:
``(1) Electronic matching against existing Federal and
State data, including vital records, employment history,
enrollment systems, tax records, and other data determined
appropriate by the Secretary to serve as evidence of
eligibility and in lieu of paper-based documentation.
``(2) Simplification and submission of electronic
documentation, digitization of documents, and systems
verification of eligibility.
``(3) Reuse of stored eligibility information (including
documentation) to assist with retention of eligible
individuals.
``(4) Capability for individuals to apply, recertify and
manage their eligibility information online, including at home,
at points of service, and other community-based locations.
``(5) Ability to expand the enrollment system to integrate
new programs, rules, and functionalities, to operate at
increased volume, and to apply streamlined verification and
eligibility processes to other Federal and State programs, as
appropriate.
``(6) Notification of eligibility, recertification, and
other needed communication regarding eligibility, which may
include communication via email and cellular phones.
``(7) Other functionalities necessary to provide eligibles
with streamlined enrollment process.
``(c) Approval and Notification.--With respect to any standard or
protocol developed under subsection (a) that has been approved by the
HIT Policy Committee and the HIT Standards Committee, the Secretary--
``(1) shall notify States of such standards or protocols;
and
``(2) may require, as a condition of receiving Federal
funds for the health information technology investments, that
States or other entities incorporate such standards and
protocols into such 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.
``(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 (42 U.S.C. 300gg), as so redesignated
by section 1201(2)--
(A) in subsection (c)--
(i) in paragraph (2), by striking ``group
health plan'' each place that such term appears
and inserting ``group or individual health
plan''; and
(ii) in paragraph (3)--
(I) by striking ``group health
insurance'' each place that such term
appears and inserting ``group or
individual health insurance''; and
(II) in subparagraph (D), by
striking ``small or large'' and
inserting ``individual or group'';
(B) in subsection (d), by striking ``group health
insurance'' each place that such term appears and
inserting ``group or individual health insurance''; and
(C) in subsection (e)(1)(A), by striking ``group
health insurance'' and inserting ``group or individual
health insurance'';
(2) by striking the second heading for subpart 2 of part A
(relating to other requirements);
(3) in section 2725 (42 U.S.C. 300gg-4), as so redesignated
by 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 (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)--
(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 (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 (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 (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'';
(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 (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'';
(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 (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)--
(A) by striking subsection (a);
(B) by striking ``subparts 1 through 3'' each place
that such appears and inserting ``subpart 1'';
(C) by redesignating subsections (b) through (e) as
subsections (a) through (d), respectively; and
(D) by redesignating such section (as amended by
this paragraph) as section 2722;
(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) 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) 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) Application.--Notwithstanding any other provision of the
Patient Protection and Affordable Care Act, nothing in such Act (or an
amendment made by such Act) shall be construed to--
(1) prohibit (or authorize the Secretary of Health and
Human Services to promulgate regulations that prohibit) a group
health plan or health insurance issuer from carrying out
utilization management techniques that are commonly used as of
the date of enactment of this Act; or
(2) restrict the application of the amendments made by this
subtitle.
(e) Technical Amendment to the Employee Retirement Income Security
Act of 1974.--Subpart B of part 7 of subtitle A of title I of the
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1181 et.
seq.) is amended, by adding at the end the following:
``SEC. 715. ADDITIONAL MARKET REFORMS.
``(a) General Rule.--Except as provided in subsection (b)--
``(1) the provisions of part A of title XXVII of the Public
Health Service Act (as amended by the Patient Protection and
Affordable Care Act) shall apply to group health plans, and
health insurance issuers providing health insurance coverage in
connection with group health plans, as if included in this
subpart; and
``(2) to the extent that any provision of this part
conflicts with a provision of such part A with respect to group
health plans, or health insurance issuers providing health
insurance coverage in connection with group health plans, the
provisions of such part A 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. 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.
(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.--Section 1902(a)(10)(A)(i) of the
Social Security Act (42 U.S.C. 1396a) is amended--
(A) by striking ``or'' at the end of subclause
(VI);
(B) by adding ``or'' at the end of subclause (VII);
and
(C) by inserting after subclause (VII) the
following:
``(VIII) beginning January 1, 2014,
who are under 65 years of age, not
pregnant, not entitled to, or enrolled
for, benefits under part A of title
XVIII, or enrolled for benefits under
part B of title XVIII, and are not
described in a previous subclause of
this clause, and whose income (as
determined under subsection (e)(14))
does not exceed 133 percent of the
poverty line (as defined in section
2110(c)(5)) applicable to a family of
the size involved, subject to
subsection (k);''.
(2) Provision of at least minimum essential coverage.--
(A) In general.--Section 1902 of such Act (42
U.S.C. 1396a) is amended by inserting after subsection
(j) the following:
``(k)(1) The medical assistance provided to an individual described
in subclause (VIII) of subsection (a)(10)(A)(i) shall consist of
benchmark coverage described in section 1937(b)(1) or benchmark
equivalent coverage described in section 1937(b)(2). Such medical
assistance shall be provided subject to the requirements of section
1937, without regard to whether a State otherwise has elected the
option to provide medical assistance through coverage under that
section, unless an individual described in subclause (VIII) of
subsection (a)(10)(A)(i) is also an individual for whom, under
subparagraph (B) of section 1937(a)(2), the State may not require
enrollment in benchmark coverage described in subsection (b)(1) of
section 1937 or benchmark equivalent coverage described in subsection
(b)(2) of that section.''.
(B) Conforming amendment.--Section 1903(i) of the
Social Security Act, as amended by section 6402(c), is
amended--
(i) in paragraph (24), by striking ``or''
at the end;
(ii) in paragraph (25), by striking the
period and inserting ``; or''; and
(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) 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:
----------------------------------------------------------------------------------------------------------------
If the State is an expansion State, If the State is not an expansion
``For any fiscal year quarter the applicable percentage point State, the applicable percentage
occurring in the calendar year: 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.--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.
``(B) Full benefits.--The term `full benefits'
means, with respect to an individual, medical
assistance for all services covered under the State
plan under this title that is not less in amount,
duration, or scope, or is determined by the Secretary
to be substantially equivalent, to the medical
assistance available for an individual described in
section 1902(a)(10)(A)(i).''.
(4) State options to offer coverage earlier and presumptive
eligibility; children required to have coverage for parents to
be eligible.--
(A) In general.--Subsection (k) of section 1902 of
the Social Security Act (as added by paragraph (2)), is
amended by inserting after paragraph (1) the following:
``(2) Beginning with the first day of any fiscal year quarter that
begins on or after January 1, 2011, and before January 1, 2014, a State
may elect through a State plan amendment to provide medical assistance
to individuals who would be described in subclause (VIII) of subsection
(a)(10)(A)(i) if that subclause were effective before January 1, 2014.
A State may elect to phase-in the extension of eligibility for medical
assistance to such individuals based on income, so long as the State
does not extend such eligibility to individuals described in such
subclause with higher income before making individuals described in
such subclause with lower income eligible for medical assistance.
``(3) If an individual described in subclause (VIII) of subsection
(a)(10)(A)(i) is the parent of a child who is under 19 years of age (or
such higher age as the State may have elected) who is eligible for
medical assistance under the State plan or under a waiver of such plan
(under that subclause or under a State plan amendment under paragraph
(2), the individual may not be enrolled under the State plan unless the
individual's child is enrolled under the State plan or under a waiver
of the plan or is enrolled in other health insurance coverage. For
purposes of the preceding sentence, the term `parent' includes an
individual treated as a caretaker relative for purposes of carrying out
section 1931.''.
(B) Presumptive eligibility.--Section 1920 of the
Social Security Act (42 U.S.C. 1396r-1) is amended by
adding at the end the following:
``(e) If the State has elected the option to provide a presumptive
eligibility period under this section or section 1920A, the State may
elect to provide a presumptive eligibility period (as defined in
subsection (b)(1)) for individuals who are eligible for medical
assistance under clause (i)(VIII) of subsection (a)(10)(A) or section
1931 in the same manner as the State provides for such a period under
this section or section 1920A, subject to such guidance as the
Secretary shall establish.''.
(5) Conforming amendments.--
(A) Section 1902(a)(10) of such Act (42 U.S.C.
1396a(a)(10)) is amended in the matter following
subparagraph (G), by striking ``and (XIV)'' and
inserting ``(XIV)'' and by inserting ``and (XV) the
medical assistance made available to an individual
described in subparagraph (A)(i)(VIII) shall be limited
to medical assistance described in subsection (k)(1)''
before the semicolon.
(B) Section 1902(l)(2)(C) of such Act (42 U.S.C.
1396a(l)(2)(C)) is amended by striking ``100'' and
inserting ``133''.
(C) Section 1905(a) of such Act (42 U.S.C.
1396d(a)) is amended in the matter preceding paragraph
(1)--
(i) by striking ``or'' at the end of clause
(xii);
(ii) by inserting ``or'' at the end of
clause (xiii); 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 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.--The requirement under paragraph (1)
shall continue to apply to a State through September 30, 2019,
with respect to the eligibility standards, methodologies, and
procedures under the State plan under this title or under any
waiver of such plan that are applicable to determining the
eligibility for medical assistance of any child who is under 19
years of age (or such higher age as the State may have
elected).
``(3) Nonapplication.--During the period that begins on
January 1, 2011, and ends on December 31, 2013, the requirement
under paragraph (1) shall not apply to a State with respect to
nonpregnant, nondisabled adults who are eligible for medical
assistance under the State plan or under a waiver of the plan
at the option of the State and whose income exceeds 133 percent
of the poverty line (as defined in section 2110(c)(5))
applicable to a family of the size involved if, on or after
December 31, 2010, the State certifies to the Secretary that,
with respect to the State fiscal year during which the
certification is made, the State has a budget deficit, or with
respect to the succeeding State fiscal year, the State is
projected to have a budget deficit. Upon submission of such a
certification to the Secretary, the requirement under paragraph
(1) shall not apply to the State with respect to any remaining
portion of the period described in the preceding sentence.
``(4) Determination of compliance.--
``(A) States shall apply modified gross income.--A
State's determination of income in accordance with
subsection (e)(14) shall not be considered to be
eligibility standards, methodologies, or procedures
that are more restrictive than the standards,
methodologies, or procedures in effect under the State
plan or under a waiver of the plan on the date of
enactment of the Patient Protection and Affordable Care
Act for purposes of determining compliance with the
requirements of paragraph (1), (2), or (3).
``(B) States may expand eligibility or move
waivered populations into coverage under the state
plan.--With respect to any period applicable under
paragraph (1), (2), or (3), a State that applies
eligibility standards, methodologies, or procedures
under the State plan under this title or under any
waiver of the plan that are less restrictive than the
eligibility standards, methodologies, or procedures,
applied under the State plan or under a waiver of the
plan on the date of enactment of the Patient Protection
and Affordable Care Act, or that makes individuals who,
on such date of enactment, are eligible for medical
assistance under a waiver of the State plan, after such
date of enactment eligible for medical assistance
through a State plan amendment with an income
eligibility level that is not less than the income
eligibility level that applied under the waiver, or as
a result of the application of subclause (VIII) of
section 1902(a)(10)(A)(i), shall not be considered to
have in effect eligibility standards, methodologies, or
procedures that are more restrictive than the
standards, methodologies, or procedures in effect under
the State plan or under a waiver of the plan on the
date of enactment of the Patient Protection and
Affordable Care Act for purposes of determining
compliance with the requirements of paragraph (1), (2),
or (3).''.
(c) Medicaid Benchmark Benefits Must Consist of at Least Minimum
Essential Coverage.--Section 1937(b) of such Act (42 U.S.C. 1396u-7(b))
is amended--
(1) in paragraph (1), in the matter preceding subparagraph
(A), by inserting ``subject to paragraphs (5) and (6),'' before
``each'';
(2) in paragraph (2)--
(A) in the matter preceding subparagraph (A), by
inserting ``subject to paragraphs (5) and (6)'' after
``subsection (a)(1),'';
(B) in subparagraph (A)--
(i) by redesignating clauses (iv) and (v)
as clauses (vi) and (vii), respectively; and
(ii) by inserting after clause (iii), the
following:
``(iv) Coverage of prescription drugs.
``(v) Mental health services.''; and
(C) in subparagraph (C)--
(i) by striking clauses (i) and (ii); and
(ii) by redesignating clauses (iii) and
(iv) as clauses (i) and (ii), respectively; and
(3) by adding at the end the following new paragraphs:
``(5) Minimum standards.--Effective January 1, 2014, any
benchmark benefit package under paragraph (1) or benchmark
equivalent coverage under paragraph (2) must provide at least
essential health benefits as described in section 1302(b) of
the Patient Protection and Affordable Care Act.
``(6) Mental health services parity.--
``(A) In general.--In the case of any benchmark
benefit package under paragraph (1) or benchmark
equivalent coverage under paragraph (2) that is offered
by an entity that is not a medicaid managed care
organization and that provides both medical and
surgical benefits and mental health or substance use
disorder benefits, the entity shall ensure that the
financial requirements and treatment limitations
applicable to such mental health or substance use
disorder benefits comply with the requirements of
section 2705(a) of the Public Health Service Act in the
same manner as such requirements apply to a group
health plan.
``(B) Deemed compliance.--Coverage provided with
respect to an individual described in section
1905(a)(4)(B) and covered under the State plan under
section 1902(a)(10)(A) of the services described in
section 1905(a)(4)(B) (relating to early and periodic
screening, diagnostic, and treatment services defined
in section 1905(r)) and provided in accordance with
section 1902(a)(43), shall be deemed to satisfy the
requirements of subparagraph (A).''.
(d) Annual Reports on Medicaid Enrollment.--
(1) State reports.--Section 1902(a) of the Social Security
Act (42 U.S.C. 1396a(a)), as amended by subsection (b), is
amended--
(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) provide that, beginning January 2015, and annually
thereafter, the State shall submit a report to the Secretary
that contains--
``(A) the total number of enrolled and newly
enrolled individuals in the State plan or under a
waiver of the plan for the fiscal year ending on
September 30 of the preceding calendar year,
disaggregated by population, including children,
parents, nonpregnant childless adults, disabled
individuals, elderly individuals, and such other
categories or sub-categories of individuals eligible
for medical assistance under the State plan or under a
waiver of the plan as the Secretary may require;
``(B) a description, which may be specified by
population, of the outreach and enrollment processes
used by the State during such fiscal year; and
``(C) any other data reporting determined necessary
by the Secretary to monitor enrollment and retention of
individuals eligible for medical assistance under the
State plan or under a waiver of the plan.''.
(2) Reports to congress.--Beginning April 2015, and
annually thereafter, the Secretary of Health and Human Services
shall submit a report to the appropriate committees of Congress
on the total enrollment and new enrollment in Medicaid for the
fiscal year ending on September 30 of the preceding calendar
year on a national and State-by-State basis, and shall include
in each such report such recommendations for administrative or
legislative changes to improve enrollment in the Medicaid
program as the Secretary determines appropriate.
(e) State Option for Coverage for Individuals With Income That
Exceeds 133 Percent of the Poverty Line.--
(1) Coverage as optional categorically needy group.--
Section 1902 of the Social Security Act (42 U.S.C. 1396a) is
amended--
(A) in subsection (a)(10)(A)(ii)--
(i) in subclause (XVIII), by striking
``or'' at the end;
(ii) in subclause (XIX), by adding ``or''
at the end; and
(iii) by adding at the end the following
new subclause:
``(XX) beginning January 1, 2014,
who are under 65 years of age and are
not described in or enrolled under a
previous subclause of this clause, and
whose income (as determined under
subsection (e)(14)) exceeds 133 percent
of the poverty line (as defined in
section 2110(c)(5)) applicable to a
family of the size involved but does
not exceed the highest income
eligibility level established under the
State plan or under a waiver of the
plan, subject to subsection (hh);'' and
(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, 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. The Secretary may waive such provisions of this
title and title XXI as are necessary to ensure that
States establish income and eligibility determination
systems that protect beneficiaries.
``(B) No income or expense disregards.--No type of
expense, block, or other income disregard shall be
applied by a State to determine income eligibility for
medical assistance under the State plan or under any
waiver of such plan or for any other purpose applicable
under the plan or waiver for which a determination of
income is required.
``(C) No assets test.--A State shall not apply any
assets or resources test for purposes of determining
eligibility for 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 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.--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.
``(G) Definitions of modified gross income and
household income.--In this paragraph, the terms
`modified gross income' and `household income' have the
meanings given such terms in section 36B(d)(2) of the
Internal Revenue Code of 1986.
``(H) Continued application of medicaid rules
regarding point-in-time income and sources of income.--
The requirement under this paragraph for States to use
modified gross income and household income to determine
income eligibility for medical assistance under the
State plan or under any waiver of such plan and for any
other purpose applicable under the plan or waiver for
which a determination of income is required shall not
be construed as affecting or limiting the application
of--
``(i) the requirement under this title and
under the State plan or a waiver of the plan to
determine an individual's income as of the
point in time at which an application for
medical assistance under the State plan or a
waiver of the plan is processed; or
``(ii) any rules established under this
title or under the State plan or a waiver of
the plan regarding sources of countable
income.''.
(b) Conforming Amendment.--Section 1902(a)(17) of such Act (42
U.S.C. 1396a(a)(17)) is amended by inserting ``(e)(14),'' before
``(l)(3)''.
(c) Effective Date.--The amendments made by subsections (a) and (b)
take effect on January 1, 2014.
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.
(b) Conforming Amendment.--The heading for section 1906A of such
Act (42 U.S.C. 1396e-1) is amended by striking ``option for children''.
(c) Effective Date.--The amendments made by this section take
effect on January 1, 2014.
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) 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'';
(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) 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) 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 for the fiscal year without regard to this subsection
and subsection (y), is less than the Federal medical assistance
percentage determined for the State for the preceding fiscal
year under this subsection.
``(2) In this subsection, the term `disaster-recovery FMAP
adjustment State' means a State that is one of the 50 States or the
District of Columbia, for which, at any time during the preceding 7
fiscal years, the President has declared a major disaster under section
401 of the Robert T. Stafford Disaster Relief and Emergency Assistance
Act and determined as a result of such disaster that every county or
parish in the State warrant individual and public assistance or public
assistance from the Federal Government under such Act and for which--
``(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) 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''.
Subtitle B--Enhanced Support for the Children's Health Insurance
Program
SEC. 2101. ADDITIONAL FEDERAL FINANCIAL PARTICIPATION FOR CHIP.
(a) In General.--Section 2105(b) of the Social Security Act (42
U.S.C. 1397ee(b)) is amended by adding at the end the following:
``Notwithstanding the preceding sentence, during the period that begins
on October 1, 2013, and ends on September 30, 2019, the enhanced FMAP
determined for a State for a fiscal year (or for any portion of a
fiscal year occurring during such period) shall be increased by 23
percentage points, but in no case shall exceed 100 percent. The
increase in the enhanced FMAP under the preceding sentence shall not
apply with respect to determining the payment to a State under
subsection (a)(1) for expenditures described in subparagraph (D)(iv),
paragraphs (8), (9), (11) of subsection (c), or clause (4) of the first
sentence of section 1905(b).''.
(b) Maintenance of Effort.--
(1) In general.--Section 2105(d) of the Social Security Act
(42 U.S.C. 1397ee(d)) is amended by adding at the end the
following:
``(3) Continuation of eligibility standards for children
until october 1, 2019.--
``(A) In general.--During the period that begins on
the date of enactment of the Patient Protection and
Affordable Care Act and ends on September 30, 2019, a
State shall not have in effect eligibility standards,
methodologies, or procedures under its State child
health plan (including any waiver under such plan) for
children (including children provided medical
assistance for which payment is made under section
2105(a)(1)(A)) that are more restrictive than the
eligibility standards, methodologies, or procedures,
respectively, under such plan (or waiver) as in effect
on the date of enactment of that Act. The preceding
sentence shall not be construed as preventing a State
during such period from--
``(i) applying eligibility standards,
methodologies, or procedures for children under
the State child health plan or under any waiver
of the plan that are less restrictive than the
eligibility standards, methodologies, or
procedures, respectively, for children under
the plan or waiver that are in effect on the
date of enactment of such Act; or
``(ii) imposing a limitation described in
section 2112(b)(7) for a fiscal year in order
to limit expenditures under the State child
health plan to those for which Federal
financial participation is available under this
section for the fiscal year.
``(B) Assurance of exchange coverage for targeted
low-income children unable to be provided child health
assistance as a result of funding shortfalls.--In the
event that allotments provided under section 2104 are
insufficient to provide coverage to all children who
are eligible to be targeted low-income children under
the State child health plan under this title, a State
shall establish procedures to ensure that such children
are provided coverage through an Exchange 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) 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) CHIP Eligibility for Children Ineligible for Medicaid as a
Result of Elimination of Disregards.--Notwithstanding any other
provision of law, a State shall treat any child who is determined to be
ineligible for medical assistance under the State Medicaid plan or
under a waiver of the plan as a result of the elimination of the
application of an income disregard based on expense or type of income,
as required under section 1902(e)(14) of the Social Security Act (as
added by this Act), as a targeted low-income child under section
2110(b) (unless the child is excluded under paragraph (2) of that
section) and shall provide child health assistance to the child under
the State child health plan (whether implemented under title XIX or
XXI, or both, of the Social Security Act).
SEC. 2102. TECHNICAL CORRECTIONS.
(a) CHIPRA.--Effective as if included in the enactment of the
Children's Health Insurance Program Reauthorization Act of 2009 (Public
Law 111-3) (in this section referred to as ``CHIPRA''):
(1) Section 2104(m) of the Social Security Act, as added by
section 102 of CHIPRA, is amended--
(A) by redesignating paragraph (7) as paragraph
(8); and
(B) by inserting after paragraph (6), the
following:
``(7) Adjustment of fiscal year 2010 allotments to account
for changes in projected spending for certain previously
approved expansion programs.--For purposes of recalculating the
fiscal year 2010 allotment, in the case of one of the 50 States
or the District of Columbia that has an approved State plan
amendment effective January 1, 2006, to provide child health
assistance through the provision of benefits under the State
plan under title XIX for children from birth through age 5
whose family income does not exceed 200 percent of the poverty
line, the Secretary shall increase the allotment by an amount
that would be equal to the Federal share of expenditures that
would have been claimed at the enhanced FMAP rate rather than
the Federal medical assistance percentage matching rate for
such population.''.
(2) Section 605 of CHIPRA is amended by striking ``legal
residents'' and insert ``lawfully residing in the United
States''.
(3) Subclauses (I) and (II) of paragraph (3)(C)(i) of
section 2105(a) of the Social Security Act (42 U.S.C.
1397ee(a)(3)(ii)), as added by section 104 of CHIPRA, are each
amended by striking ``, respectively''.
(4) Section 2105(a)(3)(E)(ii) of the Social Security Act
(42 U.S.C. 1397ee(a)(3)(E)(ii)), as added by section 104 of
CHIPRA, is amended by striking subclause (IV).
(5) Section 2105(c)(9)(B) of the Social Security Act (42
U.S.C. 1397e(c)(9)(B)), as added by section 211(c)(1) of
CHIPRA, is amended by striking ``section 1903(a)(3)(F)'' and
inserting ``section 1903(a)(3)(G)''.
(6) Section 2109(b)(2)(B) of the Social Security Act (42
U.S.C. 1397ii(b)(2)(B)), as added by section 602 of CHIPRA, is
amended by striking ``the child population growth factor under
section 2104(m)(5)(B)'' and inserting ``a high-performing State
under section 2111(b)(3)(B)''.
(7) Section 2110(c)(9)(B)(v) of the Social Security Act (42
U.S.C. 1397jj(c)(9)(B)(v)), as added by section 505(b) of
CHIPRA, is amended by striking ``school or school system'' and
inserting ``local educational agency (as defined under section
9101 of the Elementary and Secondary Education Act of 1965''.
(8) Section 211(a)(1)(B) of CHIPRA is amended--
(A) by striking ``is amended'' and all that follows
through ``adding'' and inserting ``is amended by
adding''; and
(B) by redesignating the new subparagraph to be
added by such section to section 1903(a)(3) of the
Social Security Act as a new subparagraph (H).
(b) ARRA.--Effective as if included in the enactment of section
5006(a) of division B of the American Recovery and Reinvestment Act of
2009 (Public Law 111-5), the second sentence of section 1916A(a)(1) of
the Social Security Act (42 U.S.C. 1396o-1(a)(1)) is amended by
striking ``or (i)'' and inserting ``, (i), or (j)''.
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. ENROLLMENT SIMPLIFICATION AND COORDINATION WITH STATE
HEALTH INSURANCE EXCHANGES.
``(a) Condition for Participation in Medicaid.--As a condition of
the State plan under this title and receipt of any Federal financial
assistance under section 1903(a) for calendar quarters beginning after
January 1, 2014, a State shall ensure that the requirements of
subsection (b) is met.
``(b) Enrollment Simplification and Coordination With State Health
Insurance Exchanges and Chip.--
``(1) In general.--A State shall establish procedures for--
``(A) enabling individuals, through an Internet
website that meets the requirements of paragraph (4),
to apply for 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 Care Act, and any other
assistance or subsidies available for coverage obtained
through the Exchange;
``(D) ensuring that the State agency responsible
for administering the State plan under this title (in
this section referred to as the `State Medicaid
agency'), the State agency responsible for
administering the State child health plan under title
XXI (in this section referred to as the `State CHIP
agency') and an Exchange established by the State under
section 1311 of the Patient Protection and Affordable
Care Act utilize a secure electronic interface
sufficient to allow for a determination of an
individual's eligibility for such medical assistance,
child health assistance, or premium assistance, and
enrollment in the State plan under this title, title
XXI, or a qualified health plan, as appropriate;
``(E) coordinating, for individuals who are
enrolled in the State plan or under a waiver of the
plan and who are also enrolled in a qualified health
plan offered through such an Exchange, and for
individuals who are enrolled in the State child health
plan under title XXI and who are also enrolled in a
qualified health plan, the provision of medical
assistance or child health assistance to such
individuals with the coverage provided under the
qualified health plan in which they are enrolled,
including services described in section 1905(a)(4)(B)
(relating to early and periodic screening, diagnostic,
and treatment services defined in section 1905(r)) and
provided in accordance with the requirements of section
1902(a)(43); and
``(F) conducting outreach to and enrolling
vulnerable and underserved populations eligible for
medical assistance under this title XIX or for child
health assistance under title XXI, including children,
unaccompanied homeless youth, children and youth with
special health care needs, pregnant women, racial and
ethnic minorities, rural populations, victims of abuse
or trauma, individuals with mental health or substance-
related disorders, and individuals with HIV/AIDS.
``(2) Agreements with state health insurance exchanges.--
The State Medicaid agency and the State CHIP agency may enter
into an agreement with an Exchange established by the State
under section 1311 of the Patient Protection and Affordable
Care Act under which the State Medicaid agency or State CHIP
agency may determine whether a State resident is eligible for
premium assistance for the purchase of a qualified health plan
under section 36B of the Internal Revenue Code of 1986 (and, if
applicable, advance payment of such assistance under section
1412 of the Patient Protection and Affordable Care Act), so
long as the agreement meets such conditions and requirements as
the Secretary of the Treasury may prescribe to reduce
administrative costs and the likelihood of eligibility errors
and disruptions in coverage.
``(3) Streamlined enrollment system.--The State Medicaid
agency and State CHIP agency shall participate in and comply
with the requirements for the system established under section
1413 of the Patient Protection and Affordable Care Act
(relating to streamlined procedures for enrollment through an
Exchange, Medicaid, and CHIP).
``(4) Enrollment website requirements.--The procedures
established by State under paragraph (1) shall include
establishing and having in operation, not later than January 1,
2014, an Internet website that is linked to any website of an
Exchange 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) 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 of presumptive eligibility made by a
hospital that elects under section 1902(a)(47)(B) to be a
qualified entity for such purpose''.
(c) 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) The term `freestanding birth center services' means
services furnished to an individual at a freestanding birth center (as
defined in subparagraph (B)) at such center.
``(B) The term `freestanding birth center' means a health
facility--
``(i) that is not a hospital;
``(ii) where childbirth is planned to occur away from the
pregnant woman's residence;
``(iii) that is licensed or otherwise approved by the State
to provide prenatal labor and delivery or postpartum care and
other ambulatory services that are included in the plan; and
``(iv) that complies with such other requirements relating
to the health and safety of individuals furnished services by
the facility as the State shall establish.
``(C) A State shall provide separate payments to providers
administering prenatal labor and delivery or postpartum care in a
freestanding birth center (as defined in subparagraph (B)), such as
nurse midwives and other providers of services such as birth attendants
recognized under State law, as determined appropriate by the Secretary.
For purposes of the preceding sentence, the term `birth attendant'
means an individual who is recognized or registered by the State
involved to provide health care at childbirth and who provides such
care within the scope of practice under which the individual is legally
authorized to perform such care under State law (or the State
regulatory mechanism provided by State law), regardless of whether the
individual is under the supervision of, or associated with, a physician
or other health care provider. Nothing in this subparagraph shall be
construed as changing State law requirements applicable to a birth
attendant.''.
(b) Conforming Amendment.--Section 1902(a)(10)(A) of the Social
Security Act (42 U.S.C. 1396a(a)(10)(A)), is amended in the matter
preceding clause (i) by striking ``and (21)'' and inserting ``, (21),
and (28)''.
(c) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall take effect on the date
of the enactment of this Act and shall apply to services
furnished on or after such date.
(2) Exception if state legislation required.--In the case
of a State plan for medical assistance under title XIX of the
Social Security Act which the Secretary of Health and Human
Services determines requires State legislation (other than
legislation appropriating funds) in order for the plan to meet
the additional requirement imposed by the amendments made by
this section, the State plan shall not be regarded as failing
to comply with the requirements of such title solely on the
basis of its failure to meet this additional requirement before
the first day of the first calendar quarter beginning after the
close of the first regular session of the State legislature
that begins after the date of the enactment of this Act. For
purposes of the previous sentence, in the case of a State that
has a 2-year legislative session, each year of such session
shall be deemed to be a separate regular session of the State
legislature.
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:
``(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. (a) State Option.--State plan approved under section
1902 may provide for making medical assistance available to an
individual described in section 1902(ii) (relating to individuals who
meet certain income eligibility standard) during a presumptive
eligibility period. In the case of an individual described in section
1902(ii), such medical assistance shall be limited to family planning
services and supplies described in 1905(a)(4)(C) and, at the State's
option, medical diagnosis and treatment services that are provided in
conjunction with a family planning service in a family planning
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) notify the State agency of the determination
within 5 working days after the date on which
determination is made; and
``(B) inform such individual at the time the
determination is made that an application for medical
assistance is required to be made by not later than the
last day of the month following the month during which
the determination is made.
``(3) Application for medical assistance.--In the case of
an individual described in subsection (a) who is determined by
a qualified entity to be presumptively eligible for medical
assistance under a State plan, the individual shall apply for
medical assistance by not later than the last day of the month
following the month during which the determination is made.
``(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.--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''.
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.--Subject to the succeeding provisions of
this subsection, beginning October 1, 2010, a State may provide
through a State plan amendment for the provision of medical
assistance for home and community-based attendant services and
supports for individuals who are eligible for medical
assistance under the State plan whose income does not exceed
150 percent of the poverty line (as defined in section
2110(c)(5)) or, if greater, the income level applicable for an
individual who has been determined to require an institutional
level of care to be eligible for nursing facility services
under the State plan and with respect to whom there has been a
determination that, but for the provision of such services, the
individuals would require the level of care provided in a
hospital, a nursing facility, an intermediate care facility for
the mentally retarded, or an institution for mental diseases,
the cost of which could be reimbursed under the State plan, but
only if the individual chooses to receive such home and
community-based attendant services and supports, and only if
the State meets the following requirements:
``(A) Availability.--The State shall make available
home and community-based attendant services and
supports to eligible individuals, as needed, to assist
in accomplishing activities of daily living,
instrumental activities of daily living, and health-
related tasks through hands-on assistance, supervision,
or cueing--
``(i) under a person-centered plan of
services and supports that is based on an
assessment of functional need and that is
agreed to in writing by the individual or, as
appropriate, the individual's representative;
``(ii) in a home or community setting,
which does not include a nursing facility,
institution for mental diseases, or an
intermediate care facility for the mentally
retarded;
``(iii) under an agency-provider model or
other model (as defined in paragraph (6)(C ));
and
``(iv) the furnishing of which--
``(I) is selected, managed, and
dismissed by the individual, or, as
appropriate, with assistance from the
individual's representative;
``(II) is controlled, to the
maximum extent possible, by the
individual or where appropriate, the
individual's representative, regardless
of who may act as the employer of
record; and
``(III) provided by an individual
who is qualified to provide such
services, including family members (as
defined by the Secretary).
``(B) Included services and supports.--In addition
to assistance in accomplishing activities of daily
living, instrumental activities of daily living, and
health related tasks, the home and community-based
attendant services and supports made available
include--
``(i) the acquisition, maintenance, and
enhancement of skills necessary for the
individual to accomplish activities of daily
living, instrumental activities of daily
living, and health related tasks;
``(ii) back-up systems or mechanisms (such
as the use of beepers or other electronic
devices) to ensure continuity of services and
supports; and
``(iii) voluntary training on how to
select, manage, and dismiss attendants.
``(C) Excluded services and supports.--Subject to
subparagraph (D), the home and community-based
attendant services and supports made available do not
include--
``(i) room and board costs for the
individual;
``(ii) special education and related
services provided under the Individuals with
Disabilities Education Act and vocational
rehabilitation services provided under the
Rehabilitation Act of 1973;
``(iii) assistive technology devices and
assistive technology services other than those
under (1)(B)(ii);
``(iv) medical supplies and equipment; or
``(v) home modifications.
``(D) Permissible services and supports.--The home
and community-based attendant services and supports may
include--
``(i) expenditures for transition costs
such as rent and utility deposits, first
month's rent and utilities, bedding, basic
kitchen supplies, and other necessities
required for an individual to make the
transition from a nursing facility, institution
for mental diseases, or intermediate care
facility for the mentally retarded to a
community-based home setting where the
individual resides; 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) develop and implement such amendment in
collaboration with a Development and Implementation
Council established by the State that includes a
majority of members with disabilities, elderly
individuals, and their representatives and consults and
collaborates with such individuals;
``(B) provide consumer controlled home and
community-based attendant services and supports to
individuals on a statewide basis, in a manner that
provides such services and supports in the most
integrated setting appropriate to the individual's
needs, and without regard to the individual's age, type
or nature of disability, severity of disability, or the
form of home and community-based attendant services and
supports that the individual requires in order to lead
an independent life;
``(C) with respect to expenditures during the first
full fiscal year in which the State plan amendment is
implemented, maintain or exceed the level of State
expenditures for medical assistance that is provided
under section 1905(a), section 1915, section 1115, or
otherwise to individuals with disabilities or elderly
individuals attributable to the preceding fiscal year;
``(D) establish and maintain a comprehensive,
continuous quality assurance system with respect to
community- based attendant services and supports that--
``(i) includes standards for agency-based
and other delivery models with respect to
training, appeals for denials and
reconsideration procedures of an individual
plan, and other factors as determined by the
Secretary;
``(ii) incorporates feedback from consumers
and their representatives, disability
organizations, providers, families of disabled
or elderly individuals, members of the
community, and others and maximizes consumer
independence and consumer control;
``(iii) monitors the health and well-being
of each individual who receives home and
community-based attendant services and
supports, including a process for the mandatory
reporting, investigation, and resolution of
allegations of neglect, abuse, or exploitation
in connection with the provision of such
services and supports; and
``(iv) provides information about the
provisions of the quality assurance required
under clauses (i) through (iii) to each
individual receiving such services; and
``(E) collect and report information, as determined
necessary by the Secretary, for the purposes of
approving the State plan amendment, providing Federal
oversight, and conducting an evaluation under paragraph
(5)(A), including data regarding how the State provides
home and community-based attendant services and
supports and other home and community-based services,
the cost of such services and supports, and how the
State provides individuals with disabilities who
otherwise qualify for institutional care under the
State plan or under a waiver the choice to instead
receive home and community-based services in lieu of
institutional care.
``(4) Compliance with certain laws.--A State shall ensure
that, regardless of whether the State uses an agency-provider
model or other models to provide home and community-based
attendant services and supports under a State plan amendment
under this subsection, such services and supports are provided
in accordance with the requirements of the Fair Labor Standards
Act of 1938 and applicable Federal and State laws regarding--
``(A) withholding and payment of Federal and State
income and payroll taxes;
``(B) the provision of unemployment and workers
compensation insurance;
``(C) maintenance of general liability insurance;
and
``(D) occupational health and safety.
``(5) Evaluation, data collection, and report to
congress.--
``(A) Evaluation.--The Secretary shall conduct an
evaluation of the provision of home and community-based
attendant services and supports under this subsection
in order to determine the effectiveness of the
provision of such services and supports in allowing the
individuals receiving such services and supports to
lead an independent life to the maximum extent
possible; the impact on the physical and emotional
health of the individuals who receive such services;
and an comparative analysis of the costs of services
provided under the State plan amendment under this
subsection and those provided under institutional care
in a nursing facility, institution for mental diseases,
or an intermediate care facility for the mentally
retarded.
``(B) Data collection.--The State shall provide the
Secretary with the following information regarding the
provision of home and community-based attendant
services and supports under this subsection for each
fiscal year for which such services and supports are
provided:
``(i) The number of individuals who are
estimated to receive home and community-based
attendant services and supports under this
subsection during the fiscal year.
``(ii) The number of individuals that
received such services and supports during the
preceding fiscal year.
``(iii) The specific number of individuals
served by type of disability, age, gender,
education level, and employment status.
``(iv) Whether the specific individuals
have been previously served under any other
home and community based services program under
the State plan or under a waiver.
``(C) Reports.--Not later than--
``(i) December 31, 2013, the Secretary
shall submit to Congress and make available to
the public an interim report on the findings of
the evaluation under subparagraph (A); 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.
``(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) Oversight and Assessment of the Administration of Home and
Community-based Services.--The Secretary of Health and Human Services
shall promulgate regulations to ensure that all States develop service
systems that are designed to--
(1) allocate resources for services in a manner that is
responsive to the changing needs and choices of beneficiaries
receiving non-institutionally-based long-term services and
supports (including such services and supports that are
provided under programs other the State Medicaid program), and
that provides strategies for beneficiaries receiving such
services to maximize their independence, including through the
use of client-employed providers;
(2) provide the support and coordination needed for a
beneficiary in need of such services (and their family
caregivers or representative, if applicable) to design an
individualized, self-directed, community-supported life; and
(3) improve coordination among, and the regulation of, all
providers of such services under federally and State-funded
programs in order to--
(A) achieve a more consistent administration of
policies and procedures across programs in relation to
the provision of such services; and
(B) oversee and monitor all service system
functions to assure--
(i) coordination of, and effectiveness of,
eligibility determinations and individual
assessments;
(ii) development and service monitoring of
a complaint system, a management system, a
system to qualify and monitor providers, and
systems for role-setting and individual budget
determinations; and
(iii) an adequate number of qualified
direct care workers to provide self-directed
personal assistance 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.
``(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.--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), by inserting
``1902(a)(10)(A)(ii)(XXII),'' after
``1902(a)(10)(A)(ii)(XXI),''.
(B) Section 1905(a) of the Social Security Act (42
U.S.C. 1396d(a)), as so amended, is amended in the
matter preceding paragraph (1)--
(i) in clause (xv), by striking ``or'' at
the end;
(ii) in clause (xvi), by adding ``or'' at
the end; and
(iii) by inserting after clause (xvi) the
following new clause:
``(xvii) individuals who are eligible for home and
community-based services under needs-based criteria established
under paragraph (1)(A) of section 1915(i), or who are eligible
for home and community-based services under paragraph (6) of
such section, and who will receive home and community-based
services pursuant to a State plan amendment under such
subsection,''.
(e) Elimination of Option To Limit Number of Eligible Individuals
or Length of Period for Grandfathered Individuals if Eligibility
Criteria Is Modified.--Paragraph (1) of section 1915(i) of such Act (42
U.S.C. 1396n(i)) is amended--
(1) by striking subparagraph (C) and inserting the
following:
``(C) Projection of number of individuals to be
provided home and community-based services.--The State
submits to the Secretary, in such form and manner, and
upon such frequency as the Secretary shall specify, the
projected number of individuals to be provided home and
community-based services.''; and
(2) in subclause (II) of subparagraph (D)(ii), by striking
``to be eligible for such services for a period of at least 12
months beginning on the date the individual first received
medical assistance for such services'' and inserting ``to
continue to be eligible for such services after the effective
date of the modification and until such time as the individual
no longer meets the standard for receipt of such services under
such pre-modified criteria''.
(f) Elimination of Option To Waive Statewideness; Addition of
Option To Waive Comparability.--Paragraph (3) of section 1915(i) of
such Act (42 U.S.C. 1396n(3)) is amended by striking ``1902(a)(1)
(relating to statewideness)'' and inserting ``1902(a)(10)(B) (relating
to comparability)''.
(g) Effective Date.--The amendments made by subsections (b) through
(f) take effect on the first day of the first fiscal year quarter that
begins after the date of enactment of this Act.
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''.
(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) Effective date.--The amendments made by this subsection
take effect 30 days after the date of enactment of this Act.
SEC. 2404. PROTECTION FOR RECIPIENTS OF HOME AND COMMUNITY-BASED
SERVICES AGAINST SPOUSAL IMPOVERISHMENT.
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
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.
``(II) Drug described.--For
purposes of subclause (I), a single
source drug or an innovator multiple
source drug described in this subclause
is any of the following drugs:
``(aa) A clotting factor
for which a separate furnishing
payment is made under section
1842(o)(5) and which is
included on a list of such
factors specified and updated
regularly by the Secretary.
``(bb) A drug approved by
the Food and Drug
Administration exclusively for
pediatric indications.''.
(2) Recapture of total savings due to increase.--Section
1927(b)(1) of such Act (42 U.S.C. 1396r-8(b)(1)) is amended by
adding at the end the following new subparagraph:
``(C) Special rule for increased minimum rebate
percentage.--
``(i) In general.--In addition to the
amounts applied as a reduction under
subparagraph (B), for rebate periods beginning
on or after January 1, 2010, during a fiscal
year, the Secretary shall reduce payments to a
State under section 1903(a) in the manner
specified in clause (ii), in an amount equal to
the product of--
``(I) 100 percent minus the Federal
medical assistance percentage
applicable to the rebate period for the
State; and
``(II) the amounts received by the
State under such subparagraph that are
attributable (as estimated by the
Secretary based on utilization and
other data) to the increase in the
minimum rebate percentage effected by
the amendments made by subsections
(a)(1), (b), and (d) of section 2501 of
the Patient Protection and Affordable
Care Act, taking into account the
additional drugs included under the
amendments made by subsection (c) of
section 2501 of such Act.
The Secretary shall adjust such payment
reduction for a calendar quarter to the extent
the Secretary determines, based upon subsequent
utilization and other data, that the reduction
for such quarter was greater or less than the
amount of payment reduction that should have
been made.
``(ii) Manner of payment reduction.--The
amount of the payment reduction under clause
(i) for a State for a quarter shall be deemed
an overpayment to the State under this title to
be disallowed against the State's regular
quarterly draw for all Medicaid spending under
section 1903(d)(2). Such a disallowance is not
subject to a reconsideration under section
1116(d).''.
(b) Increase in Rebate for Other Drugs.--Section 1927(c)(3)(B) of
such Act (42 U.S.C. 1396r-8(c)(3)(B)) is amended--
(1) in clause (i), by striking ``and'' at the end;
(2) in clause (ii)--
(A) by inserting ``and before January 1, 2010,''
after ``December 31, 1993,''; and
(B) by striking the period and inserting ``; and'';
and
(3) by adding at the end the following new clause:
``(iii) after December 31, 2009, is 13
percent.''.
(c) Extension of Prescription Drug Discounts to Enrollees of
Medicaid Managed Care Organizations.--
(1) In general.--Section 1903(m)(2)(A) of such Act (42
U.S.C. 1396b(m)(2)(A)) is amended--
(A) in clause (xi), by striking ``and'' at the end;
(B) in clause (xii), by striking the period at the
end and inserting ``; and''; and
(C) by adding at the end the following:
``(xiii) such contract provides that (I)
covered outpatient drugs dispensed to
individuals eligible for medical assistance who
are enrolled with the entity shall be subject
to the same rebate required by the agreement
entered into under section 1927 as the State is
subject to and that the State shall collect
such rebates from manufacturers, (II)
capitation rates paid to the entity shall be
based on actual cost experience related to
rebates and subject to the Federal regulations
requiring actuarially sound rates, and (III)
the entity shall report to the State, on such
timely and periodic basis as specified by the
Secretary in order to include in the
information submitted by the State to a
manufacturer and the Secretary under section
1927(b)(2)(A), information on the total number
of units of each dosage form and strength and
package size by National Drug Code of each
covered outpatient drug dispensed to
individuals eligible for medical assistance who
are enrolled with the entity and for which the
entity is responsible for coverage of such drug
under this subsection (other than covered
outpatient drugs that under subsection (j)(1)
of section 1927 are not subject to the
requirements of that section) and such other
data as the Secretary determines necessary to
carry out this subsection.''.
(2) Conforming amendments.--Section 1927 (42 U.S.C. 1396r-
8) is 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.''.
(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) 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).
(2) 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) 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:
``(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 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) 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)'';
(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.--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.--For purposes of
subparagraph (A), the fiscal year described in this
subparagraph with respect to a State is the first
fiscal year that occurs after fiscal year 2012 for
which the Secretary determines, on the 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.--In this paragraph,
the term `uncovered individuals' means individuals with
no health insurance coverage at any time during a year
(as determined by the Secretary based on the most
recent data available).''.
(b) Effective Date.--The amendments made by subsection (a) take
effect on October 1, 2011.
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) Notwithstanding subsections (c)(3) and (d) (3), any waiver
under subsection (b), (c), or (d), or a waiver under section 1115, that
provides medical assistance for dual eligible individuals (including
any such waivers under which non dual eligible individuals may be
enrolled in addition to dual eligible individuals) may be conducted for
a period of 5 years and, upon the request of the State, may be extended
for additional 5-year periods unless the Secretary determines that for
the previous waiver period the conditions for the waiver have not been
met or it would no longer be cost-effective and efficient, or
consistent with the purposes of this title, to extend the waiver.
``(B) In this paragraph, the term `dual eligible individual' means
an individual who is entitled to, or enrolled for, benefits under part
A of title XVIII, or enrolled for benefits under part B of title XVIII,
and is eligible for medical assistance under the State plan under this
title or under a waiver of such plan.''.
(b) Conforming Amendments.--
(1) Section 1915 of such Act (42 U.S.C. 1396n) is amended--
(A) in subsection (b), by adding at the end the
following new sentence: ``Subsection (h)(2) shall apply
to a waiver under this subsection.'';
(B) in subsection (c)(3), in the second sentence,
by inserting ``(other than a waiver described in
subsection (h)(2))'' after ``A waiver under this
subsection'';
(C) in subsection (d)(3), in the second sentence,
by 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. PROVIDING FEDERAL COVERAGE AND PAYMENT COORDINATION FOR DUAL
ELIGIBLE BENEFICIARIES.
(a) Establishment of Federal Coordinated Health Care Office.--
(1) In general.--Not later than March 1, 2010, the
Secretary of Health and Human Services (in this section
referred to as the ``Secretary'') shall establish a Federal
Coordinated Health Care 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) have as the Office a Director who shall be
appointed by, and be in direct line of authority to,
the Administrator of the Centers for Medicare &
Medicaid Services.
(b) Purpose.--The purpose of the Federal Coordinated Health Care
Office is to bring together officers and employees of the Medicare and
Medicaid programs at the Centers for Medicare & Medicaid Services in
order to--
(1) more effectively integrate benefits under the Medicare
program under title XVIII of the Social Security Act and the
Medicaid program under title XIX of such Act; and
(2) improve the coordination between the Federal Government
and States for individuals eligible for benefits under both
such programs in order to ensure that such individuals get full
access to the items and services to which they are entitled
under titles XVIII and XIX of the Social Security Act.
(c) Goals.--The goals of the Federal Coordinated Health Care Office
are as follows:
(1) Providing dual eligible individuals full access to the
benefits to which such individuals are entitled under the
Medicare and Medicaid programs.
(2) Simplifying the processes for dual eligible individuals
to access the items and services they are entitled to under the
Medicare and Medicaid programs.
(3) Improving the quality of health care and long-term
services for dual eligible individuals.
(4) Increasing dual eligible individuals' understanding of
and satisfaction with coverage under the Medicare and Medicaid
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 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. ADULT HEALTH QUALITY MEASURES.
``(a) Development of Core Set of Health Care Quality Measures for
Adults Eligible for Benefits Under Medicaid.--The Secretary shall
identify and publish a recommended core set of adult health quality
measures for Medicaid eligible adults in the same manner as the
Secretary identifies and publishes a core set of child health quality
measures under section 1139A, including with respect to identifying and
publishing existing adult health quality measures that are in use under
public and privately sponsored health care coverage arrangements, or
that are part of reporting systems that measure both the presence and
duration of health insurance coverage over time, that may be applicable
to Medicaid eligible adults.
``(b) Deadlines.--
``(1) Recommended measures.--Not later than January 1,
2011, the Secretary shall identify and publish for comment a
recommended core set of adult health quality measures for
Medicaid eligible adults.
``(2) Dissemination.--Not later than January 1, 2012, the
Secretary shall publish an initial core set of adult health
quality measures that are applicable to Medicaid eligible
adults.
``(3) Standardized reporting.--Not later than January 1,
2013, the Secretary, in consultation with States, shall develop
a standardized format for reporting information based on the
initial core set of adult health quality measures and create
procedures to encourage States to use such measures to
voluntarily report information regarding the quality of health
care for Medicaid eligible adults.
``(4) Reports to congress.--Not later than January 1, 2014,
and every 3 years thereafter, the Secretary shall include in
the report to Congress required under section 1139A(a)(6)
information similar to the information required under that
section with respect to the measures established under this
section.
``(5) Establishment of medicaid quality measurement
program.--
``(A) In general.--Not later than 12 months after
the release of the recommended core set of adult health
quality measures under paragraph (1)), the Secretary
shall establish a Medicaid Quality Measurement Program
in the same manner as the Secretary establishes the
pediatric quality measures program under section
1139A(b). The aggregate amount awarded by the Secretary
for grants and contracts for the development, testing,
and validation of emerging and innovative evidence-
based measures under such program shall equal the
aggregate amount awarded by the Secretary for grants
under section 1139A(b)(4)(A)
``(B) Revising, strengthening, and improving
initial core measures.--Beginning not later than 24
months after the establishment of the Medicaid Quality
Measurement Program, and annually thereafter, the
Secretary shall publish recommended changes to the
initial core set of adult health quality measures that
shall reflect the results of the testing, validation,
and consensus process for the development of adult
health quality measures.
``(c) Construction.--Nothing in this section shall be construed as
supporting the restriction of coverage, under title XIX or XXI or
otherwise, to only those services that are evidence-based, or in anyway
limiting available services.
``(d) Annual State Reports Regarding State-Specific Quality of Care
Measures Applied Under Medicaid.--
``(1) Annual state reports.--Each State with a State plan
or waiver approved under title XIX shall annually report
(separately or as part of the annual report required under
section 1139A(c)), to the Secretary on the--
``(A) State-specific adult health quality measures
applied by the State under the such plan, including
measures described in subsection (a)(5); and
``(B) State-specific information on the quality of
health care furnished to Medicaid eligible adults under
such plan, including information collected through
external quality reviews of managed care organizations
under section 1932 and benchmark plans under section
1937.
``(2) Publication.--Not later than September 30, 2014, and
annually thereafter, the Secretary shall collect, analyze, and
make publicly available the information reported by States
under 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. PAYMENT ADJUSTMENT FOR HEALTH CARE-ACQUIRED CONDITIONS.
(a) In General.--The Secretary of Health and Human Services (in
this subsection referred to as the ``Secretary'') shall identify
current State practices that prohibit payment for health care-acquired
conditions and shall incorporate the practices identified, or elements
of such practices, which the Secretary determines appropriate for
application to the Medicaid program in regulations. Such regulations
shall be effective as of July 1, 2011, and shall prohibit payments to
States under section 1903 of the Social Security Act for any amounts
expended for providing medical assistance for health care-acquired
conditions specified in the regulations. The regulations shall ensure
that the prohibition on payment for health care-acquired conditions
shall not result in a loss of access to care or services for Medicaid
beneficiaries.
(b) Health Care-Acquired Condition.--In this section. the term
``health care-acquired condition'' means a medical condition for which
an individual was diagnosed that could be identified by a secondary
diagnostic code described in section 1886(d)(4)(D)(iv) of the Social
Security Act (42 U.S.C. 1395ww(d)(4)(D)(iv)).
(c) Medicare Provisions.--In carrying out this section, the
Secretary shall apply to State plans (or waivers) under title XIX of
the Social Security Act the regulations promulgated pursuant to section
1886(d)(4)(D) of such Act (42 U.S.C. 1395ww(d)(4)(D)) relating to the
prohibition of payments based on the presence of a secondary diagnosis
code specified by the Secretary in such regulations, as appropriate for
the Medicaid program. The Secretary may exclude certain conditions
identified under title XVIII of the Social Security Act for non-payment
under title XIX of such Act when the Secretary finds the inclusion of
such conditions to be inapplicable to beneficiaries under title XIX.
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. State Option To Provide Coordinated Care Through a
Health Home for Individuals With Chronic Conditions.--
``(a) In General.--Notwithstanding section 1902(a)(1) (relating to
statewideness), section 1902(a)(10)(B) (relating to comparability), and
any other provision of this title for which the Secretary determines it
is necessary to waive in order to implement this section, beginning
January 1, 2011, a State, at its option as a State plan amendment, may
provide for medical assistance under this title to eligible individuals
with chronic conditions who select a designated provider (as described
under subsection (h)(5)), a team of health care professionals (as
described under subsection (h)(6)) operating with such a provider, or a
health team (as described under subsection (h)(7)) as the individual's
health home for purposes of providing the individual with health home
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--
``(i) may be tiered to reflect, with
respect to each eligible individual with
chronic conditions provided such services by a
designated provider, a team of health care
professionals operating with such a provider,
or a health team, as well as the severity or
number of each such individual's chronic
conditions or the specific capabilities of the
provider, team of health care professionals, or
health team; and
``(ii) shall be established consistent with
section 1902(a)(30)(A).
``(B) Alternate models of payment.--The methodology
for determining payment for provision of health home
services under this section shall not be limited to a
per-member per-month basis and may provide (as proposed
by the State and subject to approval by the Secretary)
for alternate models of payment.
``(3) Planning grants.--
``(A) In general.--Beginning January 1, 2011, the
Secretary may award planning grants to States for
purposes of developing a State plan amendment under
this section. A planning grant awarded to a State under
this paragraph shall remain available until expended.
``(B) State contribution.--A State awarded a
planning grant shall contribute an amount equal to the
State percentage determined under section 1905(b)
(without regard to section 5001 of Public Law 111-5)
for each fiscal year for which the grant is awarded.
``(C) Limitation.--The total amount of payments
made to States under this paragraph shall not exceed
$25,000,000.
``(d) Hospital Referrals.--A State shall include in the State plan
amendment a requirement for hospitals that are participating providers
under the State plan or a waiver of such plan to establish procedures
for referring any eligible individuals with chronic conditions who seek
or need treatment in a hospital emergency department to designated
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 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 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.--The Secretary shall enter into a
contract with an independent entity or organization to
conduct an evaluation and assessment of the States that
have elected the option to provide coordinated care
through a health home for Medicaid beneficiaries with
chronic conditions under section 1945 of the Social
Security Act (as added by subsection (a)) for the
purpose of determining the effect of such option on
reducing hospital admissions, emergency room visits,
and admissions to skilled nursing facilities.
(B) Evaluation report.--Not later than January 1,
2017, the Secretary shall report to Congress on the
evaluation and assessment conducted under subparagraph
(A).
(2) Survey and interim report.--
(A) In general.--Not later than January 1, 2014,
the Secretary of Health and Human Services shall survey
States that have elected the option under section 1945
of the Social Security Act (as added by subsection (a))
and report to Congress on the nature, extent, and use
of such option, particularly as it pertains to--
(i) hospital admission rates;
(ii) chronic disease management;
(iii) coordination of care for individuals
with chronic 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
(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. 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) 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 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. 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. The Secretary shall select not more than 5 States to participate
in the demonstration project.
(c) Eligible Safety Net Hospital System or Network.--For purposes
of this section, the term ``eligible safety net hospital system or
network'' means a large, safety net hospital system or network (as
defined by the Secretary) that operates within a State selected by the
Secretary under subsection (b).
(d) Evaluation.--
(1) Testing.--The Innovation Center shall test and evaluate
the demonstration project conducted under this section to
examine any changes in health care quality outcomes and
spending by the eligible safety net hospital systems or
networks.
(2) Budget neutrality.--During the testing period under
paragraph (1), any budget neutrality requirements under section
1115A(b)(3) of the Social Security Act (as so added) shall not
be 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. 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) Minimum participation period.--A provider desiring to
be recognized as an accountable care organization under the
demonstration project shall enter into an agreement with the
State to participate in the project for not less than a 3-year
period.
(d) Incentive Payment.--An accountable care organization that meets
the performance guidelines established by the Secretary under
subsection (c)(1) and achieves savings greater than the annual minimal
savings level established by the State under subsection (c)(2) shall
receive an incentive payment for such year equal to a portion (as
determined appropriate by the Secretary) of the amount of such excess
savings. The Secretary may establish an annual cap on incentive
payments for an accountable care organization.
(e) Authorization of Appropriations.--There are authorized to be
appropriated such sums as are necessary to carry out this section.
SEC. 2707. 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)). 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 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 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)--
(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 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 ``, and shall submit with any
recommendations, a report on the Federal and State-
specific budget consequences of the recommendations''
before the period; and
(H) by adding at the end the following:
``(11) Consultation and coordination with medpac.--
``(A) In general.--MACPAC shall consult with the
Medicare Payment Advisory Commission (in this paragraph
referred to as `MedPAC') established under section 1805
in carrying out its duties under this section, as
appropriate and particularly with respect to the issues
specified in paragraph (2) as they relate to those
Medicaid beneficiaries who are dually eligible for
Medicaid and the Medicare program under title XVIII,
adult Medicaid beneficiaries (who are not dually
eligible for Medicare), and beneficiaries under
Medicare. Responsibility for analysis of and
recommendations to change Medicare policy regarding
Medicare beneficiaries, including Medicare
beneficiaries who are dually eligible for Medicare and
Medicaid, shall rest with MedPAC.
``(B) Information sharing.--MACPAC and MedPAC shall
have access to deliberations and records of the other
such entity, respectively, upon the request of the
other such entity.
``(12) Consultation with states.--MACPAC shall regularly
consult with States in carrying out its duties under this
section, including with respect to developing processes for
carrying out such duties, and shall ensure that input from
States is taken into account and represented in MACPAC's
recommendations and reports.
``(13) Coordinate and consult with the federal coordinated
health care office.--MACPAC shall coordinate and consult with
the Federal Coordinated Health Care Office established under
section 2081 of the Patient Protection and Affordable Care Act
before making any recommendations regarding dual eligible
individuals.
``(14) Programmatic oversight vested in the secretary.--
MACPAC's authority to make recommendations in accordance with
this section shall not affect, or be considered to duplicate,
the Secretary's authority to carry out Federal responsibilities
with respect to Medicaid and CHIP.'';
(2) in subsection (c)(2)--
(A) by striking subparagraphs (A) and (B) and
inserting the 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.''.
(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, 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) No Cost-sharing for Indians With Income at or Below 300 Percent
of Poverty Enrolled in Coverage Through a State Exchange.--For
provisions prohibiting cost sharing for Indians enrolled in any
qualified health plan in the individual market through an Exchange, see
section 1402(d) of the Patient Protection and Affordable Care Act.
(b) Payer of Last Resort.--Health programs operated by the Indian
Health Service, Indian tribes, tribal organizations, and Urban Indian
organizations (as those terms are defined in section 4 of the Indian
Health Care Improvement Act (25 U.S.C. 1603)) shall be the payer of
last resort for services provided by such Service, tribes, or
organizations to individuals eligible for services through such
programs, notwithstanding any Federal, State, or local law to the
contrary.
(c) Facilitating Enrollment of Indians Under the Express Lane
Option.--Section 1902(e)(13)(F)(ii) of the Social Security Act (42
U.S.C. 1396a(e)(13)(F)(ii)) is amended--
(1) in the clause heading, by inserting ``and indian tribes
and tribal organizations'' after ``agencies''; and
(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.--The amendments made by this section shall
apply to items or services furnished on or after January 1, 2010.
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. 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.--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 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) 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 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.--The
Secretary shall establish an advisory
panel for purposes of obtaining
recommendations regarding the technical
assistance provided to entities in
accordance with subclause (I).
``(iv) No improvement or failure to submit
report.--If the Secretary determines after a
period of time specified by the Secretary that
an eligible entity implementing an improvement
plan under clause (ii) has failed to
demonstrate any improvement in the areas
specified in subparagraph (A), or if the
Secretary determines that an eligible entity
has failed to submit the report required under
clause (i), the Secretary shall terminate the
entity's grant and may include any unexpended
grant funds in grants made to nonprofit
organizations under subsection (h)(2)(B).
``(C) Final report.--Not later than December 31,
2015, the eligible entity shall submit a report to the
Secretary demonstrating improvements (if any) in each
of the areas 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--
``(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.
``(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 under subsection (g)(2) and other research and
evaluation activities carried out under subsection
(h)(3).
``(9) A description of other State programs that include
home visitation services, including, if applicable to the
State, other programs carried out under this title with funds
made available from allotments under section 502(c), programs
funded under title IV, title II of the Child Abuse Prevention
and Treatment Act (relating to community-based grants for the
prevention of child abuse and neglect), and section 645A of the
Head Start Act (relating to Early Head Start programs).
``(10) Other information as required by the Secretary.
``(f) Maintenance of Effort.--Funds provided to an eligible entity
receiving a grant under this section shall supplement, and not
supplant, funds from other sources for early childhood home visitation
programs or initiatives.
``(g) Evaluation.--
``(1) Independent, expert advisory panel.--The Secretary,
in accordance with subsection (h)(1)(A), shall appoint an
independent advisory panel consisting of experts in program
evaluation and research, education, and early childhood
development--
``(A) to review, and make recommendations on, the
design and plan for the evaluation required under
paragraph (2) within 1 year after the date of enactment
of this section;
``(B) to maintain and advise the Secretary
regarding the progress of the evaluation; and
``(C) to comment, if the panel so desires, on the
report submitted under paragraph (3).
``(2) Authority to conduct evaluation.--On the basis of the
recommendations of the advisory panel under paragraph (1), the
Secretary shall, by grant, contract, or interagency agreement,
conduct an evaluation of the statewide needs assessments
submitted under subsection (b) and the grants made under
subsections (c) and (h)(3)(B). The evaluation shall include--
``(A) an analysis, on a State-by-State basis, of
the results of such assessments, including indicators
of maternal and prenatal health and infant health and
mortality, and State actions in response to the
assessments; and
``(B) an assessment of--
``(i) the effect of early childhood home
visitation programs on child and parent
outcomes, including with respect to each of the
benchmark areas specified in subsection
(d)(1)(A) and the participant outcomes
described in subsection (d)(2)(B);
``(ii) the effectiveness of such programs
on different populations, including the extent
to which the ability of programs to improve
participant outcomes varies across programs and
populations; and
``(iii) the potential for the activities
conducted under such programs, if scaled
broadly, to improve health care practices,
eliminate health disparities, and improve
health care system quality, efficiencies, and
reduce costs.
``(3) Report.--Not later than March 31, 2015, the Secretary
shall submit a report to Congress on the results of the
evaluation conducted under paragraph (2) and shall make the
report publicly 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) 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 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.
``(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.''.
SEC. 2952. 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 thereafter for the duration of the study,
such Director may prepare and submit to the Congress
reports on the findings of the study.
(b) Grants To Provide Services to Individuals With a Postpartum
Condition and Their Families.--Title V of the Social Security Act (42
U.S.C. 701 et seq.), as amended by section 2951, is amended by adding
at the end the following new section:
``SEC. 512. SERVICES TO INDIVIDUALS WITH A POSTPARTUM CONDITION AND
THEIR FAMILIES.
``(a) In General.--In addition to any other payments made under
this title to a State, the Secretary may make grants to eligible
entities for projects for the establishment, operation, and
coordination of effective and cost-efficient systems for the delivery
of essential services to individuals with or at risk for postpartum
conditions and their families.
``(b) Certain Activities.--To the extent practicable and
appropriate, the Secretary shall ensure that projects funded under
subsection (a) provide education and services with respect to the
diagnosis and management of postpartum conditions for individuals with
or at risk for postpartum conditions and their families. The Secretary
may allow such projects to include the following:
``(1) Delivering or enhancing outpatient and home-based
health and support services, including case management and
comprehensive treatment services.
``(2) Delivering or enhancing inpatient care management
services that ensure the well-being of the mother and family
and the future development of the infant.
``(3) Improving the quality, availability, and organization
of health care and support services (including transportation
services, attendant care, homemaker services, day or respite
care, and providing counseling on financial assistance and
insurance).
``(4) Providing education about postpartum conditions to
promote earlier diagnosis and treatment. Such education may
include--
``(A) providing complete information on postpartum
conditions, symptoms, methods of coping with the
illness, and treatment resources; and
``(B) in the case of a grantee that is a State,
hospital, or birthing facility--
``(i) providing education to new mothers
and fathers, and other family members as
appropriate, concerning postpartum conditions
before new mothers leave the health facility;
and
``(ii) ensuring that training programs
regarding such education are carried out at the
health facility.
``(c) Integration With Other Programs.--To the extent practicable
and appropriate, the Secretary may integrate the grant program under
this section with other grant programs carried out by the Secretary,
including the program under section 330 of the Public Health Service
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 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.
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. 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 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 a grant
under paragraph (4), if the expenditure of non-federal funds by
the State, organization, or entity for activities, programs, or
initiatives for which amounts from allotments and grants under
this subsection may be expended is less than the amount
expended by the State, organization, or entity for such
programs or initiatives for fiscal year 2009.
``(6) Data collection and reporting.--A State or local
organization or entity receiving funds under this section shall
cooperate with such requirements relating to the collection of
data and information and reporting on outcomes regarding the
programs and activities carried out with such funds, as the
Secretary shall specify.
``(b) Purpose.--
``(1) In general.--The purpose of an allotment under
subsection (a)(1) to a State is to enable the State (or, in the
case of grants made under subsection (a)(4)(B), to enable a
local organization or entity) to carry out personal
responsibility education programs consistent with this
subsection.
``(2) Personal responsibility education programs.--
``(A) In general.--In this section, the term
`personal responsibility education program' means a
program that is designed to educate adolescents on--
``(i) both abstinence and contraception for
the prevention of pregnancy and sexually
transmitted infections, including HIV/AIDS,
consistent with the requirements of
subparagraph (B); and
``(ii) at least 3 of the adulthood
preparation subjects described in subparagraph
(C).
``(B) Requirements.--The requirements of this
subparagraph are the following:
``(i) The program replicates evidence-based
effective programs or substantially
incorporates elements of effective programs
that have been proven on the basis of rigorous
scientific research to change behavior, which
means delaying sexual activity, increasing
condom or contraceptive use for sexually active
youth, or reducing pregnancy among youth.
``(ii) The program is medically-accurate
and complete.
``(iii) The program includes activities to
educate youth who are sexually active regarding
responsible sexual behavior with respect to
both abstinence and the use of contraception.
``(iv) The program places substantial
emphasis on both abstinence and contraception
for the prevention of pregnancy among youth and
sexually transmitted infections.
``(v) The program provides age-appropriate
information and activities.
``(vi) The information and activities
carried out under the program are provided in
the cultural context that is most appropriate
for individuals in the particular population
group to which they are directed.
``(C) Adulthood preparation subjects.--The
adulthood preparation subjects described in this
subparagraph are the following:
``(i) Healthy relationships, such as
positive self-esteem and relationship dynamics,
friendships, dating, romantic involvement,
marriage, and family interactions.
``(ii) Adolescent development, such as the
development of healthy attitudes and values
about adolescent growth and development, body
image, racial and ethnic diversity, and other
related subjects.
``(iii) Financial literacy.
``(iv) Parent-child communication.
``(v) Educational and career success, such
as developing skills for employment
preparation, job seeking, independent living,
financial self-sufficiency, and workplace
productivity.
``(vi) Healthy life skills, such as goal-
setting, decision making, negotiation,
communication and interpersonal skills, and
stress management.
``(c) Reservations of Funds.--
``(1) Grants to implement innovative strategies.--From the
amount appropriated under subsection (f) for the fiscal year,
the Secretary shall reserve $10,000,000 of such amount for
purposes of awarding grants to entities to implement innovative
youth pregnancy prevention strategies and target services to
high-risk, vulnerable, and culturally under-represented youth
populations, including youth in foster care, homeless youth,
youth with HIV/AIDS, pregnant women who are under 21 years of
age and their partners, mothers who are under 21 years of age
and their partners, and youth residing in areas with high birth
rates for youth. An entity awarded a grant under this paragraph
shall agree to participate in a rigorous Federal evaluation of
the activities carried out with grant funds.
``(2) Other reservations.--From the amount appropriated
under subsection (f) for the fiscal year that remains after the
application of paragraph (1), the Secretary shall reserve the
following amounts:
``(A) Grants for indian tribes or tribal
organizations.--The Secretary shall reserve 5 percent
of such remainder for purposes of awarding grants to
Indian tribes and tribal organizations in such manner,
and subject to such requirements, as the Secretary, in
consultation with Indian tribes and tribal
organizations, determines appropriate.
``(B) Secretarial responsibilities.--
``(i) Reservation of funds.--The Secretary
shall reserve 10 percent of such remainder for
expenditures by the Secretary for the
activities described in clauses (ii) and (iii).
``(ii) Program support.--The Secretary
shall provide, directly or through a
competitive grant process, research, training
and technical assistance, including
dissemination of research and information
regarding effective and promising practices,
providing consultation and resources on a broad
array of teen pregnancy prevention strategies,
including abstinence and contraception, and
developing resources and materials to support
the activities of recipients of grants and
other State, tribal, and community
organizations working to reduce teen pregnancy.
In carrying out such functions, the Secretary
shall collaborate with a variety of entities
that have expertise in the prevention of teen
pregnancy, HIV and sexually transmitted
infections, healthy relationships, financial
literacy, and other topics addressed through
the personal responsibility education 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)).
``(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) 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 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) 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;
``(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 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
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) 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.--
``(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 regard to
subsection (q)) for a discharge if this
subsection did not apply; reduced by
``(II) any portion of such payment
amount that is attributable to--
``(aa) payments under
paragraphs (5)(A), (5)(B),
(5)(F), and (12) of subsection
(d); and
``(bb) such other payments
under subsection (d) determined
appropriate by the Secretary.
``(ii) Special rules for certain
hospitals.--
``(I) Sole community hospitals and
medicare-dependent, small rural
hospitals.--In the case of a medicare-
dependent, small rural hospital (with
respect to discharges occurring during
fiscal year 2012 and 2013) or a sole
community hospital, in applying
subparagraph (A)(i), the payment amount
that would otherwise be made under
subsection (d) shall be determined
without regard to subparagraphs (I) and
(L) of subsection (b)(3) and
subparagraphs (D) and (G) of subsection
(d)(5).
``(II) Hospitals paid under section
1814.--In the case of a hospital that
is paid under section 1814(b)(3), the
term `base operating DRG payment
amount' means the payment amount under
such section.
``(8) Announcement of net result of adjustments.--Under the
Program, the Secretary shall, not later than 60 days prior to
the fiscal year involved, inform each hospital of the
adjustments to payments to the hospital for discharges
occurring in such fiscal year under paragraphs (6) and
(7)(B)(i).
``(9) No effect in subsequent fiscal years.--The value-
based incentive payment under paragraph (6) and the payment
reduction under paragraph (7)(B)(i) shall each apply only with
respect to the fiscal year involved, and the Secretary shall
not take into account such value-based incentive payment or
payment reduction in making payments to a hospital under this
section in a subsequent fiscal 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.
``(iii) Website.--Such information shall be
posted on the Hospital Compare Internet website
in an easily understandable format.
``(B) Aggregate information.--The Secretary shall
periodically post on the Hospital Compare Internet
website aggregate information on the Program,
including--
``(i) the number of hospitals receiving
value-based incentive payments under paragraph
(6) and the range and total amount of such
value-based incentive payments; and
``(ii) the number of hospitals receiving
less than the maximum value-based incentive
payment available to the hospital for the
fiscal year involved and the range and amount
of such payments.
``(11) Implementation.--
``(A) Appeals.--The Secretary shall establish a
process by which hospitals may appeal the calculation
of a hospital's performance assessment with respect to
the performance standards established under paragraph
(3)(A) and the hospital performance score under
paragraph (5). The Secretary shall ensure that such
process provides for resolution of such appeals in a
timely manner.
``(B) Limitation on review.--Except as provided in
subparagraph (A), there shall be no administrative or
judicial review under section 1869, section 1878, or
otherwise of the 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--
(A) in subclause (II), by adding at the end the
following sentence: ``The Secretary may require
hospitals to submit data on measures that are not used
for the determination of value-based incentive payments
under subsection (o).'';
(B) in subclause (V), by striking ``beginning with
fiscal year 2008'' and inserting ``for fiscal years
2008 through 2012'';
(C) in subclause (VII), in the first sentence, by
striking ``data submitted'' and inserting ``information
regarding measures submitted''; and
(D) by adding at the end the following new
subclauses:
``(VIII) Effective for payments beginning with fiscal year 2013,
with respect to quality measures for outcomes of care, the Secretary
shall provide for such risk adjustment as the Secretary determines to
be appropriate to maintain incentives for hospitals to treat patients
with severe illnesses or conditions.
``(IX)(aa) Subject to item (bb), effective for payments beginning
with fiscal year 2013, each measure specified by the Secretary under
this clause shall be endorsed by the entity with a contract under
section 1890(a).
``(bb) In the case of a specified area or medical topic determined
appropriate by the Secretary for which a feasible and practical measure
has not been endorsed by the entity with a contract under section
1890(a), the Secretary may specify a measure that is not so endorsed as
long as due consideration is given to measures that have been endorsed
or adopted by a consensus organization identified by the Secretary.
``(X) To the extent practicable, the Secretary shall, with input
from consensus organizations and other stakeholders, take steps to
ensure that the measures specified by the Secretary under this clause
are coordinated and aligned with quality measures applicable to--
``(aa) physicians under section 1848(k); and
``(bb) other providers of services and suppliers under this
title.
``(XI) The Secretary shall establish a process to validate measures
specified under this clause as appropriate. Such process shall include
the auditing of a number of randomly selected hospitals sufficient to
ensure validity of the reporting program under this clause as a whole
and shall provide a hospital with an opportunity to appeal the
validation of measures reported by such hospital.''.
(3) Website improvements.--Section 1886(b)(3)(B) of the
Social Security Act (42 U.S.C. 1395ww(b)(3)(B)), as amended by
section 4102(b) of the HITECH Act (Public Law 111-5), is
amended by adding at the end the following new clause:
``(x)(I) The Secretary shall develop standard Internet website
reports tailored to meet the needs of various stakeholders such as
hospitals, patients, researchers, and policymakers. The Secretary shall
seek input from such stakeholders in determining the type of
information that is useful and the formats that best facilitate the use
of the information.
``(II) The Secretary shall modify the Hospital Compare Internet
website to make the use and navigation of that website readily
available to individuals accessing it.''.
(4) GAO study and report.--
(A) Study.--The Comptroller General of the United
States shall conduct a study on the performance of the
hospital value-based purchasing program established
under section 1886(o) of the Social Security Act, as
added by paragraph (1). Such study shall include an
analysis of the impact of such program on--
(i) the quality of care furnished to
Medicare beneficiaries, including diverse
Medicare beneficiary populations (such as
diverse in terms of race, ethnicity, and
socioeconomic status);
(ii) expenditures under the Medicare
program, including any reduced expenditures
under Part A of title XVIII of such Act that
are attributable to the improvement in the
delivery of inpatient hospital services by
reason of such hospital value-based purchasing
program;
(iii) the quality performance among safety
net hospitals and any barriers such hospitals
face in meeting the performance standards
applicable under such hospital value-based
purchasing program; and
(iv) the quality performance among small
rural and small urban hospitals and any
barriers such hospitals face in meeting the
performance standards applicable under such
hospital value-based purchasing program.
(B) Reports.--
(i) Interim report.--Not later than October
1, 2015, the Comptroller General of the United
States shall submit to Congress an interim
report containing the results of the study
conducted under subparagraph (A), together with
recommendations for such legislation and
administrative action as the Comptroller
General determines appropriate.
(ii) Final report.--Not later than July 1,
2017, the Comptroller General of the United
States shall submit to Congress a report
containing the results of the study conducted
under subparagraph (A), together with
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.
(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) Value-Based Purchasing Demonstration Programs.--
(1) Value-based purchasing demonstration program for
inpatient critical access hospitals.--
(A) Establishment.--
(i) In general.--Not later than 2 years
after the date of enactment of this Act, the
Secretary of Health and Human Services (in this
subsection referred to as the ``Secretary'')
shall establish a demonstration program under
which the Secretary establishes a value-based
purchasing program under the Medicare program
under title XVIII of the Social Security Act
for critical access hospitals (as defined in
paragraph (1) of section 1861(mm) of such Act
(42 U.S.C. 1395x(mm))) with respect to
inpatient critical access hospital services (as
defined in paragraph (2) of such section) in
order to test innovative methods of measuring
and rewarding quality and efficient health care
furnished by such hospitals.
(ii) Duration.--The demonstration program
under this paragraph shall be conducted for a
3-year period.
(iii) Sites.--The Secretary shall conduct
the demonstration program under this paragraph
at an appropriate number (as determined by the
Secretary) of critical access hospitals. The
Secretary shall ensure that such hospitals are
representative of the spectrum of such
hospitals that participate in the Medicare
program.
(B) Waiver authority.--The Secretary may waive such
requirements of titles XI and XVIII of the Social
Security Act as may be necessary to carry out the
demonstration program under this paragraph.
(C) Budget neutrality requirement.--In conducting
the demonstration program under this section, the
Secretary shall ensure that the aggregate payments made
by the Secretary do not exceed the amount which the
Secretary would have paid if the demonstration program
under this section was not implemented.
(D) Report.--Not later than 18 months after the
completion of the demonstration program under this
paragraph, the Secretary shall submit to Congress a
report on the demonstration program together with--
(i) recommendations on the establishment of
a permanent value-based purchasing program
under the Medicare program for critical access
hospitals with respect to inpatient critical
access hospital services; and
(ii) recommendations for such other
legislation and administrative action as the
Secretary determines appropriate.
(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.--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--
(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.
``(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) 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.--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
(2) by adding at the end the following new subparagraph:
``(I) Informal appeals process.--The Secretary
shall, by not later than January 1, 2011, establish and
have in place an informal process for eligible
professionals to seek a review of the determination
that an eligible professional did not satisfactorily
submit data on quality measures under this
subsection.''.
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 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 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.
``(E) Public availability of data submitted.--The
Secretary shall establish procedures for making data
submitted under subparagraph (C) available to the
public. Such procedures shall ensure that a long-term
care hospital has the opportunity to review the data
that is to be made public with respect to the hospital
prior to such data being made public. The Secretary
shall report quality measures that relate to services
furnished in inpatient settings in long-term care
hospitals on the Internet website of the Centers for
Medicare & Medicaid Services.''.
(b) Inpatient Rehabilitation Hospitals.--Section 1886(j) of the
Social Security Act (42 U.S.C. 1395ww(j)) is amended--
(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 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 fiscal year
2014.
``(E) Public availability of data submitted.--The
Secretary shall establish procedures for making data
submitted under subparagraph (C) available to the
public. Such procedures shall ensure that a
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. 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).
``(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 fiscal year
2014.
``(E) Public availability of data submitted.--The
Secretary shall establish procedures for making data
submitted under subparagraph (C) available to the
public. Such procedures shall ensure that a hospice
program has the opportunity to review the data that is
to be made public with respect to the hospice program
prior to such data being made public. The Secretary
shall report quality measures that relate to hospice
care provided by hospice programs on the Internet
website of the Centers for Medicare & Medicaid
Services.''.
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 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.--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.--The Secretary
shall establish procedures for making data submitted under
paragraph (4) available to the public. Such procedures shall
ensure that a hospital described in section 1886(d)(1)(B)(v)
has the opportunity to review the data that is to be made
public with respect to the hospital prior to such data being
made public. The Secretary shall report quality measures of
process, structure, outcome, patients' perspective on care,
efficiency, and costs of care that relate to services furnished
in such hospitals on the 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, 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
(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.--Not later than
January 1, 2012, the Secretary shall publish the
following:
``(i) The measures of quality of care and
costs established under paragraphs (2) and (3),
respectively.
``(ii) The dates for implementation of the
payment modifier (as determined under
subparagraph (B)).
``(iii) The initial performance period (as
specified under subparagraph (B)(ii)).
``(B) Deadlines for implementation.--
``(i) Initial implementation.--Subject to
the preceding provisions of this subparagraph,
the Secretary shall begin implementing the
payment modifier established under this
subsection through the rulemaking process
during 2013 for the physician fee schedule
established under subsection (b).
``(ii) Initial performance period.--
``(I) In general.--The Secretary
shall specify an initial performance
period for application of the payment
modifier established under this
subsection with respect to 2015.
``(II) Provision of information
during initial performance period.--
During the initial performance period,
the Secretary shall, to the extent
practicable, provide information to
physicians and groups of physicians
about the quality of care furnished by
the physician or group of physicians to
individuals enrolled under this part
compared to cost (as determined under
paragraphs (2) and (3), respectively)
with respect to the performance period.
``(iii) Application.--The Secretary shall
apply the payment modifier established under
this subsection for items and services
furnished--
``(I) beginning on January 1, 2015,
with respect to specific physicians and
groups of physicians the Secretary
determines appropriate; and
``(II) beginning not later than
January 1, 2017, with respect to all
physicians and groups of physicians.
``(C) Budget neutrality.--The payment modifier
established under this subsection shall be implemented
in a budget neutral manner.
``(5) Systems-based care.--The Secretary shall, as
appropriate, apply the payment modifier established under this
subsection in a manner that promotes systems-based care.
``(6) Consideration of special circumstances of certain
providers.--In applying the payment modifier under this
subsection, the Secretary shall, as appropriate, take into
account the special circumstances of physicians or groups of
physicians in rural areas and other underserved communities.
``(7) Application.--For purposes of the initial application
of the payment modifier established under this subsection
during the period beginning on January 1, 2015, and ending on
December 31, 2016, the term `physician' has the meaning given
such term in section 1861(r). On or after January 1, 2017, the
Secretary may apply this subsection to eligible professionals
(as defined in subsection (k)(3)(B)) as the Secretary
determines appropriate.
``(8) Definitions.--For purposes of this subsection:
``(A) Costs.--The term `costs' means expenditures
per individual as determined appropriate by the
Secretary. In making the determination under the
preceding sentence, the Secretary may take into account
the amount of growth in expenditures per individual for
a physician compared to the amount of such growth for
other physicians.
``(B) Performance period.--The term `performance
period' means a period specified by the Secretary.
``(9) Coordination with other value-based purchasing
reforms.--The Secretary shall coordinate the value-based
payment modifier established under this subsection with the
Physician Feedback Program under subsection (n) and, as the
Secretary determines appropriate, other similar provisions of
this title.
``(10) Limitations on review.--There shall be no
administrative or judicial review under section 1869, section
1878, or otherwise 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) In general.--For purposes of this subsection,
the term `applicable hospital' means a subsection (d)
hospital that meets the criteria described in
subparagraph (B).
``(B) Criteria described.--
``(i) In general.--The criteria described
in this subparagraph, with respect to a
subsection (d) hospital, is that the subsection
(d) hospital is in the top quartile of all
subsection (d) hospitals, relative to the
national average, of hospital acquired
conditions during the applicable period, as
determined by the Secretary.
``(ii) Risk adjustment.--In carrying out
clause (i), the Secretary shall establish and
apply an appropriate risk adjustment
methodology.
``(C) Exemption.--In the case of a hospital that is
paid under section 1814(b)(3), the Secretary may exempt
such hospital from the application of this subsection
if the State which is paid under such section submits
an annual report to the Secretary describing how a
similar program in the State for a participating
hospital or hospitals achieves or surpasses the
measured results in terms of patient health outcomes
and cost savings established under this subsection.
``(3) Hospital acquired conditions.--For purposes of this
subsection, the term `hospital acquired condition' means a
condition identified for purposes of subsection (d)(4)(D)(iv)
and any other condition determined appropriate by the Secretary
that an individual acquires during a stay in an applicable
hospital, as determined by the Secretary.
``(4) Applicable period.--In this subsection, the term
`applicable period' means, with respect to a fiscal year, a
period specified by the Secretary.
``(5) Reporting to hospitals.--Prior to fiscal year 2015
and each subsequent fiscal year, the Secretary shall provide
confidential reports to applicable hospitals with respect to
hospital acquired conditions of the applicable hospital during
the applicable period.
``(6) Reporting hospital specific information.--
``(A) In general.--The Secretary shall make
information available to the public regarding hospital
acquired conditions of each applicable hospital.
``(B) Opportunity to review and submit
corrections.--The Secretary shall ensure that an
applicable hospital has the 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 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. 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
``(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--
``(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.--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. INTERAGENCY WORKING GROUP ON HEALTH CARE QUALITY.
(a) In General.--The President shall convene a working group to be
known as the Interagency Working Group on Health Care Quality (referred
to in this section as the ``Working Group'').
(b) Goals.--The goals of the Working Group shall be to achieve the
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;
(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.--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) by redesignating sections 931 through 938 as sections
941 through 948, respectively;
(3) in section 948(1), as so redesignated, by striking
``931'' and inserting ``941''; and
(4) by inserting after section 926 the following:
``PART D--HEALTH CARE QUALITY IMPROVEMENT
``Subpart I--Quality Measure Development
``SEC. 931. QUALITY MEASURE DEVELOPMENT.
``(a) Quality Measure.--In this subpart, the term `quality measure'
means a standard for measuring the performance and improvement of
population health or of health plans, providers of services, and other
clinicians in the delivery of health care services.
``(b) Identification of Quality Measures.--
``(1) Identification.--The Secretary, in consultation with
the Director of the Agency for Healthcare Research and Quality
and the Administrator of the Centers for Medicare & Medicaid
Services, shall identify, not less often than triennially, gaps
where no quality measures exist and existing quality measures
that need improvement, updating, or expansion, consistent with
the national strategy under section 399HH, to the extent
available, for use in Federal health programs. In identifying
such gaps and existing quality measures that need improvement,
the Secretary shall take into consideration--
``(A) the gaps identified by the entity with a
contract 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.--The Secretary shall make available to
the public on an Internet website a report on any gaps
identified under paragraph (1) and the process used to make
such identification.
``(c) Grants or Contracts for Quality Measure Development.--
``(1) In general.--The Secretary shall award grants,
contracts, or intergovernmental agreements to eligible entities
for purposes of developing, improving, updating, or expanding
quality measures identified under subsection (b).
``(2) Prioritization in the development of quality
measures.--In awarding grants, contracts, or agreements under
this subsection, the Secretary shall give priority to the
development of quality measures that allow the assessment of--
``(A) health outcomes and functional status of
patients;
``(B) the management and coordination of health
care across episodes of care and care transitions for
patients across the continuum of providers, health care
settings, and health plans;
``(C) the experience, quality, and use of
information provided to and used by patients,
caregivers, and authorized representatives to inform
decisionmaking about treatment options, including the
use of shared decisionmaking tools and preference
sensitive care (as defined in section 936);
``(D) the meaningful use of health information
technology;
``(E) the safety, effectiveness, patient-
centeredness, appropriateness, and timeliness of care;
``(F) the efficiency of care;
``(G) the equity of health services and health
disparities across health disparity populations (as
defined in section 485E) and geographic areas;
``(H) patient experience and satisfaction;
``(I) the use of innovative strategies and
methodologies identified under section 933; and
``(J) other areas determined appropriate by the
Secretary.
``(3) Eligible entities.--To be eligible for a grant or
contract under this subsection, an entity shall--
``(A) have demonstrated expertise and capacity in
the development and evaluation of quality measures;
``(B) have adopted procedures to include in the
quality measure development process--
``(i) the views of those providers or
payers whose performance will be assessed by
the measure; and
``(ii) the views of other parties who also
will use the quality measures (such as
patients, consumers, and health care
purchasers);
``(C) collaborate with the entity with a contract
under section 1890(a) of the Social Security Act and
other stakeholders, as practicable, and the Secretary
so that quality measures developed by the eligible
entity will meet the requirements to be considered for
endorsement by the entity with a contract under such
section 1890(a);
``(D) have transparent policies regarding
governance and conflicts of interest; and
``(E) submit an application to the Secretary at
such time and in such manner, as the Secretary may
require.
``(4) Use of funds.--An entity that receives a grant,
contract, or agreement under this subsection shall use such
award to develop quality measures that meet the following
requirements:
``(A) Such measures support measures required to be
reported under the Social Security Act, where
applicable, and in support of gaps and existing quality
measures that need improvement, as described in
subsection (b)(1)(A).
``(B) Such measures support measures developed
under section 1139A of the Social Security Act and the
Medicaid Quality Measurement Program under section
1139B of such Act, where applicable.
``(C) To the extent practicable, data on such
quality measures is able to be collected using health
information 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 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.--
``(i) In general.--In convening multi-
stakeholder groups under subparagraph (A) with
respect to the selection of quality measures,
the entity shall provide for an open and
transparent process for the activities
conducted pursuant to such convening.
``(ii) Selection of organizations
participating in multi-stakeholder groups.--The
process described in clause (i) shall ensure
that the selection of representatives
comprising such groups provides for public
nominations for, and the opportunity for public
comment on, such selection.
``(D) Multi-stakeholder group defined.--In this
paragraph, the term `multi-stakeholder group' means,
with respect to a quality measure, a voluntary
collaborative of organizations representing a broad
group of stakeholders interested in or affected by the
use of such quality measure.
``(8) Transmission of multi-stakeholder input.--Not later
than February 1 of each year (beginning with 2012), the entity
shall transmit to the Secretary the input of multi-stakeholder
groups provided under paragraph (7).''.
(2) Annual report.--Section 1890(b)(5)(A) of the Social
Security Act (42 U.S.C. 1395aaa(b)(5)(A)) is amended--
(A) in clause (ii), by striking ``and'' at the end;
(B) in clause (iii), by striking the period at the
end and inserting a semicolon; and
(C) by adding at the end the following new clauses:
``(iv) gaps in endorsed quality measures,
which shall include measures that are within
priority areas identified by the Secretary
under the national strategy established under
section 399HH of the Public Health Service Act,
and where quality measures are unavailable or
inadequate to identify or address such gaps;
``(v) areas in which evidence is
insufficient to support endorsement of quality
measures in priority areas identified by the
Secretary under the national strategy
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. (a) Multi-stakeholder Group Input Into Selection of
Quality Measures.--The Secretary shall establish a pre-rulemaking
process under which the following steps occur with respect to the
selection of quality measures described in section 1890(b)(7)(B):
``(1) Input.--Pursuant to section 1890(b)(7), the entity
with a contract under section 1890 shall convene multi-
stakeholder groups to provide input to the Secretary on the
selection of quality measures described in subparagraph (B) of
such paragraph.
``(2) Public availability of measures considered for
selection.--Not later than December 1 of each year (beginning
with 2011), the Secretary shall make available to the public a
list of quality measures described in section 1890(b)(7)(B)
that the Secretary is considering under this title.
``(3) Transmission of multi-stakeholder input.--Pursuant to
section 1890(b)(8), not later than February 1 of each year
(beginning with 2012), the entity shall transmit to the
Secretary the input of multi-stakeholder groups described in
paragraph (1).
``(4) Consideration of multi-stakeholder input.--The
Secretary shall take into consideration the input from multi-
stakeholder groups described in paragraph (1) in selecting
quality measures described in section 1890(b)(7)(B) that have
been endorsed by the entity with a contract under section 1890
and measures that have not been endorsed by such entity.
``(5) Rationale for use of quality measures.--The Secretary
shall publish in the Federal Register the rationale for the use
of any quality measure described in section 1890(b)(7)(B) that
has not been endorsed by the entity with a contract under
section 1890.
``(6) Assessment of impact.--Not later than March 1, 2012,
and at least once every three years thereafter, the Secretary
shall--
``(A) conduct an assessment of the quality impact
of the use of endorsed measures described in section
1890(b)(7)(B); and
``(B) make such assessment available to the public.
``(b) Process for Dissemination of Measures Used by the
Secretary.--
``(1) In general.--The Secretary shall establish a process
for disseminating quality measures used by the Secretary. Such
process shall include the following:
``(A) The incorporation of such measures, where
applicable, in workforce programs, training curricula,
and any other means of dissemination determined
appropriate by the Secretary.
``(B) The dissemination of such quality measures
through the national strategy developed under section
399HH of the 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
``(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. 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;
``(C) support the provision of timely, consistent
quality and resource use information to health care
providers, and other groups and organizations as
appropriate, with an opportunity for providers to
correct inaccurate measures; and
``(D) agree to report, as determined by the
Secretary, measures on quality and resource use to the
public in accordance with the public reporting process
established under section 399JJ.
``(c) Consistent Data Aggregation.--The Secretary may award grants
or contracts under this section only to entities that enable summary
data that can be integrated and compared across multiple sources. The
Secretary shall provide standards for the protection of the security
and privacy of patient data.
``(d) Matching Funds.--The Secretary may not award a grant or
contract under this section to an entity unless the entity agrees that
it will make available (directly or through contributions from other
public or private entities) non-Federal contributions toward the
activities to be carried out under the grant or contract in an amount
equal to $1 for each $5 of Federal funds provided under the grant or
contract. Such non-Federal matching funds may be provided directly or
through donations from public or private entities and may be in cash or
in-kind, fairly evaluated, including plant, equipment, or services.
``(e) Authorization of Appropriations.--To carry out this section,
there are authorized to be appropriated such sums as may be necessary
for fiscal years 2010 through 2014.
``SEC. 399JJ. PUBLIC REPORTING OF PERFORMANCE INFORMATION.
``(a) Development of Performance Websites.--The Secretary shall
make available to the public, through standardized Internet websites,
performance information summarizing data on quality measures. Such
information shall be tailored to respond to the differing needs of
hospitals and other institutional health care providers, physicians and
other clinicians, patients, consumers, researchers, policymakers,
States, and other stakeholders, as the Secretary may specify.
``(b) Information on Conditions.--The performance information made
publicly available on an Internet website, as described in subsection
(a), shall include information regarding clinical conditions to the
extent such information is available, and the information shall, where
appropriate, be provider-specific and sufficiently disaggregated and
specific to meet the needs of patients with different clinical
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 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. (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.
``(b) Testing of Models (Phase I).--
``(1) In general.--The CMI shall test payment and service
delivery models in accordance with selection criteria under
paragraph (2) to determine the effect of applying such models
under the applicable title (as defined in subsection (a)(4)(B))
on program expenditures under such titles and the quality of
care received by individuals receiving benefits under such
title.
``(2) Selection of models to be tested.--
``(A) In general.--The Secretary shall select
models to be tested from models where the Secretary
determines that there is evidence that the model
addresses a defined population for which there are
deficits in care leading to poor clinical outcomes or
potentially avoidable expenditures. The models selected
under the preceding sentence may include the models
described in subparagraph (B).
``(B) Opportunities.--The models described in this
subparagraph are the following models:
``(i) Promoting broad payment and practice
reform in primary care, including patient-
centered medical home models for high-need
applicable individuals, medical homes that
address women's unique health care needs, and
models that transition primary care practices
away from fee-for-service based reimbursement
and toward comprehensive payment or salary-
based payment.
``(ii) Contracting directly with groups of
providers of services and suppliers to promote
innovative care delivery models, such as
through risk-based comprehensive payment or
salary-based payment.
``(iii) Utilizing geriatric assessments and
comprehensive care plans to coordinate the care
(including through interdisciplinary teams) of
applicable individuals with multiple chronic
conditions and at least one of the 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.
``(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.
``(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) Termination or modification.--The Secretary
shall terminate or modify the design and implementation
of a model unless the Secretary determines (and the
Chief Actuary of the Centers for Medicare & Medicaid
Services, with respect to program spending under the
applicable title, certifies), after testing has begun,
that the model is expected to--
``(i) improve the quality of care (as
determined by the Administrator of the Centers
for Medicare & Medicaid Services) without
increasing spending under the applicable 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.--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) 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) 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;
``(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). 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;
(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. (a) Establishment.--
``(1) In general.--Not later than January 1, 2012, the
Secretary shall establish a shared savings program (in this
section referred to as the `program') that promotes
accountability for a patient population and coordinates items
and services under parts A and B, and encourages investment in
infrastructure and redesigned care processes for high quality
and efficient service delivery. Under such program--
``(A) groups of providers of services and suppliers
meeting criteria specified by the Secretary may work
together to manage and coordinate care for Medicare
fee-for-service beneficiaries through an accountable
care organization (referred to in this section as an
`ACO'); and
``(B) ACOs that meet quality performance standards
established by the Secretary are eligible to receive
payments for shared savings under subsection (d)(2).
``(b) Eligible ACOs.--
``(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.
``(B) The ACO shall enter into an agreement with
the Secretary to participate in the program for not
less than a 3-year period (referred to in this section
as the `agreement period').
``(C) The ACO shall have a formal legal structure
that would allow the organization to receive and
distribute payments for shared savings under subsection
(d)(2) to participating providers of services and
suppliers.
``(D) The ACO shall include primary care ACO
professionals that are sufficient for the number of
Medicare fee-for-service beneficiaries assigned to the
ACO under subsection (c). At a minimum, the ACO shall
have at least 5,000 such beneficiaries assigned to it
under subsection (c) in order to be eligible to
participate in the ACO program.
``(E) The ACO shall provide the Secretary with such
information regarding ACO professionals participating
in the ACO as the Secretary determines necessary to
support the assignment of Medicare fee-for-service
beneficiaries to an ACO, the implementation of quality
and other reporting requirements under paragraph (3),
and the determination of payments for shared savings
under subsection (d)(2).
``(F) The ACO shall have in place a leadership and
management structure that includes clinical and
administrative 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.--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
ACOs over time by specifying higher standards, new
measures, or both for purposes of assessing such
quality of care.
``(D) Other reporting requirements.--The Secretary
may, as the Secretary determines appropriate,
incorporate reporting requirements and incentive
payments related to the physician quality reporting
initiative (PQRI) under section 1848, including such
requirements and such payments related to electronic
prescribing, electronic health records, and other
similar initiatives under section 1848, and may use
alternative criteria than would otherwise apply under
such section for determining whether to make such
payments. The incentive payments described in the
preceding sentence shall not be taken into
consideration when calculating any payments otherwise
made under subsection (d).
``(4) No duplication in participation in shared savings
programs.--A provider of services or supplier that participates
in any of the following shall not be eligible to participate in
an ACO under this section:
``(A) A model tested or expanded under section
1115A that involves shared savings under this title, or
any other program or demonstration project that
involves such shared savings.
``(B) The independence at home medical practice
pilot program under section 1866E.
``(c) Assignment of Medicare Fee-for-service Beneficiaries to
ACOs.--The Secretary shall determine an appropriate method to assign
Medicare fee-for-service beneficiaries to an ACO based on their
utilization of primary care services provided under this title by an
ACO professional described in subsection (h)(1)(A).
``(d) Payments and Treatment of Savings.--
``(1) Payments.--
``(A) In general.--Under the program, subject to
paragraph (3), payments shall continue to be made to
providers of services and suppliers participating in an
ACO under the original Medicare fee-for-service program
under parts A and B in the same manner as they would
otherwise be made except that a participating ACO is
eligible to receive payment for shared savings under
paragraph (2) if--
``(i) the ACO meets quality performance
standards established by the Secretary under
subsection (b)(3); and
``(ii) the ACO meets the requirement under
subparagraph (B)(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
