Patients' Choice Act - Requires the Secretary of Health and Human Services (HHS) to convene an interagency coordinating committee to develop a national strategic plan for prevention. Provides for health promotion and disease prevention activities consistent with such plan.
Sets forth provisions governing the establishment and operation of state-based health care exchanges to facilitate the individual purchase of private health insurance and the creation of a market where private health plans compete for enrolles based on price and quality.
Amends the Internal Revenue Code to allow a refundable tax credit for qualified health care insurance coverage.
Replaces title XIX (Medicaid) of the Social Security Act with a program to provide grants to states for: (1) acute medical care assistance to otherwise qualified blind or disabled individuals, foster care children, low-income women with breast or cervical cancer, certain tuberculosis-infected individuals, and certain individuals currently covered; and (2) long-term care services and supports for qualified disabled and elderly populations.
Repeals title XXI (State Children's Health Insurance Program) (CHIP, formerly known as SCHIP) of the Social Security Act.
Amends the Public Health Service Act to require the Secretary to supplement the costs of private health insurance for eligible low-income families through the distribution of supplemental debit cards, which may be used for costs associated with health care and provide direct support in accessing health care.
Requires the Secretary to establish and implement a competitive bidding mechanism to promote competition among Medicare Advantage plans and to increase the quality of care furnished under the plans. Requires benchmarks for such plans to be established solely through competitive bids.
Sets forth programs to prevent Medicare fraud and abuse, including ending the use of social security numbers to identify Medicare beneficiaries.
Allows the Secretary to award grants for the development, implementation, and evaluation of alternatives to current tort litigation for the resolution of disputes concerning injuries allegedly caused by health care providers or health care organizations.
Requires the Secretary to promulgate regulations to provide for the certification and auditing of the banking of electronic medical records.
Establishes: (1) a Health Care Services Commission to enhance the quality, appropriateness, and effectiveness of health care services and access to such services; and (2) the Office of the Forum for Quality and Effectiveness in Health Care.
Terminates the Agency for Healthcare Research and Quality.
Independent Health Record Trust Act of 2009 - Directs the Federal Trade Commission (FTC) to prescribe standards for the establishment, certification, operation, and interoperability of independent health record trusts.
Requires the Secretary to: (1) permit Indians to receive health care through providers outside of the Indian Health Service; and (2) make payments for such care.
Terminates the Federal Coordinating Council for Comparative Effectiveness Research.
[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2520 Introduced in House (IH)]
111th CONGRESS
1st Session
H. R. 2520
To provide comprehensive solutions for the health care system of the
United States, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 20, 2009
Mr. Ryan of Wisconsin (for himself and Mr. Nunes) introduced the
following bill; which was referred to the Committee on Energy and
Commerce, and in addition to the Committee on Ways and Means, for a
period to be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the
committee concerned
_______________________________________________________________________
A BILL
To provide comprehensive solutions for the health care system of the
United States, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Patients' Choice
Act''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--INVESTING IN PREVENTION
Sec. 101. Strategic approach to outcome-based prevention.
Sec. 102. State grants for outcome-based prevention effort.
Sec. 103. Focusing the food stamp program on nutrition.
Sec. 104. Immunizations.
TITLE II--STATE-BASED HEALTH CARE EXCHANGES
Sec. 201. State-based health care exchanges.
Sec. 202. Requirements.
Sec. 203. State Exchange incentives.
TITLE III--FAIR TAX TREATMENT FOR ALL AMERICANS TO AFFORD HEALTH CARE
Sec. 300. Reference.
Subtitle A--Refundable and Advanceable Credit for Certain Health
Insurance Coverage
Sec. 301. Refundable and advanceable credit for certain health
insurance coverage.
Sec. 302. Requiring employer transparency about employee benefits.
Sec. 303. Changes to existing tax preferences for medical coverage,
etc., for individuals eligible for
qualified health insurance credit.
Subtitle B--Health Savings Accounts
Sec. 311. Improvements to health savings accounts.
Sec. 312. Exception to requirement for employers to make comparable
health savings account contributions.
TITLE IV--FAIRNESS FOR EVERY AMERICAN PATIENT
Subtitle A--Medicaid Modernization
Sec. 401. Medicaid modernization.
Sec. 402. Outreach.
Sec. 403. Transition rules; miscellaneous provisions.
Subtitle B--Supplemental Health Care Assistance for Low-Income Families
Sec. 411. Supplemental Health Care Assistance for Low-Income Families.
TITLE V--FIXING MEDICARE FOR AMERICAN SENIORS
Subtitle A--Increasing Programmatic Efficiency, Economy, and
Accountability
Sec. 501. Eliminating inefficiencies and increasing choice in Medicare
Advantage.
Sec. 502. Medicare Accountable Care Organization demonstration program.
Sec. 503. Reducing government handouts to wealthier seniors.
Sec. 504. Rewarding prevention.
Sec. 505. Promoting healthcare provider transparency.
Sec. 506. Availability of Medicare and Medicaid claims and patient
encounter data.
Subtitle B--Reducing Fraud and Abuse
Sec. 511. Requiring the Secretary of Health and Human Services to
change the Medicare beneficiary identifier
used to identify Medicare beneficiaries
under the Medicare program.
Sec. 512. Use of technology for real-time data review.
Sec. 513. Detection of medicare fraud and abuse.
Sec. 514. Edits on 855S Medicare enrollment application and exemption
of pharmacists from surety bond
requirement.
Sec. 515. GAO study and report on effectiveness of surety bond
requirements for suppliers of durable
medical equipment in combating fraud.
TITLE VI--ENDING LAWSUIT ABUSE
Sec. 601. State grants to create health court solutions.
TITLE VII--PROMOTING HEALTH INFORMATION TECHNOLOGY
Subtitle A--Assisting the Development of Health Information Technology
Sec. 701. Purpose.
Sec. 702. Health record banking.
Sec. 703. Application of Federal and State security and confidentiality
standards.
Subtitle B--Removing Barriers to the Use of Health Information
Technology to Better Coordinate Health Care
Sec. 711. Safe harbors to antikickback civil penalties and criminal
penalties for provision of health
information technology and training
services.
Sec. 712. Exception to limitation on certain physician referrals (under
Stark) for provision of health information
technology and training services to health
care professionals.
Sec. 713. Rules of construction regarding use of consortia.
TITLE VIII--HEALTH CARE SERVICES COMMISSION
Subtitle A--Establishment and General Duties
Sec. 801. Establishment.
Sec. 802. General authorities and duties.
Sec. 803. Dissemination.
Subtitle B--Forum for Quality and Effectiveness in Health Care
Sec. 811. Establishment of office.
Sec. 812. Membership.
Sec. 813. Duties.
Sec. 814. Adoption and enforcement of guidelines and standards.
Sec. 815. Additional requirements.
Subtitle C--General Provisions
Sec. 821. Certain administrative authorities.
Sec. 822. Funding.
Sec. 823. Definitions.
Subtitle D--Terminations and Transition
Sec. 831. Termination of Agency for Healthcare Research and Quality.
Sec. 832. Transition.
Subtitle E--Independent Health Record Trust
Sec. 841. Short title.
Sec. 842. Purpose.
Sec. 843. Definitions.
Sec. 844. Establishment, certification, and membership of Independent
Health Record Trusts.
Sec. 845. Duties of IHRT to IHRT participants.
Sec. 846. Availability and use of information from records in IHRT
consistent with privacy protections and
agreements.
Sec. 847. Voluntary nature of trust participation and information
sharing.
Sec. 848. Financing of activities.
Sec. 849. Regulatory oversight.
TITLE IX--MISCELLANEOUS
Sec. 901. Health care choice for veterans.
Sec. 902. Health care choice for Indians.
Sec. 903. Termination of Federal Coordinating Council for Comparative
Effectiveness Research.
Sec. 904. HHS and GAO joint study and report on costs of the 5 medical
conditions that have the greatest impact.
TITLE I--INVESTING IN PREVENTION
SEC. 101. STRATEGIC APPROACH TO OUTCOME-BASED PREVENTION.
(a) Interagency Coordinating Committee.--
(1) In general.--The Secretary of Health and Human Services
(referred to in this title as the ``Secretary'') shall convene
an interagency coordinating committee to develop a national
strategic plan for prevention. The Secretary shall serve as the
chairperson of the committee.
(2) Composition.--In carrying out paragraph (1), the
Secretary shall include the participation of--
(A) the Director of the National Institutes of
Health;
(B) the Director of the Centers for Disease Control
and Prevention;
(C) the Administrator of the Agency for Healthcare
Research and Quality;
(D) the Administrator of the Substance Abuse and
Mental Health Services Administration;
(E) the Administrator of the Health Resources and
Services Administration;
(F) the Secretary of Agriculture;
(G) the Director of the Centers for Medicare &
Medicaid Services;
(H) the Administrator of the Environmental
Protection Agency;
(I) the Director of the Indian Health Service;
(J) the Administrator of the Administration on
Aging;
(K) the Secretary of Veterans Affairs;
(L) the Secretary of Defense;
(M) the Secretary of Education; and
(N) the Secretary of Labor.
(3) Report and plan.--Not later than 1 year after the date
of enactment of this Act, the Secretary, acting through the
coordinating committee convened under paragraph (1), shall
submit to Congress a report concerning the recommendation of
the committee for health promotion and disease prevention
activities. Such report shall include a specific strategic plan
that shall include--
(A) a list of national priorities on health
promotion and disease prevention to address lifestyle
behavior modification (smoking cessation, proper
nutrition, and appropriate exercise) and the prevention
measures for the 5 leading disease killers in the
United States;
(B) specific science-based initiatives to achieve
the measurable goals of Healthy People 2010 regarding
nutrition, exercise, and smoking cessation, and
targeting the 5 leading disease killers in the United
States;
(C) specific plans for consolidating Federal health
programs and Centers that exist to promote healthy
behavior and reduce disease risk (including eliminating
programs and offices determined to be ineffective in
meeting the priority goals of Healthy People 2010),
that include transferring the nutrition guideline
development responsibility from the Secretary of
Agriculture to the Director of the Centers for Disease
Control and Prevention;
(D) specific plans to ensure that all Federal
health care programs are fully coordinated with
science-based prevention recommendations promulgated by
the Director of the Centers for Disease Control and
Prevention;
(E) specific plans to ensure that all non-
Department of Health and Human Services prevention
programs are based on the science-based guidelines
developed by the Centers for Disease Control and
Prevention under subparagraph (D); and
(F) a list of new non-Federal and non-government
partners identified by the committee to build Federal
capacity in health promotion and disease prevention
efforts.
(4) Annual request to give testimony.--The Secretary shall
annually request an opportunity to testify before Congress
concerning the progress made by the United States in meeting
the outcome-based standards of Healthy People 2010 with respect
to disease prevention and measurable outcomes and effectiveness
of Federal programs related to this goal.
(5) Periodic reviews.--The Secretary shall conduct periodic
reviews, not less than every 5 years, and grading of every
Federal disease prevention and health promotion initiatives,
programs, and agencies. Such reviews shall be evaluated based
on effectiveness in meeting metrics-based goals with an
analysis posted on such agencies' public Internet websites.
(b) Federal Messaging on Health Promotion and Disease Prevention.--
(1) Media campaigns.--
(A) In general.--Not later than 1 year after the
date of enactment of this Act, the Secretary, acting
through the Director of the Centers for Disease Control
and Prevention, shall establish and implement a
national science-based media campaign on health
promotion and disease prevention.
(B) Requirements of campaign.--The campaign
implemented under subparagraph (A)--
(i) shall be designed to address proper
nutrition, regular exercise, smoking cessation,
obesity reduction, the 5 leading disease
killers in the United States, and secondary
prevention through disease screening promotion;
(ii) shall be carried out through
competitively bid contracts awarded to entities
providing for the professional production and
design of such campaign;
(iii) may include the use of television,
radio, Internet, and other commercial marketing
venues and may be targeted to specific age
groups based on peer-reviewed social research;
(iv) shall not be duplicative of any other
Federal efforts relating to health promotion
and disease prevention; and
(v) may include the use of humor and
nationally recognized positive role models.
(C) Evaluation.--The Secretary shall ensure that
the campaign implemented under subparagraph (A) is
subject to an independent evaluation every 2 years and
shall report every 2 years to Congress on the
effectiveness of such campaigns towards meeting
science-based metrics.
(2) Website.--The Secretary, in consultation with private-
sector experts, shall maintain or enter into a contract to
maintain an Internet website to provide science-based
information on guidelines for nutrition, regular exercise,
obesity reduction, smoking cessation, and specific chronic
disease prevention. Such website shall be designed to provide
information to health care providers and consumers.
(3) Dissemination of information through providers.--The
Secretary, acting through the Centers for Disease Control and
Prevention, shall develop and implement a plan for the
dissemination of health promotion and disease prevention
information consistent with national priorities described in
the strategic and implementing plan under subsection (a)(3)(A),
to health care providers who participate in Federal programs,
including programs administered by the Indian Health Service,
the Department of Veterans Affairs, the Department of Defense,
and the Health Resources and Services Administration, and the
Medicare and Medicaid Programs.
(4) Personalized prevention plans.--
(A) Contract.--The Secretary, acting through the
Director of the Centers for Disease Control and
Prevention, shall enter into a contract with a
qualified entity for the development and operation of a
Federal Internet website personalized prevention plan
tool.
(B) Use.--The website developed under subparagraph
(A) shall be designed to be used as a source of the
most up-to-date scientific evidence relating to disease
prevention for use by individuals. Such website shall
contain a component that enables an individual to
determine their disease risk (based on personal health
and family history, BMI, and other relevant
information) relating to the 5 leading diseases in the
United States, and obtain personalized suggestions for
preventing such diseases.
(5) Internet portal.--The Secretary shall establish an
Internet portal for accessing risk-assessment tools developed
and maintained by private and academic entities.
(6) Priority funding.--Funding for the activities
authorized under this section shall take priority over funding
from the Centers for Disease Control and Prevention provided
for grants to States and other entities for similar purposes
and goals as provided for in this section. Not to exceed
$500,000,000 shall be expended on the campaigns and activities
required under this Act.
SEC. 102. STATE GRANTS FOR OUTCOME-BASED PREVENTION EFFORT.
(a) In General.--If the Secretary determines that it is essential
to meeting the national priorities described in the plan required under
section 101(a)(3)(A), the Secretary may award grants to States for the
conduct of specific health promotion and disease prevention activities.
(b) Eligibility.--To be eligible to receive a grant under
subsection (a), a State shall submit to the Secretary an application at
such time, in such manner, and containing such information as the
Secretary may require, including a strategic plan that shall--
(1) describe the specific health promotion and disease
prevention activities to be carried out under this grant;
(2) include a list of the barriers that exist within the
State to meeting specific goals of Healthy People 2010;
(3) include targeted demographic indicators and measurable
objectives with respect to health promotion and disease
prevention;
(4) contain a set of process outcomes and milestones, based
on the process outcomes and milestones developed by the
Secretary, for measuring the effectiveness of activities
carried out under the grant in the State; and
(5) outline the manner in which interventions to be carried
out under this grant will reduce morbidity and mortality within
the State over a 5-year period (or over a 10-year period, if
the Secretary determines such period appropriate for adequately
measuring progress).
(c) Process Outcomes and Milestones.--
(1) In general.--The Secretary shall develop process
outcomes and milestones to be used to measure the effectiveness
of activities carried out under a grant under this section by a
State.
(2) Determinations.--If, beginning 2 years after the date
on which a grant is awarded to a State under this section, the
Secretary determines that the State is failing to make adequate
progress in meeting the outcomes and milestones contained in
the State plan under subsection (b)(4), the Secretary shall
provide the State with technical assistance on how to make such
progress. Such technical assistance shall continue for a period
of 2 years.
(3) Continued failure to meet objectives.--If after the
expiration of the 2-year period described in paragraph (2), the
Secretary determines that the State is failing to make adequate
progress in meeting the outcomes and milestones contained in
the State plan under subsection (b)(4) over a 5-year period,
the Secretary shall terminate all funding to the State under a
grant under this section.
(d) Regional Activities.--A State may use an amount, not to exceed
15 percent of the total grant amount to such State, to carry out
regional activities in conjunction with other States.
(e) Targeted Activities.--A State may use grant funds to target
specific populations within the State to achieve specific outcomes
described in Healthy People 2010.
(f) Innovative Incentive Structures.--The Secretary may award
grants to States for the purposes of developing innovative incentive
structures to encourage individuals to adopt specific prevention
behaviors such as reducing their body mass index or for smoking
cessation.
(g) Wellness Bonuses.--
(1) In general.--The Secretary shall award wellness bonus
payments to at least 5, but not more than 10, States that
demonstrate the greatest progress in reducing disease rates and
risk factors and increasing heathy behaviors.
(2) Requirement.--To be eligible to receive a bonus payment
under paragraph (1), a State shall demonstrate--
(A) the progress described in paragraph (1); and
(B) that the State has met a specific floor for
progress outlined in the science-based metrics of
Healthy People 2010.
(3) Use of payments.--Bonus payments under this subsection
may only be used by a State for the purposes of health
promotion and disease prevention.
(4) Funding.--Out of funds appropriated to the Director of
the Centers for Disease Control and Prevention for each fiscal
year beginning with fiscal year 2010, the Director shall give
priority to using $50,000,000 of such funds to make bonus
payments under this subsection.
(h) Administrative Expenses.--A State may use not more than 5
percent of the amount of a grant under this section to carry out
administrative activities.
(i) State.--In this section, the term ``State'' means the 50
States, the District of Columbia, the Commonwealth of Puerto Rico,
Guam, Samoa, the United States Virgin Islands, and the Commonwealth of
the Northern Mariana Islands.
(j) Authorization of Appropriations.--Funding for the activities
authorized under this section shall take priority over funding from the
Centers for Disease Control and Prevention provided for grants to
States and other entities for similar purposes and goals as provided
for in this section, not to exceed $300,000,000 for each fiscal year.
SEC. 103. FOCUSING THE FOOD STAMP PROGRAM ON NUTRITION.
(a) Counseling Brochure.--The Director of the Centers for Disease
Control and Prevention shall develop, and the Secretary of Agriculture
shall distribute to each individual and family enrolled in the Food
Stamp Program under the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.),
a science-based nutrition counseling brochure.
(b) Limitations on Food Stamp Purchases.--
(1) In general.--Not later than 6 months after the date of
enactment of this Act, the Secretary of Agriculture shall,
based on scientific, peer-reviewed recommendations provided by
a Commission that includes public health, medical, and
nutrition experts and the Director of the Centers for Disease
Control and Prevention, develop lists of foods that do not meet
science-based standards for proper nutrition and that may not
be purchased under the food stamp program. Such list shall be
updated on an annual basis to ensure the most current science-
based recommendations are applied to the food stamp program.
(2) Automated enforcement.--The Secretary of Agriculture
shall, through regulations, ensure that the limitations on food
purchases under paragraph (1) is enforced through the food
stamp program's automated system.
(3) Implementation.--The Secretary of Agriculture shall
promulgate the regulations described in paragraph (2) by the
date that is not later than 1 year after the date of enactment
of this section.
SEC. 104. IMMUNIZATIONS.
(a) Purchase of Vaccines.--Notwithstanding any other provision of
law, a State may use amounts provided under section 317 of the Public
Health Service Act (42 U.S.C. 247b) for immunization programs to
purchase vaccines for use in health care provider offices and schools.
(b) Technical Assistance and Reduction in Funding.--If a State does
not achieve a benchmark of 80 percent coverage within the State for
Centers for Disease Control and Prevention-recommended vaccines, the
Director of the Centers shall provide technical assistance to the State
for a period of 2 years. If after the expiration of such 2-year period
the State continues to fail to achieve such benchmark, the Secretary
shall reduce funding provided under section 317 of the Public Health
Service Act to such State by 5 percent.
(c) Bonus Grant.--A State achieving a benchmark of 90 percent or
greater coverage within the State for Centers for Disease Control and
Prevention-recommended vaccines shall be eligible for a bonus grant
from amounts appropriated under subsection (d).
(d) Authorization of Appropriations.--Out of funds appropriated to
the Director of the Centers for Disease Control and Prevention for each
fiscal year beginning with fiscal year 2010, there shall be made
available to carry out this section, $50,000,000 for each fiscal year.
(e) Funding for Section 317.--Section 317(j)(1) of the Public
Health Service Act (42 U.S.C. 247b(j)(1)) is amended by striking
``2005'' and inserting ``2012''.
TITLE II--STATE-BASED HEALTH CARE EXCHANGES
SEC. 201. STATE-BASED HEALTH CARE EXCHANGES.
(a) In General.--The Secretary of Health and Human Services
(referred to in this title as the ``Secretary'') shall establish a
process for the review of applications submitted by States for the
establishment and implementation of State-based health care Exchanges
(referred to in this title as a ``State Exchange'') and for the
certification of such Exchanges. The Secretary shall certify a State
Exchange if the Secretary determines that such Exchange meets the
requirements of this title.
(b) Continued Certification.--The certification of a State Exchange
under subsection (a) shall remain in effect until the Secretary
determines that the Exchange has failed to meet any of the requirements
under this title.
SEC. 202. REQUIREMENTS.
(a) General Requirements for Certification.--An application for
certification under section 201(a) shall demonstrate compliance with
the following:
(1) Purpose.--The primary purpose of a State Exchange shall
be the facilitation of the individual purchase of innovative
private health insurance and the creation of a market where
private health plans compete for enrollees based on price and
quality.
(2) Administration.--A State shall ensure the operation of
the State Exchange through direct contracts with the health
insurance plans that are participating in the State Exchange or
through a contract with a third party administrator for the
operation of the Exchange.
(3) Plan participation.--A State shall not restrict or
otherwise limit the ability of a health insurance plan to
participate in, and offer health insurance coverage through,
the State Exchange, so long as the health insurance issuers
involved are duly licensed under State insurance laws
applicable to all health insurance issuers in the State and
otherwise comply with the requirements of this title.
(4) Premiums.--
(A) Amount.--A State shall not determine premium or
cost sharing amounts for health insurance coverage
offered through the State Exchange.
(B) Collection method.--A State shall ensure the
existence of an effective and efficient method for the
collection of premiums for health insurance coverage
offered through the State Exchange.
(b) Benefit Parity With Members of Congress.--With respect to
health insurance issuers offering health insurance coverage through the
State Exchange, the State shall not impose any requirement that such
issuers provide coverage that includes benefits different than
requirements on plans offered to Members of Congress under chapter 89
of title 5, United States Code.
(c) Facilitating Universal Coverage for Americans.--
(1) Automatic enrollment.--The State Exchange shall ensure
that health insurance coverage offered through the Exchange
provides for the application of uniform mechanisms that are
designed to encourage and facilitate the enrollment of all
eligible individuals in Exchange-based health insurance
coverage. Such mechanisms shall include automatic enrollment
through various venues, which may include emergency rooms, the
submission of State tax forms, places of employment in the
State, and State departments of motor vehicles.
(2) Other enrollment opportunities.--
(A) In general.--The State Exchange shall ensure
that health insurance coverage offered through the
Exchange permits enrollment, and changes in enrollment,
of individuals at the time such individuals become
eligible individuals in the State.
(B) Annual open enrollment periods.--The State
Exchange shall ensure that health insurance coverage
offered through the Exchange permits eligible
individuals to annually change enrollment among the
coverage offered through the Exchange, subject to
subparagraph (A).
(C) Incentives for continuous annual coverage.--The
State Exchange shall include an incentive for eligible
individuals to remain insured from plan year to plan
year, and may include incentives such as State tax
incentives or premium-based incentives.
(3) Guaranteed access for individuals.--The State Exchange
shall ensure that, with respect to health insurance coverage
offered through the Exchange, all eligible individuals are able
to enroll in the coverage of their choice provided that such
individuals agree to make applicable premium and cost sharing
payments.
(4) Limitation on pre-existing condition exclusions.--The
State Exchange shall ensure that health insurance coverage
offered through the Exchange meets the requirements of section
9801 of the Internal Revenue Code of 1986 in the same manner as
if such coverage was a group health plan.
(5) Opt-out.--Nothing in this title shall be construed to
require that an individual be enrolled in health insurance
coverage.
(d) Limitation on Exorbitant Premiums.--
(1) Establishment of mechanism.--With respect to health
insurance coverage offered through the State Exchange, the
Exchange shall establish a mechanisms to protect enrollees from
the imposition of excessive premiums, to reduce adverse
selection, and to share risk.
(2) Mechanism options.--The mechanisms referred to in
paragraph (1) may include the following:
(A) Independent risk adjustment.--The
implementation of risk-adjustment among health
insurance coverage offered through the State Exchange
through a contract entered into with a private,
independent board. Such board shall include
representation of health insurance issuers and State
officials but shall be independently controlled. The
State Exchange shall ensure that risk-adjustment
implemented under this subparagraph shall be based on a
blend of patient diagnoses and estimated costs.
(B) Health security pools.--The establishment (or
continued operation under section 2745 of the Public
Health Service Act) of a health security pool to
guarantee high-risk individuals access to affordable,
quality health care.
(C) Reinsurance.--The implementation of a
successful reinsurance mechanisms to guarantee high-
risk individuals access to affordable, quality health
care.
(e) Medicaid and SCHIP Beneficiaries.--The State Exchange shall
include procedures to permit eligible individuals who are receiving (or
who are eligible to receive) health care under title XIX or XXI of the
Social Security Act to enroll in health insurance coverage offered
through the Exchange.
(f) Dissemination of Coverage Information.--The State Exchange
shall ensure that each health insurance issuer that provides health
insurance coverage through the Exchange disseminate to eligible
individuals and employers within the State information concerning
health insurance coverage options, including the plans offered and
premiums and benefits for such plans.
(g) Regional Options.--
(1) Interstate compacts.--Two or more States that establish
a State Exchange may enter into interstate compacts providing
for the regulations of health insurance coverage offered within
such States.
(2) Model legislation.--States adopting model legislation
as developed by the National Association of Insurance
Commissioners shall be eligible to enter into an interstate
compact as provided for in this section.
(3) Multi-state pooling arrangements.--State Exchanges may
implement a multi-state health care coverage pooling
arrangement under this title.
(h) Eligible Individual.--In this title, the term ``eligible
individual'' means an individual who is--
(1) a citizen or national of the United States or an alien
lawfully admitted to the United States for permanent residence
or otherwise residing in the United States under color of law;
(2) a resident of the State involved;
(3) not incarcerated; and
(4) not eligible for coverage under parts A and B (or C) of
the Medicare program under title XVIII of the Social Security
Act.
SEC. 203. STATE EXCHANGE INCENTIVES.
(a) Grants.--The Secretary may award grants, pursuant to subsection
(b), to States for the development, implementation, and evaluation of
certified State Exchanges and to provide more options and choice for
individuals purchasing health insurance coverage.
(b) One-Time Increase in Medicaid Payment.--In the case of a State
awarded a grant to carry out this section, the total amount of the
Federal payment determined for the State under section 1913 of the
Social Security Act (as amended by section 401) for fiscal year 2011
shall be increased by an amount equal to 1 percent of the total amount
of payments made to the State for fiscal year 2010 under section
1903(a) of the Social Security Act (42 U.S.C. 1396b(a)) for purposes of
carrying out a grant awarded under this section. Amounts paid to a
State pursuant to this subsection shall remain available until
expended.
TITLE III--FAIR TAX TREATMENT FOR ALL AMERICANS TO AFFORD HEALTH CARE
SEC. 300. REFERENCE.
Except as otherwise expressly provided, whenever in this title an
amendment or repeal is expressed in terms of an amendment to, or repeal
of, a section or other provision, the reference shall be considered to
be made to a section or other provision of the Internal Revenue Code of
1986.
Subtitle A--Refundable and Advanceable Credit for Certain Health
Insurance Coverage
SEC. 301. REFUNDABLE AND ADVANCEABLE CREDIT FOR CERTAIN HEALTH
INSURANCE COVERAGE.
(a) Advanceable Credit.--Subpart A of part IV of subchapter A of
chapter 1 (relating to nonrefundable personal credits) is amended by
adding at the end the following new section:
``SEC. 25E. QUALIFIED HEALTH INSURANCE CREDIT.
``(a) Allowance of Credit.--In the case of an individual, there
shall be allowed as a credit against the tax imposed by this chapter
for the taxable year the sum of the monthly limitations determined
under subsection (b) for the taxpayer and the taxpayer's spouse and
dependents.
``(b) Monthly Limitation.--
``(1) In general.--The monthly limitation for each month
during the taxable year for an eligible individual is \1/12\th
of--
``(A) the applicable adult amount, in the case that
the eligible individual is the taxpayer or the
taxpayer's spouse,
``(B) the applicable adult amount, in the case that
the eligible individual is an adult dependent, and
``(C) the applicable child amount, in the case that
the eligible individual is a child dependent.
``(2) Limitation on aggregate amount.--Notwithstanding
paragraph (1), the aggregate monthly limitations for the
taxpayer and the taxpayer's spouse and dependents for any month
shall not exceed \1/12\th of the applicable aggregate amount.
``(3) No credit for ineligible months.--With respect to any
individual, the monthly limitation shall be zero for any month
for which such individual is not an eligible individual.
``(4) Applicable amount.--
``(A) In general.--For purposes of this section--
``(i) Applicable adult amount.--The
applicable adult amount is $2,290.
``(ii) Applicable child amount.--The
applicable child amount is $1,710.
``(iii) Applicable aggregate amount.--The
applicable aggregate amount is $5,710.
``(B) Cost-of-living adjustments.--
``(i) In general.--In the case of any
taxable year beginning in a calendar year after
2011, each dollar amount contained in
subparagraph (A) shall be increased by an
amount equal to such dollar amount multiplied
by the blended cost-of-living adjustment.
``(ii) Blended cost-of-living adjustment.--
For purposes of clause (i), the blended cost-
of-living adjustment means one-half of the sum
of--
``(I) the cost-of-living adjustment
determined under section 1(f)(3) for
the calendar year in which the taxable
year begins by substituting `calendar
year 2010' for `calendar year 1992' in
subparagraph (B) thereof, plus
``(II) the cost-of-living
adjustment determined under section
213(d)(10)(B)(ii) for the calendar year
in which the taxable year begins by
substituting `2010' for `1996' in
subclause (II) thereof.
``(iii) Rounding.--Any increase determined
under clause (i) shall be rounded to the
nearest multiple of $10.
``(C) Revenue neutrality adjustments.--
``(i) In general.--In the case of any
taxable year beginning in a calendar year after
2011, each dollar amount contained in
subparagraph (A), as adjusted under
subparagraph (B), shall be further adjusted (if
necessary) such that the aggregate of such
dollar amounts allowed as credits under this
section for such taxable year equals but does
not exceed the total increase in revenues in
the Treasury resulting from the amendments made
by sections 303 and 401 of the Patients' Choice
Act for such taxable year as estimated by the
Secretary.
``(ii) Date of adjustment.--The Secretary
shall announce the adjustments for any taxable
year under this subparagraph not later than the
preceding October 1.
``(c) Limitation Based on Amount of Tax.--In the case of a taxable
year to which section 26(a)(2) does not apply, the credit allowed under
subsection (a) for the taxable year shall not exceed the excess of--
``(1) the sum of the regular tax liability (as defined in
section 26(b)) plus the tax imposed by section 55, over
``(2) the sum of the credits allowable under this subpart
(other than this section) and section 27 for the taxable year.
``(d) Excess Credit Refundable to Certain Tax-Favored Accounts.--
If--
``(1) the credit which would be allowable under subsection
(a) if only qualified refund eligible health insurance were
taken into account under this section, exceeds
``(2) the limitation imposed by section 26 or subsection
(c) for the taxable year,
such excess shall be paid by the Secretary into the designated account
of the taxpayer.
``(e) Eligible Individual.--For purposes of this section--
``(1) In general.--The term `eligible individual' means,
with respect to any month, an individual who--
``(A) is the taxpayer, the taxpayer's spouse, or
the taxpayer's dependent, and
``(B) is covered under qualified health insurance
as of the 1st day of such month.
``(2) Medicare coverage, medicaid disability coverage, and
military coverage.--The term `eligible individual' shall not
include any individual who for any month is--
``(A) entitled to benefits under part A of title
XVIII of the Social Security Act or enrolled under part
B of such title, and the individual is not a
participant or beneficiary in a group health plan or
large group health plan that is a primary plan (as
defined in section 1862(b)(2)(A) of such Act),
``(B) enrolled by reason of disability in the
program under title XIX of such Act, or
``(C) entitled to benefits under chapter 55 of
title 10, United States Code, including under the
TRICARE program (as defined in section 1072(7) of such
title).
``(3) Identification requirements.--The term `eligible
individual' shall not include any individual for any month
unless the policy number associated with the qualified health
insurance and the TIN of each eligible individual covered under
such health insurance for such month are included on the return
of tax for the taxable year in which such month occurs.
``(4) Prisoners.--The term `eligible individual' shall not
include any individual for a month if, as of the first day of
such month, such individual is imprisoned under Federal, State,
or local authority.
``(5) Aliens.--The term `eligible individual' shall not
include any alien individual who is not a lawful permanent
resident of the United States.
``(f) Health Insurance.--For purposes of this section--
``(1) Qualified health insurance.--The term `qualified
health insurance' means any insurance constituting medical care
which (as determined under regulations prescribed by the
Secretary)--
``(A) has a reasonable annual and lifetime benefit
maximum, and
``(B) provides coverage for inpatient and
outpatient care, emergency benefits, and physician
care.
Such term does not include any insurance substantially all of
the coverage of which is coverage described in section
223(c)(1)(B).
``(2) Qualified refund eligible health insurance.--The term
`qualified refund eligible health insurance' means any
qualified health insurance which is coverage under a group
health plan (as defined in section 5000(b)(1)).
``(g) Designated Accounts.--
``(1) Designated account.--For purposes of this section,
the term `designated account' means any specified account
established and maintained by the provider of the taxpayer's
qualified refund eligible health insurance--
``(A) which is designated by the taxpayer (in such
form and manner as the Secretary may provide) on the
return of tax for the taxable year,
``(B) which, under the terms of the account,
accepts the payment described in subsection (d) on
behalf of the taxpayer, and
``(C) which, under such terms, provides for the
payment of expenses by the taxpayer or on behalf of
such taxpayer by the trustee or custodian of such
account, including payment to such provider.
``(2) Specified account.--For purposes of this paragraph,
the term `specified account' means--
``(A) any health savings account under section 223
or Archer MSA under section 220, or
``(B) any health insurance reserve account.
``(3) Health insurance reserve account.--For purposes of
this subsection, the term `health insurance reserve account'
means a trust created or organized in the United States as a
health insurance reserve account exclusively for the purpose of
paying the qualified medical expenses (within the meaning of
section 223(d)(2)) of the account beneficiary (as defined in
section 223(d)(3)), but only if the written governing
instrument creating the trust meets the requirements described
in subparagraphs (B), (C), (D), and (E) of section 223(d)(1).
Rules similar to the rules under subsections (g) and (h) of
section 408 shall apply for purposes of this subparagraph.
``(4) Treatment of payment.--Any payment under subsection
(d) to a designated account shall not be taken into account
with respect to any dollar limitation which applies with
respect to contributions to such account (or to tax benefits
with respect to such contributions).
``(h) Other Definitions.--For purposes of this section--
``(1) Dependent.--The term `dependent' has the meaning
given such term by section 152 (determined without regard to
subsections (b)(1), (b)(2), and (d)(1)(B) thereof). An
individual who is a child to whom section 152(e) applies shall
be treated as a dependent of the custodial parent for a
coverage month unless the custodial and noncustodial parent
provide otherwise.
``(2) Adult.--The term `adult' means an individual who is
not a child.
``(3) Child.--The term `child' means a qualifying child (as
defined in section 152(c)).
``(i) Special Rules.--
``(1) Coordination with medical deduction.--Any amount paid
by a taxpayer for insurance which is taken into account for
purposes of determining the credit allowable to the taxpayer
under subsection (a) shall not be taken into account in
computing the amount allowable to the taxpayer as a deduction
under section 213(a) or 162(l).
``(2) Coordination with health care tax credit.--No credit
shall be allowed under subsection (a) for any taxable year to
any taxpayer and qualifying family members with respect to whom
a credit under section 35 is allowed for such taxable year.
``(3) Denial of credit to 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.
``(4) Married couples must file joint return.--
``(A) In general.--If the taxpayer is married at
the close of the taxable year, the credit shall be
allowed under subsection (a) only if the taxpayer and
his spouse file a joint return for the taxable year.
``(B) Marital status; certain married individuals
living apart.--Rules similar to the rules of paragraphs
(3) and (4) of section 21(e) shall apply for purposes
of this paragraph.
``(5) Verification of coverage, etc.--No credit shall be
allowed under this section with respect to any individual
unless such individual's coverage (and such related information
as the Secretary may require) is verified in such manner as the
Secretary may prescribe.
``(6) Insurance which covers other individuals; treatment
of payments.--Rules similar to the rules of paragraphs (7) and
(8) of section 35(g) shall apply for purposes of this section.
``(j) Coordination With Advance Payments.--
``(1) Reduction in credit for advance payments.--With
respect to any taxable year, the amount which would (but for
this subsection) be allowed as a credit to the taxpayer under
subsection (a) shall be reduced (but not below zero) by the
aggregate amount paid on behalf of such taxpayer under section
7527A for months beginning in such taxable year.
``(2) Recapture of excess advance payments.--If the
aggregate amount paid on behalf of the taxpayer under section
7527A for months beginning in the taxable year exceeds the sum
of the monthly limitations determined under subsection (b) for
the taxpayer and the taxpayer's spouse and dependents for such
months, then the tax imposed by this chapter for such taxable
year shall be increased by the sum of--
``(A) such excess, plus
``(B) interest on such excess determined at the
underpayment rate established under section 6621 for
the period from the date of the payment under section
7527A to the date such excess is paid.
For purposes of subparagraph (B), an equal part of the
aggregate amount of the excess shall be deemed to be
attributable to payments made under section 7527A on the first
day of each month beginning in such taxable year, unless the
taxpayer establishes the date on which each such payment giving
rise to such excess occurred, in which case subparagraph (B)
shall be applied with respect to each date so established. The
Secretary may rescind or waive all or any portion of any amount
imposed by reason of subparagraph (B) if such excess was not
the result of the actions of the taxpayer.''.
(b) Advance Payment of Credit.--Chapter 77 (relating to
miscellaneous provisions) is amended by inserting after section 7527
the following new section:
``SEC. 7527A. ADVANCE PAYMENT OF CREDIT FOR QUALIFIED REFUND ELIGIBLE
HEALTH INSURANCE.
``(a) In General.--The Secretary shall establish a program for
making payments on behalf of individuals to providers of qualified
refund eligible health insurance (as defined in section 25E(f)(2)) for
such individuals.
``(b) Limitation.--The Secretary may make payments under subsection
(a) only to the extent that the Secretary determines that the amount of
such payments made on behalf of any taxpayer for any month does not
exceed the sum of the monthly limitations determined under section
25E(b) for the taxpayer and taxpayer's spouse and dependents for such
month.''.
(c) Information Reporting.--
(1) In general.--Subpart B of part III of subchapter A of
chapter 61 (relating to information concerning transactions
with other persons) is amended by inserting after section 6050W
the following new section:
``SEC. 6050X. RETURNS RELATING TO CREDIT FOR QUALIFIED REFUND ELIGIBLE
HEALTH INSURANCE.
``(a) Requirement of Reporting.--Every person who is entitled to
receive payments for any month of any calendar year under section 7527A
(relating to advance payment of credit for qualified refund eligible
health insurance) with respect to any individual shall, at such time as
the Secretary may prescribe, make the return described in subsection
(b) with respect to each such individual.
``(b) Form and Manner of Returns.--A return is described in this
subsection if such return--
``(1) is in such form as the Secretary may prescribe, and
``(2) contains, with respect to each individual referred to
in subsection (a)--
``(A) the name, address, and TIN of each such
individual,
``(B) the months for which amounts payments under
section 7527A were received,
``(C) the amount of each such payment,
``(D) the type of insurance coverage provided by
such person with respect to such individual and the
policy number associated with such coverage,
``(E) the name, address, and TIN of the spouse and
each dependent covered under such coverage, and
``(F) such other information as the Secretary may
prescribe.
``(c) Statements To Be Furnished to Individuals With Respect to
Whom Information Is Required.--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--
``(1) the contact information of the person required to
make such return, and
``(2) the information required to be shown on the return
with respect to such individual.
The written statement required under the preceding sentence shall be
furnished on or before January 31 of the year following the calendar
year for which the return under subsection (a) is required to be made.
``(d) Returns Which Would Be Required To Be Made by 2 or More
Persons.--Except to the extent provided in regulations prescribed by
the Secretary, in the case of any amount received by any person on
behalf of another person, only the person first receiving such amount
shall be required to make the return under subsection (a).''.
(2) Assessable penalties.--
(A) Subparagraph (B) of section 6724(d)(1)
(relating to definitions) is amended by striking ``or''
at the end of clause (xxii), by striking ``and'' at the
end of clause (xxiii) and inserting ``or'', and by
inserting after clause (xxiii) the following new
clause:
``(xxiv) section 6050X (relating to returns
relating to credit for qualified refund
eligible health insurance), and''.
(B) Paragraph (2) of section 6724(d) is amended by
striking ``or'' at the end of subparagraph (EE), by
striking the period at the end of subparagraph (FF) and
inserting ``, or'' and by inserting after subparagraph
(FF) the following new subparagraph:
``(GG) section 6050X (relating to returns relating
to credit for qualified refund eligible health
insurance).''.
(d) Conforming Amendments.--
(1) Paragraph (2) of section 1324(b) of title 31, United
States Code, is amended by inserting ``25E,'' before ``35,''.
(2)(A) Section 24(b)(3)(B) is amended by inserting ``,
25E,'' after ``25D''.
(B) Section 25(e)(1)(C)(ii) is amended by inserting
``25E,'' after ``25D,''.
(C) Section 25B(g)(2) is amended by inserting ``25E,''
after ``25D,''.
(D) Section 26(a)(1) is amended by inserting ``25E,'' after
``25D,''.
(E) Section 30(c)(2)(B)(ii) is amended by inserting
``25E,'' after ``25D,''.
(F) Section 30D(c)(2)(B)(ii) is amended by striking ``and
25D'' and inserting ``, 25D, and 25E''.
(G) Section 904(i) is amended by inserting ``25E,'' after
``25B,''.
(H) Section 1400C(d)(2) is amended by inserting ``25E,''
after ``25D,''.
(3) The table of sections for subpart A of part IV of
subchapter A of chapter 1 is amended by inserting after the
item relating to section 25D the following new item:
``Sec. 25E. Qualified health insurance credit.''.
(4) The table of sections for chapter 77 is amended by
inserting after the item relating to section 7527 the following
new item:
``Sec. 7527A. Advance payment of credit for qualified refund eligible
health insurance.''.
(5) The table of sections for subpart B of part III of
subchapter A of chapter 61 is amended by adding at the end the
following new item:
``Sec. 6050X. Returns relating to credit for qualified refund eligible
health insurance.''.
(e) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2010.
SEC. 302. REQUIRING EMPLOYER TRANSPARENCY ABOUT EMPLOYEE BENEFITS.
(a) In General.--Section 6051(a) (relating to W-2 requirement) is
amended by striking ``and'' at the end of paragraph (12), by striking
the period at the end of paragraph (13) and inserting ``, and'' and by
inserting after paragraph (13) the following new paragraph:
``(14) the aggregate cost (within the meaning of section
4980B(f)(4)) for coverage of the employee under an accident or
health plan which is excludable from the gross income of the
employee under section 106(a) (other than coverage under a
health flexible spending arrangement).''.
(b) Effective Date.--The amendments made by this section shall
apply to statements for calendar years beginning after 2009.
SEC. 303. CHANGES TO EXISTING TAX PREFERENCES FOR MEDICAL COVERAGE,
ETC., FOR INDIVIDUALS ELIGIBLE FOR QUALIFIED HEALTH
INSURANCE CREDIT.
(a) Exclusion for Contributions by Employer to Accident and Health
Plans.--
(1) In general.--Section 106 (relating to contributions by
employer to accident and health plans) is amended by adding at
the end the following new subsection:
``(f) No Exclusion for Individuals Eligible for Qualified Health
Insurance Credit.--Subsection (a) shall not apply with respect to any
employer-provided coverage under an accident or health plan for any
individual for any month unless such individual is described in
paragraph (2) or (5) of section 25E(e) for such month. The amount
includible in gross income by reason of this subsection shall be
determined under rules similar to the rules of section 4980B(f)(4).''.
(2) Conforming amendments.--
(A) Section 106(b)(1) is amended--
(i) by inserting ``gross income does not
include'' before ``amounts contributed'', and
(ii) by striking ``shall be treated as
employer-provided coverage for medical expenses
under an accident or health plan''.
(B) Section 106(d)(1) is amended--
(i) by inserting ``gross income does not
include'' before ``amounts contributed'', and
(ii) by striking ``shall be treated as
employer-provided coverage for medical expenses
under an accident or health plan''.
(b) Amounts Received Under Accident and Health Plans.--Section 105
(relating to amounts received under accident and health plans) is
amended by adding at the end the following new subsection:
``(f) No Exclusion for Individuals Eligible for Qualified Health
Insurance Credit.--Subsection (b) shall not apply with respect to any
employer-provided coverage under an accident or health plan for any
individual for any month unless such individual is described in
paragraph (2) or (5) of section 25E(e) for such month.''.
(c) Special Rules for Health Insurance Costs of Self-Employed
Individuals.--Subsection (l) of section 162 (relating to special rules
for health insurance costs of self-employed individuals) is amended by
adding at the end the following new paragraph:
``(6) No deduction to individuals eligible for qualified
health insurance.--Paragraph (1) shall not apply for any
individual for any month unless such individual is described in
paragraph (2) or (5) of section 25E(e) for such month.''.
(d) Earned Income Credit Unaffected by Repealed Exclusions.--
Subparagraph (B) of section 32(c)(2) is amended by redesignating
clauses (v) and (vi) as clauses (vi) and (vii), respectively, and by
inserting after clause (iv) the following new clause:
``(v) the earned income of an individual
shall be computed without regard to sections
105(f) and 106(f),''.
(e) Modification of Deduction for Medical Expenses.--Subsection (d)
of section 213 is amended by adding at the end the following new
paragraph:
``(12) Premiums for qualified health insurance.--The term
`medical care' does not include any amount paid as a premium
for coverage of an eligible individual (as defined in section
25E(e)) under qualified health insurance (as defined in section
25E(f)) for any month.''.
(f) Reporting Requirement.--Subsection (a) of section 6051 is
amended by striking ``and'' at the end of paragraph (12), by striking
the period at the end of paragraph (13) and inserting ``and'', and by
inserting after paragraph (13) the following new paragraph:
``(14) the total amount of employer-provided coverage under
an accident or health plan which is includible in gross income
by reason of sections 105(f) and 106(f).''.
(g) Retired Public Safety Officers.--Section 402(l)(4)(D) is
amended by adding at the end the following: ``Such term shall not
include any premium for coverage by an accident or health insurance
plan for any month unless such individual is described in paragraph (2)
or (5) of section 25E(e) for such month.''.
(h) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2010.
(i) No Intent To Encourage State Taxation of Health Benefits.--No
intent to encourage any State to treat health benefits as taxable
income for the purpose of increasing State income taxes may be inferred
from the provisions of, and amendments made by, this section.
Subtitle B--Health Savings Accounts
SEC. 311. IMPROVEMENTS TO HEALTH SAVINGS ACCOUNTS.
(a) Increase in Monthly Contribution Limit.--
(1) In general.--Paragraph (2) of section 223(b) (relating
to limitations) is amended to read as follows:
``(2) Monthly limitation.--
``(A) In general.--In the case of an eligible
individual who has coverage under a high deductible
health plan, the monthly limitation for any month of
such coverage is \1/12\ of the sum of--
``(i) the greater of--
``(I) the sum of the annual
deductible and the other annual out-of-
pocket expenses (other than for
premiums) required to be paid under the
plan by the eligible individual for
covered benefits, or
``(II) in the case of an eligible
individual who has--
``(aa) self-only coverage
under a high deductible health
plan as of the first day of
such month, $3,000, or
``(bb) family coverage
under a high deductible health
plan as of the first day of
such month, $5,950, and
``(ii) in the case of an eligible
individual who has coverage under a qualified
long-term care insurance contract (as defined
in section 7702B(b)), the lesser of--
``(I) the annual premium for such
coverage, or
``(II) $1,000.
``(B) Special rules relating to out-of-pocket
expenses.--
``(i) Reduction for separate plan.--The
annual out-of-pocket expenses taken into
account under subparagraph (A)(i)(I) with
respect to any eligible individual shall be
reduced by any out-of-pocket expense payable
under a separate plan covering the individual.
``(ii) Secretarial authority.--The
Secretary may by regulations provide that
annual out-of-pocket expenses will not be taken
into account under subparagraph (A)(i)(I) to
the extent that there is only a remote
likelihood that such amounts will be required
to be paid.''.
(2) Application of special rules for married individuals.--
Paragraph (5) of section 223(b) (relating to limitations) is
amended to read as follows:
``(5) Special rules for married individuals.--
``(A) In general.--In the case of individuals who
are married to each other and who are both eligible
individuals, the limitation under paragraph (1) for
each spouse shall be equal to the spouse's applicable
share of the combined marital limit.
``(B) Combined marital limit.--For purposes of
subparagraph (A), the combined marital limit is the
excess (if any) of--
``(i) the lesser of--
``(I) subject to subparagraph (C),
the sum of the limitations computed
separately under paragraph (1) for each
spouse (including any additional
contribution amount under paragraph
(3)), or
``(II) the dollar amount in effect
under subsection (c)(2)(A)(ii)(II),
over
``(ii) the aggregate amount paid to Archer
MSAs of such spouses for the taxable year.
``(C) Special rule where both spouses have family
coverage.--For purposes of subparagraph (B)(i)(I), if
either spouse has family coverage which covers both
spouses, both spouses shall be treated as having only
such coverage (and if both spouses each have such
coverage under different plans, shall be treated as
having only family coverage with the plan with respect
to which the lowest amount is determined under
paragraph (2)(A)(i)(I)).
``(D) Applicable share.--For purposes of
subparagraph (A), a spouse's applicable share is \1/2\
of the combined marital limit unless both spouses agree
on a different division.
``(E) Couples not married entire year.--The
Secretary shall prescribe rules for the application of
this paragraph in the case of any taxable year for
which the individuals were not married to each other
during all months included in the taxable year,
including rules which allow individuals in appropriate
cases to take into account coverage prior to marriage
in computing the combined marital limit for purposes of
this paragraph.''.
(3) Self-only coverage.--Paragraph (4) of section 223(c)
(relating to definitions and special rules) is amended to read
as follows:
``(4) Coverage.--
``(A) Family coverage.--The term `family coverage'
means any coverage other than self-only coverage.
``(B) Self-only coverage.--If more than 1
individual is covered by a high deductible health plan
but only 1 of the individuals is an eligible
individual, the coverage shall be treated as self-only
coverage.''.
(4) Conforming amendments.--
(A) Section 223(b)(3)(A) is amended by striking
``subparagraphs (A) and (B) of''.
(B) Section 223(c)(2)(A) is amended--
(i) by striking ``$1,000'' in clause (i)(I)
and inserting ``$1,150'', and
(ii) by striking ``$5,000'' in clause
(ii)(I) and inserting ``$5,800''.
(C) Section 223(d)(1)(A)(ii)(I) is amended by
striking ``subsection (b)(2)(B)(ii)'' and inserting
``subsection (c)(2)(A)(ii)(II)''.
(D) Clause (ii) of section 223(c)(2)(D) is amended
to read as follows:
``(ii) Certain items disregarded in
computing monthly limitation.--Such plan's
annual deductible, and such plan's annual out-
of-pocket limitation, for services provided
outside of such network shall not be taken into
account for purposes of subsection (b)(2).''
(E) Subsection (g) of section 223 is amended to
read as follows:
``(g) Cost-of-Living Adjustments.--
``(1) In general.--In the case of any taxable year
beginning in a calendar year after 2009, each dollar amount
contained in subsections (b)(2)(A) and (c)(2)(A) shall be
increased by an amount equal to such dollar amount multiplied
by the blended cost-of-living adjustment.
``(2) Blended cost-of-living adjustment.--For purposes of
paragraph (1), the blended cost-of-living adjustment means one-
half of the sum of--
``(A) the cost-of-living adjustment determined
under section 1(f)(3) for the calendar year in which
the taxable year begins by substituting `calendar year
2008' for `calendar year 1992' in subparagraph (B)
thereof, plus
``(B) the cost-of-living adjustment determined
under section 213(d)(10)(B)(ii) for the calendar year
in which the taxable year begins by substituting `2008'
for `1996' in subclause (II) thereof.
``(3) Rounding.--Any increase determined under paragraph
(2) shall be rounded to the nearest multiple of $50.''.
(b) Use of Account for Individual High Deductible Health Plan
Premiums.--Section 223(d)(2)(C) (relating to exceptions) is amended by
striking ``or'' at the end of clause (iii), by striking the period at
the end of clause (iv) and inserting ``, or'', and by adding at the end
the following new clause:
``(v) a high deductible health plan, but
only if--
``(I) the plan is not a group
health plan (as defined in section
5000(b)(1) without regard to section
5000(d)), and
``(II) the expenses are for
coverage for a month with respect to
which the account beneficiary is an
eligible individual by reason of the
coverage under the plan.
For purposes of clause (v), an arrangement which
constitutes individual health insurance shall not be
treated as a group health plan, notwithstanding that an
employer or employee organization negotiates the cost
of benefits of such arrangement.''.
(c) Safe Harbor for Absence of Maintenance of Chronic Disease.--
Section 223(c)(2)(C) (safe harbor for absence of preventive care
deductible) is amended--
(1) by inserting ``or maintenance of chronic disease, or
both'' after ``the Secretary)'', and
(2) by inserting ``or maintenance of chronic disease'' in
the heading after ``preventive care''.
(d) Clarification of Treatment of Capitated Primary Care Payments
as Amounts Paid for Medical Care.--Section 213(d) (relating to
definitions) is amended by adding at the end the following new
paragraph:
``(12) Treatment of capitated primary care payments.--
Capitated primary care payments shall be treated as amounts
paid for medical care.''.
(e) Special Rule for Individuals Eligible for Veterans or Indian
Health Benefits.--Section 223(c)(1) (defining eligible individual) is
amended by adding at the end the following new subparagraph:
``(C) Special rule for individuals eligible for
veterans or indian health benefits.--For purposes of
subparagraph (A)(ii), an individual shall not be
treated as covered under a health plan described in
such subparagraph merely because the individual
receives periodic hospital care or medical services
under any law administered by the Secretary of Veterans
Affairs or the Bureau of Indian Affairs.''.
(f) Certain Physician Fees To Be Treated as Medical Care.--
(1) In general.--Section 213(d), is amended by adding at
the end the following new paragraph:
``(12) Pre-paid physician fees.--The term `medical care'
shall include amounts paid by patients to their primary
physician in advance for the right to receive medical services
on an as-needed basis.''.
(2) Effective date.--The amendment made by this section
shall apply to taxable years beginning after the date of the
enactment of this Act.
(g) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to taxable years
beginning after December 31, 2009.
(2) Capitated primary care payments.--The amendment made by
subsection (d) shall apply to amounts paid before, on, or after
the date of the enactment of this Act.
SEC. 312. EXCEPTION TO REQUIREMENT FOR EMPLOYERS TO MAKE COMPARABLE
HEALTH SAVINGS ACCOUNT CONTRIBUTIONS.
(a) Greater Employer-Provided Contributions to HSAs for Chronically
Ill Employees Treated as Meeting Comparability Requirements.--
Subsection (b) of section 4980G (relating to failure of employer to
make comparable health savings account contributions) is amended to
read as follows:
``(b) Rules and Requirements.--
``(1) In general.--Except as provided in paragraph (2),
rules and requirements similar to the rules and requirements of
section 4980E shall apply for purposes of this section.
``(2) Treatment of employer-provided contributions to hsas
for chronically ill employees.--For purposes of this section--
``(A) In general.--Any contribution by an employer
to a health savings account of an employee who is (or
the spouse or any dependent of the employee who is) a
chronically ill individual in an amount which is
greater than a contribution to a health savings account
of a comparable participating employee who is not a
chronically ill individual shall not fail to be
considered a comparable contribution.
``(B) Nondiscrimination requirement.--Subparagraph
(A) shall not apply unless the excess employer
contributions described in subparagraph (A) are the
same for all chronically ill individuals who are
similarly situated.
``(C) Chronically ill individual.--For purposes of
this paragraph, the term `chronically ill individual'
means any individual whose qualified medical expenses
for any taxable year are more than 50 percent greater
than the average qualified medical expenses of all
employees of the employer for such year.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2009.
TITLE IV--FAIRNESS FOR EVERY AMERICAN PATIENT
Subtitle A--Medicaid Modernization
SEC. 401. MEDICAID MODERNIZATION.
(a) In General.--Effective January 1, 2011, title XIX of the Social
Security Act (42 U.S.C. 1396 et seq.) is amended to read as follows:
``TITLE XIX--GRANTS TO STATES FOR MEDICAL ASSISTANCE PROGRAMS
``TABLE OF CONTENTS OF TITLE
``Sec. 1900. References to pre-modernized Medicaid provisions;
continuity for commonwealths and
territories.
``Part A--Grants to States for Acute Care for Individuals With
Disabilities and Certain Low-Income Individuals
``Sec. 1901. Purpose; Appropriation.
``Sec. 1902. Payments to States for acute care medical assistance.
``Sec. 1903. Definitions of eligible individuals and acute care medical
assistance.
``Sec. 1904. State plan requirements for acute care medical assistance.
``Sec. 1905. Definitions.
``Sec. 1906. Enrollment of individuals under group health plans and
other arrangements.
``Sec. 1907. Drug rebates.
``Sec. 1908. Managed care.
``Sec. 1909. Annual reports.
``Part B--Grants to States for Long-Term Care Services and Supports
``Sec. 1911. Purpose.
``Sec. 1912. State plan.
``Sec. 1913. State allotments.
``Sec. 1914. Use of grants.
``Sec. 1915. Administrative provisions.
``Sec. 1916. Definition of long-term care services and supports.
``Sec. 1917. Provision requirements for long-term care services and
supports, including option for self-
directed services and supports.
``Sec. 1918. Treatment of income and resources for certain
institutionalized spouses.
``Sec. 1919. Annual reports.
``Part C--Grants to States for Survey and Certification of Medical
Facilities and Other Requirements
``Sec. 1931. Authorization of appropriations.
``Sec. 1932. Application of certain requirements under pre-modernized
Medicaid.
``Part D--Grants to States for Program Integrity
``Sec. 1941. Authorization of appropriations.
``Sec. 1942. Application of certain requirements under pre-modernized
Medicaid.
``Part E--Grants to States for Administration
``Sec. 1951. Authorization of appropriations; payments to states.
``Sec. 1952. Cost-sharing protections.
``Sec. 1953. Application of certain requirements under pre-modernized
Medicaid.
``Part F--Other Provisions
``Sec. 1961. Application of certain requirements under pre-modernized
Medicaid.
``SEC. 1900. REFERENCES TO PRE-MODERNIZED MEDICAID PROVISIONS;
CONTINUITY FOR COMMONWEALTHS AND TERRITORIES.
``(a) In General.--In this title, if a reference to this title or
to a provision of this title is prefaced by the term `old', such
reference is to this title or a provision of this title as in effect on
December 31, 2010.
``(b) Regulations.--The Secretary shall promulgate regulations to
bring requirements imposed under an old provision of this title that
applies under this title after December 31, 2010, into conformity with
the policies embodied in this title as in effect on and after January
1, 2011.
``(c) Continuity for Commonwealths and Territories.--In the case of
Puerto Rico, the United States Virgin Islands, Guam, the Northen
Mariana Islands, and American Samoa, this title as in effect on and
after January 1, 2011, shall not apply to such commonwealths and
territories, and old title XIX shall apply to a Medicaid program
operated by such commonwealths or territories on and after that date.
``PART A--GRANTS TO STATES FOR ACUTE CARE FOR INDIVIDUALS WITH
DISABILITIES AND CERTAIN LOW-INCOME INDIVIDUALS
``SEC. 1901. PURPOSE; APPROPRIATION.
``(a) Purpose.--It is the purpose of this part to enable each
State, as far as practicable under the conditions in the State, to
provide acute care medical assistance to eligible individuals described
in section 1903 whose income and resources are insufficient to meet the
costs of necessary medical services, and (2) rehabilitation and other
services to help such individuals attain or retain capability for
independence or self-care.
``(b) Appropriation.--For the purpose of making payments to States
under this part, there is appropriated out of any money in the Treasury
not otherwise appropriated, such sums as are necessary for fiscal year
2011 and each fiscal year thereafter.
``SEC. 1902. PAYMENTS TO STATES FOR ACUTE CARE MEDICAL ASSISTANCE.
``(a) In General.--From the amounts appropriated under section 1901
for a fiscal year, the Secretary shall pay to each State which has a
plan approved under this part, for each quarter, beginning with the
quarter commencing January 1, 2011, an amount equal to the Federal
medical assistance percentage (as defined in section 1905(b)) of the
total amount expended during such quarter as acute care medical
assistance under the State plan under this part.
``(b) Administrative Expenses.--Each State with a plan approved
under this part shall receive a payment determined in accordance with
part E for administrative expenses incurred in carrying out the plan
under this part and part B (if the State has a plan approved under that
part).
``SEC. 1903. DEFINITIONS OF ELIGIBLE INDIVIDUALS AND ACUTE CARE MEDICAL
ASSISTANCE.
``(a) Eligible Individuals.--
``(1) In general.--In this part, the term `eligible
individual' means an individual--
``(A) who is--
``(i) a blind or disabled individual; or
``(ii) an individual described in paragraph
(2); and
``(B) who the State determines satisfies--
``(i) the income and resources eligibility
requirements established by the State under the
State plan under this part; and
``(ii) such other requirements for
assistance as are imposed under this title,
including documentation of citizenship or
status as a qualified alien under title IV of
the Personal Responsibility and Work
Opportunity Reconciliation Act of 1996.
``(2) Individuals described.--For purposes of paragraph
(1)(A)(ii), the following individuals are described in this
paragraph:
``(A) A child in foster care under the
responsibility of the State.
``(B) A low-income woman with breast or cervical
cancer described in old section 1902(aa).
``(C) Certain TB-infected individuals described in
old section 1902(z)(1).
``(3) Grandfathered individuals.--An individual shall be an
eligible individual under the State plan under this part if--
``(A) the individual is described in paragraph
(1)(A);
``(B) the individual satisfies the documentation
requirements referred to in paragraph (1)(B)(ii); and
``(C) the State would have provided medical
assistance under the State plan under old title XIX to
the individual, but only so long as the individual
continues to satisfy such old eligibility requirements.
``(4) Concurrent eligibility for part b.--An eligible
individual under this part may be eligible under part B, but
only if the individual satisfies the eligibility requirements
of part B in addition to satisfying the requirements for
eligibility under this part.
``(5) Presumptive eligibility for certain breast or
cervical cancer patients.--Old section 1920B (relating to
presumptive eligibility for certain breast or cervical cancer
patients) shall apply under this part.
``(b) Benefits.--Subject to paragraph (3), in this part, the term
`acute care medical assistance' means the following:
``(1) Mandatory benefits.--The care and services listed in
paragraphs (1) through (5), (17), and (21) of old section
1905(a) (but, in the case of paragraph (4)(A) of such section,
without regard to any limitation based on age or services in an
institution for mental diseases).
``(2) Optional benefits.--Any care or services listed in a
paragraph of old section 1905(a) (other than paragraph (16)).
``(3) Exceptions.--
``(A) Certain services limited to part b.--Services
described in paragraphs (15), (22), (23), (24), and
(26) of old section 1905(a) shall only be provided
under the State plan under part B.
``(B) Limit on provision of long-term care services
and supports.--A care or service that the Secretary
determines is a long-term care service and support
(including nursing facility services described in old
section 1905(a)(4)(A)) shall not be provided to an
individual under the State plan under this part for
more than 30 days within any 12-month period.
``(C) Exclusions.--Such term shall not include any
payments with respect to care or services for any
individual who is an inmate of a public institution or
a patient in an institution for mental diseases
(regardless of age).
``SEC. 1904. STATE PLAN REQUIREMENTS FOR ACUTE CARE MEDICAL ASSISTANCE.
``(a) In General.--In order to receive payments under this part, a
State shall have an approved State plan for acute care medical
assistance. For purposes of this part, such assistance includes
payments for preventive care, primary care, diagnosis and treatment of
acute and chronic health conditions, emergency care, diagnosis and
treatment of mental illnesses and related conditions, and
rehabilitation and other services to help eligible individuals attain
or retain capability for independence or self-care. A State medical
assistance plan shall include a description, consistent with the
requirements of this part of--
``(1) eligibility standards, including income and asset
standards;
``(2) benefits, including the amount, duration, and scope
of covered items and services;
``(3) strategies for improving access and quality of care;
and
``(4) methods of service delivery.
``(b) Public Availability of State Plan.--The State shall make
available to the public the State plan under this part and any
amendments submitted by the State to the plan.
``(c) Amount, Duration, and Scope.--The State plan shall provide
that the acute care medical assistance made available to any eligible
individual shall not be less in amount, duration, or scope than the
acute care medical assistance made available to any other eligible
individual.
``(d) Application of Certain Pre-Modernized Medicaid
Requirements.--
``(1) Old state plan requirements.--The following
provisions of old section 1902 shall apply to the State plans
under this part:
``(A) Old section 1902(a)(10)(C) (relating to
certain eligibility and other requirements).
``(B) Old section 1902(a)(10)(D) (relating to home
health services).
``(C) Old section 1902(a)(10)(G) (relating to
nonapplication of certain supplemental security income
eligibility criteria).
``(D) The subclauses in the flush matter following
old section 1902(a)(10)(G) (relating to the provision
of certain services) other than subclauses (V), (VII),
(VIII), and (IX).
``(E) Old section 1902(a)(17) (relating to
reasonable standards for determining eligibility).
``(F) Old section 1902(a)(19) (relating to
eligibility safeguards).
``(G) Old section 1902(a)(34) (relating to
eligibility beginning with the third month prior to the
month of application).
``(H) Subparagraphs (A), (B), and (C) of old
section 1902(a)(43) (relating to early and periodic
screening, diagnostic, and treatment services).
``(I) Old section 1902(a)(46)(A) (relating to
compliance with section 1137 requirements).
``(J) The fourth and sixth sentences of old section
1902(a) (relating to eligibility for certain
individuals).
``(2) Other old title xix requirements.--
``(A) Old section 1902(e)(3) (relating to optional
eligibility for certain disabled individuals).
``(B) Old section 1902(e)(9) (relating to optional
respiratory care services).
``(C) Old section 1902(f) (relating to eligibility
of certain aged, blind, or disabled individuals).
``(D) Old section 1902(m) (relating to eligibility
of certain aged or disabled individuals), other than
paragraph (4).
``(E) Old section 1902(o) (relating to disregard of
certain supplemental security income benefits).
``(F) Old section 1902(v) (relating to eligibility
determinations of blind or disabled individuals).
``(e) Other Requirements.--The State plan under this part shall--
``(1) comply with the requirements of the other parts of
this title; and
``(2) provide that the State will make the contributions
specified under section 340A-1(e) of the Public Health Service
Act .
``SEC. 1905. DEFINITIONS.
``(a) In General.--The definitions specified in this section shall
apply for purposes of this part and, to the extent applicable and
consistent with the policy embodied in such part, parts B, C, D, E, and
F.
``(b) Federal Medical Assistance Percentage.--The term `Federal
medical assistance percentage' for any State shall be 100 percent less
the State percentage; and the State percentage shall be that percentage
which bears the same ratio to 45 percent as the square of the per
capita income of such State bears to the square of the per capita
income of the continental United States (including Alaska) and Hawaii,
except that the Federal medical assistance percentage shall in no case
be less than 50 percent or more than 83 percent. The Federal medical
assistance percentage for any State shall be determined and promulgated
in accordance with the provisions of section 1101(a)(8)(B).
``(c) Application of Certain Pre-Modernized Medicaid Provisions.--
The following old provisions shall apply under this part:
``(1) Old section 1905 provisions.--The following
provisions of old section 1905:
``(A) Old section 1905(d) (relating to the
definition of an intermediate care facility for the
mentally retarded).
``(B) Old section 1905(e) (relating to the
definition of physicians services).
``(C) Old section 1905(f) (relating to the
definition of nursing facility services).
``(D) Old section 1905(g) (relating to the
provision of chiropractors' services).
``(E) Old section 1905(j) (relating to State
supplementary payments).
``(F) Old section 1905(k) (relating to supplemental
security income benefits payable pursuant to section
211 of Public Law 93-66).
``(G) Old section 1905(l)(1) (relating to rural
health clinic services).
``(H) Old section 1905(o) (relating to hospice
care).
``(I) Old section 1905(q) (relating to the
definition of a qualified severely impaired
individual).
``(J) Old section 1905(r) (relating to the
definition of early and periodic screening, diagnostic,
and treatment services).
``(K) Old section 1905(s) (relating to the
definition of a qualified disabled and working
individual).
``(L) Old section 1905(t) (relating to the
definition of primary care case management services).
``(M) Old section 1905(v) (relating to the
definition of an employed individual with a medically
improved disability).
``(N) Paragraphs (1) and (3) of old section 1905(w)
(relating to the definition of an independent foster
care adolescent).
``(O) Old section 1905(x) (relating to strategies,
treatment, and services for individuals with Sickle
Cell Disease).
``(2) Other old provisions.--
``(A) Old section 1903(m) (relating to the
definition of a medicaid managed care organization).
``SEC. 1906. ENROLLMENT OF INDIVIDUALS UNDER GROUP HEALTH PLANS AND
OTHER ARRANGEMENTS.
``The following old provisions shall apply under this part:
``(1) Old section 1906 (relating to enrollment of
individuals under group health plans).
``(2) Old section 1902(a)(70) (relating to State option to
establish a non-emergency medical transportation brokerage
program).
``(3) Paragraphs (2) and (11) of old section 1902(e)
(relating to eligibility for individuals enrolled with a group
health plan or under a managed care arrangement during a
minimum enrollment period).
``SEC. 1907. DRUG REBATES.
``Old sections 1902(a)(54) and 1927 (relating to payment for
covered outpatient drugs and rebates) shall apply under this part.
``SEC. 1908. MANAGED CARE.
``The following old provisions shall apply under this part:
``(1) Old section 1932 (relating to managed care), other
than subsection (a)(2) of such section.
``(2) Old section 1903(k) (relating to technical and
actuarial assistance for States).
``SEC. 1909. ANNUAL REPORTS.
``(a) In General.--Each State that receives payments under this
part shall submit an annual report to the Secretary, in such form and
manner as the Secretary shall specify.
``(b) Application of Old EPSDT Reporting Requirements.--Each annual
report shall include the information required to be reported under old
section 1902(a)(43)(D)(iv).
``PART B--GRANTS TO STATES FOR LONG-TERM CARE SERVICES AND SUPPORTS
``SEC. 1911. PURPOSE.
``(a) In General.--The purpose of this part is to increase the
flexibility of States in operating a system of long-term care services
and supports designed to--
``(1) provide assistance to needy families so that
individuals with disabilities and low-income senior citizens
may be served and supported in their own homes and communities;
``(2) emphasize the independence and dignity of the person
served by public programs;
``(3) end the institutional bias that existed under the
Medicaid program prior to January 1, 2011;
``(4) provide stable and predictable funding for States as
they rebalance their long-term care systems from institutions
to communities;
``(5) provide flexibility to States to adopt new and
innovative service delivery methods; and
``(6) promote independence and support activities that will
enable individuals to return or maintain ties to the community,
including through employment.
``(b) No Individual Entitlement.--No individual determined eligible
for long-term care services and supports under this part shall be
entitled to a specific service or type of delivery of service.
``SEC. 1912. STATE PLAN.
``(a) In General.--In order to receive payments under this part, a
State must have an approved State plan for long-term care services and
supports. A State long term care services and supports plan shall
include a description, consistent with the requirements of this part,
of--
``(1) income and assets eligibility standards and spousal
impoverishment protections consistent with subsection (b);
``(2) the standardized assessments tools used to determine
eligibility for specific long-term care services and supports;
``(3) the person-centered plans used to provide such
services and supports;
``(4) the proposed uses of funding, if applicable, to
provide targeted methods to meet individual level of support
needs including tiering (preventive, emergency, low, medium,
high); and
``(5) the long-term care services and supports to be
available under the plan based on individual assessment of need
in accordance with sections 1916 and 1917.
``(b) Minimum Eligibility Standards.--
``(1) Populations covered.--The State plan shall specify
the disabled and elderly populations who are eligible for long-
term care services and supports.
``(2) Needs-based criteria.--The plan shall include a
description of the needs-based criteria the State will use to
assess an individual's need for specific services and supports
available under the State plan.
``(3) Other eligibility requirements.--
``(A) Income and assets.--A State may use different
income and asset standards and methodologies for
determining eligibility than those used for determining
eligibility for acute care medical assistance under
part A. A State may not make eligibility standards
related to income, asset, and spousal impoverishment
protection more restrictive than the Federal minimum
requirements of December 31, 2008.
``(B) Application of spousal impoverishment
protections.--The State plan shall provide that the
State shall comply with the requirements of section
1918 (relating to spousal impoverishment protections).
``(C) Statewideness.--The State plan shall provide
that, except with respect to methods used for
determining homestead exemptions, the income and asset
standards and methodologies shall be in effect in all
political subdivisions of the State.
``(4) Transition assistance.--The State plan shall specify
how the State will provide transition assistance for
individuals who, on December 31, 2010, are enrolled under the
State plan under old title XIX (or under a waiver of that plan)
and receiving long-term care services or supports on that date.
The State shall provide such assistance to individuals who are
and are not likely to be determined eligible for long-term care
services and supports under the State plan under this part, as
in effect on January 1, 2011 (or the first day on which the
State plan is in effect under this part).
``(c) Payment Methodologies to Providers.--
``(1) In general.--The State plan shall describe the
methodologies used to determine payments to providers. Such
methodologies--
``(A) may be varied to assist in transitioning from
facilities-based to community-based care; and
``(B) shall not be subject to Secretarial approval.
``(2) Transparency.--The State plan shall provide that the
State shall make publicly available--
``(A) the payment methodologies applicable under
the plan; and
``(B) the name of any provider that receives
$1,000,000 or more in any 12-month period and the
actual amount paid to the provider during that period.
``(d) Coordination of Effort With Other Related Public and Private
Programs.--The plan shall include a description of the State's efforts
to coordinate the delivery of services and supports under the plan with
other related public and private programs that serve individuals with
disabilities or aged populations that need or may be at risk of needing
long term care.
``(e) Public Availability of State Plan.--The State shall make
available to the public the State plan under this part and any
amendments submitted by the State to the plan.
``(f) Application of Old Title XIX Requirements.--The following old
title XIX provisions shall apply to a State plan under this part:
``(1) Subsections (a)(50) and (q) of old section 1902
(relating to a monthly personal needs allowance for certain
institutionalized individuals and couples).
``(2) Old section 1902(a)(67) (relating to payment for
certain services furnished to a PACE program eligible
individual).
``(3) Paragraph (1) of old section 1902(r) (relating to the
post-eligibility treatment of income for certain individuals)
and paragraph (2) of such section (relating to methodologies
for determining income and resource eligibility for
individuals, but only with respect to individuals who are
eligible under this part on or after January 1, 2011).
``(4) Old section 1905(i) (relating to the definition of an
institution for mental diseases).
``(g) Other Requirements of Other Parts.--The State plan under this
part shall--
``(1) comply with the requirements of the other parts of
this title; and
``(2) provide that the State will make the contributions
specified under section 340A-1(e) of the Public Health Service
Act.
``SEC. 1913. STATE ALLOTMENTS.
``(a) Appropriation.--For the purpose of providing allotments to
States under this section, there is appropriated out of any money in
the Treasury not otherwise appropriated--
``(1) for fiscal year 2011, $65,274,560,000;
``(2) for fiscal year 2012, $67,885,540,000;
``(3) for fiscal year 2013, $70,600,964,100;
``(4) for fiscal year 2014, $73,425,000,000;
``(5) for fiscal year 2015, $76,362,000,000;
``(6) for fiscal year 2016, $79,416,480,000;
``(7) for fiscal year 2017, $82,593,140,000;
``(8) for fiscal year 2018, $85,896,870,000; and
``(9) for fiscal year 2019, $89,332,743,000.
``(b) Allotments to 50 States and the District of Columbia.--
``(1) Fiscal year 2011 allotments.--Subject to subsection
(e), the Secretary shall allot to each State with a long term
care plan approved under this title an amount in fiscal year
2011 equal to the Federal expenditures made by the State for
long-term care as defined in section 1916 in fiscal year 2008,
increased by 8 percent.
``(2) Subsequent fiscal year allotments.--For fiscal year
2012 and each subsequent fiscal year through fiscal year 2019,
the allotment for a State under this section is equal to the
allotment for the State determined for the preceding fiscal
year, increased by 4 percent.
``(c) Limitation.--
``(1) In general.--Except as provided in paragraph (2), no
other Federal funds are available under this title for
expenditures incurred for long-term care services and supports
after December 31, 2010, except as provided under a State plan
approved under this part.
``(2) Exception.--
``(A) In general.--If a State does not have an
approved State plan by October 1, 2010, the Secretary
may make payments equal to 85 percent of the State's
estimated quarterly allotment until June 30, 2011.
``(B) Full funding.--A State shall receive 100
percent of its allotment for fiscal year 2011 if the
State has a plan approved under this part by June 30,
2011.
``(d) Maintenance of Effort.--In order to qualify for the grant
payable under this section, the State must demonstrate in each fiscal
year that it made long-term care service and supports expenditures
(including funding from local government sources) equal to the amount
of not less than 95 percent of the nonfederal share amount spent in
fiscal year 2009 under the State plan under old title XIX on long term
care services and supports (as defined in section 1916). Expenditures
not made under this part shall not be recognized by the Secretary for
purposes of this requirement.
``(e) Grants Reduced if Insufficient Appropriations.--
``(1) In general.--If the amount appropriated for fiscal
year 2011 under subsection (a)(1) is less than the amount
necessary to fund each State's allotment for that fiscal year,
the Secretary shall reduce the allotment for each State for
that fiscal year based on the applicable percentage determined
for the State under paragraph (2) provide a reduced percentage
basis as follows: Each state shall receive a percentage of its
allotment based on the ratio of non-institutional spending to
total long term care spending in FY 2009.
``(2) Applicable percentage.--For purposes of paragraph
(1), the applicable percentage determined with respect to a
State is as follows:
``If the ratio of the State's non- The applicable percentage is:
institutional spending to total long-
term care spending for fiscal year
2009 is:
50 percent or greater................ 100
at least 46, but less than 50 percent 99
at least 40, but less than 46 percent 98
at least 36, but less than 40........ 97
at least 30, but less than 36........ 96
less than 30 percent................. 95.
``(f) Administrative Expenses.--
``(1) In general.--Each State with a plan approved under
this part shall receive a payment determined in accordance with
amounts appropriated for part E for administrative expenses
incurred in carrying out the plan under this part and part A.
``(2) Assessment-related costs.--Costs attributable to
providing an individualized needs-based assessment for purposes
of identifying the long-term care services and supports to be
provided under the State plan to an individual shall be
considered a long-term care service and support and shall not
be treated as an administrative expense.
``SEC. 1914. USE OF GRANTS.
``(a) In General.--A State shall use funds for long-term care
services and supports as defined in section 1916.
``(b) Self-Direction.--A State shall offer individuals the
opportunity to self-direct their long-term care services and supports.
``SEC. 1915. ADMINISTRATIVE PROVISIONS.
``(a) Funding on a Quarterly Basis.--The Secretary shall make
payments to States in equal amounts of a State's annual allotment on a
quarterly basis. Each quarterly payment shall remain available for use
by the State for twelve succeeding fiscal year quarters.
``(b) Publication.--The Secretary shall publish each State's
allotment--
``(1) for fiscal year 2011 not later than December 15,
2009; and
``(2) for each subsequent fiscal year, not later than
December 15 of the calendar year preceding the calendar year in
which the fiscal year begins.
``SEC. 1916. DEFINITION OF LONG-TERM CARE SERVICES AND SUPPORTS.
``(a) Definition.--
``(1) In general.--Subject to subsection (e), in this part,
the term `long-term care services and supports' means any of
the services or supports specified in paragraphs (2) or (3)
that may be provided in a nursing facility, an institution, a
home, or other setting.
``(2) Services and supports described.--For purposes of
paragraph (1), the services and supports described in this
paragraph include assistive technology, adaptive equipment,
remote monitoring equipment, case management for the aged, case
management for individuals with disabilities, nursing home
services, long-term rehabilitative services necessary to
restore functional abilities, services provided in intermediate
care facilities for people with disabilities, habilitation
services (including adult day care programs), community
treatment teams for individuals with mental illness, home
health services, services provided in an institution for mental
disease, a Program of All-Inclusive Care for the Elderly
(PACE), personal care (including personal assistance services),
recovery support including peer counseling, supportive
employment, training skills necessary to assist the individual
in achieving or maintaining independence, training of family
members including foster parents in supportive and behavioral
modification skills, ongoing and periodic training to maintain
life skills, transitional care including room and board not to
exceed 60 days within a 12-month period.
``(3) Inclusion of certain benefits under old title xix.--
Such services and supports may include any of the following
services:
``(A) Old section 1905(a)(15) (relating to services
in an intermediate care facility for the mentally
retarded).
``(B) Services described in subsections (a)(16) and
(h) of old section 1905, but without regard to any
restriction on such services on the basis of age
(relating to inpatient psychiatric hospital services).
``(C) Old section 1905(a)(22) (relating to home and
community care (to the extent allowed and as defined in
old section 1929) for functionally disabled elderly
individuals).
``(D) Old section 1905(a)(23) (relating to
community supported living arrangements services (to
the extent allowed and as defined in old section
1930)).
``(E) Subject to subsection (e), old section
1905(a)(24) but without regard to any restriction on
furnishing services to patients or residents of
facilities or institutions (relating to personal care
services).
``(F) Old sections 1905(a)(26) and 1934 (relating
to services furnished under a PACE program under old
section 1934 to PACE program eligible individuals
enrolled under the program under such old section).
``(G) Old section 1915(c)(5) (relating to the
definition of habilitation services).
``(4) Limitation.--Long-term care services and supports
cannot be used for services and administrative costs provided
through the foster care (with the exception of training of
foster care parents), child welfare, adult protective services,
juvenile justice, public guardianship, or correctional systems.
``(b) Rehabilitative Care.--For purposes of rehabilitation due to
acute care medical needs, a State may claim rehabilitative services
provided in an institutional setting, nursing home, or as part of home
health expenditures as acute care benefits under the State plan under
part A rather than under the State plan under this part for a
cumulative period of 30 days within a 12-month period if such care is
directly related to the onset of an acute care need. A State shall
demonstrate the services were provided as a direct result of an acute
care need.
``(c) Managed Care.--If a State provides long-term care services
and supports through managed care, the State shall submit a methodology
for determining the level of expenditures attributed to long term care
for approval by the Secretary.
``(d) Application of Part A Definitions.--A definition specified in
section 1905 shall apply to the same term used in this part, unless the
Secretary determines that the application of such definition would be
inconsistent with the purpose of this part.
``(e) Exclusion.--No payments shall be made under the State plan
under this part with respect to long-term care supports and services
provided for any individual who is an inmate of a public institution.
Nothing in the preceding sentence shall be construed as precluding the
provision of long-term care services and supports under the State plan
under this part to an individual who is a patient in an institution for
mental diseases.
``SEC. 1917. PROVISION REQUIREMENTS FOR LONG-TERM CARE SERVICES AND
SUPPORT, INCLUDING OPTION FOR SELF-DIRECTED SERVICES AND
SUPPORTS.
``(a) Requirements for the Provision of Long-Term Care Services and
Supports.--
``(1) In general.--Subject to the succeeding provisions of
this subsection, a State may provide through a State plan
amendment for the provision of long-term care services and
supports for individuals eligible under the State plan under
this part, subject to the following requirements:
``(A) Needs-based criteria for eligibility for, and
receipt of, long-term care services and supports.--The
State establishes needs-based criteria for determining
an individual's eligibility under the State plan for
medical assistance for such long-term care services and
supports, and if the individual is eligible for such
services and supports, the specific services and
supports that will be available under the State plan to
the individual.
``(B) Criteria for institutionalized versus non-
institutionalized services.--In establishing needs-
based criteria, the State may establish criteria for
determining eligibility for, and receipt of, services
and supports provided in a facility or institution that
are more stringent that the criteria established for
eligibility and receipt of services and supports in a
non-facility or non-institutionalized setting.
``(C) Authority to limit number of eligible
individuals.--A State may limit the number of
individuals who are eligible for such services and
supports and may establish waiting lists for the
receipt of such services and supports.
``(D) Criteria based on individual assessment.--
``(i) In general.--The criteria established
by the State shall require an assessment of an
individual's support needs and capabilities,
and may take into account the inability of the
individual to perform 2 or more activities of
daily living (as defined in section
7702B(c)(2)(B) of the Internal Revenue Code of
1986) or the need for significant assistance to
perform such activities, and such other risk
factors as the State determines to be
appropriate.
``(ii) Adjustment authority.--The State
plan amendment provides the State with the
option to modify the criteria established under
subparagraph (A) (without having to obtain
prior approval from the Secretary) in the event
that the enrollment of individuals eligible for
services exceeds the projected enrollment, but
only if--
``(I) the State provides at least
60 days notice to the Secretary and the
public of the proposed modification;
``(II) the State deems an
individual receiving long-term care
services and supports on the basis of
the most recent version of the criteria
in effect prior to the effective date
of the modification to be eligible for
such services and supports for a period
of at least 12 months beginning on the
date the individual first received
medical assistance for such services
and supports; and
``(III) after the effective date of
such modification, the State, at a
minimum, applies the criteria for
determining whether an individual
requires the level of care provided in
a facility or institutionalized setting
which applied under the State plan
immediately prior to the application of
the modified criteria.
``(E) Independent evaluation and assessment.--
``(i) Eligibility determination.--The State
uses an independent evaluation for making the
determinations described in subparagraph (A).
``(ii) Assessment.--In the case of an
individual who is determined to be eligible for
long-term care services and supports, the State
uses an independent assessment, based on the
needs of the individual to--
``(I) determine a necessary level
of services and supports to be
provided, consistent with an
individual's physical and mental
capacity;
``(II) prevent the provision of
unnecessary or inappropriate care; and
``(III) establish an individualized
care plan for the individual in
accordance with subparagraph (G).
``(F) Assessment.--The independent assessment
required under subparagraph (E)(ii) shall include the
following:
``(i) An objective evaluation of an
individual's inability to perform 2 or more
activities of daily living (as defined in
section 7702B(c)(2)(B) of the Internal Revenue
Code of 1986) or the need for significant
assistance to perform such activities.
``(ii) A face-to-face evaluation of the
individual by an individual trained in the
assessment and evaluation of individuals whose
physical or mental conditions trigger a
potential need for long-term care services and
supports.
``(iii) Where appropriate, consultation
with the individual's family, spouse, guardian,
or other responsible individual.
``(iv) Consultation with appropriate
treating and consulting health and support
professionals caring for the individual.
``(v) An examination of the individual's
relevant history, medical records, and care and
support needs, guided by best practices and
research on effective strategies that result in
improved health and quality of life outcomes.
``(vi) An evaluation of the ability of the
individual or the individual's representative
to self-direct the purchase of, or control the
receipt of, such services and supports if the
individual so elects.
``(G) Individualized care plan.--
``(i) In general.--In the case of an
individual who is determined to be eligible for
long-term care services and supports, the State
uses the independent assessment required under
subparagraph (E)(ii) to establish a written
individualized care plan for the individual.
``(ii) Plan requirements.--The State
ensures that the individualized care plan for
an individual--
``(I) is developed--
``(aa) in consultation with
the individual, the
individual's treating
physician, health care or
support professional, or other
appropriate individuals, as
defined by the State, and,
where appropriate the
individual's family, caregiver,
or representative; and
``(bb) taking into account
the extent of, and need for,
any family or other supports
for the individual;
``(II) identifies the long-term
care services and supports to be
furnished to the individual (or, if the
individual elects to self-direct the
purchase of, or control the receipt of,
such services and supports, funded for
the individual); and
``(III) is reviewed at least
annually and as needed when there is a
significant change in the individual's
circumstances.
``(iii) State requirement to offer election
for self-directed services and supports.--
``(I) Individual choice.--The State
shall allow an individual or the
individual's representative the
opportunity to elect to receive self-
directed long-term care services and
supports in a manner which gives them
the most control over such services and
supports consistent with the
individual's abilities and the
requirements of subclauses (II) and
(III).
``(II) Self-directed.--The term
`self-directed' means, with respect to
the long-term care services and
supports offered under the State plan
amendment, such services and supports
for the individual which are planned
and purchased under the direction and
control of such individual or the
individual's authorized representative,
including the amount, duration, scope,
provider, and location of such services
and supports, under the State plan
consistent with the following
requirements:
``(aa) Assessment.--There
is an assessment of the needs,
capabilities, and preferences
of the individual with respect
to such services and supports.
``(bb) Service plan.--Based
on such assessment, there is
developed jointly with such
individual or the individual's
authorized representative a
plan for such services and
supports for such individual
that is approved by the State
and that satisfies the
requirements of subclause
(III).
``(III) Plan requirements.--For
purposes of subclause (II)(bb), the
requirements of this subclause are that
the plan--
``(aa) specifies those
services and supports which the
individual or the individual's
authorized representative would
be responsible for directing;
``(bb) identifies the
methods by which the individual
or the individual's authorized
representative will select,
manage, and dismiss providers
of such services and supports;
``(cc) specifies the role
of family members and others
whose participation is sought
by the individual or the
individual's authorized
representative with respect to
such services and supports;
``(dd) is developed through
a person-centered process that
is directed by the individual
or the individual's authorized
representative, builds upon the
individual's capacity to engage
in activities that promote
community life and that
respects the individual's
preferences, choices, and
abilities, and involves
families, friends, and
professionals as desired or
required by the individual or
the individual's authorized
representative;
``(ee) includes appropriate
risk management techniques that
recognize the roles and sharing
of responsibilities in
obtaining services and supports
in a self-directed manner and
assure the appropriateness of
such plan based upon the
resources and capabilities of
the individual or the
individual's authorized
representative; and
``(ff) may include an
individualized budget which
identifies the dollar value of
the services and supports under
the control and direction of
the individual or the
individual's authorized
representative.
``(IV) Budget process.--With
respect to individualized budgets
described in subclause (III)(ff), the
State plan amendment--
``(aa) describes the method
for calculating the dollar
values in such budgets based on
reliable costs and service
utilization;
``(bb) defines a process
for making adjustments in such
dollar values to reflect
changes in individual
assessments and service plans;
and
``(cc) provides a procedure
to evaluate expenditures under
such budgets.
``(H) Quality assurance; conflict of interest
standards.--
``(i) Quality assurance.--The State ensures
that the provision of long-term care services
and supports meets Federal and State guidelines
for quality assurance.
``(ii) Conflict of interest standards.--The
State establishes standards for the conduct of
the independent evaluation and the independent
assessment to safeguard against conflicts of
interest.
``(I) Redeterminations and appeals.--The State
allows for at least annual redeterminations of
eligibility, and appeals in accordance with the
frequency of, and manner in which, redeterminations and
appeals of eligibility are made under the State plan.
``(J) Presumptive eligibility for assessment.--The
State, at its option, elects to provide for a period of
presumptive eligibility (not to exceed a period of 60
days) only for those individuals that the State has
reason to believe may be eligible for long-term care
services and supports. Such presumptive eligibility
shall be limited to medical assistance for carrying out
the independent evaluation and assessment under
subparagraph (E) to determine an individual's
eligibility for such services and if the individual is
so eligible, the specific long-term care services and
supports that the individual will receive.
``(2) Definition of individual's representative.--In this
section, the term `individual's representative' means, with
respect to an individual, a parent, a family member, or a
guardian of the individual, an advocate for the individual, or
any other individual who is authorized to represent the
individual.
``(b) Self-Directed Personal Assistance Services.--If a State
includes personal care or personal assistance services in the long-term
care services and supports available under the State plan, the State
shall comply with the requirements of old section 1915(j) in the case
of an individual who elects to self-direct the receipt of such care or
services.
``SEC. 1918. TREATMENT OF INCOME AND RESOURCES FOR CERTAIN
INSTITUTIONALIZED SPOUSES.
``Old section 1924 (relating to treatment of income and resources
for certain institutionalized spouses), other than paragraphs (2) and
(4)(A) of subsection (a) of such section, shall apply under this part.
``SEC. 1919. ANNUAL REPORTS.
``(a) In General.--Each State that receives payments under this
part shall submit an annual report to the Secretary, in such form and
manner as the Secretary shall specify.
``(b) Requirements.--The report shall include the following with
respect to the most recent fiscal year ended:
``(1) The number of individuals served under the plan.
``(2) The number of individuals served by tier (preventive,
emergency, low, medium, and high needs).
``(3) The number of individuals known to the State on
waiting list for services (if any) and type of disability
(physical, developmental, mental health) or aged.
``(4) Expenditures by service category.
``PART C--GRANTS TO STATES FOR SURVEY AND CERTIFICATION OF MEDICAL
FACILITIES AND OTHER REQUIREMENTS
``SEC. 1931. AUTHORIZATION OF APPROPRIATIONS.
``For the purpose of carrying our Federal activities and providing
grants to States for expenses necessary to carry out this part, there
is authorized to be appropriated--
``(1) for fiscal year 2011, $300,000,000; and
``(2) for each succeeding fiscal year, the amount
authorized under this section for the preceding fiscal year,
increased by 5 percent.
``SEC. 1932. APPLICATION OF CERTAIN REQUIREMENTS UNDER PRE-MODERNIZED
MEDICAID.
``The following old provisions shall apply under this part:
``(1) Old section 1902(a)(9) (relating to health standards
and applicable requirements for laboratory services).
``(2) Old section 1902(a)(28) (relating to nursing
facilities and nursing facility services).
``(3) Old sections 1902(a)(29) and 1908 (relating to a
State program for the licensing of administrators of nursing
homes).
``(4) Old section 1902(a)(33)(B) (relating to licensing
health institutions).
``(5) Old section 1902(d) (relating to medical or
utilization review functions).
``(6) Old section 1902(i) (relating to intermediate care
facilities for the mentally retarded).
``(7) Old section 1902(y) (relating to psychiatric
hospitals).
``(8) Paragraphs (2) and (6) of old section 1903(g)
(relating to the Secretarial requirement to conduct sample
onsite surveys of private and public institutions and
recertifications for the need for certain services).
``(9) Old section 1903(q)(4)(B) (relating to the definition
of a board and care facility).
``(10) Old section 1910 (relating to certification and
approval of rural health clinics and intermediate care
facilities for the mentally retarded).
``(11) Old section 1911 (relating to Indian Health Service
facilities).
``(12) Old section 1913 (relating to hospital providers of
nursing facility services).
``(13) Old section 1919 (relating to requirements for
nursing facilities).
``PART D--GRANTS TO STATES FOR PROGRAM INTEGRITY
``SEC. 1941. AUTHORIZATION OF APPROPRIATIONS.
``(a) In General.--For the purpose of carrying out Federal
activities under this part and providing grants to States for expenses
necessary to carry out this part, there is authorized to be
appropriated--
``(1) for fiscal year 2011, $100,000,000; and
``(2) for each succeeding fiscal year, the amount
authorized under this section for the preceding fiscal year,
increased by 5 percent.
``(b) Availability; Authority for Use of Funds.--
``(1) Availability.--Amounts appropriated pursuant to
subsection (a) shall remain available until expended.
``(2) Authority for use of funds for transportation and
travel expenses for attendees at education, training, or
consultative activities.--
``(A) In general.--The Secretary may use amounts
appropriated pursuant to subsection (a) to pay for
transportation and the travel expenses, including per
diem in lieu of subsistence, at rates authorized for
employees of agencies under subchapter I of chapter 57
of title 5, United States Code, while away from their
homes or regular places of business, of individuals
described in subsection (b)(4) who attend education,
training, or consultative activities conducted under
the authority of that subsection.
``(B) Public disclosure.--The Secretary shall make
available on a website of the Centers for Medicare &
Medicaid Services that is accessible to the public--
``(i) the total amount of funds expended
for each conference conducted under the
authority of subsection (b)(4); and
``(ii) the amount of funds expended for
each such conference that were for
transportation and for travel expenses.
``(c) Annual Report.--Not later than 180 days after the end of each
fiscal year, the Secretary shall submit a report to Congress which
identifies--
``(1) the use of funds appropriated pursuant to subsection
(a); and
``(2) the effectiveness of the use of such funds.
``SEC. 1942. APPLICATION OF CERTAIN REQUIREMENTS UNDER PRE-MODERNIZED
MEDICAID.
``The following old provisions shall apply under this part:
``(1) Old subsections (a)(25) (other than subparagraph (E))
and (g) of section 1902 and section 1903(o) (relating to third
party liability).
``(2) Old section 1902(a)(30)(B) (relating to hospital,
intermediate care facility for the mentally retarded, or
hospital for mental diseases admission screening and review
requirements).
``(3) Old section 1902(a)(32) (relating to certain payment
requirements).
``(4) Old section 1902(a)(35) (relating to disclosing
entities under section 1124).
``(5) Old section 1902(a)(37) and the fifth sentence
(relating to claims payment procedures).
``(6) Old section 1902(a)(44) (relating to payment for
inpatient hospital services, services in an intermediate care
facility for the mentally retarded, or inpatient mental
hospital services).
``(7) Old sections 1902(a)(45) and 1912 (relating to
assignment of rights of payment).
``(8) Old sections 1902(a)(49) and 1921 (relating to
information and access to information concerning sanctions
taken by State licensing authorities against health care
practitioners and providers).
``(9) Old sections 1902(a)(61) and 1903(q) (relating to
requirements for a medicaid fraud and abuse control unit).
``(10) Old section 1902(a)(64) (relating to reports from
beneficiaries and others and data compilation requirements
concerning alleged instances of waste, fraud, and abuse).
``(11) Old section 1902(a)(65) (relating to provider number
and surety bond requirement for suppliers of durable medical
equipment).
``(12) Old section 1902(a)(68) (relating to requirements
for certain entities).
``(13) Old sections 1902(a)(69) and 1936 (relating to the
Medicaid Integrity Program) other than paragraphs (1), (2)(A),
and (3) of old section 1936(e).
``(14) Old section 1902(a)(70)(B)(iv) (relating to
prohibitions on referrals and conflict of interest for certain
brokers of non-emergency medical transportation).
``(15) Old sections 1902(a)(71) and 1940 (relating to a
required asset verification program).
``(16) Old section 1902(p) (relating to exclusion of
certain individuals or entities).
``(17) Old section 1902(x) (relating to unique identifiers
for physicians).
``(18) Old section 1903(p) (relating to interstate
collection of rights of support).
``(19) Old section 1903(r)(2) (relating to requirements for
mechanized claims processing and information retrieval
systems).
``(20) Old section 1903(u) (relating to erroneous excess
payments), other than clause (v) of paragraph (1)(D).
``(21) Old section 1903(v) and the seventh sentence of old
section 1902(a) (relating to limitations on payments for
services furnished to aliens), other than subparagraphs (A) and
(B) of paragraph (4).
``(22) Old section 1903(x) (relating to citizenship
documentation).
``(23) Old section 1909 (relating to State false claims act
requirements for increased State share of recoveries).
``(24) Old section 1914 (relating to withholding of Federal
share of payments for certain Medicare providers).
``(25) Old section 1917 (relating to liens, adjustments and
recoveries, and transfers of assets).
``(26) Old section 1922 (relating to correction and
reduction plans for intermediate care facilities for the
mentally retarded).
``PART E--GRANTS TO STATES FOR ADMINISTRATION
``SEC. 1951. AUTHORIZATION OF APPROPRIATIONS; PAYMENTS TO STATES.
``(a) In General.--For the purpose of providing grants to States
for administrative expenses necessary to carry out parts A and B, there
is authorized to be appropriated--
``(1) for fiscal year 2011, $7,000,000,000; and
``(2) for each succeeding fiscal year, the amount
authorized under this subsection for the preceding fiscal year,
increased by 3 percent.
``(b) Payments to States.--
``(1) In general.--From the amount appropriated pursuant to
subsection (a) for a fiscal year, the Secretary shall pay each
State with approved plans under parts A and B for the fiscal
year an amount equal to the product of the amount appropriated
for the fiscal year and the ratio of the total amount of
payments made to the State under paragraphs (2) through (7) of
section 1903(a) for fiscal year 2008 (as such section was in
effect for that fiscal year) to the total amount of such
payments made to all States for such fiscal year.
``(2) Pro rata adjustment.--The Secretary shall make pro
rata adjustments to the amounts determined under paragraph (1)
for a fiscal year as necessary so as to not exceed the amount
appropriated pursuant to subsection (a) for the fiscal year.
``SEC. 1952. COST-SHARING PROTECTIONS.
``(a) In General.--A State may impose cost-sharing for individuals
provided acute care medical assistance under a State plan under part A
or long-term care services and supports under a State plan under part B
consistent with the following:
``(1) The State may (in a uniform manner) require payment
of monthly premiums or other cost-sharing set on a sliding
scale based on family income.
``(2) A premium or other cost-sharing requirement imposed
under paragraph (1) may only apply to the extent that, in the
case of an individual whose family income--
``(A) exceeds 150 percent of the poverty line, the
aggregate annual amount of such premium and other cost-
sharing charges imposed under the plan does not exceed
5 percent of the individual's annual income; and
``(B) exceeds 250 percent of the poverty line, the
aggregate annual amount of such premium and other cost-
sharing charges do not exceed 7.5 percent of the
individual's annual income.
``(3) A State shall not require prepayment of any premium
or cost-sharing imposed pursuant to paragraph (1) and shall not
terminate eligibility of an individual under the State plan on
the basis of failure to pay any such premium or cost-sharing
until such failure continues for a period of at least 60 days
from the date on which the premium or cost-sharing became past
due. The State may waive payment of any such premium or cost-
sharing in any case where the State determines that requiring
such payment would create an undue hardship.
``(b) Application to Institutionalized Individuals.--A State may
impose cost-sharing consistent with subsection (a) to individuals who
are patients in, or residents of, a medical institution or nursing
facility except that rules relating to the post-eligibility treatment
of income (including a minium monthly personal needs allowance)
applicable to institutionalized individuals under old title XIX shall
apply in the same manner to individuals eligible for long-term care
services and supports under a State plan under part B.
``(c) Poverty Line Defined.--In this section, the term `poverty
line' has the meaning given such term in section 673(2) of the
Community Services Block Grant Act (42 U.S.C. 9902(2)), including any
revision required by such section.
``SEC. 1953. APPLICATION OF CERTAIN REQUIREMENTS UNDER PRE-MODERNIZED
MEDICAID.
``The following old provisions shall apply to the State plans under
this title:
``(1) Old state plan requirements.--
``(A) Old section 1902(a)(1) (relating to the
requirement for plans to be in effect in all political
subdivisions of the State).
``(B) Old section 1902(a)(2) (relating to State
financial participation).
``(C) Old section 1902(a)(3) (relating to
opportunity for a fair hearing).
``(D) Old section 1902(a)(4) (relating to
administration).
``(E) Old section 1902(a)(5) (relating to
designation of a single State agency).
``(F) Old section 1902(a)(6) (relating to reporting
requirements).
``(G) Old section 1902(a)(7) (relating to
restrictions on the use or disclosure of information).
``(H) Old section 1902(a)(8) (relating to
applications for assistance).
``(I) Old section 1902(a)(11) (relating to
cooperative agreements with other State agencies).
``(J) Old section 1902(a)(12) (relating to
determinations of blindness).
``(K) Old section 1902(a)(13) (relating to
determination of rates of payment for certain
services), other than clause (iv) of subparagraph (A).
``(L) Subsections (a)(15) and (bb) of old section
1902(a) (relating to payment for services provided by
rural health clinics and federally qualified health
centers).
``(M) Old section 1902(a)(16) (relating to
furnishing services to individuals when absent from the
State).
``(N) Old section 1902(a)(22) (relating to certain
administrative provisions).
``(O) Paragraphs (23) and (25)(D) of old section
1902(a) (relating to any willing provider
requirements).
``(P) Old section 1902(a)(24) (relating to
consultative services by other agencies).
``(Q) Old section 1902(a)(26) (relating to review
of need for inpatient mental hospital services and
written plan of care requirements).
``(R) Old section 1902(a)(27) (relating to provider
record keeping requirements).
``(S) Old section 1902(a)(30)(A) (relating to
utilization review).
``(T) Old section 1902(a)(31) (relating to written
plan of care for services and review for intermediate
care facility for the mentally retarded services).
``(U) Old section 1902(a)(33)(A) (relating to
quality review requirements).
``(V) Old section 1902(a)(36) (relating to public
availability of facility surveys).
``(W) Old section 1902(a)(38) (relating to the
provision of information described in section
1128(b)(9) by certain entities).
``(X) Old section 1902(a)(39) (relating to the
exclusion of certain entities).
``(Y) Old section 1902(a)(40) (relating to
requirement for uniform reporting systems).
``(Z) Old section 1902(a)(41) (relating to notice
to State medical licensing boards).
``(AA) Old section 1902(a)(42) (relating to certain
audit requirements).
``(BB) Old section 1902(a)(48) (relating to
eligibility cards).
``(CC) Old section 1902(a)(55) (relating to the
receipt and initial processing of applications, but
only to the extent such section is consistent with the
policy embodied in the State plans under parts A and
B).
``(DD) Subsections (a)(56) and (s) of old section
1902 (relating to adjusted payments for certain
inpatient hospital services).
``(EE) Old section 1902(a)(59) (relating to
maintenance of list of participating physicians).
``(FF) The second sentence of old section 1902
(relating to designation of certain State agencies).
``(GG) Old section 1902(b) (relating to limitations
on approval of plans).
``(HH) Old section 1902(j) (relating to application
of requirements to American Samoa and the Northern
Mariana Islands).
``(2) Other old title xix requirements.--
``(A) Old section 1903(b)(4) (relating to
limitations on payments to enrollment brokers).
``(B) Old section 1903(c) (relating to furnishing
of services included in a program or plan under part B
or C of the Individuals with Disabilities Education
Act).
``(C) Old section 1903(d) (relating to payments).
``(D) Old section 1903(e) (relating to costs with
respect to certain hospital services).
``(E) Old section 1903(i) (relating to limitations
on payments).
``(F) Old section 1903(r) (relating to requirements
for mechanized claims processing and information
retrieval systems).
``(G) Subsections (b)(5) and (w) of old section
1903 (relating to limitations on payments related to
provider taxes).
``(H) Old section 1904 (relating to operation of
State plans).
``(I) Old sections 1902(a)(60) and 1908A (relating
to medical child support).
``(J) Paragraphs (32)(D) and (62) of old section
1902(a) and section 1928 (relating to program for
distribution of pediatric vaccines).
``PART F--OTHER PROVISIONS
``SEC. 1961. APPLICATION OF CERTAIN REQUIREMENTS UNDER PRE-MODERNIZED
MEDICAID.
``The following old provisions shall apply under this part:
``(1) The third sentence of old section 1902 (relating to
nonapplication of certain old provisions to a religious
nonmedical health care institution).
``(2) Old section 1918 (relating to application of
provisions of title II relating to subpoenas).
``(3) Old section 1939 (relating to references to laws
directly affecting the Medicaid program.''.
(b) Repeal of Title XXI.--Effective January 1, 2011, title XXI of
the Social Security Act (42 U.S.C. 1397aa et seq.) is repealed.
SEC. 402. OUTREACH.
(a) Authorization of Appropriations.--The following amounts are
authorized to be appropriated to the Secretary of Health and Human
Services:
(1) For fiscal year 2009, $100,000,000 for the design and
implementation of a public outreach campaign to inform the
public about the changes to the programs under such titles that
take effect on January 1, 2011, as a result of the amendment
made by section 401.
(2) For each of fiscal years 2010 and 2011, $200,000,000 to
carry out such public outreach campaign.
(3) For fiscal year 2012, $50,000,000 to carry out such
public outreach campaign.
(b) Availability.--Funds appropriated under subsection (a) shall
remain available for expenditure through September 30, 2012.
(c) Authority for Use of Funds.--The Secretary may use funds made
available under paragraphs (2) and (3) of subsection (a) to award
grants to, or enter into contracts with, public or private entities,
including States, local governments, schools, churches, and community
groups.
SEC. 403. TRANSITION RULES; MISCELLANEOUS PROVISIONS.
(a) In General.--
(1) Not later than June 30, 2010, a State that is one of
the 50 States or the District of Columbia shall inform all
individuals enrolled in a State plan under title XIX or XXI of
the Social Security Act on such date (and any new enrollees
after such date) of the changes to the programs under such
titles that take effect on January 1, 2011, as a result of the
amendment made by section 401.
(2) No State that is one of the 50 States or the District
of Columbia shall approve any applications for medical
assistance or child health assistance under a State plan under
title XIX or XXI (as in effect for fiscal year 2010) after
December 31, 2010.
(b) Submission of Legislative Proposal for Technical and Conforming
Amendments.--Not later than 6 months after the date of enactment of
this Act, the Secretary of Health and Human Services shall submit to
Congress a legislative proposal for such technical and conforming
amendments as are necessary to carry out the amendments made by this
Act.
Subtitle B--Supplemental Health Care Assistance for Low-Income Families
SEC. 411. SUPPLEMENTAL HEALTH CARE ASSISTANCE FOR LOW-INCOME FAMILIES.
Part D of title III of the Public Health Service Act (42 U.S.C.
254b et seq.) is amended by adding at the end the following:
``Subpart XI--Health Care Assistance to Low-Income Families
``SEC. 340A-1. FINANCIAL ASSISTANCE TO LOW-INCOME FAMILIES.
``(a) In General.--The Secretary shall supplement the costs of
private health insurance for eligible low-income families through the
distribution of supplemental debit cards to eligible families, which
may be used to pay for costs associated with health care for the
members of such eligible families and provide direct support to such
families in accessing health care.
``(b) Eligibility.--
``(1) Eligible families.--To be eligible for financial
assistance under this section--
``(A) a family shall--
``(i) consist of 2 or more individuals
living together who are related by marriage,
birth, adoption, or guardianship;
``(ii) have a gross income that does not
exceed 200 percent of the poverty line, as
applicable to a family of the size involved;
and
``(iii) include at least 1 individual who
is a dependent under the age of 19; and
``(B) no member of the family shall be covered by
private health insurance.
``(2) Determination of gross income.--The gross income of a
family shall be determined by taking the sum of the income of
each family member who is at least age 21 but not older than
age 65, except that the income of any member of the family who
qualifies for coverage under Medicaid Part A or B shall not be
counted.
``(3) Limitation on individual eligibility; assistance.--
``(A) In general.--No individual who is a member of
an eligible family under paragraph (1) is eligible to
qualify separately for financial assistance under this
section.
``(B) Aliens.--The Secretary shall ensure that
financial assistance under this section is not provided
for costs associated with health care for any member of
an eligible family who is an alien individual who is
not a lawful permanent resident of the United States.
``(c) Supplemental Debit Card for Health Care Expenditures.--
``(1) In general.--The Secretary shall issue to each
eligible family that enrolls in the program in accordance with
subsection (f) a supplemental debit card with a dollar-amount
value, in accordance with subsection (d), that may be used to
pay for qualifying health care expenses.
``(2) Use of the debit card.--
``(A) Qualifying health care expenses.--A
supplemental debit card issued under this section may
be used by members of the eligible family to pay for--
``(i) the purchase of health care insurance
for any member of the family;
``(ii) cost sharing expenses related to
health care, including deductibles, copayments,
and coinsurance, for any member of the family;
and
``(iii) the direct purchase of health care
services and supplies for any member of the
family.
``(B) Geographic range.--Each supplemental debit
card may be used to pay for qualifying health care
expenses incurred anywhere in the 50 States or the
District of Columbia.
``(C) Limitations.--No supplemental debit card
shall be used to make a payment for any cost--
``(i) incurred prior to the determination
of the family's eligibility for assistance
under this section; or
``(ii) that is not a health-related
expense.
``(3) Rollover of unused amounts.--Not more than one-
quarter of the annual dollar amount of a supplemental debit
card that is unexpended at the end of each 12-month period may
rollover--
``(A) to the family's supplemental debit card for
expenditure during the subsequent 12-month period,
provided that the family to which the supplemental
debit card was issued in the previous 12-month period
is eligible to receive a supplemental debit card in the
subsequent 12-month period; or
``(B) to the family's health savings account (as
defined in section 223(g)(2) of the Internal Revenue
Code of 1986).
``(4) Monthly statements.--The Secretary shall issue a
monthly statement to each family to which a supplemental debit
card has been issued under this section, which shall state each
payment made with the family's supplemental debit card during
the month covered by the statement, the dollar amount of each
such payment, and the provider to which each such payment was
made.
``(d) Amount of Financial Assistance.--
``(1) Amounts for calendar year 2011.--Subject to paragraph
(5), the amount of financial assistance available to each
eligible family during the calendar year 2011 shall be
determined as follows:
``(A) Each family whose annual income does not
exceed 100 percent of the poverty level, as applicable
to a family of the size involved, shall receive $5,000.
``(B) Each family whose annual income exceeds 100
percent, but does not exceed 200 percent, of the
poverty level, as applicable to a family of the size
involved, shall receive an amount as follows:
``(i) For families whose annual income
exceeds 100 percent but does not exceed 120
percent, of the poverty level, $4,000.
``(ii) For families whose annual income
exceeds 120 percent but does not exceed 140
percent, of the poverty level, $3,500.
``(iii) For families whose annual income
exceeds 140 percent but does not exceed 160
percent, of the poverty level, $3,000.
``(iv) For families whose annual income
exceeds 160 percent but does not exceed 180
percent, of the poverty level, $2,500.
``(v) For families whose annual income
exceeds 180 percent but does not exceed 200
percent, of the poverty level, $2,000.
``(2) Additional amounts.--In addition to the amounts under
paragraph (1), subject to paragraph (5), the following amounts
shall be added to the supplemental debit cards of qualifying
families:
``(A) For each pregnancy during which a pregnant
woman's family is eligible for assistance under this
section, an additional amount of $1,000 shall be added
to the family's supplemental debit card, except that no
family shall receive such additional $1,000 for any
pregnancy for which the family received such amount in
the previous 12-month period.
``(B) For each member of an eligible family who is
less than 1 year old on any day within the calendar
year in which the family is eligible for assistance, an
additional amount of $500 shall be added to the
family's supplemental debit card.
``(3) Cost of living adjustments.--In the case of any
taxable year beginning in a calendar year after 2011, each
dollar amount contained in paragraphs (1) and (2) shall be
increased in the same manner as the dollar amounts specified in
section 25E(b)(3) of the Internal Revenue Code of 1986 are
increased by the blended cost-of-living adjustment determined
under subsection (k)(2) of section 25E of the Internal Revenue
Code for the taxable year involved.
``(4) State option to increase amounts.--At the option of
each State, amounts in excess of the annual dollar amounts
under paragraphs (1) and (2) may be provided through the
supplemental debit card to eligible families in that State, but
no Federal funds shall be paid to any State for any amount
provided in excess of such annual dollar amount.
``(5) Risk adjustment.--The Secretary may adjust the amount
of financial assistance available to an eligible family for a
calendar year under this section based on age, health
indicators, and other factors that represent distinct patterns
of health care services utilization and costs.
``(e) Contributions of States.--
``(1) In general.--As a condition for receiving Federal
funds under Part A or Part B of Medicaid, each State shall
contribute 50 percent of the total amount expended under the
supplemental debit card program by the participating families
that reside within the State during the time that the family
resides in that State. For purposes of this section, the
residency of a family is determined by the residency the
legally responsible head of the household.
``(2) Payments from states.--
``(A) Billing notification.--
``(i) Timing.--On June 30th and December
31st of each year, the Secretary shall send
written notification to each State of that
State's 50 percent share of expenses, as
described in paragraph (1), for the 6-month
period ending on the last day of the month
previous to such notification.
``(ii) Contents.--Each such notification to
a State shall clearly state--
``(I) the payment amount due from
the State;
``(II) the name of each individual
for whom payment was made through the
supplemental debit card program;
``(III) the health care provider to
whom each payment was made;
``(IV) the amount of each payment;
and
``(V) any other information, as the
Secretary requires.
``(B) Payments.--Each State shall make a payment to
the Secretary, in the amount billed, not later than 30
days after the billing notification date, in accordance
with subparagraph (A)(i).
``(C) Penalties.--If a State fails to pay to the
Secretary an amount required under subparagraph (B),
interest shall accrue on such amount at the rate
provided under old section 1903(d)(5) of the Social
Security Act. The amount so owed and applicable
interest shall be immediately offset against amounts
otherwise payable to the State under this section, in
accordance with the Federal Claims Collection Act of
1996 and applicable regulations.
``(f) Enrollment.--
``(1) In general.--The Secretary shall establish procedures
and times for enrollment in the supplemental debit card
program. Open enrollment shall be available not less than 4
times per calendar year.
``(2) Transition of individuals enrolled in medicaid or the
state children's health insurance program.--
``(A) Information from the states.--Each State
shall--
``(i) not later than June 30, 2010, inform
all individuals then enrolled in Medicaid or
the State Children's Health Insurance Program
(SCHIP), of the changes in effect beginning on
January 1, 2011; and
``(ii) not later than October 31, 2010,
redetermine the eligibility of each individual
enrolled in Medicaid or SCHIP, other than those
individuals who qualify for Medicaid or SCHIP
as disabled, elderly, or a special population,
for the supplemental debit card program,
according to the eligibility criteria under
subsection (b).
``(B) Automatic enrollment.--The Secretary shall
provide for the automatic enrollment in the
supplemental debit card program of all individuals who
are enrolled in Medicaid or SCHIP and who have been
redetermined by a State under subparagraph (A) to be
eligible for Medicaid or SCHIP. Any individual who is
determined by a State not to qualify for the
supplemental debit card program may retain coverage
under Medicaid or SCHIP until June 30, 2011.
``(3) Assistance with qualified health insurance credit.--
Each State shall, to the extent practicable, provide
individuals residing within the State with information
regarding the qualified health insurance credit described in
section 25E of the Internal Revenue Code of 1986, including
information regarding eligibility for, and how to claim, such
credit.
``(g) Administration.--
``(1) National system.--The Secretary may enter into
contracts or agreements with a State, a consortium of States,
or a private entity, including a bank, enrollment broker, or
similar entity, to establish and maintain a unified national
system to support the processes and transactions necessary to
administer this section.
``(2) Automated system.--The Secretary shall establish an
automated means, such as an electronic benefit transfer system,
by which the benefits under this section shall be transferred
to eligible families.
``(3) Verification of applicant information.--The Secretary
may verify information provided by applicants with the
appropriate Federal, State, and local agencies, including the
Internal Revenue Service, the Social Security Administration,
the Department of Labor, and child support enforcement
agencies.
``(4) Choice counseling.--The Secretary may enter into
contracts or agreements with a State, a consortium of a State,
or a private entity, including an enrollment broker or
community organization or other organization, to educate
eligible families about their options and to assist in their
enrollment in the supplemental debit card plan.
``(5) Appeals.--The Secretary shall establish an
independent appeals process, to be administered by an entity
separate from the entity that makes initial eligibility
determinations, which shall be available to individuals who are
denied benefits under the supplemental debit card program.
``(6) Resolution of errors.--The Secretary shall provide
for a reconciliation process with the States to resolve any
errors and adjudicate disputes due to incomplete or false
information in a family's application or in the billing process
described in subsection (e).
``(7) Penalties for false information.--Any person who
provides false information to qualify for the supplemental
debit card program shall pay a penalty in the amount of 110
percent of the amount of assistance paid on behalf of such
person and all members of such person's family.
``(h) Implementation Plan.--Not later than 6 months after the date
of enactment of this section, the Secretary shall submit to Congress a
plan for implementing this program during fiscal years 2009-2012.
``(i) Authorization of Appropriations.--
``(1) Administration of the supplemental debit card
program.--To administer the program under this section, there
are authorized to be appropriated--
``(A) for fiscal year 2009, $300,000,000, for the
design of a unified, national system of conducting the
supplemental debit card program;
``(B) for fiscal year 2010, $1,000,000,000 for
start-up costs, including, contracting, hiring and
training employees, and testing the program; and
``(C) for fiscal year 2011 and each subsequent
fiscal year, $3,000,000,000.
``(2) Authorization of benefits under the supplemental
debit card program.--To provide the supplemental debit card
benefits described in this section, there are authorized to be
appropriated--
``(A) for fiscal year 2011, $24,020,000,000;
``(B) for fiscal year 2012, $25,220,000,000;
``(C) for fiscal year 2013, $26,480,000,000;
``(D) for fiscal year 2014, $27,810,000,000; and
``(E) for fiscal year 2015, $29,200,000,000.''.
TITLE V--FIXING MEDICARE FOR AMERICAN SENIORS
Subtitle A--Increasing Programmatic Efficiency, Economy, and
Accountability
SEC. 501. ELIMINATING INEFFICIENCIES AND INCREASING CHOICE IN MEDICARE
ADVANTAGE.
Part C of title XVIII of the Social Security Act is amended by
adding at the end the following new section:
``medicare advantage competitive bidding
``Sec. 1860C-2. (a) Competitive Bidding.--
``(1) In general.--In order to promote competition among
Medicare Advantage plans and to increase the quality of care
furnished under such plans, the Secretary shall establish and
implement a competitive bidding mechanism under this part.
``(2) Mechanism to begin in 2011.--The mechanism
established under paragraph (1) shall apply to all MA
organizations and plans beginning in 2011.
``(3) No effect on part d benefits.--The mechanism
established under paragraph (1) shall not affect the provisions
of this part relating to benefits under part D, including the
bidding mechanism used for benefits under such part.
``(b) Rules for Competitive Bidding Mechanism.--Notwithstanding any
other provision of this part, the following rules shall apply under the
competitive bidding mechanism established under subsection (a).
``(1) Benchmark.--Benchmark amounts for an area for a year
shall be established solely through the competitive bids of MA
plans. The benchmark amount for each area for a year shall be
the average bid of the plans in that area for that year. In
establishing the benchmark for an area for a year under the
preceding sentence, the Secretary shall exclude the highest and
lowest bid for that area and year. The benchmark amount for an
area for a year may not exceed the benchmark amount for that
area and year that would have applied if this section had not
been enacted.
``(2) Bids.--The MA plan bid shall reflect the per capita
payments that the MA plan will accept for providing a benefit
package that is actuarially equivalent to 106 percent of the
value of the original Medicare fee-for-service program option.
MA plan bid submissions shall include data on plan average
provider network contract rates compared to the rates under the
original Medicare fee-for-service program option for the top 5
most common claim submissions per provider type.
``(3) Risk adjustment.--The benchmark under paragraph (1)
and the MA plan bid shall be risk adjusted using the risk
adjustment requirements under this part.
``(4) Beneficiary premiums.--The MA monthly basic
beneficiary premium for a beneficiary who enrolls in an MA plan
whose plan bid is at or below the benchmark shall be zero and
the beneficiary shall receive the full difference (if any)
between the bid and the benchmark in the form of additional
benefits or as a rebate on their premiums under this title. The
MA monthly basic beneficiary premium for a beneficiary who
enrolls in an MA plan whose plan bid is above the benchmark
shall be equal to the amount by which the bid exceeds the
benchmark.
``(5) Benchmark amounts for rural counties.--The Secretary
may adjust the benchmark amount established under paragraph (1)
for any rural county (as identified by the Secretary after
consultation with the Secretary of Commerce) to encourage plan
participation in such county.
``(6) Existing requirements.--Requirements relating to
licensure, quality, and beneficiary protections that would
otherwise apply under this part shall apply under the
competitive bidding mechanism established under subsection (a).
``(c) Waiver.--In order to implement the competitive bidding
mechanism under established subsection (a), the Secretary may waive or
modify requirements under this part.''.
SEC. 502. MEDICARE ACCOUNTABLE CARE ORGANIZATION DEMONSTRATION PROGRAM.
(a) Establishment.--
(1) In general.--In order to promote innovative care
coordination and delivery that is cost-effective, the Secretary
of Health and Human Services (in this section referred to as
the ``Secretary'') shall conduct a demonstration program under
the Medicare program under which--
(A) groups of providers meeting certain criteria
may work together to manage and coordinate care for
Medicare fee-for-service beneficiaries through an
Accountable Care Organization (in this section referred
to as an ``ACO''); and
(B) providers in participating ACOs are eligible
for bonuses based on performance.
(2) Medicare fee-for-service beneficiary defined.--In this
section, the term ``Medicare fee-for-service beneficiary''
means an individual who is enrolled in the original medicare
fee-for-service program under parts A and B of title XVIII of
the Social Security Act and not enrolled in an MA plan under
part C of such title.
(b) Eligible ACOs.--
(1) In general.--Subject to paragraph (2), the following
provider groups are eligible to participate as ACOs under the
demonstration program under this section:
(A) Physicians in group practice arrangements.
(B) Networks of individual physician practices.
(C) Partnerships or joint venture arrangements
between hospitals and physicians.
(D) Partnerships or joint ventures, which may
include pharmacists providing medication therapy
management.
(E) Hospitals employing physicians.
(F) Integrated delivery systems.
(G) Community-based coalitions of providers.
(2) Requirements.--An ACO shall meet the following
requirements:
(A) The ACO shall have a formal legal structure
that would allow the organization to receive and
distribute bonuses to participating providers.
(B) The ACO shall include the primary care
providers of at least 5,000 Medicare fee-for-service
beneficiaries.
(C) The ACO shall be willing to become accountable
for the overall care of the Medicare fee-for-service
beneficiaries.
(D) The ACO shall provide the Secretary with a list
of primary care and specialist physicians participating
in the ACO to support the beneficiary assignment,
implementation of performance measures, and the
determination of bonus payments under the demonstration
program.
(E) The ACO shall have in place contracts with a
core group of key specialist physicians, a leadership
and management structure, and processes to promote
evidence-based medicine and to coordinate care.
(c) Assignment of Medicare Fee-for-Service Beneficiaries.--
(1) In general.--Under the demonstration program under this
section, each Medicare fee-for-service Medicare beneficiary
shall be automatically assigned to a primary care provider.
Such assignment shall be based on the physician from whom the
beneficiary received the most primary care in the preceding
year.
(2) Beneficiaries may continue to see providers outside of
the aco.--Under the demonstration program under this section, a
Medicare fee-for-service Medicare beneficiary may continue to
see providers in and outside of the ACO to which they have been
assigned.
(d) Bonus Payments.--
(1) In general.--Under the demonstration program, Medicare
payments shall continue to be made to providers under the
original Medicare fee-for-service program in the same manner as
they would otherwise be made except that a participating ACO is
eligible for bonuses if--
(A) it meets certain quality performance measures;
and
(B) spending for their Medicare fee-for-service
beneficiaries meets the requirement under paragraph
(3).
(2) Quality.--Under the demonstration program under this
section, providers meet the requirement under paragraph (1)(A)
if they generally follow consensus-based guidelines established
by non-government professional medical societies. Patient
satisfaction and risk-adjusted outcomes shall be determined
through an independent entity with medical expertise.
(3) Requirement relating to spending.--
(A) In general.--An ACO shall only be eligible to
receive a bonus payment if the average Medicare
expenditures under the ACO for Medicare fee-for-service
beneficiaries over a two-year period is at least 2
percent below the average benchmark for the
corresponding two-year period. The benchmark for each
ACO shall be set using the most recent three years of
total per-beneficiary spending for Medicare fee-for-
service beneficiaries assigned to the ACO. Such
benchmark shall be updated by the projected rate of
growth in national per capita spending for the original
medicare fee-for-service program, as projected (using
the most recent three years of data) by the Chief
Actuary of the Centers for Medicare & Medicaid
Services.
(4) Amount of bonus payments.--The amount of the bonus
payment to a participating ACO shall be one-half of the
percentage point difference between the two-year average of
their patients' Medicare expenditures and 98 percent of the
two-year average benchmark. The bonus amount, in dollars, shall
be equal to the bonus share multiplied by the benchmark for the
most recent year.
(5) Limitation.--Bonus payments may only be made to an ACO
if the primary care provider to which the Medicare fee-for-
service beneficiary has been assigned under subsection (c)
elects to participate in such ACO.
(e) Waiver Authority.--The Secretary may waive such requirements of
titles XI and XVIII of the Social Security Act (42 U.S.C. 1301 et seq.;
1395 et seq.) as may be appropriate for the purpose of carrying out the
demonstration program under this section.
(f) Report.--Upon completion of the demonstration program under
this section, the Secretary shall submit to Congress a report on the
program together with such recommendations as the Secretary determines
appropriate.
SEC. 503. REDUCING GOVERNMENT HANDOUTS TO WEALTHIER SENIORS.
(a) Elimination of Annual Indexing of Income Thresholds for Reduced
Part B Premium Subsidies.--
(1) In general.--Paragraph (5) of section 1839(i) of the
Social Security Act (42 U.S.C. 1395r(i)) is repealed.
(2) Effective date.--The repeal made by paragraph (1) shall
apply to premiums for months beginning after December 2010.
(b) Income-Related Reduction in Part D Premium Subsidy.--
(1) Income-related reduction in part d premium subsidy.--
(A) In general.--Section 1860D-13(a) of the Social
Security Act (42 U.S.C. 1395w-113(a)) is amended by
adding at the end the following new paragraph:
``(7) Reduction in premium subsidy based on income.--
``(A) In general.--In the case of an individual
whose modified adjusted gross income exceeds the
threshold amount applicable under paragraph (2) of
section 1839(i) (including application of paragraph (5)
of such section) for the calendar year, the monthly
amount of the premium subsidy applicable to the premium
under this section for a month after December 2010
shall be reduced (and the monthly beneficiary premium
shall be increased) by the monthly adjustment amount
specified in subparagraph (B).
``(B) Monthly adjustment amount.--The monthly
adjustment amount specified in this subparagraph for an
individual for a month in a year is equal to the
product of--
``(i) the quotient obtained by dividing--
``(I) the applicable percentage
determined under paragraph (3)(C) of
section 1839(i) (including application
of paragraph (5) of such section) for
the individual for the calendar year
reduced by 25.5 percent; by
``(II) 25.5 percent; and
``(ii) the base beneficiary premium (as
computed under paragraph (2)).
``(C) Modified adjusted gross income.--For purposes
of this paragraph, the term `modified adjusted gross
income' has the meaning given such term in subparagraph
(A) of section 1839(i)(4), determined for the taxable
year applicable under subparagraphs (B) and (C) of such
section.
``(D) Determination by commissioner of social
security.--The Commissioner of Social Security shall
make any determination necessary to carry out the
income-related reduction in premium subsidy under this
paragraph.
``(E) Procedures to assure correct income-related
reduction in premium subsidy.--
``(i) Disclosure of base beneficiary
premium.--Not later than September 15 of each
year beginning with 2010, the Secretary shall
disclose to the Commissioner of Social Security
the amount of the base beneficiary premium (as
computed under paragraph (2)) for the purpose
of carrying out the income-related reduction in
premium subsidy under this paragraph with
respect to the following year.
``(ii) Additional disclosure.--Not later
than October 15 of each year beginning with
2010, the Secretary shall disclose to the
Commissioner of Social Security the following
information for the purpose of carrying out the
income-related reduction in premium subsidy
under this paragraph with respect to the
following year:
``(I) The modified adjusted gross
income threshold applicable under
paragraph (2) of section 1839(i)
(including application of paragraph (5)
of such section).
``(II) The applicable percentage
determined under paragraph (3)(C) of
section 1839(i) (including application
of paragraph (5) of such section).
``(III) The monthly adjustment
amount specified in subparagraph (B).
``(IV) Any other information the
Commissioner of Social Security
determines necessary to carry out the
income-related reduction in premium
subsidy under this paragraph.
``(F) Rule of construction.--The formula used to
determine the monthly adjustment amount specified under
subparagraph (B) shall only be used for the purpose of
determining such monthly adjustment amount under such
subparagraph.''.
(B) Collection of monthly adjustment amount.--
Section 1860D-13(c) of the Social Security Act (42
U.S.C. 1395w-113(c)) is amended--
(i) in paragraph (1), by striking ``(2) and
(3)'' and inserting ``(2), (3), and (4)''; and
(ii) by adding at the end the following new
paragraph:
``(4) Collection of monthly adjustment amount.--
``(A) In general.--Notwithstanding any provision of
this subsection or section 1854(d)(2), subject to
subparagraph (B), the amount of the income-related
reduction in premium subsidy for an individual for a
month (as determined under subsection (a)(7)) shall be
paid through withholding from benefit payments in the
manner provided under section 1840.
``(B) Agreements.--In the case where the monthly
benefit payments of an individual that are withheld
under subparagraph (A) are insufficient to pay the
amount described in such subparagraph, the Commissioner
of Social Security shall enter into agreements with the
Secretary, the Director of the Office of Personnel
Management, and the Railroad Retirement Board as
necessary in order to allow other agencies to collect
the amount described in subparagraph (A) that was not
withheld under such subparagraph.''.
(2) Conforming amendments.--
(A) Medicare.--Part D of title XVIII of the Social
Security Act (42 U.S.C. 1395w-101 et seq.) is amended--
(i) in section 1860D-13(a)(1)--
(I) by redesignating subparagraph
(F) as subparagraph (G);
(II) in subparagraph (G), as
redesignated by subparagraph (A), by
striking ``(D) and (E)'' and inserting
``(D), (E), and (F)''; and
(III) by inserting after
subparagraph (E) the following new
subparagraph:
``(F) Increase based on income.--The monthly
beneficiary premium shall be increased pursuant to
paragraph (7).''; and
(ii) in section 1860D-15(a)(1)(B), by
striking ``paragraph (1)(B)'' and inserting
``paragraphs (1)(B) and (1)(F)''.
(B) Internal revenue code.--Section 6103(l)(20) of
the Internal Revenue Code of 1986 (relating to
disclosure of return information to carry out Medicare
part B premium subsidy adjustment) is amended--
(i) in the heading, by striking ``part b
premium subsidy adjustment'' and inserting
``parts b and d premium subsidy adjustments'';
(ii) in subparagraph (A)--
(I) in the matter preceding clause
(i), by inserting ``or 1860D-13(a)(7)''
after ``1839(i)''; and
(II) in clause (vii), by inserting
after ``subsection (i) of such
section'' the following: ``or under
section 1860D-13(a)(7) of such Act'';
(iii) in subparagraph (B)--
(I) by inserting ``or such section
1860D-13(a)(7)'' before the period at
the end;
(II) as amended by clause (i), by
inserting ``or for the purpose of
resolving tax payer appeals with
respect to any such premium
adjustment'' before the period at the
end; and
(III) by adding at the end the
following new sentence: ``Officers,
employees, and contractors of the
Social Security Administration may
disclose such return information to
officers, employees, and contractors of
the Department of Health and Human
Services, the Office of Personnel
Management, the Railroad Retirement
Board, the Department of Justice, and
the courts of the United States to the
extent necessary to carry out the
purposes described in the preceding
sentence.''; and
(iv) by adding at the end the following new
subparagraph:
``(C) Timing of disclosure.--Return information
shall be disclosed to officers, employees, and
contractors of the Social Security Administration under
subparagraph (A) not later than the date that is 90
days prior to the date on which the taxpayer first
becomes entitled to benefits under part A of title
XVIII of the Social Security Act or eligible to enroll
for benefits under part B of such title.''.
SEC. 504. REWARDING PREVENTION.
Section 1839 of the Social Security Act (42 U.S.C. 1395r) is
amended--
(1) in subsection (a)(2), by striking ``and (i)'' and
inserting ``(i), and (j)''; and
(2) by adding at the end the following new subsection:
``(j)(1) With respect to the monthly premium amount for months
after December 2010, the Secretary may adjust (under procedures
established by the Secretary) the amount of such premium for an
individual based on whether or not the individual participates in
certain healthy behaviors, such as weight management, exercise,
nutrition counseling, refraining from tobacco use, designating a health
home, and other behaviors determined appropriate by the Secretary.
``(2) In making the adjustments under paragraph (1) for a month,
the Secretary shall ensure that the total amount of premiums to be paid
under this part for the month is equal to the total amount of premiums
that would have been paid under this part for the month if no such
adjustments had been made, as estimated by the Secretary.''.
SEC. 505. PROMOTING HEALTHCARE PROVIDER TRANSPARENCY.
(a) Transparency.--Title XVIII of the Social Security Act is
amended by adding at the end the following new section:
``price transparency requirements
``Sec. 1899. (a) Pre-Treatment Disclosure.--A provider of services
(as defined in section 1861(u)) and a supplier (as defined in section
1861(d)) shall provide to each individual (regardless of whether or not
the individual is a beneficiary under this title) who is scheduled to
receive a treatment (or to begin a course of treatment) that is not for
an emergency medical condition the estimated price that the provider of
services or supplier will charge for the treatment (or course of
treatment). Such price shall be determined at the time of scheduling.
``(b) Post-Treatment Disclosure.--A provider of services (as so
defined) and a supplier (as so defined) shall include with any bill
that includes the charges for a treatment with respect to an individual
(regardless of whether or not the individual is a beneficiary under
this title), an itemized list of component charges for such treatment,
including charges for drugs and medical equipment involved, as
determined at the time of billing. With respect to each item included
on such list, the provider of services or supplier shall include the
price charged for the item.''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to providers of services and suppliers on and after January 1,
2011.
SEC. 506. AVAILABILITY OF MEDICARE AND MEDICAID CLAIMS AND PATIENT
ENCOUNTER DATA.
(a) Public Availability.--Not later than 1 year after the date of
enactment of this Act (and annually thereafter), the Secretary of
Health and Human Services (in this section referred to as the
``Secretary''), shall make available to the public (including through
an Internet website) data on claims and patient encounters under titles
XVIII and XIX of the Social Security Act during the preceding calendar
year. Such data shall be appropriately disaggregated and patient
deidentified, as determined necessary by the Secretary in order to
comply with the Federal regulations (concerning the privacy of
individually identifiable health information) promulgated under section
264(c) of the Health Insurance Portability and Accountability Act of
1996.
(b) Provision of Data to State Exchanges and Health Insurance
Issuers Under the State Exchange.--The Secretary shall submit such data
directly to a State Exchange under title II and health insurance
issuers under such Exchange (in a form and manner determined
appropriate by the Secretary).
(c) Matching of Data.--The Secretary shall ensure that the total
amount of claims under such titles during the preceding year for which
data is made available under subsection (a) is equal to the reported
outlays from the Federal government and the States under such titles
during the preceding years.
Subtitle B--Reducing Fraud and Abuse
SEC. 511. REQUIRING THE SECRETARY OF HEALTH AND HUMAN SERVICES TO
CHANGE THE MEDICARE BENEFICIARY IDENTIFIER USED TO
IDENTIFY MEDICARE BENEFICIARIES UNDER THE MEDICARE
PROGRAM.
(a) Procedures.--
(1) In general.--Not later than 1 year after the date of
enactment of this Act, in order to protect beneficiaries from
identity theft, the Secretary of Health and Human Services (in
this section referred to as the ``Secretary'') shall establish
and implement procedures to change the Medicare beneficiary
identifier used to identify individuals entitled to benefits
under part A of title XVIII of the Social Security Act or
enrolled under part B of such title so that such an
individual's social security account number is not used. Such
procedures shall provide that the new Medicare beneficiary
identifier includes biometric identification protections.
(2) Maintaining existing hicn structure.--In order to
minimize the impact of the change under paragraph (1) on
systems that communicate with Medicare beneficiary eligibility
systems, the procedures under paragraph (1) shall provide that
the new Medicare beneficiary identifier maintain the existing
Health Insurance Claim Number structure.
(3) Protection against fraud.--The procedures under
paragraph (1) shall provide for a process for changing the
Medicare beneficiary identifier for an individual to a
different identifier in the case of the discovery of fraud,
including identity theft.
(4) Phase-in authority.--
(A) In general.--Subject to subparagraphs (B) and
(C), the Secretary may phase in the change under
paragraph (1) in such manner as the Secretary
determines appropriate.
(B) Limit.--The phase-in period under subparagraph
(A) shall not exceed 10 years.
(C) Newly entitled and enrolled individuals.--The
Secretary shall ensure that the change under paragraph
(1) is implemented not later than January 1, 2010, with
respect to any individual who first becomes entitled to
benefits under part A of title XVIII of the Social
Security Act or enrolled under part B of such title on
or after such date.
(b) Education and Outreach.--The Secretary shall establish a
program of education and outreach for individuals entitled to, or
enrolled for, benefits under part A of title XVIII of the Social
Security Act or enrolled under part B of such title, providers of
services (as defined in subsection (u) of section 1861 of such Act (42
U.S.C. 1395x)), and suppliers (as defined in subsection (d) of such
section) on the change under paragraph (1).
(c) Data Matching.--
(1) Access to certain information.--Section 205(r) of the
Social Security Act (42 U.S.C. 405(r)) is amended by adding at
the end the following new paragraph:
``(9)(A) The Commissioner of Social Security shall, upon
the request of the Secretary--
``(i) enter into an agreement with the Secretary
for the purpose of matching data in the system of
records of the Commissioner with data in the system of
records of the Secretary, so long as the requirements
of subparagraphs (A) and (B) of paragraph (3) are met,
in order to determine--
``(I) whether a beneficiary under the
program under title XVIII, XIX, or XXI is dead,
imprisoned, or otherwise not eligible for
benefits under such program; and
``(II) whether a provider of services or a
supplier under the program under title XVIII,
XIX, or XXI is dead, imprisoned, or otherwise
not eligible to furnish or receive payment for
furnishing items and services under such
program; and
``(ii) include in such agreement safeguards to
assure the maintenance of the confidentiality of any
information disclosed and procedures to permit the
Secretary to use such information for the purpose
described in clause (i).
``(B) Information provided pursuant to an agreement under
this paragraph shall be provided at such time, in such place,
and in such manner as the Commissioner determines appropriate.
``(C) Information provided pursuant to an agreement under
this paragraph shall include information regarding whether--
``(i) the name (including the first name and any
family name or surname), the date of birth (including
the month, day, and year), and social security number
of an individual provided to the Commissioner match the
information contained in the Commissioner's records,
and
``(ii) such individual is shown on the records of
the Commissioner as being deceased.''.
(2) Investigation based on certain information.--Title XI
of the Social Security Act (42 U.S.C. 1301 et seq.) is amended
by inserting after section 1128F the following new section:
``SEC. 1128G. ACCESS TO CERTAIN DATA AND INVESTIGATION OF CLAIMS
INVOLVING INDIVIDUALS WHO ARE NOT ELIGIBLE FOR BENEFITS
OR ARE NOT ELIGIBLE PROVIDERS OF SERVICES OR SUPPLIERS.
``(a) Data Agreement.--The Secretary shall enter into an agreement
with the Commissioner of Social Security pursuant to section 205(r)(9).
``(b) Investigation of Claims Involving Certain Individuals Who Are
Not Eligible for Benefits or Are Not Eligible Providers of Services or
Suppliers.--
``(1) In general.--The Secretary shall, in the case where a
provider of services or a supplier under the program under
title XVIII, XIX, or XXI submits a claim for payment for items
or services furnished to an individual who the Secretary
determines, as a result of information provided pursuant to
such agreement, is not eligible for benefits under such
program, or where the Secretary determines, as a result of such
information, that such provider of services or supplier is not
eligible to furnish or receive payment for furnishing such
items or services, conduct an investigation with respect to the
provider of services or supplier. If the Secretary determines
further action is appropriate, the Secretary shall refer the
investigation to the Inspector General of the Department of
Health and Human Services as soon as practicable.
``(2) Assessment of implementation and effectiveness by the
oig.--The Inspector General of the Department of Health and
Human Services shall test the implementation of the provisions
of this section (including the implementation of the agreement
under section 205(r)(9)) and conduct such period assessments of
such implementation as the Inspector General determines
necessary to determine the effectiveness of such
implementation.''.
(d) Authorization of Appropriations.--There are authorized to be
appropriated such sums as may be necessary to carry out this section.
SEC. 512. USE OF TECHNOLOGY FOR REAL-TIME DATA REVIEW.
Title XVIII of the Social Security Act, as amended by this Act, is
amended by adding at the end the following new section:
``use of technology for real-time data review
``Sec. 1899A. (a) In General.--The Secretary shall establish
procedures for the use of technology (including front-end, pre-payment
technology similar to that used by hedge funds, investment funds, and
banks) to provide real-time data analysis of claims for payment under
this title to identify and investigate unusual billing or order
practices under this title that could indicate fraud or abuse.
``(b) Competitive Bidding.--The procedures established under
subsection (a) shall ensure that the implementation of such technology
is conducted through a competitive bidding process.''.
SEC. 513. DETECTION OF MEDICARE FRAUD AND ABUSE.
(a) In General.--Section 1893 of the Social Security Act (42 U.S.C.
1395ddd) is amended--
(1) in subsection (b), by adding at the end the following
new paragraph:
``(7) Implementation of fraud and abuse detection methods
under subsection (i).'';
(2) in subsection (c), by adding at the end of the flush
matter following paragraph (4), the following new sentence ``In
the case of an activity described in subsection (b)(8), an
entity shall only be eligible to enter into a contract under
the Program to carry out the activity if the entity is selected
through a competitive bidding process in accordance with
subsection (i)(3).''; and
(3) by adding at the end the following new subsection:
``(i) Detection of Medicare Fraud and Abuse.--
``(1) Establishment of system to identify counties most
vulnerable to fraud.--Not later than 6 months after the date of
enactment of this subsection, the Secretary shall establish a
system to identify the 50 counties most vulnerable to fraud
with respect to items and services furnished by providers of
services (other than hospitals and critical access hospitals)
and suppliers based on the degree of county-specific
reimbursement and analysis of payment trends under this title.
The Secretary shall designate the counties identified under the
preceding sentence as `high risk areas'.
``(2) Fraud and abuse detection.--
``(A) Initial implementation.--The Secretary shall
establish procedures for the implementation of fraud
and abuse detection methods under this title with
respect to items and services furnished by such
providers of services and suppliers in high risk areas
designated under paragraph (1) (and, beginning not
later than 18 months after the date of enactment of
this subsection, with respect to items and services
furnished by such providers of services and suppliers
in areas not so designated) including the following:
``(i) Data analysis to establish prepayment
claim edits designed to target the claims for
payment under this title for such items and
services that are most likely to be fraudulent.
``(ii) Prepayment benefit integrity reviews
for claims for payment under this title for
such items and services that are suspended as a
result of such edits.
``(B) Requirement for participation.--In no case
may a provider of services or supplier who does not
meet the requirements under subparagraph (A)
participate in the program under this title.
``(C) Expanded implementation.--Not later than 24
months after the date of enactment of this subsection,
the Secretary shall establish procedures for the
implementation of such fraud and abuse detection
methods under this title with respect to items and
services furnished by all providers of services and
suppliers, including those not in high risk areas
designated under paragraph (1).
``(3) Competitive bidding.--In selecting entities to carry
out this subsection, the Secretary shall use a competitive
bidding process.
``(4) Report to congress.--The Secretary shall submit to
Congress an annual report on the effectiveness of activities
conducted under this subsection, including a description of any
savings to the program under this title as a result of such
activities and the overall administrative cost of such
activities and a determination as to the amount of funding
needed to carry out this subsection for subsequent fiscal
years, together with recommendations for such legislation and
administrative action as the Secretary determines
appropriate.''.
(b) Authorization of Appropriations.--To carry out the amendments
made by this section, there are authorized to be appropriated--
(1) such sums as may be necessary, not to exceed
$50,000,000, for each of fiscal years 2010 through 2014; and
(2) such sums as may be necessary, not to exceed an amount
the Secretary determines appropriate in the most recent report
submitted to Congress under section 1893(j)(4) of the Social
Security Act, as added by subsection (a), for each subsequent
fiscal year.
SEC. 514. EDITS ON 855S MEDICARE ENROLLMENT APPLICATION AND EXEMPTION
OF PHARMACISTS FROM SURETY BOND REQUIREMENT.
(a) Edits on 855S Medicare Enrollment Application.--Section 1834(a)
of the Social Security Act (42 U.S.C. 1395m(a)) is amended by adding at
the end the following new paragraphs:
``(22) Confirmation with national supplier clearinghouse
prior to payment.--
``(A) In general.--Not later than 1 year after the
date of enactment of this paragraph, the Secretary
shall establish procedures to require carriers, prior
to paying a claim for payment for durable medical
equipment, prosthetics, orthotics, and supplies under
this title, to confirm with the National Supplier
Clearinghouse--
``(i) that the National Provider Identifier
of the physician or practitioner prescribing or
ordering the item or service is valid and
active;
``(ii) that the Medicare identification
number of the supplier is valid and active; and
``(iii) that the item or service for which
the claim for payment is submitted was properly
identified on the CMS-855S Medicare enrollment
application.
``(B) Online database for implementation.--Not
later than 18 months after the date of enactment of
this paragraph, the Secretary shall establish an online
database similar to that used for the National Provider
Identifier to enable providers of services,
accreditors, carriers, and the National Supplier
Clearinghouse to view information on specialties and
the types of items and services each supplier has
indicated on the CMS-855S Medicare enrollment
application submitted by the supplier.
``(C) Notification of claim denial and
resubmission.--In the case where a claim for payment
for durable medical equipment, prosthetics, orthotics,
and supplies under this title is denied because the
item or service furnished does not correctly match up
with the information on file with the National Supplier
Clearinghouse--
``(i) the National Supplier Clearinghouse
shall--
``(I) provide the supplier written
notification of the reason for such
denial; and
``(II) allow the supplier 60 days
to provide the National Supplier
Clearinghouse with appropriate
certification, licensing, or
accreditation; and
``(ii) the Secretary shall waive applicable
requirements relating to the time frame for the
submission of claims for payment under this
title in order to permit the resubmission of
such claim if payment of such claim would
otherwise be allowed under this title.
``(D) Improvements to medicare enrollment
application.--The Secretary shall establish procedures
under which a prospective supplier of durable medical
equipment, prosthetics, orthotics, and supplies under
this title shall certify, as part of the CMS-855S
Medicare enrollment application submitted by such
supplier, under penalty of perjury, that the
information provided by the supplier on such
application is accurate to the best of the supplier's
knowledge.
``(23) Termination of participation for submission of
fraudulent claims.--If the Secretary finds that a supplier of
durable medical equipment, prosthetics, orthotics, and supplies
under this title has submitted fraudulent claims for payment
under this title, the Secretary shall terminate the suppliers
participation under this title. Not later than 1 year after the
date of enactment of this paragraph, the Secretary shall
establish a process under which a supplier whose participation
has been terminated under the preceding sentence may appeal
such termination and such appeal shall be resolved not later
than 60 days after the date on which the appeal was made.''.
(b) Exemption of Pharmacists From Surety Bond Requirement.--Section
1834(a)(16) of the Social Security Act (42 U.S.C. 1395m(a)(16)) is
amended, in the second sentence, by inserting ``and shall waive such
requirement in the case of a pharmacist'' before the period at the end.
SEC. 515. GAO STUDY AND REPORT ON EFFECTIVENESS OF SURETY BOND
REQUIREMENTS FOR SUPPLIERS OF DURABLE MEDICAL EQUIPMENT
IN COMBATING FRAUD.
(a) Study.--The Comptroller General of the United States shall
conduct a study on the effectiveness of the surety bond requirement
under section 1834(a)(16) of the Social Security Act (42 U.S.C.
1395m(a)(16)) in combating fraud.
(b) Report.--Not later than 1 year after the date of enactment of
this Act, the Comptroller General shall submit to Congress a report
containing the results of the study conducted under subsection (a),
together with recommendations for such legislation and administrative
action as the Comptroller General determines appropriate.
TITLE VI--ENDING LAWSUIT ABUSE
SEC. 601. STATE GRANTS TO CREATE HEALTH COURT SOLUTIONS.
Part P of title III of the Public Health Service Act (42 U.S.C.
280g et seq.) is amended by adding at the end the following:
``SEC. 399R. STATE GRANTS TO CREATE HEALTH COURT SOLUTIONS.
``(a) In General.--The Secretary may award grants to States for the
development, implementation, and evaluation of alternatives to current
tort litigation that comply with this section, for the resolution of
disputes concerning injuries allegedly caused by health care providers
or health care organizations.
``(b) Conditions for Demonstration Grants.--
``(1) Application.--To be eligible to receive a grant under
this section, a State shall submit to the Secretary an
application at such time, in such manner, and containing such
information as may be required by the Secretary. A grant shall
be awarded under this section on such terms and conditions as
the Secretary determines appropriate.
``(2) State requirements.--To be eligible to receive a
grant under this section, a State shall--
``(A) develop and implement an alternative to
current tort litigation for resolving disputes over
injuries allegedly caused by health care providers or
health care organizations based on one or more of the
models described in subsection (d); and
``(B) implement policies that provide for a
reduction in health care errors through the collection
and analysis by organizations that engage in voluntary
efforts to improve patient safety and the quality of
health care delivery, of patient safety data related to
disputes resolved under the alternatives under
subparagraph (A).
``(3) Demonstration of effectiveness.--To be eligible to
receive a grant under subsection (a), a State shall demonstrate
how the proposed alternative to be implemented under paragraph
(2)(A) will--
``(A) make the medical liability system of the
State more reliable through the prompt and fair
resolution of disputes;
``(B) encourage the early disclosure of health care
errors;
``(C) enhance patient safety; and
``(D) maintain access to medical liability
insurance.
``(4) Sources of compensation.--To be eligible to receive a
grant under subsection (a), a State shall identify the sources
from, and methods by which, compensation would be paid for
medical liability claims resolved under the proposed
alternative to current tort litigation implemented under
paragraph (2)(A). Funding methods shall, to the extent
practicable, provide financial incentives for activities that
improve patient safety.
``(5) Scope.--
``(A) In general.--To be eligible to receive a
grant under subsection (a), a State shall utilize the
proposed alternative identified under paragraph (2)(A)
for the resolution of all types of disputes concerning
injuries allegedly caused by health care providers or
health care organizations.
``(B) Current state efforts to establish
alternative to tort litigation.--
``(i) In general.--Nothing in this section
shall be construed to limit the efforts that
any State has made prior to the date of
enactment of this section to establish any
alternative to tort litigation.
``(ii) Alternative for practice areas or
injuries.--In the case of a State that has
established an alternative to tort litigation
for a certain area of health care practice or a
category of injuries, the alternative selected
as provided for in this section shall
supplement not replace or invalidate such
established alternative unless the State
intends otherwise.
``(6) Notification of patients.--To be eligible to receive
a grant under subsection (a), the State shall demonstrate how
patients will be notified when they are receiving health care
services that fall within the scope of the alternative selected
under this section by the State to current tort litigation.
``(c) Representation by Counsel.--A State that receives a grant
under this section may not preclude any party to a dispute that falls
within the jurisdiction of the alternative to current tort litigation
that is implemented under the grant from obtaining legal representation
at any point during the consideration of the claim under such
alternative.
``(d) Models.--
``(1) In general.--The models in this section are the
following:
``(2) Expert panel review and early offer guidelines.--
``(A) In general.--A State may use amounts received
under a grant under this section to develop and
implement an expert panel and early offer review system
that meets the requirements of this paragraph.
``(B) Establishment of panel.--Under the system
under this paragraph, the State shall establish an
expert panel to review any disputes concerning injuries
allegedly caused by health care providers or health
care organizations according to the guidelines
described in this paragraph.
``(C) Composition.--
``(i) In general.--An expert panel under
this paragraph shall be composed of 3 medical
experts (either physicians or health care
professionals) and 3 attorneys to be appointed
by the head of the State agency responsible for
health.
``(ii) Licensure and expertise.--Each
physician or health care professional appointed
to an expert panel under clause (i) shall--
``(I) be appropriately credentialed
or licensed in the State in which the
dispute takes place to deliver health
care services; and
``(II) typically treat the
condition, make the diagnosis, or
provide the type of treatment that is
under review.
``(iii) Independence.--
``(I) In general.--Subject to
subclause (II), each individual
appointed to an expert panel under this
paragraph shall--
``(aa) not have a material
familial, financial, or
professional relationship with
a party involved in the dispute
reviewed by the panel; and
``(bb) not otherwise have a
conflict of interest with such
a party.
``(II) Exception.--Nothing in
subclause (I) shall be construed to
prohibit an individual who has staff
privileges at an institution where the
treatment involved in the dispute was
provided from serving as a member of an
expert panel merely on the basis of
such affiliation, if the affiliation is
disclosed to the parties and neither
party objects.
``(iv) Practicing health care professional
in same field.--
``(I) In general.--In a dispute
before an expert panel that involves
treatment, or the provision of items or
services--
``(aa) by a physician, the
medical experts on the expert
panel shall be practicing
physicians (allopathic or
osteopathic) of the same or
similar specialty as a
physician who typically treats
the condition, makes the
diagnosis, or provides the type
of treatment under review; or
``(bb) by a health care
professional other than a
physician, at least two medical
experts on the expert panel
shall be practicing physicians
(allopathic or osteopathic) of
the same or similar specialty
as the health care professional
who typically treats the
condition, makes the diagnosis,
or provides the type of
treatment under review, and, if
determined appropriate by the
State agency, the third medical
expert shall be a practicing
health care professional (other
than such a physician) of such
a same or similar specialty.
``(II) Practicing defined.--In this
paragraph, the term `practicing' means,
with respect to an individual who is a
physician or other health care
professional, that the individual
provides health care services to
individual patients on average at least
2 days a week.
``(v) Pediatric expertise.--In the case of
dispute relating to a child, at least 1 medical
expert on the expert panel shall have expertise
described in clause (iv)(I) in pediatrics.
``(D) Determination.--After a review, an expert
panel shall make a determination as to the liability of
the parties involved and compensation based on a
schedule of compensation that is developed by the
panel. Such a schedule shall at least include--
``(i) payment for the net economic loss
incurred by the patient, on a periodic basis,
reduced by any payments received by the patient
under--
``(I) any health or accident
insurance;
``(II) any wage or salary
continuation plan; or
``(III) any disability income
insurance;
``(ii) payment for the non-economic damages
incurred by the patient, if appropriate for the
injury, based on a defined payment schedule
developed by the State, in consultation with
relevant experts and with the Secretary;
``(iii) reasonable attorney's fees; and
``(iv) regular updates of the schedule
under clause (ii) as necessary.
``(E) Acceptance.--If the parties to a dispute who
come before an expert panel under this paragraph accept
the determination of the expert panel concerning
liability and compensation, such compensation shall be
paid to the claimant and the claimant shall agree to
forgo any further action against the health care
providers or health care organizations involved.
``(F) Failure to accept.--If any party decides not
to accept the expert panel's determination under this
paragraph, the State may choose whether to allow the
panel to review the determination de novo, with
deference, or to provide an opportunity for parties to
reject the determination of the panel.
``(G) Review by state court after exhaustion of
administrative remedies.--
``(i) Right to file.--If the State elects
not to permit the expert panel under this
paragraph to conduct its own reviews of
determinations, or if the State elects to
permit such reviews but a party is not
satisfied with the final decision of the panel
after such a review, the party shall have the
right to file a claim relating to the injury
involved in a State court of competent
jurisdiction.
``(ii) Forfeit of awards.--Any party filing
an action in a State court under clause (i)
shall forfeit any compensation award made under
subparagraph (C).
``(iii) Admissibility.--The determinations
of the expert panel pursuant to a review under
subparagraph (C) shall be admissible into
evidence in any State court proceeding under
this subparagraph.
``(3) Administrative health care tribunals.--
``(A) In general.--A State may use amounts received
under a grant under this section to develop and
implement an administrative health care tribunal system
under which the parties involved shall have the right
to request a hearing to review any dispute concerning
injuries allegedly caused by health care providers or
health care organizations before an administrative
health care tribunal established by the State involved.
``(B) Requirements.--In establishing an
administrative health care tribunal under this
paragraph, a State shall--
``(i) ensure that such tribunals are
presided over by special judges with health
care expertise who meet applicable State
standards for judges and who agree to preside
over such court voluntarily;
``(ii) provide authority to such judges to
make binding rulings, rendered in written
decisions, on standards of care, causation,
compensation, and related issues with reliance
on independent expert witnesses commissioned by
the tribunal;
``(iii) establish a legal standard for the
tribunal that shall be the same as the standard
that would apply in the State court of
competent jurisdiction which would otherwise
handle the claim; and
``(iv) provide for an appeals process to
allow for review of decisions by State courts.
``(C) Determination.--After a tribunal conducts a
review under this paragraph, the tribunal shall make a
determination as to the liability of the parties
involved and the amount of compensation that should be
paid based on a schedule of compensation developed by
the tribunal. Such a schedule shall at a minimum
include--
``(i) payment for the net economic loss
incurred by the patient, on a periodic basis,
reduced by any payments received by the patient
under--
``(I) any health or accident
insurance;
``(II) any wage or salary
continuation plan; or
``(III) any disability income
insurance;
``(ii) payment for the non-economic damages
incurred by the patient, if appropriate for the
injury, based on a defined payment schedule
developed by the State in consultation with
relevant experts and with the Secretary;
``(iii) reasonable attorney's fees; and
``(iv) regular updates of the schedule
under clause (ii) as necessary.
``(D) Review by state court after exhaustion of
administrative remedies.--
``(i) Right to file.--Nothing in this
paragraph shall be construed to prohibit any
individual who is not satisfied with the
determinations of a tribunal under this
paragraph, from filing a claim for the injury
involved in a State court of competent
jurisdiction.
``(ii) Forfeit of award.--Any party filing
an action in a State court under clause (i)
shall forfeit any compensation award made under
subparagraph (C).
``(iii) Admissibility.--The determinations
of the tribunal under subparagraph (C) shall be
admissible into evidence in any State court
proceeding under this subparagraph.
``(4) Expert panel review and administrative health care
tribunal combination model.--
``(A) In general.--A State may use amounts received
under a grant under this section to develop and
implement an expert panel review and administrative
health care tribunal combination system to review any
dispute concerning injuries allegedly caused by health
care providers or health care organizations. Under such
system, a dispute concerning injuries allegedly caused
by health care providers or health care organizations
shall proceed through the procedures described in this
subparagraph prior to the submission of such dispute to
a State court.
``(B) General procedure.--
``(i) Establishment of expert panel.--Prior
to submitting any dispute described in
subparagraph (A) to an administrative health
care tribunal under the system established
under this paragraph, the State shall establish
an expert panel (in accordance with
subparagraph (C)) to review the allegations
involved in such dispute.
``(ii) Referral to tribunal.--If either
party to a dispute described in clause (i)
fails to accept the determination of the expert
panel, the dispute shall then be referred to an
administrative health care tribunal (in
accordance with subparagraph (D).
``(C) Expert review panel.--
``(i) In general.--The provisions of
paragraph (2) shall apply with respect to the
establishment and operation of an expert review
panel under this subparagraph, except that the
subparagraphs (F) and (G) of such paragraph
shall not apply.
``(ii) Failure to accept determination of
panel.--If any party to a dispute before an
expert panel under this subparagraph refuses to
accept the panel's determination, the dispute
shall be referred to an administrative health
care tribunal under subparagraph (D).
``(D) Administrative health care tribunals.--
``(i) In general.--Upon the failure of any
party to accept the determination of an expert
panel under subparagraph (C), the parties shall
request a hearing concerning the liability or
compensation involved by an administrative
health care tribunal established by the State
involved under this subparagraph.
``(ii) Requirements.--The provisions of
paragraph (3) shall apply with respect to the
establishment and operation of an
administrative health care tribunal under this
subparagraph.
``(iii) Forfeit of awards.--Any party
proceeding to the second step-administrative
health care tribunal-under this model shall
forfeit any compensation awarded by the expert
panel.
``(iv) Admissibility.--The determinations
of the expert panel under subparagraph (C)
shall be admissible into evidence in any
administrative health care tribunal proceeding
under this subparagraph.
``(E) Right to file.--Nothing in this paragraph
shall be construed to prohibit any individual who is
not satisfied with the determination of the tribunal
(after having proceeded through both the expert panel
under subparagraph (C) and the tribunal under
subparagraph (D)) from filing a claim for the injury
involved in a State court of competent jurisdiction.
``(F) Admissibility.--The determinations of both
the expert panel and the tribunal under this paragraph
shall be admissible into evidence in any State court
proceeding under this paragraph.
``(G) Forfeit of awards.--Any party filing an
action in State court under subparagraph (E) shall
forfeit any compensation award made by both the expert
panel and the administrative health care tribunal under
this paragraph.
``(e) Definitions.--In this section:
``(1) Current tort litigation.--The term `current tort
litigation' means the tort litigation system existing in the
State on the date on which the State submits an application
under subsection (b)(1), for the resolution of disputes
concerning injuries allegedly caused by health care providers
or health care organizations.
``(2) Health care organization.--The term `health care
organization' means any individual or entity that is obligated
to provide, pay for, or administer health benefits under any
health plan.
``(3) Net economic loss.--The term `net economic loss'
means--
``(A) reasonable expenses incurred for products,
services and accommodations needed for health care,
training and other remedial treatment and care of an
injured individual;
``(B) reasonable and appropriate expenses for
rehabilitation treatment and occupational training;
``(C) 100 percent of the loss of income from work
that an injured individual would have performed if not
injured, reduced by any income from substitute work
actually performed; and
``(D) reasonable expenses incurred in obtaining
ordinary and necessary services to replace services an
injured individual would have performed for the benefit
of the individual or the family of such individual if
the individual had not been injured.
``(4) Non-economic damages.--The term `non-economic
damages' means losses for physical and emotional pain,
suffering, inconvenience, physical impairment, mental anguish,
disfigurement, loss of enjoyment of life, loss of society and
companionship, loss of consortium (other than loss of domestic
service), injury to reputation, and all other non-pecuniary
losses of any kind or nature, to the extent permitted under
State law.
``(f) Funding.--
``(1) One-time increase in medicaid payment.--In the case
of a State awarded a grant to carry out this section, the total
amount of the Federal payment determined for the State under
section 1913 of the Social Security Act (as amended by section
401) for fiscal year 2011 (in addition to the any increase
applicable for that fiscal year under section 203(b) but
determined without regard to any such increase) shall be
increased by an amount equal to 1 percent of the total amount
of payments made to the State for fiscal year 2010 under
section 1903(a) of the Social Security Act (42 U.S.C. 1396b(a))
for purposes of carrying out a grant awarded under this
section. Amounts paid to a State pursuant to this subsection
shall remain available until expended.
``(2) Authorization of appropriations.--There are
authorized to be appropriated for any fiscal year such sums as
may be necessary for purposes of making payments to States
pursuant to paragraph (1).''.
TITLE VII--PROMOTING HEALTH INFORMATION TECHNOLOGY
Subtitle A--Assisting the Development of Health Information Technology
SEC. 701. PURPOSE.
It is the purpose of this subtitle to promote the utilization of
health record banking by improving the coordination of health
information through an infrastructure for the secure and authorized
exchange and use of healthcare information.
SEC. 702. HEALTH RECORD BANKING.
(a) Establishment.--Not later than 1 year after the date of
enactment of this Act, the Secretary of Health and Human Services shall
promulgate regulations to provide for the certification and auditing of
the banking of electronic medical records.
(b) General Rights.--An individual who has a health record
contained in a health record bank shall maintain ownership over the
health record and shall have the right to review the contents of the
record.
SEC. 703. APPLICATION OF FEDERAL AND STATE SECURITY AND CONFIDENTIALITY
STANDARDS.
(a) In General.--Current Federal security and confidentiality
standards and State security and confidentiality laws shall apply to
this subtitle until such time as Congress acts to amend such standards.
(b) Definitions.--In this section:
(1) Current federal security and confidentiality
standards.--The term ``current Federal security and
confidentiality standards'' means the Federal privacy standards
established pursuant to section 264(c) of the Health Insurance
Portability and Accountability Act of 1996 (42 U.S.C. 1320d-2
note) and security standards established under section 1173(d)
of the Social Security Act (42 U.S.C. 1320d-2(d)).
(2) State security and confidentiality laws.--The term
``State security and confidentiality laws'' means State laws
and regulations relating to the privacy and confidentiality of
individually identifiable health information or to the security
of such information.
(3) State.--The term ``State'' has the meaning given such
term for purposes of title XI of the Social Security Act, as
provided under section 1101(a) of such Act (42 U.S.C. 1301(a)).
Subtitle B--Removing Barriers to the Use of Health Information
Technology to Better Coordinate Health Care
SEC. 711. SAFE HARBORS TO ANTIKICKBACK CIVIL PENALTIES AND CRIMINAL
PENALTIES FOR PROVISION OF HEALTH INFORMATION TECHNOLOGY
AND TRAINING SERVICES.
(a) For Civil Penalties.--Section 1128A of the Social Security Act
(42 U.S.C. 1320a-7a) is amended--
(1) in subsection (b), by adding at the end the following
new paragraph:
``(4) For purposes of this subsection, inducements to reduce or
limit services described in paragraph (1) shall not include the
practical or other advantages resulting from health information
technology or related installation, maintenance, support, or training
services.''; and
(2) in subsection (i), by adding at the end the following
new paragraph:
``(8) The term `health information technology' means
hardware, software, license, right, intellectual property,
equipment, or other information technology (including new
versions, upgrades, and connectivity) designed or provided
primarily for the electronic creation, maintenance, or exchange
of health information to better coordinate care or improve
health care quality, efficiency, or research.''.
(b) For Criminal Penalties.--Section 1128B of such Act (42 U.S.C.
1320a-7b) is amended--
(1) in subsection (b)(3)--
(A) in subparagraph (G), by striking ``and'' at the
end;
(B) in the subparagraph (H) added by section 237(d)
of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (Public Law 108-173; 117
Stat. 2213)--
(i) by moving such subparagraph 2 ems to
the left; and
(ii) by striking the period at the end and
inserting a semicolon;
(C) in the subparagraph (H) added by section 431(a)
of such Act (117 Stat. 2287)--
(i) by redesignating such subparagraph as
subparagraph (I);
(ii) by moving such subparagraph 2 ems to
the left; and
(iii) by striking the period at the end and
inserting ``; and''; and
(D) by adding at the end the following new
subparagraph:
``(J) any nonmonetary remuneration (in the form of health
information technology, as defined in section 1128A(i)(8), or
related installation, maintenance, support or training
services) made to a person by a specified entity (as defined in
subsection (g)) if--
``(i) the provision of such remuneration is without
an agreement between the parties or legal condition
that--
``(I) limits or restricts the use of the
health information technology to services
provided by the physician to individuals
receiving services at the specified entity;
``(II) limits or restricts the use of the
health information technology in conjunction
with other health information technology; or
``(III) conditions the provision of such
remuneration on the referral of patients or
business to the specified entity;
``(ii) such remuneration is arranged for in a
written agreement that is signed by the parties
involved (or their representatives) and that specifies
the remuneration solicited or received (or offered or
paid) and states that the provision of such
remuneration is made for the primary purpose of better
coordination of care or improvement of health quality,
efficiency, or research; and
``(iii) the specified entity providing the
remuneration (or a representative of such entity) has
not taken any action to disable any basic feature of
any hardware or software component of such remuneration
that would permit interoperability.''; and
(2) by adding at the end the following new subsection:
``(g) Specified Entity Defined.--For purposes of subsection
(b)(3)(J), the term `specified entity' means an entity that is a
hospital, group practice, prescription drug plan sponsor, a Medicare
Advantage organization, or any other such entity specified by the
Secretary, considering the goals and objectives of this section, as
well as the goals to better coordinate the delivery of health care and
to promote the adoption and use of health information technology.''.
(c) Effective Date and Effect on State Laws.--
(1) Effective date.--The amendments made by subsections (a)
and (b) shall take effect on the date that is 120 days after
the date of the enactment of this Act.
(2) Preemption of state laws.--No State (as defined in
section 1101(a) of the Social Security Act (42 U.S.C. 1301(a))
for purposes of title XI of such Act) shall have in effect a
State law that imposes a criminal or civil penalty for a
transaction described in section 1128A(b)(4) or section
1128B(b)(3)(J) of such Act, as added by subsections (a)(1) and
(b), respectively, if the conditions described in the
respective provision, with respect to such transaction, are
met.
(d) Study and Report To Assess Effect of Safe Harbors on Health
System.--
(1) In general.--The Secretary of Health and Human Services
shall conduct a study to determine the impact of each of the
safe harbors described in paragraph (3). In particular, the
study shall examine the following:
(A) The effectiveness of each safe harbor in
increasing the adoption of health information
technology.
(B) The types of health information technology
provided under each safe harbor.
(C) The extent to which the financial or other
business relationships between providers under each
safe harbor have changed as a result of the safe harbor
in a way that adversely affects or benefits the health
care system or choices available to consumers.
(D) The impact of the adoption of health
information technology on health care quality, cost,
and access under each safe harbor.
(2) Report.--Not later than 3 years after the effective
date described in subsection (c)(1), the Secretary of Health
and Human Services shall submit to Congress a report on the
study under paragraph (1).
(3) Safe harbors described.--For purposes of paragraphs (1)
and (2), the safe harbors described in this paragraph are--
(A) the safe harbor under section 1128A(b)(4) of
such Act (42 U.S.C. 1320a-7a(b)(4)), as added by
subsection (a)(1); and
(B) the safe harbor under section 1128B(b)(3)(J) of
such Act (42 U.S.C. 1320a-7b(b)(3)(J)), as added by
subsection (b).
SEC. 712. EXCEPTION TO LIMITATION ON CERTAIN PHYSICIAN REFERRALS (UNDER
STARK) FOR PROVISION OF HEALTH INFORMATION TECHNOLOGY AND
TRAINING SERVICES TO HEALTH CARE PROFESSIONALS.
(a) In General.--Section 1877(b) of the Social Security Act (42
U.S.C. 1395nn(b)) is amended by adding at the end the following new
paragraph:
``(6) Information technology and training services.--
``(A) In general.--Any nonmonetary remuneration (in
the form of health information technology or related
installation, maintenance, support or training
services) made by a specified entity to a physician
if--
``(i) the provision of such remuneration is
without an agreement between the parties or
legal condition that--
``(I) limits or restricts the use
of the health information technology to
services provided by the physician to
individuals receiving services at the
specified entity;
``(II) limits or restricts the use
of the health information technology in
conjunction with other health
information technology; or
``(III) conditions the provision of
such remuneration on the referral of
patients or business to the specified
entity;
``(ii) such remuneration is arranged for in
a written agreement that is signed by the
parties involved (or their representatives) and
that specifies the remuneration made and states
that the provision of such remuneration is made
for the primary purpose of better coordination
of care or improvement of health quality,
efficiency, or research; and
``(iii) the specified entity (or a
representative of such entity) has not taken
any action to disable any basic feature of any
hardware or software component of such
remuneration that would permit
interoperability.
``(B) Health information technology defined.--For
purposes of this paragraph, the term `health
information technology' means hardware, software,
license, right, intellectual property, equipment, or
other information technology (including new versions,
upgrades, and connectivity) designed or provided
primarily for the electronic creation, maintenance, or
exchange of health information to better coordinate
care or improve health care quality, efficiency, or
research.
``(C) Specified entity defined.--For purposes of
this paragraph, the term `specified entity' means an
entity that is a hospital, group practice, prescription
drug plan sponsor, a Medicare Advantage organization,
or any other such entity specified by the Secretary,
considering the goals and objectives of this section,
as well as the goals to better coordinate the delivery
of health care and to promote the adoption and use of
health information technology.''.
(b) Effective Date; Effect on State Laws.--
(1) Effective date.--The amendment made by subsection (a)
shall take effect on the date that is 120 days after the date
of the enactment of this Act.
(2) Preemption of state laws.--No State (as defined in
section 1101(a) of the Social Security Act (42 U.S.C. 1301(a))
for purposes of title XI of such Act) shall have in effect a
State law that imposes a criminal or civil penalty for a
transaction described in section 1877(b)(6) of such Act, as
added by subsection (a), if the conditions described in such
section, with respect to such transaction, are met.
(c) Study and Report To Assess Effect of Exception on Health
System.--
(1) In general.--The Secretary of Health and Human Services
shall conduct a study to determine the impact of the exception
under section 1877(b)(6) of such Act (42 U.S.C. 1395nn(b)(6)),
as added by subsection (a). In particular, the study shall
examine the following:
(A) The effectiveness of the exception in
increasing the adoption of health information
technology.
(B) The types of health information technology
provided under the exception.
(C) The extent to which the financial or other
business relationships between providers under the
exception have changed as a result of the exception in
a way that adversely affects or benefits the health
care system or choices available to consumers.
(D) The impact of the adoption of health
information technology on health care quality, cost,
and access under the exception.
(2) Report.--Not later than 3 years after the effective
date described in subsection (b)(1), the Secretary of Health
and Human Services shall submit to Congress a report on the
study under paragraph (1).
SEC. 713. RULES OF CONSTRUCTION REGARDING USE OF CONSORTIA.
(a) Application to Safe Harbor From Criminal Penalties.--Section
1128B(b)(3) of the Social Security Act (42 U.S.C. 1320a-7b(b)(3)) is
amended by adding after and below subparagraph (J), as added by section
711(b)(1), the following: ``For purposes of subparagraph (J), nothing
in such subparagraph shall be construed as preventing a specified
entity, consistent with the specific requirements of such subparagraph,
from forming a consortium composed of health care providers, payers,
employers, and other interested entities to collectively purchase and
donate health information technology, or from offering health care
providers a choice of health information technology products in order
to take into account the varying needs of such providers receiving such
products.''.
(b) Application to Stark Exception.--Paragraph (6) of section
1877(b) of the Social Security Act (42 U.S.C. 1395nn(b)), as added by
section 712(a), is amended by adding at the end the following new
subparagraph:
``(D) Rule of construction.--For purposes of
subparagraph (A), nothing in such subparagraph shall be
construed as preventing a specified entity, consistent
with the specific requirements of such subparagraph,
from--
``(i) forming a consortium composed of
health care providers, payers, employers, and
other interested entities to collectively
purchase and donate health information
technology; or
``(ii) offering health care providers a
choice of health information technology
products in order to take into account the
varying needs of such providers receiving such
products.''.
TITLE VIII--HEALTH CARE SERVICES COMMISSION
Subtitle A--Establishment and General Duties
SEC. 801. ESTABLISHMENT.
(a) In General.--There is hereby established a Health Care Services
Commission (in this title, referred to as the ``Commission'') to be
composed of 5 commissioners (in this title referred to as the
``Commissioners'') to be appointed by the President by and with the
advice and consent of the Senate. Not more than 3 of such Commissioners
shall be members of the same political party, and in making
appointments members of different political parties shall be appointed
alternately as nearly as may be practicable. No Commissioner shall
engage in any other business, vocation, or employment than that of
serving as Commissioner. Each Commissioner shall hold office for a term
of 5 years and until a successor is appointed and has qualified, except
that--
(1) such Commissioner shall not so continue to serve beyond
the expiration of the next session of Congress subsequent to
the expiration of said fixed term of office;
(2) any Commissioner appointed to fill a vacancy occurring
prior to the expiration of the term for which a predecessor was
appointed shall be appointed for the remainder of such term;
and
(3) the terms of office of the Commissioners first taking
office after the date of the enactment of this Act shall expire
as designated by the President at the time of nomination, 1 at
the end of 1 year, 1 at the end of 2 years, 1 at the end of 3
years, 1 at the end of 4 years, and 1 at the end of 5 years,
after the date of the enactment of this Act.
(b) Purpose.--The purpose of the Commission is to enhance the
quality, appropriateness, and effectiveness of health care services,
and access to such services, through the establishment of a broad base
of scientific research and through the promotion of improvements in
clinical practice and in the organization, financing, and delivery of
health care services.
(c) Appointment of Chairman.--The President shall, from among the
Commissioners appointed under subsection (a), designate an individual
to serve as the Chairman of the Commission.
SEC. 802. GENERAL AUTHORITIES AND DUTIES.
(a) In General.--In carrying out section 801(b), the Commissioners
shall conduct and support research, demonstration projects,
evaluations, training, guideline development, and the dissemination of
information, on health care services and on systems for the delivery of
such services, including activities with respect to--
(1) the effectiveness, efficiency, and quality of health
care services;
(2) the outcomes of health care services and procedures;
(3) clinical practice, including primary care and practice-
oriented research;
(4) health care technologies, facilities, and equipment;
(5) health care costs, productivity, and market forces;
(6) health promotion and disease prevention;
(7) health statistics and epidemiology; and
(8) medical liability.
(b) Requirements With Respect to Rural Areas and Underserved
Populations.--In carrying out subsection (a), the Commissioners shall
undertake and support research, demonstration projects, and evaluations
with respect to--
(1) the delivery of health care services in rural areas
(including frontier areas); and
(2) the health of low-income groups, minority groups, and
the elderly.
SEC. 803. DISSEMINATION.
(a) In General.--The Commissioners shall--
(1) promptly publish, make available, and otherwise
disseminate, in a form understandable and on as broad a basis
as practicable so as to maximize its use, the results of
research, demonstration projects, and evaluations conducted or
supported under this title and the guidelines, standards, and
review criteria developed under this title;
(2) promptly make available to the public data developed in
such research, demonstration projects, and evaluations; and
(3) as appropriate, provide technical assistance to State
and local government and health agencies and conduct liaison
activities to such agencies to foster dissemination.
(b) Prohibition Against Restrictions.--Except as provided in
subsection (c), the Commissioners may not restrict the publication or
dissemination of data from, or the results of, projects conducted or
supported under this title.
(c) Limitation on Use of Certain Information.--No information, if
an establishment or person supplying the information or described in it
is identifiable, obtained in the course of activities undertaken or
supported under this title may be used for any purpose other than the
purpose for which it was supplied unless such establishment or person
has consented (as determined under regulations of the Secretary) to its
use for such other purpose. Such information may not be published or
released in other form if the person who supplied the information or
who is described in it is identifiable unless such person has consented
(as determined under regulations of the Secretary) to its publication
or release in other form.
(d) Certain Interagency Agreement.--The Commissioners and the
Director of the National Library of Medicine shall enter into an
agreement providing for the implementation of subsection (a)(1).
Subtitle B--Forum for Quality and Effectiveness in Health Care
SEC. 811. ESTABLISHMENT OF OFFICE.
There is established within the Commission an office to be known as
the Office of the Forum for Quality and Effectiveness in Health Care.
The office shall be headed by a director (referred to in this title as
the ``Director'') who shall be appointed by the Commissioners.
SEC. 812. MEMBERSHIP.
(a) In General.--The Office of the Forum for Quality and
Effectiveness in Health Care shall be composed of 15 individuals
nominated by private sector health care organizations and appointed by
the Commission and shall include representation from at least the
following:
(1) Health insurance industry.
(2) Health care provider groups.
(3) Non-profit organizations.
(4) Rural health organizations.
(b) Terms.--
(1) In general.--Except as provided in paragraph (2),
members of the Office of the Forum for Quality and
Effectiveness in Health Care shall serve for a term of 5 years.
(2) Staggered rotation.--Of the members first appointed to
the Office of the Forum for Quality and Effectiveness in Health
Care, the Commission shall appoint 5 members to serve for a
term of 2 years, 5 members to serve for a term of 3 years, and
5 members to serve for a term of 4 years.
(c) Treatment of Other Employment.--Each member of the Office of
the Forum for Quality and Effectiveness in Health Care shall serve the
Office independently from any other position of employment.
SEC. 813. DUTIES.
(a) Establishment of Forum Program.--The Commissioners, acting
through the Director, shall establish a program to be known as the
Forum for Quality and Effectiveness in Health Care. For the purpose of
promoting transparency in price, quality, appropriateness, and
effectiveness of health care, the Director, using the process set forth
in section 814, shall arrange for the development and periodic review
and updating of standards of quality, performance measures, and medical
review criteria through which health care providers and other
appropriate entities may assess or review the provision of health care
and assure the quality of such care.
(b) Certain Requirements.--Guidelines, standards, performance
measures, and review criteria under subsection (a) shall--
(1) be based on the best available research and
professional judgment regarding the effectiveness and
appropriateness of health care services and procedures; and
(2) be presented in formats appropriate for use by
physicians, health care practitioners, providers, medical
educators, and medical review organizations and in formats
appropriate for use by consumers of health care.
(c) Authority for Contracts.--In carrying out this subtitle, the
Director may enter into contracts with public or nonprofit private
entities.
(d) Public Disclosure of Recommendations.--For each fiscal year
beginning with 2010, the Director shall make publicly available the
following:
(1) Quarterly reports for public comment that include
proposed recommendations for guidelines, standards, performance
measures, and review criteria under subsection (a) and any
updates to such guidelines, standards, performance measures,
and review criteria.
(2) After consideration of such comments, a final report
that contains final recommendations for such guidelines,
standards, performance measures, review criteria, and updates.
(e) Date Certain for Initial Guidelines and Standards.--The
Commissioners, by not later than January 1, 2012, shall assure the
development of an initial set of guidelines, standards, performance
measures, and review criteria under subsection (a).
SEC. 814. ADOPTION AND ENFORCEMENT OF GUIDELINES AND STANDARDS.
(a) Adoption of Recommendations of Forum for Quality and
Effectiveness in Health Care.--For each fiscal year, the Commissioners
shall adopt the recommendations made for such year in the final report
under subsection (d)(2) of section 813 for guidelines, standards,
performance measures, and review criteria described in subsection (a)
of such section.
(b) Enforcement Authority.--The Commissioners, in consultation with
the Secretary of Health and Human Services, have the authority to make
recommendations to the Secretary to enforce compliance of health care
providers with the guidelines, standards, performance measures, and
review criteria adopted under subsection (a). Such recommendations may
include the following, with respect to a health care provider who is
not in compliance with such guidelines, standards, measures, and
criteria:
(1) Exclusion from participation in Federal health care
programs (as defined in section 1128B(f) of the Social Security
Act (42 U.S.C. 1320a-7b(f))).
(2) Imposition of a civil money penalty on such provider.
SEC. 815. ADDITIONAL REQUIREMENTS.
(a) Program Agenda.--The Commissioners shall provide for an agenda
for the development of the guidelines, standards, performance measures,
and review criteria described in section 813(a), including with respect
to the standards, performance measures, and review criteria,
identifying specific aspects of health care for which the standards,
performance measures, and review criteria are to be developed and those
that are to be given priority in the development of the standards,
performance measures, and review criteria.
Subtitle C--General Provisions
SEC. 821. CERTAIN ADMINISTRATIVE AUTHORITIES.
The Commissioners, in carrying out this title, may accept voluntary
and uncompensated services.
SEC. 822. FUNDING.
For the purpose of carrying out this title, there are authorized to
be appropriated such sums as may be necessary for fiscal years 2010
through 2014.
SEC. 823. DEFINITIONS.
For purposes of this title:
(1) The term ``Commissioners'' means the Commissioners of
the Health Care Services Commission.
(2) The term ``Commission'' means the Health Care Services
Commission.
(3) The term ``Director'' means the Director of the Office
of the Forum for Quality and Effectiveness in Health Care.
(4) The term ``Secretary'' means the Secretary of Health
and Human Services.
Subtitle D--Terminations and Transition
SEC. 831. TERMINATION OF AGENCY FOR HEALTHCARE RESEARCH AND QUALITY.
As of the date of the enactment of this Act, the Agency for
Healthcare Research and Quality is terminated, and title IX of the
Public Health Service Act is repealed.
SEC. 832. TRANSITION.
All orders, grants, contracts, privileges, and other determinations
or actions of the Agency for Healthcare Research and Quality that are
effective as of the date before the date of the enactment of this Act,
shall be transferred to the Secretary and shall continue in effect
according to their terms unless changed pursuant to law.
Subtitle E--Independent Health Record Trust
SEC. 841. SHORT TITLE.
This subtitle may be cited as the ``Independent Health Record Trust
Act of 2009''.
SEC. 842. PURPOSE.
It is the purpose of this subtitle to provide for the establishment
of a nationwide health information technology network that--
(1) improves health care quality, reduces medical errors,
increases the efficiency of care, and advances the delivery of
appropriate, evidence-based health care services;
(2) promotes wellness, disease prevention, and the
management of chronic illnesses by increasing the availability
and transparency of information related to the health care
needs of an individual;
(3) ensures that appropriate information necessary to make
medical decisions is available in a usable form at the time and
in the location that the medical service involved is provided;
(4) produces greater value for health care expenditures by
reducing health care costs that result from inefficiency,
medical errors, inappropriate care, and incomplete information;
(5) promotes a more effective marketplace, greater
competition, greater systems analysis, increased choice,
enhanced quality, and improved outcomes in health care
services;
(6) improves the coordination of information and the
provision of such services through an effective infrastructure
for the secure and authorized exchange and use of health
information; and
(7) ensures that the health information privacy, security,
and confidentiality of individually identifiable health
information is protected.
SEC. 843. DEFINITIONS.
In this subtitle:
(1) Access.--The term ``access'' means, with respect to an
electronic health record, entering information into such
account as well as retrieving information from such account.
(2) Account.--The term ``account'' means an electronic
health record of an individual contained in an independent
health record trust.
(3) Affirmative consent.--The term ``affirmative consent''
means, with respect to an electronic health record of an
individual contained in an IHRT, express consent given by the
individual for the use of such record in response to a clear
and conspicuous request for such consent or at the individual's
own initiative.
(4) Authorized ehr data user.--The term ``authorized EHR
data user'' means, with respect to an electronic health record
of an IHRT participant contained as part of an IHRT, any entity
(other than the participant) authorized (in the form of
affirmative consent) by the participant to access the
electronic health record.
(5) Confidentiality.--The term ``confidentiality'' means,
with respect to individually identifiable health information of
an individual, the obligation of those who receive such
information to respect the health information privacy of the
individual.
(6) Electronic health record.--The term ``electronic health
record'' means a longitudinal collection of information
concerning a single individual, including medical records and
personal health information, that is stored electronically.
(7) Health information privacy.--The term ``health
information privacy'' means, with respect to individually
identifiable health information of an individual, the right of
such individual to control the acquisition, uses, or
disclosures of such information.
(8) Health plan.--The term ``health plan'' means a group
health plan (as defined in section 2208(1) of the Public Health
Service Act (42 U.S.C. 300bb-8(1))) as well as a plan that
offers health insurance coverage in the individual market.
(9) HIPAA privacy regulations.--The term ``HIPAA privacy
regulations'' means the regulations promulgated under section
264(c) of the Health Insurance Portability and Accountability
Act of 1996 (42 U.S.C. 1320d-2 note).
(10) Independent health record trust; ihrt.--The terms
``independent health record trust'' and ``IHRT'' mean a legal
arrangement under the administration of an IHRT operator that
meets the requirements of this subtitle with respect to
electronic health records of individuals participating in the
trust or IHRT.
(11) IHRT operator.--The term ``IHRT operator'' means, with
respect to an IHRT, the organization that is responsible for
the administration and operation of the IHRT in accordance with
this subtitle.
(12) IHRT participant.--The term ``IHRT participant''
means, with respect to an IHRT, an individual who has a
participation agreement in effect with respect to the
maintenance of the individual's electronic health record by the
IHRT.
(13) Individually identifiable health information.--The
term ``individually identifiable health information'' has the
meaning given such term in section 1171(6) of the Social
Security Act (42 U.S.C. 1320d(6)).
(14) Security.--The term ``security'' means, with respect
to individually identifiable health information of an
individual, the physical, technological, or administrative
safeguards or tools used to protect such information from
unwarranted access or disclosure.
SEC. 844. ESTABLISHMENT, CERTIFICATION, AND MEMBERSHIP OF INDEPENDENT
HEALTH RECORD TRUSTS.
(a) Establishment.--Not later than one year after the date of the
enactment of this Act, the Federal Trade Commission, in consultation
with the National Committee on Vital and Health Statistics, shall
prescribe standards for the establishment, certification, operation,
and interoperability of IHRTs to carry out the purposes described in
section 842 in accordance with the provisions of this subtitle.
(b) Certification.--
(1) Certification by ftc.--The Federal Trade Commission
shall provide for the certification of IHRTs. No IHRT may be
certified unless the IHRT is determined to meet the standards
for certification established under subsection (a).
(2) Decertification.--The Federal Trade Commission shall
establish a process for the revocation of certification of an
IHRT under this section in the case that the IHRT violates the
standards established under subsection (a).
(c) Membership.--
(1) In general.--To be eligible to be a participant in an
IHRT, an individual shall--
(A) submit to the IHRT information as required by
the IHRT to establish an electronic health record with
the IHRT; and
(B) enter into a privacy protection agreement
described in section 846(b)(1) with the IHRT.
The process to determine eligibility of an individual under
this subsection shall allow for the establishment by such
individual of an electronic health record as expeditiously as
possible if such individual is determined so eligible.
(2) No limitation on membership.--Nothing in this
subsection shall be construed to permit an IHRT to restrict
membership, including on the basis of health condition.
SEC. 845. DUTIES OF IHRT TO IHRT PARTICIPANTS.
(a) Fiduciary Duty of IHRT; Penalties for Violations of Fiduciary
Duty.--
(1) Fiduciary duty.--With respect to the electronic health
record of an IHRT participant maintained by an IHRT, the IHRT
shall have a fiduciary duty to act for the benefit and in the
interests of such participant and of the IHRT as a whole. Such
duty shall include obtaining the affirmative consent of such
participant prior to the release of information in such
participant's electronic health record in accordance with the
requirements of this subtitle.
(2) Penalties.--If the IHRT knowingly or recklessly
breaches the fiduciary duty described in paragraph (1), the
IHRT shall be subject to the following penalties:
(A) Loss of certification of the IHRT.
(B) A fine that is not in excess of $50,000.
(C) A term of imprisonment for the individuals
involved of not more than 5 years.
(b) Electronic Health Record Deemed To Be Held in Trust by IHRT.--
With respect to an individual, an electronic health record maintained
by an IHRT shall be deemed to be held in trust by the IHRT for the
benefit of the individual and the IHRT shall have no legal or equitable
interest in such electronic health record.
SEC. 846. AVAILABILITY AND USE OF INFORMATION FROM RECORDS IN IHRT
CONSISTENT WITH PRIVACY PROTECTIONS AND AGREEMENTS.
(a) Protected Electronic Health Records Use and Access.--
(1) General rights regarding uses of information.--
(A) In general.--With respect to the electronic
health record of an IHRT participant maintained by an
IHRT, subject to paragraph (2)(C), primary uses and
secondary uses (described in subparagraphs (B) and (C),
respectively) of information within such record (other
than by such participant) shall be permitted only upon
the authorization of such use, prior to such use, by
such participant.
(B) Primary uses.--For purposes of subparagraph (A)
and with respect to an electronic health record of an
individual, a primary use is a use for purposes of the
individual's self-care or care by health care
professionals.
(C) Secondary uses.--For purposes of subparagraph
(B) and with respect to an electronic health record of
an individual, a secondary use is any use not described
in subparagraph (B) and includes a use for purposes of
public health research or other related activities.
Additional authorization is required for a secondary
use extending beyond the original purpose of the
secondary use authorized by the IHRT participant
involved. Nothing in this paragraph shall be construed
as requiring authorization for every secondary use that
is within the authorized original purpose.
(2) Rules for primary use of records for health care
purposes.--With respect to the electronic health record of an
IHRT participant (or specified parts of such electronic health
record) maintained by an IHRT standards for access to such
record shall provide for the following:
(A) Access by ihrt participants to their electronic
health records.--
(i) Ownership.--The participant maintains
ownership over the entire electronic health
record (and all portions of such record) and
shall have the right to electronically access
and review the contents of the entire record
(and any portion of such record) at any time,
in accordance with this subparagraph.
(ii) Addition of personal information.--The
participant may add personal health information
to the health record of that participant,
except that such participant shall not alter
information that is entered into the electronic
health record by any authorized EHR data user.
Such participant shall have the right to
propose an amendment to information that is
entered by an authorized EHR data user pursuant
to standards prescribed by the Federal Trade
Commission for purposes of amending such
information.
(iii) Identification of information entered
by participant.--Any additions or amendments
made by the participant to the health record
shall be identified and disclosed within such
record as being made by such participant.
(B) Access by entities other than ihrt
participant.--
(i) Authorized access only.--Except as
provided under subparagraph (C) and paragraph
(4), access to the electronic health record (or
any portion of the record)--
(I) may be made only by authorized
EHR data users and only to such
portions of the record as specified by
the participant; and
(II) may be limited by the
participant for purposes of entering
information into such record,
retrieving information from such
record, or both.
(ii) Identification of entity that enters
information.--Any information that is added by
an authorized EHR data user to the health
record shall be identified and disclosed within
such record as being made by such user.
(iii) Satisfaction of hipaa privacy
regulations.--In the case of a record of a
covered entity (as defined for purposes of
HIPAA privacy regulations), with respect to an
individual, if such individual is an IHRT
participant with an independent health record
trust and such covered entity is an authorized
EHR data user, the requirement under the HIPAA
privacy regulations for such entity to provide
the record to the participant shall be deemed
met if such entity, without charge to the IHRT
or the participant--
(I) forwards to the trust an
appropriately formatted electronic copy
of the record (and updates to such
records) for inclusion in the
electronic health record of the
participant maintained by the trust;
(II) enters such record into the
electronic health record of the
participant so maintained; or
(III) otherwise makes such record
available for electronic access by the
IHRT or the individual in a manner that
permits such record to be included in
the account of the individual contained
in the IHRT.
(iv) Notification of sensitive
information.--Any information, with respect to
the participant, that is sensitive information,
as specified by the Federal Trade Commission,
shall not be forwarded or entered by an
authorized EHR data user into the electronic
health record of the participant maintained by
the trust unless the user certifies that the
participant has been notified of such
information.
(C) Deemed authorization for access for emergency
health care.--
(i) Findings.--Congress finds that--
(I) given the size and nature of
visits to emergency departments in the
United States, readily available health
information could make the difference
between life and death; and
(II) because of the case mix and
volume of patients treated, emergency
departments are well positioned to
provide information for public health
surveillance, community risk
assessment, research, education,
training, quality improvement, and
other uses.
(ii) Use of information.--With respect to
the electronic health record of an IHRT
participant (or specified parts of such
electronic health record) maintained by an
IHRT, the participant shall be deemed as
providing authorization (in the form of
affirmative consent) for health care providers
to access, in connection with providing
emergency care services to the participant, a
limited, authenticated information set
concerning the participant for emergency
response purposes, unless the participant
specifies that such information set (or any
portion of such information set) may not be so
accessed. Such limited information set may
include information--
(I) patient identification data, as
determined appropriate by the
participant;
(II) provider identification that
includes the use of unique provider
identifiers;
(III) payment information;
(IV) information related to the
individual's vitals, allergies, and
medication history;
(V) information related to existing
chronic problems and active clinical
conditions of the participant; and
(VI) information concerning
physical examinations, procedures,
results, and diagnosis data.
(3) Rules for secondary uses of records for research and
other purposes.--
(A) In general.--With respect to the electronic
health record of an IHRT participant (or specified
parts of such electronic health record) maintained by
an IHRT, the IHRT may sell such record (or specified
parts of such record) only if--
(i) the transfer is authorized by the
participant pursuant to an agreement between
the participant and the IHRT and is in
accordance with the privacy protection
agreement described in subsection (b)(1)
entered into between such participant and such
IHRT;
(ii) such agreement includes parameters
with respect to the disclosure of information
involved and a process for the authorization of
the further disclosure of information in such
record;
(iii) the information involved is to be
used for research or other activities only as
provided for in the agreement;
(iv) the recipient of the information
provides assurances that the information will
not be further transferred or reused in
violation of such agreement; and
(v) the transfer otherwise meets the
requirements and standards prescribed by the
Federal Trade Commission.
(B) Treatment of public health reporting.--Nothing
in this paragraph shall be construed as prohibiting or
limiting the use of health care information of an
individual, including an individual who is an IHRT
participant, for public health reporting (or other
research) purposes prior to the inclusion of such
information in an electronic health record maintained
by an IHRT.
(4) Law enforcement clarification.--Nothing in this
subtitle shall prevent an IHRT from disclosing information
contained in an electronic health record maintained by the IHRT
when required for purposes of a lawful investigation or
official proceeding inquiring into a violation of, or failure
to comply with, any criminal or civil statute or any
regulation, rule, or order issued pursuant to such a statute.
(5) Rule of construction.--Nothing in this section shall be
construed to require a health care provider that does not
utilize electronic methods or appropriate levels of health
information technology on the date of the enactment of this Act
to adopt such electronic methods or technology as a requirement
for participation or compliance under this subtitle.
(b) Privacy Protection Agreement; Treatment of State Privacy and
Security Laws.--
(1) Privacy protection agreement.--A privacy protection
agreement described in this subsection is an agreement, with
respect to an electronic health record of an IHRT participant
to be maintained by an independent health record trust, between
the participant and the trust--
(A) that is consistent with the standards described
in subsection (a)(2);
(B) under which the participant specifies the
portions of the record that may be accessed, under what
circumstances such portions may be accessed, any
authorizations for indicated authorized EHR data users
to access information contained in the record, and the
purposes for which the information (or portions of the
information) in the record may be used;
(C) which provides a process for the authorization
of the transfer of information contained in the record
to a third party, including for the sale of such
information for purposes of research, by an authorized
EHR data user and reuse of such information by such
third party, including a provision requiring that such
transfer and reuse is not in violation of any privacy
or transfer restrictions placed by the participant on
the independent health record of such participant; and
(D) under which the trust provides assurances that
the trust will not transfer, disclose, or provide
access to the record (or any portion of the record) in
violation of the parameters established in the
agreement or to any person or entity who has not agreed
to use and transfer such record (or portion of such
record) in accordance with such agreement.
(2) Treatment of state laws.--
(A) In general.--Except as provided under
subparagraph (B), the provisions of a privacy
protection agreement entered into between an IHRT and
an IHRT participant shall preempt any provision of
State law (or any State regulation) relating to the
privacy and confidentiality of individually
identifiable health information or to the security of
such health information.
(B) Exception for privileged information.--The
provisions of a privacy protection agreement shall not
preempt any provision of State law (or any State
regulation) that recognizes privileged communications
between physicians, health care practitioners, and
patients of such physicians or health care
practitioners, respectively.
(C) State defined.--For purposes of this section,
the term ``State'' has the meaning given such term when
used in title XI of the Social Security Act, as
provided under section 1101(a) of such Act (42 U.S.C.
1301(a)).
SEC. 847. VOLUNTARY NATURE OF TRUST PARTICIPATION AND INFORMATION
SHARING.
(a) In General.--Participation in an independent health record
trust, or authorizing access to information from such a trust, is
voluntary. No employer, health insurance issuer, group health plan,
health care provider, or other person may require, as a condition of
employment, issuance of a health insurance policy, coverage under a
group health plan, the provision of health care services, payment for
such services, or otherwise, that an individual participate in, or
authorize access to information from, an independent health record
trust.
(b) Enforcement.--The penalties provided for in subsection (a) of
section 1177 of the Social Security Act (42 U.S.C. 1320d-6) shall apply
to a violation of subsection (a) in the same manner as such penalties
apply to a person in violation of subsection (a) of such section.
SEC. 848. FINANCING OF ACTIVITIES.
(a) In General.--Except as provided in subsection (b), an IHRT may
generate revenue to pay for the operations of the IHRT through--
(1) charging IHRT participants account fees for use of the
trust;
(2) charging authorized EHR data users for accessing
electronic health records maintained in the trust;
(3) the sale of information contained in the trust (as
provided for in section 846(a)(3)(A)); and
(4) any other activity determined appropriate by the
Federal Trade Commission.
(b) Prohibition Against Access Fees for Health Care Providers.--For
purposes of providing incentives to health care providers to access
information maintained in an IHRT, as authorized by the IHRT
participants involved, the IHRT may not charge a fee for services
specified by the IHRT. Such services shall include the transmittal of
information from a health care provider to be included in an
independent electronic health record maintained by the IHRT (or
permitting such provider to input such information into the record),
including the transmission of or access to information described in
section 846(a)(2)(C)(ii) by appropriate emergency responders.
(c) Required Disclosures.--The sources and amounts of revenue
derived under subsection (a) for the operations of an IHRT shall be
fully disclosed to each IHRT participant of such IHRT and to the
public.
(d) Treatment of Income.--For purposes of the Internal Revenue Code
of 1986, any revenue described in subsection (a) shall not be included
in gross income of any IHRT, IHRT participant, or authorized EHR data
user.
SEC. 849. REGULATORY OVERSIGHT.
(a) In General.--In carrying out this subtitle, the Federal Trade
Commission shall promulgate regulations for independent health record
trusts.
(b) Establishment of Interagency Steering Committee.--
(1) In general.--The Secretary of Health and Human Services
shall establish an Interagency Steering Committee in accordance
with this subsection.
(2) Chairperson.--The Secretary of Health and Human
Services shall serve as the chairperson of the Interagency
Steering Committee.
(3) Membership.--The members of the Interagency Steering
Committee shall consist of the Attorney General, the
Chairperson of the Federal Trade Commission, the Chairperson
for the National Committee for Vital and Health Statistics, a
representative of the Federal Reserve, and other Federal
officials determined appropriate by the Secretary of Health and
Human Services.
(4) Duties.--The Interagency Steering Committee shall
coordinate the implementation of this title, including the
implementation of policies described in subsection (d) based
upon the recommendations provided under such subsection, and
regulations promulgated under this subtitle.
(c) Federal Advisory Committee.--
(1) In general.--The National Committee for Vital and
Health Statistics shall serve as an advisory committee for the
IHRTs. The membership of such advisory committee shall include
a representative from the Federal Trade Commission and the
chairperson of the Interagency Steering Committee. Not less
than 60 percent of such membership shall consist of
representatives of nongovernment entities, at least one of whom
shall be a representative from an organization representing
health care consumers.
(2) Duties.--The National Committee for Vital and Health
Statistics shall issue periodic reports and review policies
concerning IHRTs based on each of the following factors:
(A) Privacy and security policies.
(B) Economic progress.
(C) Interoperability standards.
(d) Policies Recommended by Federal Trade Commission.--The Federal
Trade Commission, in consultation with the National Committee for Vital
and Health Statistics, shall recommend policies to--
(1) provide assistance to encourage the growth of
independent health record trusts;
(2) track economic progress as it pertains to operators of
independent health records trusts and individuals receiving
nontaxable income with respect to accounts;
(3) conduct public education activities regarding the
creation and usage of the independent health records trusts;
(4) establish standards for the interoperability of health
information technology to ensure that information contained in
such record may be shared between the trust involved, the
participant, and authorized EHR data users, including for the
standardized collection and transmission of individual health
records (or portions of such records) to authorized EHR data
users through a common interface and for the portability of
such records among independent health record trusts; and
(5) carry out any other activities determined appropriate
by the Federal Trade Commission.
(e) Regulations Promulgated by Federal Trade Commission.--The
Federal Trade Commission shall promulgate regulations based on, at a
minimum, the following factors:
(1) Requiring that an IHRT participant, who has an
electronic health record that is maintained by an IHRT, be
notified of a security breech with respect to such record, and
any corrective action taken on behalf of the participant.
(2) Requiring that information sent to, or received from,
an IHRT that has been designated as high-risk should be
authenticated through the use of methods such as the periodic
changing of passwords, the use of biometrics, the use of tokens
or other technology as determined appropriate by the council.
(3) Requiring a delay in releasing sensitive health care
test results and other similar information to patients directly
in order to give physicians time to contact the patient.
(4) Recommendations for entities operating IHRTs, including
requiring analysis of the potential risk of health transaction
security breeches based on set criteria.
(5) The conduct of audits of IHRTs to ensure that they are
in compliance with the requirements and standards established
under this subtitle.
(6) Disclosure to IHRT participants of the means by which
such trusts are financed, including revenue from the sale of
patient data.
(7) Prevention of certification of an entity seeking
independent heath record trust certification based on--
(A) the potential for conflicts between the
interests of such entity and the security of the health
information involved; and
(B) the involvement of the entity in any activity
that is contrary to the best interests of a patient.
(8) Prevention of the use of revenue sources that are
contrary to a patient's interests.
(9) Public disclosure of audits in a manner similar to
financial audits required for publicly traded stock companies.
(10) Requiring notification to a participating entity that
the information contained in such record may not be
representative of the complete or accurate electronic health
record of such account holder.
(f) Compliance Report.--Not later than 1 year after the date of the
enactment of this Act, and annually thereafter, the Commission shall
submit to the Committee on Health, Education, Labor, and Pensions and
the Committee on Finance of the Senate and the Committee on Energy and
Commerce and the Committee on Ways and Means of the House of
Representatives, a report on compliance by and progress of independent
health record trusts with this subtitle. Such report shall describe the
following:
(1) The number of complaints submitted about independent
health record trusts, which shall be divided by complaints
related to security breaches, and complaints not related to
security breaches, and may include other categories as the
Interagency Steering Committee established under subsection (b)
determines appropriate.
(2) The number of enforcement actions undertaken by the
Commission against independent health record trusts in response
to complaints under paragraph (1), which shall be divided by
enforcement actions related to security breaches and
enforcement actions not related to security breaches and may
include other categories as the Interagency Steering Committee
established under subsection (b) determines appropriate.
(3) The economic progress of the individual owner or
institution operator as achieved through independent health
record trust usage and existing barriers to such usage.
(4) The progress in security auditing as provided for by
the Interagency Steering Committee council under subsection
(b).
(5) The other core responsibilities of the Commission as
described in subsection (a).
(g) Interagency Memorandum of Understanding.--The Interagency
Steering Committee shall ensure, through the execution of an
interagency memorandum of understanding, that--
(1) regulations, rulings, and interpretations issued by
Federal officials relating to the same matter over which 2 or
more such officials have responsibility under this subtitle are
administered so as to have the same effect at all times; and
(2) the memorandum provides for the coordination of
policies related to enforcing the same requirements through
such officials in order to have coordinated enforcement
strategy that avoids duplication of enforcement efforts and
assigns priorities in enforcement.
TITLE IX--MISCELLANEOUS
SEC. 901. HEALTH CARE CHOICE FOR VETERANS.
Beginning not later than 2 years after the date of the enactment of
this Act, the Secretary of Veterans Affairs may--
(1) permit veterans, and survivors and dependents of
veterans, who are eligible for health care and services under
the laws administered by the Secretary to receive such care and
services through such non-Department of Veterans Affairs
providers and facilities as the Secretary may approve for
purposes of this section; and
(2) pursuant to such procedures as the Secretary of Veteran
Affairs shall prescribe for purposes of this section, make
payments to such providers and facilities for the provision of
such care and services to veterans, and such survivors and
dependents, at such rates as the Secretary may specify in such
procedures and in such manner so that the Secretary ensures
that the aggregate payments made by the Secretary to such
providers and facilities do not exceed the aggregate amounts
which the Secretary would have paid for such care and services
if this section had not been enacted.
SEC. 902. HEALTH CARE CHOICE FOR INDIANS.
(a) In General.--Beginning not later than 2 years after the date of
enactment of this Act, the Secretary of Health and Human Services
shall--
(1) permit Indians who are eligible for health care and
services under a health care program operated or financed by
the Indian Health Service or by an Indian Tribe, Tribal
Organization, or Urban Indian Organization (and any such other
individuals who are so eligible as the Secretary may specify),
to receive such care and services through such non- Indian
Health Service, Indian Tribe, Tribal Organization, or Urban
Indian Organization providers and facilities as the Secretary
shall approve for purposes of this section; and
(2) pursuant to such procedures as the Secretary of Health
and Human Services shall prescribe for purposes of this
section, make payments to such providers and facilities for the
provision of such care and services to Indians and individuals
described in paragraph (1), at such rates as the Secretary
shall specify in such procedures and in such manner so that the
Secretary ensures that the aggregate payments made by the
Secretary to such providers and facilities do not exceed the
aggregate amounts which the Secretary would have paid for such
care and services if this section had not been enacted.
(b) Definitions.--In this section, the terms ``Indian'', ``Indian
Health Program'', ``Indian Tribe'', ``Tribal Organization'', and
``Urban Indian Organization'' have the meanings given those terms in
section 4 of the Indian Health Care Improvement Act.
SEC. 903. TERMINATION OF FEDERAL COORDINATING COUNCIL FOR COMPARATIVE
EFFECTIVENESS RESEARCH.
The Federal Coordinating Council for Comparative Effectiveness
Research is hereby terminated and section 804 of the American Recovery
and Reinvestment Act of 2009 establishing and funding such Council is
hereby repealed.
SEC. 904. HHS AND GAO JOINT STUDY AND REPORT ON COSTS OF THE 5 MEDICAL
CONDITIONS THAT HAVE THE GREATEST IMPACT.
(a) Study.--The Secretary of Health and Human Services (in this
section referred to as the ``Secretary'') and the Comptroller General
of the United States (in this section referred to as the ``Comptroller
General'') shall jointly conduct a study on the costs of the top 5
medical conditions facing the public which have the greatest impact in
terms of morbidity, mortality, and financial cost. Such study shall
include--
(1) current estimates as well as a ``generational score''
to capture the financial cost and health toll certain medical
conditions will inflict on the baby boomer generation and on
other individuals; and
(2) a careful review of certain medical conditions,
including heart disease, obesity, diabetes, stroke, cancer,
Alzheimers, and other medical conditions the Secretary and
Comptroller General determine appropriate.
(b) Report.--Not later than 1 year after the date of enactment of
this Act, the Secretary and the Comptroller General shall jointly
submit to Congress a report containing the results of the study
conducted under subsection (a), together with recommendations for such
legislation and administrative action as the Secretary and the
Comptroller General determine appropriate.
(c) Targeting of Prevention and Wellness Efforts.--The Secretary
shall target prevention and wellness efforts conducted under the
provisions of and amendments made by this Act in order to combat
medical conditions identified in the report submitted under subsection
(b), including such medical conditions identified as the top 5 medical
conditions facing the public which have the greatest impact in terms of
morbidity, mortality, and financial cost as of or after the date of
enactment of this Act.
<all>
Introduced in House
Introduced in House
Referred to House Energy and Commerce
Referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to House Ways and Means
Referred to the Subcommittee on Health.
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