ppacacon

Transcript

1 111 TH C ONGRESS " ! LEGISLATIVE COUNSEL P RINT 111–1 2d Session COMPILATION OF PATIENT PROTECTION AND AFFORDABLE CARE ACT [As Amended Through May 1, 2010] INCLUDING P ATIENT P ROTECTION AND A FFORDABLE C ARE A CT H - RELATED PORTIONS OF THE H EALTH C ARE AND EALTH E DUCATION R ECONCILIATION A CT OF 2010 PREPARED BY THE Office of the Legislative Counsel FOR THE USE OF THE U.S. HOUSE OF REPRESENTATIVES MAY 2010 June 9, 2010 VerDate 0ct 09 2002 14:17 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00001 Fmt 6012 Sfmt 6012 F:\P11\NHI\COMP\PPACFRN.001 HOLCPC f:\seals\congseal.004

2 OFFICE OF THE LEGISLATIVE COUNSEL SANDRA L. STROKOFF, Legislative Counsel EDWARD G. GROSSMAN, Deputy Legislative Counsel Prepared by DWARD G. G ROSSMAN , Deputy Legislative Counsel E with the assistance of RAIG A. S TERKX , Publications Coordinator C LONDA LOUNT , Staff Assistant C. B E MILY M. V OLBERDING , Staff Assistant E This document is of the Patient Protection and Affordable Care Act (‘‘PPACA’’; Public Law 111–148) consolidating the amendments made by title X of the Act and the Health Care and Education Rec- onciliation Act of 2010 (‘‘HCERA’’; Public Law 111–152). The text of the Indian Health Care Improvement Reauthorization and Ex- tension Act of 2009 (S. 1790), as enacted (in amended form) by sec- tion 10221 of PPACA, is shown in a separate, accompanying docu- ment. .—This document was prepared by Preparation of document the attorneys and staff of the House Office of the Legislative Coun- sel (HOLC) for the use of its attorneys and clients. It is not an offi- cial document of the House of Representatives or its committees and may not be cited as ‘‘the law’’. At the request of the Leader- ship, it is being made available to the public through Congressional websites and may be downloaded at http://docs.house.gov/ energycommerce/ppacacon.pdf. Errors in this document are solely the responsibility of HOLC. Please email any corrections to ‘‘[email protected]’’. This document (originally dated May 24, 2010) may be updated to reflect corrections of errors or subsequent changes in law. United States Code citations .—United States Code section numbers assigned to sections in PPACA are specified in brackets after the section numbers in the heading of each section, viz., 2711 ø 42 U.S.C. 300gg–11 ¿ . i June 9, 2010 VerDate 0ct 09 2002 14:18 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00001 Fmt 0486 Sfmt 6601 F:\P11\NHI\COMP\PPACFRN.002 HOLCPC

3 C O N T E N T S [For continuous pagination in electronic, PDF version, add 19 pages] Page Patient Protection and Affordable Care Act (Public Law 111–148) ... 1 Sec. 1. Short title; table of contents ... 1 TITLE I—QUALITY, AFFORDABLE HEALTH CARE FOR ALL AMERICANS Subtitle A—Immediate Improvements in Health Care Coverage for All Americans Sec. 1001. Amendments to the Public Health Service Act ... 13 Sec. 1002. Health insurance consumer information ... 27 Sec. 1003. Ensuring that consumers get value for their dollars ... 28 Sec. 1004. Effective dates ... 30 Subtitle B—Immediate Actions to Preserve and Expand Coverage Sec. 1101. Immediate access to insurance for uninsured individuals with a preexisting condition ... 30 Sec. 1102. Reinsurance for early retirees ... 33 Sec. 1103. Immediate information that allows consumers to identify af- fordable coverage options ... 36 Sec. 1104. Administrative simplification ... 37 Sec. 1105. Effective date ... 44 Subtitle C—Quality Health Insurance Coverage for All Americans P ART 1—H EALTH I NSURANCE M ARKET R EFORMS Sec. 1201. Amendment to the Public Health Service Act ... 45 P ART THER P ROVISIONS 2—O Sec. 1251. Preservation of right to maintain existing coverage ... 55 Sec. 1252. Rating reforms must apply uniformly to all health insurance issuers and group health plans ... 56 Sec. 1253. Annual report on self-insured plans ... 56 Sec. 1254. Study of large group market ... 57 Sec. 1255. Effective dates ... 57 Subtitle D—Available Coverage Choices for All Americans LANS 1—E STABLISHMENT OF Q UALIFIED H EALTH P ART P Sec. 1301. Qualified health plan defined ... 58 Sec. 1302. Essential health benefits requirements ... 59 Sec. 1303. Special rules ... 64 Sec. 1304. Related definitions ... 68 ii June 9, 2010 VerDate 0ct 09 2002 14:18 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00002 Fmt 0486 Sfmt 0486 F:\P11\NHI\COMP\PPACFRN.002 HOLCPC

4 Page P 2—C ONSUMER C HOICES AND I NSURANCE C OMPETITION T HROUGH H EALTH ART ENEFIT XCHANGES B E 69 Sec. 1311. Affordable choices of health benefit plans ... 80 Sec. 1312. Consumer choice ... Sec. 1313. Financial integrity ... 83 ART 3—S P F LEXIBILITY R ELATING TO E XCHANGES TATE Sec. 1321. State flexibility in operation and enforcement of Exchanges and related requirements ... 85 Sec. 1322. Federal program to assist establishment and operation of non- profit, member-run health insurance issuers ... 86 ø stricken ¿ Sec. 1323. Community health insurance option 92 ... Sec. 1323. Funding for the territories ... 92 Sec. 1324. Level playing field ... 93 ART 4—S TATE F LEXIBILITY TO E STABLISH A LTERNATIVE P ROGRAMS P Sec. 1331. State flexibility to establish basic health programs for low- income individuals not eligible for Medicaid ... 93 Sec. 1332. Waiver for State innovation ... 98 Sec. 1333. Provisions relating to offering of plans in more than one State ... 100 Sec. 1334. Multi-State plans ... 101 5—R P ART EINSURANCE AND R ISK A DJUSTMENT Sec. 1341. Transitional reinsurance program for individual market in each State ... 105 Sec. 1342. Establishment of risk corridors for plans in individual and small group markets ... 108 Sec. 1343. Risk adjustment ... 109 Subtitle E—Affordable Coverage Choices for All Americans ART I—P REMIUM T AX C REDITS AND C OST - P R EDUCTIONS SHARING SUBPART A PREMIUM TAX CREDITS AND COST - SHARING REDUCTIONS — Sec. 1401. Refundable tax credit providing premium assistance for cov- erage under a qualified health plan ... 110 Sec. 1402. Reduced cost-sharing for individuals enrolling in qualified health plans ... 119 SUBPART B — ELIGIBILITY DETERMINATIONS Sec. 1411. Procedures for determining eligibility for Exchange participa- tion, premium tax credits and reduced cost-sharing, and individual 123 responsibility exemptions ... Sec. 1412. Advance determination and payment of premium tax credits and cost-sharing reductions ... 131 Sec. 1413. Streamlining of procedures for enrollment through an ex- 133 change and State Medicaid, CHIP, and health subsidy programs ... Sec. 1414. Disclosures to carry out eligibility requirements for certain programs ... 135 Sec. 1415. Premium tax credit and cost-sharing reduction payments dis- regarded for Federal and Federally-assisted programs ... 137 Sec. 1416. Study of geographic variation in application of FPL ... 137 AX II—S MALL B USINESS T ART C REDIT P Sec. 1421. Credit for employee health insurance expenses of small busi- nesses ... 138 iii June 9, 2010 VerDate 0ct 09 2002 14:18 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00003 Fmt 0486 Sfmt 0486 F:\P11\NHI\COMP\PPACFRN.002 HOLCPC

5 Page Subtitle F—Shared Responsibility for Health Care ART NDIVIDUAL R ESPONSIBILITY P I—I Sec. 1501. Requirement to maintain minimum essential coverage ... 143 151 Sec. 1502. Reporting of health insurance coverage ... P ART II—E MPLOYER R ESPONSIBILITIES Sec. 1511. Automatic enrollment for employees of large employers ... 154 Sec. 1512. Employer requirement to inform employees of coverage op- tions ... 154 Sec. 1513. Shared responsibility for employers ... 155 Sec. 1514. Reporting of employer health insurance coverage ... 159 Sec. 1515. Offering of Exchange-participating qualified health plans through cafeteria plans ... 161 Subtitle G—Miscellaneous Provisions Sec. 1551. Definitions ... 164 Sec. 1552. Transparency in government ... 164 Sec. 1553. Prohibition against discrimination on assisted suicide ... 164 Sec. 1554. Access to therapies ... 165 Sec. 1555. Freedom not to participate in Federal health insurance pro- grams ... 165 Sec. 1556. Equity for certain eligible survivors ... 165 166 Sec. 1557. Nondiscrimination ... Sec. 1558. Protections for employees ... 166 167 Sec. 1559. Oversight ... 167 Sec. 1560. Rules of construction ... Sec. 1561. Health information technology enrollment standards and pro- tocols ... 168 Sec. 1562. GAO study regarding the rate of denial of coverage and en- rollment by health insurance issuers and group health plans ... 170 Sec. 1563. Small business procurement ... 170 Sec. 1563 [sic]. Conforming amendments ... 171 Sec. 1563 [sic]. Sense of the Senate promoting fiscal responsibility ... 178 TITLE II—ROLE OF PUBLIC PROGRAMS Subtitle A—Improved Access to Medicaid Sec. 2001. Medicaid coverage for the lowest income populations ... 179 Sec. 2002. Income eligibility for nonelderly determined using modified gross income ... 186 Sec. 2003. Requirement to offer premium assistance for employer-spon- 190 sored insurance ... Sec. 2004. Medicaid coverage for former foster care children ... 191 Sec. 2005. Payments to territories ... 191 Sec. 2006. Special adjustment to FMAP determination for certain States recovering from a major disaster ... 192 Sec. 2007. Medicaid Improvement Fund rescission ... 193 Subtitle B—Enhanced Support for the Children’s Health Insurance Program Sec. 2101. Additional federal financial participation for CHIP ... 194 Sec. 2102. Technical corrections ... 197 Subtitle C—Medicaid and CHIP Enrollment Simplification Sec. 2201. Enrollment Simplification and coordination with State Health Insurance Exchanges ... 198 iv June 9, 2010 VerDate 0ct 09 2002 14:18 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00004 Fmt 0486 Sfmt 0486 F:\P11\NHI\COMP\PPACFRN.002 HOLCPC

6 Page Sec. 2202. Permitting hospitals to make presumptive eligibility deter- minations for all Medicaid eligible populations ... 200 Subtitle D—Improvements to Medicaid Services Sec. 2301. Coverage for freestanding birth center services ... 201 Sec. 2302. Concurrent care for children ... 202 Sec. 2303. State eligibility option for family planning services ... 203 Sec. 2304. Clarification of definition of medical assistance ... 206 Subtitle E—New Options for States to Provide Long-Term Services and Supports Sec. 2401. Community First Choice Option ... 206 Sec. 2402. Removal of barriers to providing home and community-based services ... 211 Sec. 2403. Money Follows the Person Rebalancing Demonstration ... 214 Sec. 2404. Protection for recipients of home and community-based serv- ices against spousal impoverishment ... 215 Sec. 2405. Funding to expand State Aging and Disability Resource Cen- ters ... 215 Sec. 2406. Sense of the Senate regarding long-term care ... 215 Subtitle F—Medicaid Prescription Drug Coverage Sec. 2501. Prescription drug rebates ... 216 Sec. 2502. Elimination of exclusion of coverage of certain drugs ... 219 Sec. 2503. Providing adequate pharmacy reimbursement ... 220 Subtitle G—Medicaid Disproportionate Share Hospital (DSH) Payments Sec. 2551. Disproportionate share hospital payments ... 223 Subtitle H—Improved Coordination for Dual Eligible Beneficiaries Sec. 2601. 5-year period for demonstration projects ... 224 Sec. 2602. Providing Federal coverage and payment coordination for dual eligible beneficiaries ... 225 Subtitle I—Improving the Quality of Medicaid for Patients and Providers Sec. 2701. Adult health quality measures ... 227 Sec. 2702. Payment Adjustment for Health Care-Acquired Conditions ... 229 Sec. 2703. State option to provide health homes for enrollees with chron- ic conditions ... 229 Sec. 2704. Demonstration project to evaluate integrated care around a hospitalization ... 233 Sec. 2705. Medicaid Global Payment System Demonstration Project ... 235 Sec. 2706. Pediatric Accountable Care Organization Demonstration Project ... 236 Sec. 2707. Medicaid emergency psychiatric demonstration project ... 237 Subtitle J—Improvements to the Medicaid and CHIP Payment and Access Commission (MACPAC) Sec. 2801. MACPAC assessment of policies affecting all Medicaid bene- ficiaries ... 239 Subtitle K—Protections for American Indians and Alaska Natives Sec. 2901. Special rules relating to Indians ... 244 Sec. 2902. Elimination of sunset for reimbursement for all medicare part B services furnished by certain indian hospitals and clinics ... 244 v June 9, 2010 VerDate 0ct 09 2002 14:18 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00005 Fmt 0486 Sfmt 0486 F:\P11\NHI\COMP\PPACFRN.002 HOLCPC

7 Page Subtitle L—Maternal and Child Health Services Sec. 2951. Maternal, infant, and early childhood home visiting programs 245 Sec. 2952. Support, education, and research for postpartum depression ... 255 Sec. 2953. Personal responsibility education ... 258 Sec. 2954. Restoration of funding for abstinence education ... 263 Sec. 2955. Inclusion of information about the importance of having a health care power of attorney in transition planning for children aging out of foster care and independent living programs ... 264 TITLE III—IMPROVING THE QUALITY AND EFFICIENCY OF HEALTH CARE Subtitle A—Transforming the Health Care Delivery System P 1—L INKING ART AYMENT TO Q UALITY O UTCOMES U NDER THE M EDICARE P P ROGRAM Sec. 3001. Hospital Value-Based purchasing program ... 266 Sec. 3002. Improvements to the physician quality reporting system ... 277 Sec. 3003. Improvements to the physician feedback program ... 279 Sec. 3004. Quality reporting for long-term care hospitals, inpatient reha- bilitation hospitals, and hospice programs ... 282 Sec. 3005. Quality reporting for PPS-exempt cancer hospitals ... 285 Sec. 3006. Plans for a Value-Based purchasing program for skilled nurs- ing facilities and home health agencies ... 286 Sec. 3007. Value-based payment modifier under the physician fee sched- ule ... 288 Sec. 3008. Payment adjustment for conditions acquired in hospitals ... 291 ART 2—N ATIONAL S TRATEGY TO I MPROVE H EALTH C ARE Q UALITY P Sec. 3011. National strategy ... 293 Sec. 3012. Interagency Working Group on Health Care Quality ... 295 Sec. 3013. Quality measure development ... 296 Sec. 3014. Quality measurement ... 300 Sec. 3015. Data collection; public reporting ... 304 C 3—E D EVELOPMENT OF N EW P ART NCOURAGING ARE M ODELS ATIENT P Sec. 3021. Establishment of Center for Medicare and Medicaid Innova- tion within CMS ... 306 Sec. 3022. Medicare shared savings program ... 313 Sec. 3023. National pilot program on payment bundling ... 318 Sec. 3024. Independence at home demonstration program ... 324 Sec. 3025. Hospital readmissions reduction program ... 328 Sec. 3026. Community-Based Care Transitions Program ... 333 Sec. 3027. Extension of gainsharing demonstration ... 335 Subtitle B—Improving Medicare for Patients and Providers NSURING ART I—E B ENEFICIARY A CCESS TO P HYSICIAN C ARE AND O THER S ERVICES P Sec. 3101. Increase in the physician payment update ¿ø repealed ¿ ø ... 336 Sec. 3102. Extension of the work geographic index floor and revisions to the practice expense geographic adjustment under the Medicare physician fee schedule ... 336 Sec. 3103. Extension of exceptions process for Medicare therapy caps ... 338 Sec. 3104. Extension of payment for technical component of certain phy- sician pathology services ... 338 Sec. 3105. Extension of ambulance add-ons ... 338 Sec. 3106. Extension of certain payment rules for long-term care hospital services and of moratorium on the establishment of certain hospitals and facilities ... 338 vi June 9, 2010 VerDate 0ct 09 2002 14:18 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00006 Fmt 0486 Sfmt 0486 F:\P11\NHI\COMP\PPACFRN.002 HOLCPC

8 Page Sec. 3107. Extension of physician fee schedule mental health add-on ... 338 Sec. 3108. Permitting physician assistants to order post-Hospital ex- tended care services ... 339 Sec. 3109. Exemption of certain pharmacies from accreditation require- 339 ments ... Sec. 3110. Part B special enrollment period for disabled TRICARE bene- 340 ficiaries ... Sec. 3111. Payment for bone density tests ... 341 342 Sec. 3112. Revision to the Medicare Improvement Fund ... 342 Sec. 3113. Treatment of certain complex diagnostic laboratory tests ... 343 Sec. 3114. Improved access for certified nurse-midwife services ... P ART URAL P ROTECTIONS II—R Sec. 3121. Extension of outpatient hold harmless provision ... 344 Sec. 3122. Extension of Medicare reasonable costs payments for certain clinical diagnostic laboratory tests furnished to hospital patients in 344 certain rural areas ... Sec. 3123. Extension of the Rural Community Hospital Demonstration Program ... 344 Sec. 3124. Extension of the Medicare-dependent hospital (MDH) pro- gram ... 345 Sec. 3125. Temporary improvements to the Medicare inpatient hospital payment adjustment for low-volume hospitals ... 346 Sec. 3126. Improvements to the demonstration project on community 346 health integration models in certain rural counties ... Sec. 3127. MedPAC study on adequacy of Medicare payments for health care providers serving in rural areas ... 347 Sec. 3128. Technical correction related to critical access hospital serv- ices ... 347 Sec. 3129. Extension of and revisions to Medicare rural hospital flexi- bility program ... 347 AYMENT ART III—I MPROVING P CCURACY A P Sec. 3131. Payment adjustments for home health care ... 348 Sec. 3132. Hospice reform ... 352 Sec. 3133. Improvement to medicare disproportionate share hospital 354 (DSH) payments ... Sec. 3134. Misvalued codes under the physician fee schedule ... 356 Sec. 3135. Modification of equipment utilization factor for advanced im- 358 aging services ... Sec. 3136. Revision of payment for power-driven wheelchairs ... 359 360 Sec. 3137. Hospital wage index improvement ... 362 Sec. 3138. Treatment of certain cancer hospitals ... 362 Sec. 3139. Payment for biosimilar biological products ... Sec. 3140. Medicare hospice concurrent care demonstration program ... 363 Sec. 3141. Application of budget neutrality on a national basis in the 364 calculation of the Medicare hospital wage index floor ... Sec. 3142. HHS study on urban Medicare-dependent hospitals ... 364 Sec. 3143. Protecting home health benefits ... 365 Subtitle C—Provisions Relating to Part C Sec. 3201. Medicare Advantage payment ¿ø repealed & replaced ø ... 365 ¿ Sec. 3202. Benefit protection and simplification ... 370 Sec. 3203. ø Application of coding intensity adjustment during MA pay- 372 ment transition repealed and replaced ¿ ... ¿ø Sec. 3204. Simplification of annual beneficiary election periods ... 373 Sec. 3205. Extension for specialized MA plans for special needs individ- uals ... 373 vii June 9, 2010 VerDate 0ct 09 2002 14:18 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00007 Fmt 0486 Sfmt 0486 F:\P11\NHI\COMP\PPACFRN.002 HOLCPC

9 Page Sec. 3206. Extension of reasonable cost contracts ... 376 Sec. 3207. Technical correction to MA private fee-for-service plans ... 376 Sec. 3208. Making senior housing facility demonstration permanent ... 376 Sec. 3209. Authority to deny plan bids ... 377 Sec. 3210. Development of new standards for certain Medigap plans ... 377 Subtitle D—Medicare Part D Improvements for Prescription Drug Plans and MA– PD Plans Sec. 3301. Medicare coverage gap discount program ... 378 Sec. 3302. Improvement in determination of Medicare part D low-income benchmark premium ... 386 Sec. 3303. Voluntary de minimis policy for subsidy eligible individuals under prescription drug plans and MA–PD plans ... 386 Sec. 3304. Special rule for widows and widowers regarding eligibility for low-income assistance ... 387 Sec. 3305. Improved information for subsidy eligible individuals reas- signed to prescription drug plans and MA–PD plans ... 387 Sec. 3306. Funding outreach and assistance for low-income programs ... 388 Sec. 3307. Improving formulary requirements for prescription drug plans and MA–PD plans with respect to certain categories or classes of drugs 389 Sec. 3308. Reducing part D premium subsidy for high-income bene- ficiaries ... 390 Sec. 3309. Elimination of cost sharing for certain dual eligible individ- uals ... 393 Sec. 3310. Reducing wasteful dispensing of outpatient prescription drugs in long-term care facilities under prescription drug plans and MA– PD plans ... 393 Sec. 3311. Improved Medicare prescription drug plan and MA–PD plan complaint system ... 394 Sec. 3312. Uniform exceptions and appeals process for prescription drug plans and MA–PD plans ... 394 Sec. 3313. Office of the Inspector General studies and reports ... 395 Sec. 3314. Including costs incurred by AIDS drug assistance programs and Indian Health Service in providing prescription drugs toward the annual out-of-pocket threshold under part D ... 396 ø ¿ø repealed and Sec. 3315. Immediate reduction in coverage gap in 2010 ... replaced ¿ 397 Subtitle E—Ensuring Medicare Sustainability Sec. 3401. Revision of certain market basket updates and incorporation of productivity improvements into market basket updates that do not already incorporate such improvements ... 398 Sec. 3402. Temporary adjustment to the calculation of part B premiums . 407 Advisory Board ... Medicare ¿ Payment Sec. 3403. Independent ø 407 Subtitle F—Health Care Quality Improvements Sec. 3501. Health care delivery system research; Quality improvement technical assistance ... 429 Sec. 3502. Establishing community health teams to support the patient- centered medical home ... 435 Sec. 3503. Medication management services in treatment of chronic dis- ease ... 438 Sec. 3504. Design and implementation of regionalized systems for emer- gency care ... 440 Sec. 3505. Trauma care centers and service availability ... 444 Sec. 3506. Program to facilitate shared decisionmaking ... 450 Sec. 3507. Presentation of prescription drug benefit and risk informa- tion ... 453 Sec. 3508. Demonstration program to integrate quality improvement and patient safety training into clinical education of health professionals ... 453 viii June 9, 2010 VerDate 0ct 09 2002 14:18 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00008 Fmt 0486 Sfmt 0486 F:\P11\NHI\COMP\PPACFRN.002 HOLCPC

10 Page Sec. 3509. Improving women’s health ... 454 Sec. 3510. Patient navigator program ... 460 Sec. 3511. Authorization of appropriations ... 461 Sec. 3512. GAO study and report on causes of action ... 461 Subtitle G—Protecting and Improving Guaranteed Medicare Benefits Sec. 3601. Protecting and improving guaranteed Medicare benefits ... 462 Sec. 3602. No cuts in guaranteed benefits ... 462 TITLE IV—PREVENTION OF CHRONIC DISEASE AND IMPROVING PUBLIC HEALTH Subtitle A—Modernizing Disease Prevention and Public Health Systems Sec. 4001. National Prevention, Health Promotion and Public Health Council ... 463 Sec. 4002. Prevention and Public Health Fund ... 466 Sec. 4003. Clinical and community Preventive Services ... 466 Sec. 4004. Education and outreach campaign regarding preventive bene- fits ... 469 Subtitle B—Increasing Access to Clinical Preventive Services Sec. 4101. School-based health centers ... 471 Sec. 4102. Oral healthcare prevention activities ... 476 Sec. 4103. Medicare coverage of annual wellness visit providing a per- sonalized prevention plan ... 478 Sec. 4104. Removal of barriers to preventive services in Medicare ... 482 Sec. 4105. Evidence-based coverage of preventive services in Medicare ... 483 Sec. 4106. Improving access to preventive services for eligible adults in Medicaid ... 484 Sec. 4107. Coverage of comprehensive tobacco cessation services for preg- nant women in Medicaid ... 485 Sec. 4108. Incentives for prevention of chronic diseases in medicaid ... 486 Subtitle C—Creating Healthier Communities Sec. 4201. Community transformation grants ... 489 Sec. 4202. Healthy aging, living well; evaluation of community-based prevention and wellness programs for Medicare beneficiaries ... 492 Sec. 4203. Removing barriers and improving access to wellness for indi- viduals with disabilities ... 496 Sec. 4204. Immunizations ... 496 Sec. 4205. Nutrition labeling of standard menu items at Chain Res- taurants ... 499 Sec. 4206. Demonstration project concerning individualized wellness plan ... 502 Sec. 4207. Reasonable break time for nursing mothers ... 503 Subtitle D—Support for Prevention and Public Health Innovation Sec. 4301. Research on optimizing the delivery of public health services . 504 Sec. 4302. Understanding health disparities: data collection and anal- ysis ... 504 Sec. 4303. CDC and employer-based wellness programs ... 509 Sec. 4304. Epidemiology-Laboratory Capacity Grants ... 510 Sec. 4305. Advancing research and treatment for pain care management 511 Sec. 4306. Funding for Childhood Obesity Demonstration Project ... 513 Subtitle E—Miscellaneous Provisions Sec. 4401. Sense of the Senate concerning CBO scoring ... 514 ix June 9, 2010 VerDate 0ct 09 2002 14:18 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00009 Fmt 0486 Sfmt 0486 F:\P11\NHI\COMP\PPACFRN.002 HOLCPC

11 Page Sec. 4402. Effectiveness of Federal health and wellness initiatives ... 514 TITLE V—HEALTH CARE WORKFORCE Subtitle A—Purpose and Definitions 515 Sec. 5001. Purpose ... Sec. 5002. Definitions ... 515 Subtitle B—Innovations in the Health Care Workforce Sec. 5101. National health care workforce commission ... 519 Sec. 5102. State health care workforce development grants ... 526 Sec. 5103. Health care workforce assessment ... 531 Sec. 5104. Interagency task force to assess and improve access to health care in the State of Alaska ... 534 Subtitle C—Increasing the Supply of the Health Care Workforce Sec. 5201. Federally supported student loan funds ... 535 Sec. 5202. Nursing student loan program ... 535 Sec. 5203. Health care workforce loan repayment programs ... 536 Sec. 5204. Public health workforce recruitment and retention programs .. 538 Sec. 5205. Allied health workforce recruitment and retention programs .. 540 Sec. 5206. Grants for State and local programs ... 540 Sec. 5207. Funding for National Health Service Corps ... 541 Sec. 5208. Nurse-managed health clinics ... 542 Sec. 5209. Elimination of cap on commissioned corps ... 534 Sec. 5210. Establishing a Ready Reserve Corps ... 543 Subtitle D—Enhancing Health Care Workforce Education and Training Sec. 5301. Training in family medicine, general internal medicine, gen- eral pediatrics, and physician assistantship ... 544 Sec. 5302. Training opportunities for direct care workers ... 547 Sec. 5303. Training in general, pediatric, and public health dentistry ... 548 Sec. 5304. Alternative dental health care providers demonstration project ... 550 Sec. 5305. Geriatric education and training; career awards; comprehen- sive geriatric education ... 552 Sec. 5306. Mental and behavioral health education and training grants .. 555 Sec. 5307. Cultural competency, prevention, and public health and indi- viduals with disabilities training ... 558 Sec. 5308. Advanced nursing education grants ... 559 Sec. 5309. Nurse education, practice, and retention grants ... 559 Sec. 5310. Loan repayment and scholarship program ... 561 Sec. 5311. Nurse faculty loan program ... 561 Sec. 5312. Authorization of appropriations for parts B through D of title VIII ... 563 Sec. 5313. Grants to promote the community health workforce ... 564 Sec. 5314. Fellowship training in public health ... 566 Sec. 5315. United States Public Health Sciences Track ... 567 Sec. 5316. Demonstration grants for family nurse practitioner training programs ... 572 Subtitle E—Supporting the Existing Health Care Workforce Sec. 5401. Centers of excellence ... 574 Sec. 5402. Health care professionals training for diversity ... 576 Sec. 5403. Interdisciplinary, community-based linkages ... 576 Sec. 5404. Workforce diversity grants ... 581 x June 9, 2010 VerDate 0ct 09 2002 14:18 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00010 Fmt 0486 Sfmt 0486 F:\P11\NHI\COMP\PPACFRN.002 HOLCPC

12 Page Sec. 5405. Primary care extension program ... 582 Subtitle F—Strengthening Primary Care and Other Workforce Improvements Sec. 5501. Expanding access to primary care services and general sur- 585 gery services ... Sec. 5502. ø Medicare Federally qualified health center improve- ¿ø repealed ¿ ments 587 ... Sec. 5503. Distribution of additional residency positions ... 587 Sec. 5504. Counting resident time in nonprovider settings ... 590 Sec. 5505. Rules for counting resident time for didactic and scholarly activities and other activities ... 591 Sec. 5506. Preservation of resident cap positions from closed hospitals ... 593 Sec. 5507. Demonstration projects To address health professions work- force needs; extension of family-to-family health information centers ... 595 601 Sec. 5508. Increasing teaching capacity ... Sec. 5509. Graduate nurse education demonstration ... 606 Subtitle G—Improving Access to Health Care Services Sec. 5601. Spending for Federally Qualified Health Centers (FQHCs) ... 609 Sec. 5602. Negotiated rulemaking for development of methodology and criteria for designating medically underserved populations and health professions shortage areas ... 610 Sec. 5603. Reauthorization of the Wakefield Emergency Medical Services for Children Program ... 612 Sec. 5604. Co-locating primary and specialty care in community-based mental health settings ... 612 Sec. 5605. Key National indicators ... 613 Sec. 5606. State grants to health care providers who provide services to a high percentage of medically underserved populations or other special populations ... 617 Subtitle H—General Provisions 618 Sec. 5701. Reports ... TITLE VI—TRANSPARENCY AND PROGRAM INTEGRITY Subtitle A—Physician Ownership and Other Transparency Sec. 6001. Limitation on Medicare exception to the prohibition on certain physician referrals for hospitals ... 619 Sec. 6002. Transparency reports and reporting of physician ownership 624 or investment interests ... Sec. 6003. Disclosure requirements for in-office ancillary services excep- tion to the prohibition on physician self-referral for certain imaging 632 services ... 632 Sec. 6004. Prescription drug sample transparency ... 633 Sec. 6005. Pharmacy benefit managers transparency requirements ... Subtitle B—Nursing Home Transparency and Improvement ART MPROVING T RANSPARENCY OF I NFORMATION 1—I P Sec. 6101. Required disclosure of ownership and additional disclosable 635 parties information ... Sec. 6102. Accountability requirements for skilled nursing facilities and nursing facilities ... 638 Sec. 6103. Nursing home compare Medicare website ... 640 Sec. 6104. Reporting of expenditures ... 647 Sec. 6105. Standardized complaint form ... 648 Sec. 6106. Ensuring staffing accountability ... 648 xi June 9, 2010 VerDate 0ct 09 2002 14:18 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00011 Fmt 0486 Sfmt 0486 F:\P11\NHI\COMP\PPACFRN.002 HOLCPC

13 Page Sec. 6107. GAO study and report on Five-Star Quality Rating System ... 649 P 2—T ARGETING E NFORCEMENT ART Sec. 6111. Civil money penalties ... 649 Sec. 6112. National independent monitor demonstration project ... 653 Sec. 6113. Notification of facility closure ... 655 Sec. 6114. National demonstration projects on culture change and use of information technology in nursing homes ... 656 ART 3—I MPROVING S TAFF T RAINING P Sec. 6121. Dementia and abuse prevention training ... 657 Subtitle C—Nationwide Program for National and State Background Checks on Direct Patient Access Employees of Long-term Care Facilities and Providers Sec. 6201. Nationwide program for National and State background checks on direct patient access employees of long-term care facilities and providers ... 658 Subtitle D—Patient-Centered Outcomes Research Sec. 6301. Patient-Centered Outcomes Research ... 664 Sec. 6302. Federal coordinating council for comparative effectiveness re- search ... 685 Subtitle E—Medicare, Medicaid, and CHIP Program Integrity Provisions Sec. 6401. Provider screening and other enrollment requirements under Medicare, Medicaid, and CHIP ... 685 Sec. 6402. Enhanced Medicare and Medicaid program integrity provi- sions ... 691 Sec. 6403. Elimination of duplication between the Healthcare Integrity and Protection Data Bank and the National Practitioner Data Bank ... 702 Sec. 6404. Maximum period for submission of Medicare claims reduced to not more than 12 months ... 707 Sec. 6405. Physicians who order items or services required to be Medi- care enrolled physicians or eligible professionals ... 708 Sec. 6406. Requirement for physicians to provide documentation on re- ferrals to programs at high risk of waste and abuse ... 708 Sec. 6407. Face to face encounter with patient required before physicians may certify eligibility for home health services or durable medical equipment under Medicare ... 709 Sec. 6408. Enhanced penalties ... 710 Sec. 6409. Medicare self-referral disclosure protocol ... 712 Sec. 6410. Adjustments to the Medicare durable medical equipment, prosthetics, orthotics, and supplies competitive acquisition program ... 713 Sec. 6411. Expansion of the Recovery Audit Contractor (RAC) program ... 714 Subtitle F—Additional Medicaid Program Integrity Provisions Sec. 6501. Termination of provider participation under Medicaid if termi- nated under Medicare or other State plan ... 716 Sec. 6502. Medicaid exclusion from participation relating to certain ownership, control, and management affiliations ... 716 Sec. 6503. Billing agents, clearinghouses, or other alternate payees re- quired to register under Medicaid ... 716 Sec. 6504. Requirement to report expanded set of data elements under MMIS to detect fraud and abuse ... 717 Sec. 6505. Prohibition on payments to institutions or entities located outside of the United States ... 717 Sec. 6506. Overpayments ... 717 Sec. 6507. Mandatory State use of national correct coding initiative ... 718 xii June 9, 2010 VerDate 0ct 09 2002 14:18 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00012 Fmt 0486 Sfmt 0486 F:\P11\NHI\COMP\PPACFRN.002 HOLCPC

14 Page Sec. 6508. General effective date ... 719 Subtitle G—Additional Program Integrity Provisions Sec. 6601. Prohibition on false statements and representations ... 719 Sec. 6602. Clarifying definition ... 720 Sec. 6603. Development of model uniform report form ... 720 Sec. 6604. Applicability of State law to combat fraud and abuse ... 720 Sec. 6605. Enabling the Department of Labor to issue administrative summary cease and desist orders and summary seizures orders against plans that are in financially hazardous condition ... 721 Sec. 6606. MEWA plan registration with Department of Labor ... 722 Sec. 6607. Permitting evidentiary privilege and confidential communica- tions ... 722 Subtitle H—Elder Justice Act Sec. 6701. Short title of subtitle ... 722 Sec. 6702. Definitions ... 722 Sec. 6703. Elder Justice ... 722 Subtitle I—Sense of the Senate Regarding Medical Malpractice Sec. 6801. Sense of the Senate regarding medical malpractice ... 745 TITLE VII—IMPROVING ACCESS TO INNOVATIVE MEDICAL THERAPIES Subtitle A—Biologics Price Competition and Innovation Sec. 7001. Short title ... 747 Sec. 7002. Approval pathway for biosimilar biological products ... 747 Sec. 7003. Savings ... 764 Subtitle B—More Affordable Medicines for Children and Underserved Communities Sec. 7101. Expanded participation in 340B program ... 764 Sec. 7102. Improvements to 340B program integrity ... 767 Sec. 7103. GAO study to make recommendations on improving the 340B program ... 771 TITLE VIII—CLASS ACT Sec. 8001. Short title of title ... 772 Sec. 8002. Establishment of national voluntary insurance program for purchasing community living assistance services and support ... 772 TITLE IX—REVENUE PROVISIONS Subtitle A—Revenue Offset Provisions Sec. 9001. Excise tax on high cost employer-sponsored health coverage ... 793 Sec. 9002. Inclusion of cost of employer-sponsored health coverage on W–2 ... 800 Sec. 9003. Distributions for medicine qualified only if for prescribed drug or insulin ... 800 Sec. 9004. Increase in additional tax on distributions from HSAs and Archer MSAs not used for qualified medical expenses ... 801 Sec. 9005. Limitation on health flexible spending arrangements under cafeteria plans ... 801 Sec. 9006. Expansion of information reporting requirements ... 801 Sec. 9007. Additional requirements for charitable hospitals ... 802 Sec. 9008. Imposition of annual fee on branded prescription pharma- ceutical manufacturers and importers ... 806 xiii June 9, 2010 VerDate 0ct 09 2002 14:18 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00013 Fmt 0486 Sfmt 0486 F:\P11\NHI\COMP\PPACFRN.002 HOLCPC

15 Page Sec. 9009. Imposition of annual fee on medical device manufacturers ø ¿ø repealed and replaced ... and importers ¿ 810 Sec. 9010. Imposition of annual fee on health insurance providers ... 811 Sec. 9011. Study and report of effect on veterans health care ... 815 Sec. 9012. Elimination of deduction for expenses allocable to Medicare Part D subsidy ... 816 Sec. 9013. Modification of itemized deduction for medical expenses ... 816 Sec. 9014. Limitation on excessive remuneration paid by certain health insurance providers ... 816 Sec. 9015. Additional hospital insurance tax on high-income taxpayers ... 818 Sec. 9016. Modification of section 833 treatment of certain health organi- zations ... 820 Sec. 9017. ø Excise tax on elective cosmetic medical proce- dures ¿ø nullified ¿ ... 820 Subtitle B—Other Provisions Sec. 9021. Exclusion of health benefits provided by Indian tribal govern- ments ... 821 Sec. 9022. Establishment of simple cafeteria plans for small businesses .. 822 Sec. 9023. Qualifying therapeutic discovery project credit ... 825 TITLE X—STRENGTHENING QUALITY, AFFORDABLE HEALTH CARE FOR ALL AMERICANS Subtitle A—Provisions Relating to Title I Sec. 10101. Amendments to subtitle A ø amendments fully incorporated ¿ 833 Sec. 10102. Amendments to subtitle B ø amendments fully incorporated ¿ 833 ø amendments fully incorporated ¿ Sec. 10103. Amendments to subtitle C 833 Sec. 10104. Amendments to subtitle D ... 834 Sec. 10105. Amendments to subtitle E ø amendments fully incorporated ¿ 834 amendments fully incorporated Sec. 10106. Amendments to subtitle F ø ¿ 835 Sec. 10107. Amendments to subtitle G amendments fully incorporated ¿ ø 835 Sec. 10108. Free choice vouchers ... 835 Sec. 10109. Development of standards for financial and administrative transactions ... 838 Subtitle B—Provisions Relating to Title II ART 1—M EDICAID AND CHIP P Sec. 10201. Amendments to the Social Security Act and title II of this Act ... 839 Sec. 10202. Incentives for States to offer home and community-based services as a long-term care alternative to nursing homes ... 845 Sec. 10203. Extension of funding for CHIP through fiscal year 2015 and other CHIP-related provisions ... 848 ART 2—S UPPORT FOR P REGNANT AND P ARENTING T EENS AND W OMEN P Sec. 10211. Definitions ... 852 Sec. 10212. Establishment of pregnancy assistance fund ... 853 Sec. 10213. Permissible uses of Fund ... 853 Sec. 10214. Appropriations ... 856 P ART 3—I NDIAN H EALTH C ARE I MPROVEMENT Sec. 10221. Indian health care improvement ... 857 Subtitle C—Provisions Relating to Title III Sec. 10301. Plans for a Value-Based purchasing program for ambulatory surgical centers ø amendments fully incorporated ¿ ... 858 xiv June 9, 2010 VerDate 0ct 09 2002 14:18 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00014 Fmt 0486 Sfmt 0486 F:\P11\NHI\COMP\PPACFRN.002 HOLCPC

16 Page Sec. 10302. Revision to national strategy for quality improvement in ø amendments fully incorporated ... 858 health care ¿ 858 Sec. 10303. Development of outcome measures ... Sec. 10304. Selection of efficiency measures amendments fully incor- ø ... porated ¿ 858 ø amendments fully incor- Sec. 10305. Data collection; public reporting porated ... 858 ¿ Sec. 10306. Improvements under the Center for Medicare and Medicaid ø ¿ ... 859 Innovation amendments fully incorporated Sec. 10307. Improvements to the Medicare shared savings program amendments fully incorporated ¿ ... 859 ø Sec. 10308. Revisions to national pilot program on payment bundling ø amendments fully incorporated ¿ ... 859 Sec. 10309. Revisions to hospital readmissions reduction program ø ¿ ... 859 amendments fully incorporated ø amendments fully in- Sec. 10310. Repeal of physician payment update ¿ ... 859 corporated Sec. 10311. Revisions to extension of ambulance add-ons ø amendments fully incorporated ¿ ... 859 Sec. 10312. Certain payment rules for long-term care hospital services and moratorium on the establishment of certain hospitals and facilities ø amendments fully incorporated ¿ ... 859 Sec. 10313. Revisions to the extension for the rural community hospital demonstration program ø amendments fully incorporated ¿ ... 860 Sec. 10314. Adjustment to low-volume hospital provision ø amendments 860 fully incorporated ¿ ... Sec. 10315. Revisions to home health care provisions ø amendments fully ¿ ... incorporated 860 amendments fully incorporated ... 860 ø Sec. 10316. Medicare DSH ¿ Sec. 10317. Revisions to extension of section 508 hospital provisions ¿ ... 860 ø amendments fully incorporated Sec. 10318. Revisions to transitional extra benefits under Medicare Ad- ø vantage ¿ ... 860 amendments fully incorporated Sec. 10319. Revisions to market basket adjustments amendments fully ø ¿ ... 860 incorporated Sec. 10320. Expansion of the scope of, and additional improvements to, the Independent Medicare Advisory Board ... 861 amendments fully in- Sec. 10321. Revision to community health teams ø corporated ¿ ... 861 Sec. 10322. Quality reporting for psychiatric hospitals ... 861 Sec. 10323. Medicare coverage for individuals exposed to environmental health hazards ... 863 Sec. 10324. Protections for frontier States ... 868 Sec. 10325. Revision to skilled nursing facility prospective ?payment sys- tem ... 870 Sec. 10326. Pilot testing pay-for-performance programs for certain Medi- 870 care providers ... Sec. 10327. Improvements to the physician quality reporting system ... 871 Sec. 10328. Improvement in part D medication therapy management (MTM) programs ... 873 Sec. 10329. Developing methodology to assess health plan value ... 874 Sec. 10330. Modernizing computer and data systems of the Centers for Medicare & Medicaid services to support improvements in care deliv- ery ... 875 Sec. 10331. Public reporting of performance information ... 875 Sec. 10332. Availability of medicare data for performance measurement . 877 Sec. 10333. Community-based collaborative care networks ... 879 Sec. 10334. Minority health ... 880 Sec. 10335. Technical correction to the hospital value-based purchasing program ø amendments fully incorporated ¿ ... 883 xv June 9, 2010 VerDate 0ct 09 2002 14:18 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00015 Fmt 0486 Sfmt 0486 F:\P11\NHI\COMP\PPACFRN.002 HOLCPC

17 Page Sec. 10336. GAO study and report on Medicare beneficiary access to high-quality dialysis services ... 884 Subtitle D—Provisions Relating to Title IV amendments fully incorporated ¿ Sec. 10401. Amendments to subtitle A ø 884 ø amendments fully incorporated ¿ Sec. 10402. Amendments to subtitle B 884 ø Sec. 10403. Amendments to subtitle C ¿ amendments fully incorporated 884 ø ¿ Sec. 10404. Amendments to subtitle D amendments fully incorporated 885 Sec. 10405. Amendments to subtitle E amendments fully incorporated ¿ ø 885 Sec. 10406. Amendment relating to waiving coinsurance for preventive services ø amendments fully incorporated ¿ ... 885 Sec. 10407. Better diabetes care ... 885 Sec. 10408. Grants for small businesses to provide comprehensive work- place wellness programs ... 886 Sec. 10409. Cures Acceleration Network ... 887 Sec. 10410. Centers of Excellence for Depression ... 894 Sec. 10411. Programs relating to congenital heart disease ... 898 Sec. 10412. Automated Defibrillation in Adam’s Memory Act ... 899 Sec. 10413. Young women’s breast health awareness and support of young women diagnosed with breast cancer ... 900 Subtitle E—Provisions Relating to Title V Sec. 10501. Amendments to the Public Health Service Act, the Social Security Act, and title V of this Act ... 903 Sec. 10502. Infrastructure to Expand Access to Care ... 910 Sec. 10503. Community Health Centers and the National Health Service Corps Fund ... 910 Sec. 10504. Demonstration project to provide access to affordable care ... 911 Subtitle F—Provisions Relating to Title VI Sec. 10601. Revisions to limitation on medicare exception to the prohibi- tion on certain physician referrals for hospitals ø amendments fully ¿ incorporated ... 911 Sec. 10602. Clarifications to patient-centered outcomes research ø amend- ... ¿ ments fully incorporated 912 Sec. 10603. Striking provisions relating to individual provider applica- amendments fully incorporated ¿ tion fees ø ... 912 Sec. 10604. Technical correction to section 6405 ø amendments fully in- ¿ ... corporated 912 Sec. 10605. Certain other providers permitted to conduct face to face ø amendments fully incorporated ¿ ... encounter for home health services 912 Sec. 10606. Health care fraud enforcement ... 912 Sec. 10607. State demonstration programs to evaluate alternatives to current medical tort litigation ... 915 Sec. 10608. Extension of medical malpractice coverage to free clinics ... 920 Sec. 10609. Labeling changes ... 920 Subtitle G—Provisions Relating to Title VIII ø amendments fully incor- Sec. 10801. Provisions relating to title VIII porated ... ¿ 921 Subtitle H—Provisions Relating to Title IX Sec. 10901. Modifications to excise tax on high cost employer-sponsored health coverage ø amendments fully incorporated ¿ ... 921 Sec. 10902. Inflation adjustment of limitation on health flexible spending arrangements under cafeteria plans ø amendments fully incorporated ¿ .. 921 Sec. 10903. Modification of limitation on charges by charitable hospitals ø amendments fully incorporated ¿ ... 922 xvi June 9, 2010 VerDate 0ct 09 2002 14:18 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00016 Fmt 0486 Sfmt 0486 F:\P11\NHI\COMP\PPACFRN.002 HOLCPC

18 Page Sec. 10904. Modification of annual fee on medical device manufacturers ø amendments fully incorporated ... 922 and importers ¿ Sec. 10905. Modification of annual fee on health insurance providers ø ¿ ... 922 amendments fully incorporated Sec. 10906. Modifications to additional hospital insurance tax on high- ø amendments fully incorporated ¿ income taxpayers 922 ... Sec. 10907. Excise tax on indoor tanning services in lieu of elective ø ¿ ... 922 cosmetic medical procedures substitutes for section 9017 of PPACA Sec. 10908. Exclusion for assistance provided to participants in State 923 student loan repayment programs for certain health professionals ... Sec. 10909. Expansion of adoption credit and adoption assistance pro- grams ... 924 Health Care and Education Reconciliation Act of 2010 (Public Law 111– 152) ... 927 Sec. 1001. Tax credits ø ¿ . ... 928 amendments fully incorporated into PPACA ø amendments fully incorporated into Sec. 1002. Individual responsibility ¿ . ... 929 PPACA Sec. 1003. Employer responsibility ø amendments fully incorporated into PPACA ¿ . ... 929 Sec. 1004. Income definitions. ... 929 Sec. 1005. Implementation funding. ... 931 Subtitle B—Medicare 931 Sec. 1101. Closing the medicare prescription drug ‘‘donut hole’’ ø substitutes for section 3315 of PPACA ¿ . ... 931 Sec. 1102. Medicare Advantage payments ø substitutes for sections 3201 934 & 3203 of PPACA ¿ . ... Sec. 1103. Savings from limits on MA plan administrative costs. ... 939 ø amendment Sec. 1104. Disproportionate share hospital (DSH) payments . ... fully incorporated into PPACA 940 ¿ Sec. 1105. Market basket updates ø amendments fully incorporated into PPACA 940 ¿ . ... ø amendments fully incorporated Sec. 1106. Physician ownership-referral into PPACA . ... 940 ¿ Sec. 1107. Payment for imaging services amendments fully incorporated ø ¿ 941 into PPACA . ... ø Sec. 1108. PE GPCI adjustment for 2010 amendment fully incorporated into PPACA ¿ . ... 941 Sec. 1109. Payment for qualifying hospitals. ... 941 Subtitle C—Medicaid 941 ø Sec. 1201. Federal funding for States amendments fully incorporated ¿ . ... 931 into PPACA 942 Sec. 1202. Payments to primary care physicians. ... Sec. 1203. Disproportionate share hospital payments. ... 943 Sec. 1204. Funding for the territories. ... 943 Sec. 1205. Delay in Community First Choice option ø amendment fully incorporated into PPACA . ... 944 ¿ Sec. 1206. Drug rebates for new formulations of existing drugs ø amend- ment fully incorporated into PPACA ¿ . ... 944 Subtitle D—Reducing Fraud, Waste, and Abuse 944 Sec. 1301. Community mental health centers. ... 944 Sec. 1302. Medicare prepayment medical review limitations. ... 944 xvii June 9, 2010 VerDate 0ct 09 2002 14:18 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00017 Fmt 0486 Sfmt 0486 F:\P11\NHI\COMP\PPACFRN.002 HOLCPC

19 Page Sec. 1303. Funding to fight fraud, waste, and abuse. ... 944 Sec. 1304. 90-day period of enhanced oversight for initial claims of DME suppliers amendment fully incorporated into PPACA ¿ . ... 945 ø Subtitle E—Provisions Relating to Revenue 945 Sec. 1401. High-cost plan excise tax amendments fully incorporated into ø PPACA ¿ . ... 945 Sec. 1402. Unearned income Medicare contribution. ... 946 Sec. 1403. Delay of limitation on health flexible spending arrangements under cafeteria plans ø amendments fully incorporated into PPACA ¿ . ... 948 Sec. 1404. Brand name pharmaceuticals amendments fully incorporated ø into PPACA ¿ . ... 948 Sec. 1405. Excise tax on medical device manufacturers ø substitutes for section 9009 of PPACA ¿ . ... 949 Sec. 1406. Health insurance providers ø amendment fully incorporated into PPACA 950 ¿ . ... Sec. 1407. Delay of elimination of deduction for expenses allocable to amendment fully incorporated in PPACA ¿ . ... 950 ø medicare part D subsidy Sec. 1408. Elimination of unintended application of cellulosic biofuel pro- ducer credit. ... 950 950 Sec. 1409. Codification of economic substance doctrine and penalties. ... 953 Sec. 1410. Time for payment of corporate estimated taxes. ... Subtitle F—Other Provisions 953 Sec. 1501. Community college and career training grant program. ... 953 TITLE II—EDUCATION AND HEALTH ø Omitted From This Compilation Subtitle A—Education ¿ Subtitle B—Health 954 Sec. 2301. Insurance reforms ø amendment fully incorporated into PPACA ¿ . ... 954 Sec. 2302. Drugs purchased by covered entities. ... 954 Sec. 2303. Community health centers ø amendment fully incorporated into PPACA ¿ . ... 955 xviii June 9, 2010 VerDate 0ct 09 2002 14:18 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00018 Fmt 0486 Sfmt 0486 F:\P11\NHI\COMP\PPACFRN.002 HOLCPC

20 PATIENT PROTECTION AND AFFORDABLE CARE ACT 42 U.S.C. 18001 note SECTION 1 ¿ ø . SHORT TITLE; TABLE OF CONTENTS. T .—This Act may be cited as the ‘‘Patient Pro- HORT (a) S ITLE tection and Affordable Care Act’’. (b) T ONTENTS .—The table of contents of this Act is ABLE OF C as follows: Sec. 1. Short title; table of contents. TITLE I—QUALITY, AFFORDABLE HEALTH CARE FOR ALL AMERICANS Subtitle A—Immediate Improvements in Health Care Coverage for All Americans Sec. 1001. Amendments to the Public Health Service Act. Sec. 1002. Health insurance consumer information. Sec. 1003. Ensuring that consumers get value for their dollars. Sec. 1004. Effective dates. Subtitle B—Immediate Actions to Preserve and Expand Coverage Sec. 1101. Immediate access to insurance for uninsured individuals with a pre- existing condition. Sec. 1102. Reinsurance for early retirees. Sec. 1103. Immediate information that allows consumers to identify affordable cov- erage options. Sec. 1104. Administrative simplification. Sec. 1105. Effective date. Subtitle C—Quality Health Insurance Coverage for All Americans ART 1—H EALTH I NSURANCE M ARKET R EFORMS P Sec. 1201. Amendment to the Public Health Service Act. 2—O ART THER P ROVISIONS P Sec. 1251. Preservation of right to maintain existing coverage. Sec. 1252. Rating reforms must apply uniformly to all health insurance issuers and group health plans. Sec. 1253. Annual report on self-insured plans. Sec. 1254. Study of large group market. Sec. 1255. Effective dates. Subtitle D—Available Coverage Choices for All Americans P 1—E STABLISHMENT OF Q ART H EALTH P LANS UALIFIED Sec. 1301. Qualified health plan defined. Sec. 1302. Essential health benefits requirements. Sec. 1303. Special rules. Sec. 1304. Related definitions. P ART 2—C ONSUMER C HOICES AND I NSURANCE C OMPETITION T HROUGH H EALTH ENEFIT E XCHANGES B Sec. 1311. Affordable choices of health benefit plans. Sec. 1312. Consumer choice. Sec. 1313. Financial integrity. 1 June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00001 Fmt 9001 Sfmt 6611 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

21 2 Sec. 1 PPACA (Consolidated) ART 3—S F LEXIBILITY R ELATING TO E XCHANGES P TATE Sec. 1321. State flexibility in operation and enforcement of Exchanges and related requirements. Sec. 1322. Federal program to assist establishment and operation of nonprofit, member-run health insurance issuers. ø stricken . Sec. 1323. Community health insurance option ¿ Sec. 1323. Funding for the territories. Sec. 1324. Level playing field. ART 4—S TATE F LEXIBILITY TO STABLISH A LTERNATIVE P ROGRAMS E P Sec. 1331. State flexibility to establish basic health programs for low-income indi- viduals not eligible for Medicaid. Sec. 1332. Waiver for State innovation. Sec. 1333. Provisions relating to offering of plans in more than one State. Sec. 1334. Multi-State plans. ART 5—R EINSURANCE AND R A DJUSTMENT ISK P Sec. 1341. Transitional reinsurance program for individual market in each State. Sec. 1342. Establishment of risk corridors for plans in individual and small group markets. Sec. 1343. Risk adjustment. Subtitle E—Affordable Coverage Choices for All Americans ART I—P REMIUM T AX C REDITS AND C OST - SHARING R EDUCTIONS P SUBPART A PREMIUM TAX CREDITS AND COST - SHARING REDUCTIONS — Sec. 1401. Refundable tax credit providing premium assistance for coverage under a qualified health plan. Sec. 1402. Reduced cost-sharing for individuals enrolling in qualified health plans. — ELIGIBILITY DETERMINATIONS SUBPART B Sec. 1411. Procedures for determining eligibility for Exchange participation, pre- mium tax credits and reduced cost-sharing, and individual responsi- bility exemptions. Sec. 1412. Advance determination and payment of premium tax credits and cost- sharing reductions. Sec. 1413. Streamlining of procedures for enrollment through an exchange and State Medicaid, CHIP, and health subsidy programs. Sec. 1414. Disclosures to carry out eligibility requirements for certain programs. Sec. 1415. Premium tax credit and cost-sharing reduction payments disregarded for Federal and Federally-assisted programs. Sec. 1416. Study of geographic variation in application of FPL. P ART II—S MALL B USINESS T AX C REDIT Sec. 1421. Credit for employee health insurance expenses of small businesses. Subtitle F—Shared Responsibility for Health Care ART I—I NDIVIDUAL R P ESPONSIBILITY Sec. 1501. Requirement to maintain minimum essential coverage. Sec. 1502. Reporting of health insurance coverage. P ART II—E MPLOYER R ESPONSIBILITIES Sec. 1511. Automatic enrollment for employees of large employers. Sec. 1512. Employer requirement to inform employees of coverage options. Sec. 1513. Shared responsibility for employers. Sec. 1514. Reporting of employer health insurance coverage. Sec. 1515. Offering of Exchange-participating qualified health plans through cafe- teria plans. Subtitle G—Miscellaneous Provisions Sec. 1551. Definitions. Sec. 1552. Transparency in government. Sec. 1553. Prohibition against discrimination on assisted suicide. Sec. 1554. Access to therapies. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00002 Fmt 9001 Sfmt 6611 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

22 3 Sec. 1 PPACA (Consolidated) Sec. 1555. Freedom not to participate in Federal health insurance programs. Sec. 1556. Equity for certain eligible survivors. Sec. 1557. Nondiscrimination. Sec. 1558. Protections for employees. Sec. 1559. Oversight. Sec. 1560. Rules of construction. Sec. 1561. Health information technology enrollment standards and protocols. Sec. 1562. GAO study regarding the rate of denial of coverage and enrollment by health insurance issuers and group health plans. Sec. 1563. Small business procurement. Sec. 1563 [sic]. Conforming amendments. Sec. 1563 [sic]. Sense of the Senate promoting fiscal responsibility. TITLE II—ROLE OF PUBLIC PROGRAMS Subtitle A—Improved Access to Medicaid Sec. 2001. Medicaid coverage for the lowest income populations. Sec. 2002. Income eligibility for nonelderly determined using modified gross in- come. Sec. 2003. Requirement to offer premium assistance for employer-sponsored insur- ance. Sec. 2004. Medicaid coverage for former foster care children. Sec. 2005. Payments to territories. Sec. 2006. Special adjustment to FMAP determination for certain States recovering from a major disaster. Sec. 2007. Medicaid Improvement Fund rescission. Subtitle B—Enhanced Support for the Children’s Health Insurance Program Sec. 2101. Additional federal financial participation for CHIP. Sec. 2102. Technical corrections. Subtitle C—Medicaid and CHIP Enrollment Simplification Sec. 2201. Enrollment Simplification and coordination with State Health Insurance Exchanges. Sec. 2202. Permitting hospitals to make presumptive eligibility determinations for all Medicaid eligible populations. Subtitle D—Improvements to Medicaid Services Sec. 2301. Coverage for freestanding birth center services. Sec. 2302. Concurrent care for children. Sec. 2303. State eligibility option for family planning services. Sec. 2304. Clarification of definition of medical assistance. Subtitle E—New Options for States to Provide Long-Term Services and Supports Sec. 2401. Community First Choice Option. Sec. 2402. Removal of barriers to providing home and community-based services. Sec. 2403. Money Follows the Person Rebalancing Demonstration. Sec. 2404. Protection for recipients of home and community-based services against spousal impoverishment. Sec. 2405. Funding to expand State Aging and Disability Resource Centers. Sec. 2406. Sense of the Senate regarding long-term care. Subtitle F—Medicaid Prescription Drug Coverage Sec. 2501. Prescription drug rebates. Sec. 2502. Elimination of exclusion of coverage of certain drugs. Sec. 2503. Providing adequate pharmacy reimbursement. Subtitle G—Medicaid Disproportionate Share Hospital (DSH) Payments Sec. 2551. Disproportionate share hospital payments. Subtitle H—Improved Coordination for Dual Eligible Beneficiaries Sec. 2601. 5-year period for demonstration projects. Sec. 2602. Providing Federal coverage and payment coordination for dual eligible beneficiaries. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00003 Fmt 9001 Sfmt 6611 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

23 4 Sec. 1 PPACA (Consolidated) Subtitle I—Improving the Quality of Medicaid for Patients and Providers Sec. 2701. Adult health quality measures. Sec. 2702. Payment Adjustment for Health Care-Acquired Conditions. Sec. 2703. State option to provide health homes for enrollees with chronic condi- tions. Sec. 2704. Demonstration project to evaluate integrated care around a hospitaliza- tion. Sec. 2705. Medicaid Global Payment System Demonstration Project. Sec. 2706. Pediatric Accountable Care Organization Demonstration Project. Sec. 2707. Medicaid emergency psychiatric demonstration project. Subtitle J—Improvements to the Medicaid and CHIP Payment and Access Commission (MACPAC) Sec. 2801. MACPAC assessment of policies affecting all Medicaid beneficiaries. Subtitle K—Protections for American Indians and Alaska Natives Sec. 2901. Special rules relating to Indians. Sec. 2902. Elimination of sunset for reimbursement for all medicare part B services furnished by certain indian hospitals and clinics. Subtitle L—Maternal and Child Health Services Sec. 2951. Maternal, infant, and early childhood home visiting programs. Sec. 2952. Support, education, and research for postpartum depression. Sec. 2953. Personal responsibility education. Sec. 2954. Restoration of funding for abstinence education. Sec. 2955. Inclusion of information about the importance of having a health care power of attorney in transition planning for children aging out of foster care and independent living programs. TITLE III—IMPROVING THE QUALITY AND EFFICIENCY OF HEALTH CARE Subtitle A—Transforming the Health Care Delivery System ART 1—L INKING P AYMENT TO Q UALITY O UTCOMES U NDER THE M EDICARE P ROGRAM P Sec. 3001. Hospital Value-Based purchasing program. Sec. 3002. Improvements to the physician quality reporting system. Sec. 3003. Improvements to the physician feedback program. Sec. 3004. Quality reporting for long-term care hospitals, inpatient rehabilitation hospitals, and hospice programs. Sec. 3005. Quality reporting for PPS-exempt cancer hospitals. Sec. 3006. Plans for a Value-Based purchasing program for skilled nursing facilities and home health agencies. Sec. 3007. Value-based payment modifier under the physician fee schedule. Sec. 3008. Payment adjustment for conditions acquired in hospitals. P ART 2—N ATIONAL S TRATEGY TO I MPROVE H EALTH C ARE Q UALITY Sec. 3011. National strategy. Sec. 3012. Interagency Working Group on Health Care Quality. Sec. 3013. Quality measure development. Sec. 3014. Quality measurement. Sec. 3015. Data collection; public reporting. ART 3—E NCOURAGING D EVELOPMENT OF N EW P ATIENT P ARE M ODELS C Sec. 3021. Establishment of Center for Medicare and Medicaid Innovation within CMS. Sec. 3022. Medicare shared savings program. Sec. 3023. National pilot program on payment bundling. Sec. 3024. Independence at home demonstration program. Sec. 3025. Hospital readmissions reduction program. Sec. 3026. Community-Based Care Transitions Program. Sec. 3027. Extension of gainsharing demonstration. Subtitle B—Improving Medicare for Patients and Providers O ART I—E NSURING B ENEFICIARY A CCESS TO P HYSICIAN C ARE AND THER S ERVICES P Sec. 3101. ø Increase in the physician payment update ¿ø repealed ¿ . June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00004 Fmt 9001 Sfmt 6611 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

24 5 Sec. 1 PPACA (Consolidated) Sec. 3102. Extension of the work geographic index floor and revisions to the prac- tice expense geographic adjustment under the Medicare physician fee schedule. Sec. 3103. Extension of exceptions process for Medicare therapy caps. Sec. 3104. Extension of payment for technical component of certain physician pa- thology services. Sec. 3105. Extension of ambulance add-ons. Sec. 3106. Extension of certain payment rules for long-term care hospital services and of moratorium on the establishment of certain hospitals and facili- ties. Sec. 3107. Extension of physician fee schedule mental health add-on. Sec. 3108. Permitting physician assistants to order post-Hospital extended care services. Sec. 3109. Exemption of certain pharmacies from accreditation requirements. Sec. 3110. Part B special enrollment period for disabled TRICARE beneficiaries. Sec. 3111. Payment for bone density tests. Sec. 3112. Revision to the Medicare Improvement Fund. Sec. 3113. Treatment of certain complex diagnostic laboratory tests. Sec. 3114. Improved access for certified nurse-midwife services. ART II—R URAL P ROTECTIONS P Sec. 3121. Extension of outpatient hold harmless provision. Sec. 3122. Extension of Medicare reasonable costs payments for certain clinical di- agnostic laboratory tests furnished to hospital patients in certain rural areas. Sec. 3123. Extension of the Rural Community Hospital Demonstration Program. Sec. 3124. Extension of the Medicare-dependent hospital (MDH) program. Sec. 3125. Temporary improvements to the Medicare inpatient hospital payment adjustment for low-volume hospitals. Sec. 3126. Improvements to the demonstration project on community health inte- gration models in certain rural counties. Sec. 3127. MedPAC study on adequacy of Medicare payments for health care pro- viders serving in rural areas. Sec. 3128. Technical correction related to critical access hospital services. Sec. 3129. Extension of and revisions to Medicare rural hospital flexibility program. ART III—I MPROVING P AYMENT A CCURACY P Sec. 3131. Payment adjustments for home health care. Sec. 3132. Hospice reform. Sec. 3133. Improvement to medicare disproportionate share hospital (DSH) pay- ments. Sec. 3134. Misvalued codes under the physician fee schedule. Sec. 3135. Modification of equipment utilization factor for advanced imaging serv- ices. Sec. 3136. Revision of payment for power-driven wheelchairs. Sec. 3137. Hospital wage index improvement. Sec. 3138. Treatment of certain cancer hospitals. Sec. 3139. Payment for biosimilar biological products. Sec. 3140. Medicare hospice concurrent care demonstration program. Sec. 3141. Application of budget neutrality on a national basis in the calculation of the Medicare hospital wage index floor. Sec. 3142. HHS study on urban Medicare-dependent hospitals. Sec. 3143. Protecting home health benefits. Subtitle C—Provisions Relating to Part C Sec. 3201. ø Medicare Advantage payment ¿ø repealed & replaced ¿ . Sec. 3202. Benefit protection and simplification. ø Application of coding intensity adjustment during MA payment transi- Sec. 3203. tion ¿ø repealed and replaced ¿ . Sec. 3204. Simplification of annual beneficiary election periods. Sec. 3205. Extension for specialized MA plans for special needs individuals. Sec. 3206. Extension of reasonable cost contracts. Sec. 3207. Technical correction to MA private fee-for-service plans. Sec. 3208. Making senior housing facility demonstration permanent. Sec. 3209. Authority to deny plan bids. Sec. 3210. Development of new standards for certain Medigap plans. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00005 Fmt 9001 Sfmt 6611 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

25 6 Sec. 1 PPACA (Consolidated) Subtitle D—Medicare Part D Improvements for Prescription Drug Plans and MA– PD Plans Sec. 3301. Medicare coverage gap discount program. Sec. 3302. Improvement in determination of Medicare part D low-income bench- mark premium. Sec. 3303. Voluntary de minimis policy for subsidy eligible individuals under pre- scription drug plans and MA–PD plans. Sec. 3304. Special rule for widows and widowers regarding eligibility for low-in- come assistance. Sec. 3305. Improved information for subsidy eligible individuals reassigned to pre- scription drug plans and MA–PD plans. Sec. 3306. Funding outreach and assistance for low-income programs. Sec. 3307. Improving formulary requirements for prescription drug plans and MA– PD plans with respect to certain categories or classes of drugs. Sec. 3308. Reducing part D premium subsidy for high-income beneficiaries. Sec. 3309. Elimination of cost sharing for certain dual eligible individuals. Sec. 3310. Reducing wasteful dispensing of outpatient prescription drugs in long- term care facilities under prescription drug plans and MA–PD plans. Sec. 3311. Improved Medicare prescription drug plan and MA–PD plan complaint system. Sec. 3312. Uniform exceptions and appeals process for prescription drug plans and MA–PD plans. Sec. 3313. Office of the Inspector General studies and reports. Sec. 3314. Including costs incurred by AIDS drug assistance programs and Indian Health Service in providing prescription drugs toward the annual out- of-pocket threshold under part D. Sec. 3315. Immediate reduction in coverage gap in 2010 ¿ø repealed and replaced ¿ . ø Subtitle E—Ensuring Medicare Sustainability Sec. 3401. Revision of certain market basket updates and incorporation of produc- tivity improvements into market basket updates that do not already in- corporate such improvements. Sec. 3402. Temporary adjustment to the calculation of part B premiums. Sec. 3403. Independent Medicare ¿ Payment Advisory Board. ø Subtitle F—Health Care Quality Improvements Sec. 3501. Health care delivery system research; Quality improvement technical as- sistance. Sec. 3502. Establishing community health teams to support the patient-centered medical home. Sec. 3503. Medication management services in treatment of chronic disease. Sec. 3504. Design and implementation of regionalized systems for emergency care. Sec. 3505. Trauma care centers and service availability. Sec. 3506. Program to facilitate shared decisionmaking. Sec. 3507. Presentation of prescription drug benefit and risk information. Sec. 3508. Demonstration program to integrate quality improvement and patient safety training into clinical education of health professionals. Sec. 3509. Improving women’s health. Sec. 3510. Patient navigator program. Sec. 3511. Authorization of appropriations. Sec. 3512. GAO study and report on causes of action. Subtitle G—Protecting and Improving Guaranteed Medicare Benefits Sec. 3601. Protecting and improving guaranteed Medicare benefits. Sec. 3602. No cuts in guaranteed benefits. TITLE IV—PREVENTION OF CHRONIC DISEASE AND IMPROVING PUBLIC HEALTH Subtitle A—Modernizing Disease Prevention and Public Health Systems Sec. 4001. National Prevention, Health Promotion and Public Health Council. Sec. 4002. Prevention and Public Health Fund. Sec. 4003. Clinical and community Preventive Services. Sec. 4004. Education and outreach campaign regarding preventive benefits. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00006 Fmt 9001 Sfmt 6611 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

26 7 Sec. 1 PPACA (Consolidated) Subtitle B—Increasing Access to Clinical Preventive Services Sec. 4101. School-based health centers. Sec. 4102. Oral healthcare prevention activities. Sec. 4103. Medicare coverage of annual wellness visit providing a personalized pre- vention plan. Sec. 4104. Removal of barriers to preventive services in Medicare. Sec. 4105. Evidence-based coverage of preventive services in Medicare. Sec. 4106. Improving access to preventive services for eligible adults in Medicaid. Sec. 4107. Coverage of comprehensive tobacco cessation services for pregnant women in Medicaid. Sec. 4108. Incentives for prevention of chronic diseases in medicaid. Subtitle C—Creating Healthier Communities Sec. 4201. Community transformation grants. Sec. 4202. Healthy aging, living well; evaluation of community-based prevention and wellness programs for Medicare beneficiaries. Sec. 4203. Removing barriers and improving access to wellness for individuals with disabilities. Sec. 4204. Immunizations. Sec. 4205. Nutrition labeling of standard menu items at Chain Restaurants. Sec. 4206. Demonstration project concerning individualized wellness plan. Sec. 4207. Reasonable break time for nursing mothers. Subtitle D—Support for Prevention and Public Health Innovation Sec. 4301. Research on optimizing the delivery of public health services. Sec. 4302. Understanding health disparities: data collection and analysis. Sec. 4303. CDC and employer-based wellness programs. Sec. 4304. Epidemiology-Laboratory Capacity Grants. Sec. 4305. Advancing research and treatment for pain care management. Sec. 4306. Funding for Childhood Obesity Demonstration Project. Subtitle E—Miscellaneous Provisions Sec. 4401. Sense of the Senate concerning CBO scoring. Sec. 4402. Effectiveness of Federal health and wellness initiatives. TITLE V—HEALTH CARE WORKFORCE Subtitle A—Purpose and Definitions Sec. 5001. Purpose. Sec. 5002. Definitions. Subtitle B—Innovations in the Health Care Workforce Sec. 5101. National health care workforce commission. Sec. 5102. State health care workforce development grants. Sec. 5103. Health care workforce assessment. Sec. 5104. Interagency task force to assess and improve access to health care in the State of Alaska. Subtitle C—Increasing the Supply of the Health Care Workforce Sec. 5201. Federally supported student loan funds. Sec. 5202. Nursing student loan program. Sec. 5203. Health care workforce loan repayment programs. Sec. 5204. Public health workforce recruitment and retention programs. Sec. 5205. Allied health workforce recruitment and retention programs. Sec. 5206. Grants for State and local programs. Sec. 5207. Funding for National Health Service Corps. Sec. 5208. Nurse-managed health clinics. Sec. 5209. Elimination of cap on commissioned corps. Sec. 5210. Establishing a Ready Reserve Corps. Subtitle D—Enhancing Health Care Workforce Education and Training Sec. 5301. Training in family medicine, general internal medicine, general pediat- rics, and physician assistantship. Sec. 5302. Training opportunities for direct care workers. Sec. 5303. Training in general, pediatric, and public health dentistry. Sec. 5304. Alternative dental health care providers demonstration project. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00007 Fmt 9001 Sfmt 6611 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

27 8 Sec. 1 PPACA (Consolidated) Sec. 5305. Geriatric education and training; career awards; comprehensive geriatric education. Sec. 5306. Mental and behavioral health education and training grants. Sec. 5307. Cultural competency, prevention, and public health and individuals with disabilities training. Sec. 5308. Advanced nursing education grants. Sec. 5309. Nurse education, practice, and retention grants. Sec. 5310. Loan repayment and scholarship program. Sec. 5311. Nurse faculty loan program. Sec. 5312. Authorization of appropriations for parts B through D of title VIII. Sec. 5313. Grants to promote the community health workforce. Sec. 5314. Fellowship training in public health. Sec. 5315. United States Public Health Sciences Track. Sec. 5316. Demonstration grants for family nurse practitioner training programs. Subtitle E—Supporting the Existing Health Care Workforce Sec. 5401. Centers of excellence. Sec. 5402. Health care professionals training for diversity. Sec. 5403. Interdisciplinary, community-based linkages. Sec. 5404. Workforce diversity grants. Sec. 5405. Primary care extension program. Subtitle F—Strengthening Primary Care and Other Workforce Improvements Sec. 5501. Expanding access to primary care services and general surgery services. ø Medicare Federally qualified health center improvements Sec. 5502. repealed ¿ . ¿ø Sec. 5503. Distribution of additional residency positions. Sec. 5504. Counting resident time in nonprovider settings. Sec. 5505. Rules for counting resident time for didactic and scholarly activities and other activities. Sec. 5506. Preservation of resident cap positions from closed hospitals. Sec. 5507. Demonstration projects To address health professions workforce needs; extension of family-to-family health information centers. Sec. 5508. Increasing teaching capacity. Sec. 5509. Graduate nurse education demonstration. Subtitle G—Improving Access to Health Care Services Sec. 5601. Spending for Federally Qualified Health Centers (FQHCs). Sec. 5602. Negotiated rulemaking for development of methodology and criteria for designating medically underserved populations and health professions shortage areas. Sec. 5603. Reauthorization of the Wakefield Emergency Medical Services for Chil- dren Program. Sec. 5604. Co-locating primary and specialty care in community-based mental health settings. Sec. 5605. Key National indicators. Sec. 5606. State grants to health care providers who provide services to a high per- centage of medically underserved populations or other special popu- lations. Subtitle H—General Provisions Sec. 5701. Reports. TITLE VI—TRANSPARENCY AND PROGRAM INTEGRITY Subtitle A—Physician Ownership and Other Transparency Sec. 6001. Limitation on Medicare exception to the prohibition on certain physician referrals for hospitals. Sec. 6002. Transparency reports and reporting of physician ownership or invest- ment interests. Sec. 6003. Disclosure requirements for in-office ancillary services exception to the prohibition on physician self-referral for certain imaging services. Sec. 6004. Prescription drug sample transparency. Sec. 6005. Pharmacy benefit managers transparency requirements. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00008 Fmt 9001 Sfmt 6611 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

28 9 Sec. 1 PPACA (Consolidated) Subtitle B—Nursing Home Transparency and Improvement P MPROVING T RANSPARENCY OF I NFORMATION ART 1—I Sec. 6101. Required disclosure of ownership and additional disclosable parties in- formation. Sec. 6102. Accountability requirements for skilled nursing facilities and nursing fa- cilities. Sec. 6103. Nursing home compare Medicare website. Sec. 6104. Reporting of expenditures. Sec. 6105. Standardized complaint form. Sec. 6106. Ensuring staffing accountability. Sec. 6107. GAO study and report on Five-Star Quality Rating System. ART 2—T ARGETING E NFORCEMENT P Sec. 6111. Civil money penalties. Sec. 6112. National independent monitor demonstration project. Sec. 6113. Notification of facility closure. Sec. 6114. National demonstration projects on culture change and use of informa- tion technology in nursing homes. ART 3—I P S TAFF T RAINING MPROVING Sec. 6121. Dementia and abuse prevention training. Subtitle C—Nationwide Program for National and State Background Checks on Direct Patient Access Employees of Long-term Care Facilities and Providers Sec. 6201. Nationwide program for National and State background checks on direct patient access employees of long-term care facilities and providers. Subtitle D—Patient-Centered Outcomes Research Sec. 6301. Patient-Centered Outcomes Research. Sec. 6302. Federal coordinating council for comparative effectiveness research. Subtitle E—Medicare, Medicaid, and CHIP Program Integrity Provisions Sec. 6401. Provider screening and other enrollment requirements under Medicare, Medicaid, and CHIP. Sec. 6402. Enhanced Medicare and Medicaid program integrity provisions. Sec. 6403. Elimination of duplication between the Healthcare Integrity and Protec- tion Data Bank and the National Practitioner Data Bank. Sec. 6404. Maximum period for submission of Medicare claims reduced to not more than 12 months. Sec. 6405. Physicians who order items or services required to be Medicare enrolled physicians or eligible professionals. Sec. 6406. Requirement for physicians to provide documentation on referrals to pro- grams at high risk of waste and abuse. Sec. 6407. Face to face encounter with patient required before physicians may cer- tify eligibility for home health services or durable medical equipment under Medicare. Sec. 6408. Enhanced penalties. Sec. 6409. Medicare self-referral disclosure protocol. Sec. 6410. Adjustments to the Medicare durable medical equipment, prosthetics, orthotics, and supplies competitive acquisition program. Sec. 6411. Expansion of the Recovery Audit Contractor (RAC) program. Subtitle F—Additional Medicaid Program Integrity Provisions Sec. 6501. Termination of provider participation under Medicaid if terminated under Medicare or other State plan. Sec. 6502. Medicaid exclusion from participation relating to certain ownership, control, and management affiliations. Sec. 6503. Billing agents, clearinghouses, or other alternate payees required to reg- ister under Medicaid. Sec. 6504. Requirement to report expanded set of data elements under MMIS to detect fraud and abuse. Sec. 6505. Prohibition on payments to institutions or entities located outside of the United States. Sec. 6506. Overpayments. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00009 Fmt 9001 Sfmt 6611 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

29 10 Sec. 1 PPACA (Consolidated) Sec. 6507. Mandatory State use of national correct coding initiative. Sec. 6508. General effective date. Subtitle G—Additional Program Integrity Provisions Sec. 6601. Prohibition on false statements and representations. Sec. 6602. Clarifying definition. Sec. 6603. Development of model uniform report form. Sec. 6604. Applicability of State law to combat fraud and abuse. Sec. 6605. Enabling the Department of Labor to issue administrative summary cease and desist orders and summary seizures orders against plans that are in financially hazardous condition. Sec. 6606. MEWA plan registration with Department of Labor. Sec. 6607. Permitting evidentiary privilege and confidential communications. Subtitle H—Elder Justice Act Sec. 6701. Short title of subtitle. Sec. 6702. Definitions. Sec. 6703. Elder Justice. Subtitle I—Sense of the Senate Regarding Medical Malpractice Sec. 6801. Sense of the Senate regarding medical malpractice. TITLE VII—IMPROVING ACCESS TO INNOVATIVE MEDICAL THERAPIES Subtitle A—Biologics Price Competition and Innovation Sec. 7001. Short title. Sec. 7002. Approval pathway for biosimilar biological products. Sec. 7003. Savings. Subtitle B—More Affordable Medicines for Children and Underserved Communities Sec. 7101. Expanded participation in 340B program. Sec. 7102. Improvements to 340B program integrity. Sec. 7103. GAO study to make recommendations on improving the 340B program. TITLE VIII—CLASS ACT Sec. 8001. Short title of title. Sec. 8002. Establishment of national voluntary insurance program for purchasing community living assistance services and support. TITLE IX—REVENUE PROVISIONS Subtitle A—Revenue Offset Provisions Sec. 9001. Excise tax on high cost employer-sponsored health coverage. Sec. 9002. Inclusion of cost of employer-sponsored health coverage on W–2. Sec. 9003. Distributions for medicine qualified only if for prescribed drug or insulin. Sec. 9004. Increase in additional tax on distributions from HSAs and Archer MSAs not used for qualified medical expenses. Sec. 9005. Limitation on health flexible spending arrangements under cafeteria plans. Sec. 9006. Expansion of information reporting requirements. Sec. 9007. Additional requirements for charitable hospitals. Sec. 9008. Imposition of annual fee on branded prescription pharmaceutical manu- facturers and importers. Sec. 9009. Imposition of annual fee on medical device manufacturers and import- ø ers ¿ø repealed and replaced ¿ . Sec. 9010. Imposition of annual fee on health insurance providers. Sec. 9011. Study and report of effect on veterans health care. Sec. 9012. Elimination of deduction for expenses allocable to Medicare Part D sub- sidy. Sec. 9013. Modification of itemized deduction for medical expenses. Sec. 9014. Limitation on excessive remuneration paid by certain health insurance providers. Sec. 9015. Additional hospital insurance tax on high-income taxpayers. Sec. 9016. Modification of section 833 treatment of certain health organizations. Sec. 9017. ø Excise tax on elective cosmetic medical procedures ¿ø nullified ¿ . June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00010 Fmt 9001 Sfmt 6611 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

30 11 Sec. 1 PPACA (Consolidated) Subtitle B—Other Provisions Sec. 9021. Exclusion of health benefits provided by Indian tribal governments. Sec. 9022. Establishment of simple cafeteria plans for small businesses. Sec. 9023. Qualifying therapeutic discovery project credit. TITLE X—STRENGTHENING QUALITY, AFFORDABLE HEALTH CARE FOR ALL AMERICANS Subtitle A—Provisions Relating to Title I amendments fully incorporated above . Sec. 10101. Amendments to subtitle A ¿ ø ¿ . ø Sec. 10102. Amendments to subtitle B amendments fully incorporated above amendments fully incorporated above Sec. 10103. Amendments to subtitle C . ø ¿ Sec. 10104. Amendments to subtitle D. amendments fully incorporated above ¿ . Sec. 10105. Amendments to subtitle E ø amendments fully incorporated above ¿ . Sec. 10106. Amendments to subtitle F ø ø amendments fully incorporated above Sec. 10107. Amendments to subtitle G . ¿ Sec. 10108. Free choice vouchers. Sec. 10109. Development of standards for financial and administrative trans- actions. Subtitle B—Provisions Relating to Title II P 1—M CHIP EDICAID AND ART Sec. 10201. Amendments to the Social Security Act and title II of this Act. Sec. 10202. Incentives for States to offer home and community-based services as a long-term care alternative to nursing homes. Sec. 10203. Extension of funding for CHIP through fiscal year 2015 and other CHIP-related provisions. P 2—S ART P REGNANT AND P ARENTING T EENS AND W OMEN UPPORT FOR Sec. 10211. Definitions. Sec. 10212. Establishment of pregnancy assistance fund. Sec. 10213. Permissible uses of Fund. Sec. 10214. Appropriations. P ART 3—I NDIAN H EALTH C ARE I MPROVEMENT Sec. 10221. Indian health care improvement. Subtitle C—Provisions Relating to Title III Sec. 10301. Plans for a Value-Based purchasing program for ambulatory surgical centers ¿ . ø amendments fully incorporated above Sec. 10302. Revision to national strategy for quality improvement in health care amendments fully incorporated above . ø ¿ Sec. 10303. Development of outcome measures. ø Sec. 10304. Selection of efficiency measures amendments fully incorporated above ¿ . ø Sec. 10305. Data collection; public reporting amendments fully incorporated above . ¿ Sec. 10306. Improvements under the Center for Medicare and Medicaid Innovation ø ¿ . amendments fully incorporated above ø amendments Sec. 10307. Improvements to the Medicare shared savings program ¿ . fully incorporated above Sec. 10308. Revisions to national pilot program on payment bundling ø amendments fully incorporated above ¿ . Sec. 10309. Revisions to hospital readmissions reduction program ø amendments ¿ fully incorporated above . Sec. 10310. Repeal of physician payment update ø amendments fully incorporated ¿ . above ø amendments fully incor- Sec. 10311. Revisions to extension of ambulance add-ons porated above ¿ . Sec. 10312. Certain payment rules for long-term care hospital services and morato- rium on the establishment of certain hospitals and facilities ø amend- ments fully incorporated above . ¿ Sec. 10313. Revisions to the extension for the rural community hospital demonstra- tion program ø amendments fully incorporated above ¿ . Sec. 10314. Adjustment to low-volume hospital provision ø amendments fully incor- porated above ¿ . June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00011 Fmt 9001 Sfmt 6611 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

31 12 Sec. 1 PPACA (Consolidated) ø amendments fully incor- Sec. 10315. Revisions to home health care provisions . ¿ porated above ¿ . ø Sec. 10316. Medicare DSH amendments fully incorporated above amendments ø Sec. 10317. Revisions to extension of section 508 hospital provisions . fully incorporated above ¿ Sec. 10318. Revisions to transitional extra benefits under Medicare Advantage amendments fully incorporated above . ø ¿ amendments fully incor- ø Sec. 10319. Revisions to market basket adjustments ¿ . porated above Sec. 10320. Expansion of the scope of, and additional improvements to, the Inde- pendent Medicare Advisory Board. Sec. 10321. Revision to community health teams ø amendments fully incorporated ¿ . above Sec. 10322. Quality reporting for psychiatric hospitals. Sec. 10323. Medicare coverage for individuals exposed to environmental health haz- ards. Sec. 10324. Protections for frontier States. Sec. 10325. Revision to skilled nursing facility prospective payment system. Sec. 10326. Pilot testing pay-for-performance programs for certain Medicare pro- viders. Sec. 10327. Improvements to the physician quality reporting system. Sec. 10328. Improvement in part D medication therapy management (MTM) pro- grams. Sec. 10329. Developing methodology to assess health plan value. Sec. 10330. Modernizing computer and data systems of the Centers for Medicare & Medicaid services to support improvements in care delivery. Sec. 10331. Public reporting of performance information. Sec. 10332. Availability of medicare data for performance measurement. Sec. 10333. Community-based collaborative care networks. Sec. 10334. Minority health. Sec. 10335. Technical correction to the hospital value-based purchasing program ø ¿ . amendments fully incorporated above Sec. 10336. GAO study and report on Medicare beneficiary access to high-quality dialysis services. Subtitle D—Provisions Relating to Title IV Sec. 10401. Amendments to subtitle A ø ¿ . amendments fully incorporated above ø ¿ . Sec. 10402. Amendments to subtitle B amendments fully incorporated above Sec. 10403. Amendments to subtitle C ø amendments fully incorporated above ¿ . ø amendments fully incorporated above ¿ Sec. 10404. Amendments to subtitle D . Sec. 10405. Amendments to subtitle E amendments fully incorporated above ¿ . ø Sec. 10406. Amendment relating to waiving coinsurance for preventive services amendments fully incorporated above ¿ . ø Sec. 10407. Better diabetes care. Sec. 10408. Grants for small businesses to provide comprehensive workplace wellness programs. Sec. 10409. Cures Acceleration Network. Sec. 10410. Centers of Excellence for Depression. Sec. 10411. Programs relating to congenital heart disease. Sec. 10412. Automated Defibrillation in Adam’s Memory Act. Sec. 10413. Young women’s breast health awareness and support of young women diagnosed with breast cancer. Subtitle E—Provisions Relating to Title V Sec. 10501. Amendments to the Public Health Service Act, the Social Security Act, and title V of this Act. Sec. 10502. Infrastructure to Expand Access to Care. Sec. 10503. Community Health Centers and the National Health Service Corps Fund. Sec. 10504. Demonstration project to provide access to affordable care. Subtitle F—Provisions Relating to Title VI Sec. 10601. Revisions to limitation on medicare exception to the prohibition on cer- tain physician referrals for hospitals amendments fully incorporated ø above ¿ . Sec. 10602. Clarifications to patient-centered outcomes research ø amendments fully incorporated above ¿ . June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00012 Fmt 9001 Sfmt 6611 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

32 13 Sec. 1001 PPACA (Consolidated) Sec. 10603. Striking provisions relating to individual provider application fees ø . amendments fully incorporated above ¿ amendments fully incorporated ø Sec. 10604. Technical correction to section 6405 ¿ . above Sec. 10605. Certain other providers permitted to conduct face to face encounter for amendments fully incorporated above home health services . ø ¿ Sec. 10606. Health care fraud enforcement. Sec. 10607. State demonstration programs to evaluate alternatives to current med- ical tort litigation. Sec. 10608. Extension of medical malpractice coverage to free clinics. Sec. 10609. Labeling changes. Subtitle G—Provisions Relating to Title VIII Sec. 10801. Provisions relating to title VIII amendments fully incorporated above ¿ . ø Subtitle H—Provisions Relating to Title IX Sec. 10901. Modifications to excise tax on high cost employer-sponsored health cov- ø amendments fully incorporated above ¿ . erage Sec. 10902. Inflation adjustment of limitation on health flexible spending arrange- ments under cafeteria plans amendments fully incorporated above ¿ . ø Sec. 10903. Modification of limitation on charges by charitable hospitals ø amend- ments fully incorporated above ¿ . Sec. 10904. Modification of annual fee on medical device manufacturers and im- porters amendments fully incorporated above ¿ . ø ø Sec. 10905. Modification of annual fee on health insurance providers amendments ¿ . fully incorporated above Sec. 10906. Modifications to additional hospital insurance tax on high-income tax- ø amendments fully incorporated above ¿ . payers Sec. 10907. Excise tax on indoor tanning services in lieu of elective cosmetic med- ical procedures ø substitutes for section 9017 of PPACA ¿ . Sec. 10908. Exclusion for assistance provided to participants in State student loan repayment programs for certain health professionals. Sec. 10909. Expansion of adoption credit and adoption assistance programs. TITLE I—QUALITY, AFFORDABLE HEALTH CARE FOR ALL AMERICANS Subtitle A—Immediate Improvements in Health Care Coverage for All Americans SEC. 1001. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT. Part A of title XXVII of the Public Health Service Act (42 U.S.C. 300gg et seq.) is amended— (1) by striking the part heading and inserting the fol- lowing: ‘‘PART A—INDIVIDUAL AND GROUP MARKET REFORMS’’; (2) by redesignating sections 2704 through 2707 as sec- tions 2725 through 2728, respectively; (3) by redesignating sections 2711 through 2713 as sec- tions 2731 through 2733, respectively; (4) by redesignating sections 2721 through 2723 as sec- tions 2735 through 2737, respectively; and (5) by inserting after section 2702, the following: June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00013 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

33 14 Sec. 1001 2711 PHSA PPACA (Consolidated) \ ‘‘Subpart II—Improving Coverage ‘‘SEC. 2711 ¿ . NO LIFETIME OR ANNUAL LIMITS. ø 42 U.S.C. 300gg–11 ¿ Replaced by section 10101(a) ø .— ROHIBITION ‘‘(a) P .—A group health plan and a health insur- N GENERAL ‘‘(1) I ance issuer offering group or individual health insurance cov- erage may not establish— ‘‘(A) lifetime limits on the dollar value of benefits for any participant or beneficiary; or ‘‘(B) except as provided in paragraph (2), annual limits on the dollar value of benefits for any participant or bene- ficiary. NNUAL LIMITS PRIOR TO 2014 .—With respect to plan ‘‘(2) A years beginning prior to January 1, 2014, a group health plan and a health insurance issuer offering group or individual health insurance coverage may only establish a restricted an- nual limit on the dollar value of benefits for any participant or beneficiary with respect to the scope of benefits that are essen- tial health benefits under section 1302(b) of the Patient Protec- tion and Affordable Care Act, as determined by the Secretary. In defining the term ‘restricted annual limit’ for purposes of the preceding sentence, the Secretary shall ensure that access to needed services is made available with a minimal impact on premiums. ‘‘(b) P ER B ENEFICIARY L IMITS .—Subsection (a) shall not be con- strued to prevent a group health plan or health insurance coverage from placing annual or lifetime per beneficiary limits on specific covered benefits that are not essential health benefits under section 1302(b) of the Patient Protection and Affordable Care Act, to the extent that such limits are otherwise permitted under Federal or State law. ‘‘SEC. 2712 ø 42 U.S.C. 300gg–12 ¿ . PROHIBITION ON RESCISSIONS. ‘‘A group health plan and a health insurance issuer offering group or individual health insurance coverage shall not rescind such plan or coverage with respect to an enrollee once the enrollee is covered under such plan or coverage involved, except that this section shall not apply to a covered individual who has performed an act or practice that constitutes fraud or makes an intentional misrepresentation of material fact as prohibited by the terms of the plan or coverage. Such plan or coverage may not be cancelled ex- cept with prior notice to the enrollee, and only as permitted under section 2702(c) or 2742(b). ‘‘SEC. 2713 42 U.S.C. 300gg–13 ¿ . COVERAGE OF PREVENTIVE HEALTH ø SERVICES. ‘‘(a) I N G ENERAL .—A group health plan and a health insurance issuer offering group or individual health insurance coverage shall, at a minimum provide coverage for and shall not impose any cost sharing requirements for— ‘‘(1) evidence-based items or services that have in effect a rating of ‘A’ or ‘B’ in the current recommendations of the United States Preventive Services Task Force; June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00014 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

34 15 Sec. 1001 PPACA (Consolidated) \ 2714 PHSA ‘‘(2) immunizations that have in effect a recommendation from the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention with respect to the individual involved; and ‘‘(3) with respect to infants, children, and adolescents, evi- dence-informed preventive care and screenings provided for in the comprehensive guidelines supported by the Health Re- sources and Services Administration. ‘‘(4) with respect to women, such additional preventive care and screenings not described in paragraph (1) as provided for in comprehensive guidelines supported by the Health Re- sources and Services Administration for purposes of this para- graph. ‘‘(5) for the purposes of this Act, and for the purposes of any other provision of law, the current recommendations of the United States Preventive Service Task Force regarding breast cancer screening, mammography, and prevention shall be con- sidered the most current other than those issued in or around November 2009. Nothing in this subsection shall be construed to prohibit a plan or issuer from providing coverage for services in addition to those rec- ommended by United States Preventive Services Task Force or to deny coverage for services that are not recommended by such Task Force. NTERVAL .— ‘‘(b) I ‘‘(1) I .—The Secretary shall establish a min- N GENERAL imum interval between the date on which a recommendation described in subsection (a)(1) or (a)(2) or a guideline under sub- section (a)(3) is issued and the plan year with respect to which the requirement described in subsection (a) is effective with re- spect to the service described in such recommendation or guideline. INIMUM .—The interval described in paragraph (1) ‘‘(2) M shall not be less than 1 year. ALUE - BASED I NSURANCE D ESIGN .—The Secretary may de- ‘‘(c) V velop guidelines to permit a group health plan and a health insur- ance issuer offering group or individual health insurance coverage to utilize value-based insurance designs. ‘‘SEC. 2714 42 U.S.C. 300gg–14 ¿ . EXTENSION OF DEPENDENT COV- ø ERAGE. N ‘‘(a) I ENERAL .—A group health plan and a health insurance G issuer offering group or individual health insurance coverage that provides dependent coverage of children shall continue to make such coverage available for an adult child until the child turns 26 years of age. Nothing in this section shall require a health plan or a health insurance issuer described in the preceding sentence to make coverage available for a child of a child receiving dependent ø As revised by section 2301(b) of HCERA ¿ coverage. ‘‘(b) R EGULATIONS .—The Secretary shall promulgate regula- tions to define the dependents to which coverage shall be made available under subsection (a). ‘‘(c) R ULE OF C ONSTRUCTION .—Nothing in this section shall be construed to modify the definition of ‘dependent’ as used in the In- June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00015 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

35 16 Sec. 1001 2715 PHSA PPACA (Consolidated) \ ternal Revenue Code of 1986 with respect to the tax treatment of the cost of coverage. 42 U.S.C. 300gg–15 ¿ . DEVELOPMENT AND UTILIZATION OF ‘‘SEC. 2715 ø UNIFORM EXPLANATION OF COVERAGE DOCUMENTS AND STANDARDIZED DEFINITIONS. ‘‘(a) I G ENERAL .—Not later than 12 months after the date of N enactment of the Patient Protection and Affordable Care Act, the Secretary shall develop standards for use by a group health plan and a health insurance issuer offering group or individual health insurance coverage, in compiling and providing to applicants, en- rollees, and policyholders or certificate holders a summary of bene- fits and coverage explanation that accurately describes the benefits and coverage under the applicable plan or coverage. In developing such standards, the Secretary shall consult with the National Asso- ciation of Insurance Commissioners (referred to in this section as the ‘NAIC’), a working group composed of representatives of health insurance-related consumer advocacy organizations, health insur- ance issuers, health care professionals, patient advocates including those representing individuals with limited English proficiency, and other qualified individuals. As revised by section 10101(b) ¿ ø ‘‘(b) R EQUIREMENTS .—The standards for the summary of bene- fits and coverage developed under subsection (a) shall provide for the following: PPEARANCE .—The standards shall ensure that the ‘‘(1) A summary of benefits and coverage is presented in a uniform format that does not exceed 4 pages in length and does not in- clude print smaller than 12-point font. ‘‘(2) L ANGUAGE .—The standards shall ensure that the sum- mary is presented in a culturally and linguistically appropriate manner and utilizes terminology understandable by the aver- age plan enrollee. ONTENTS .—The standards shall ensure that the sum- ‘‘(3) C mary of benefits and coverage includes— ‘‘(A) uniform definitions of standard insurance terms and medical terms (consistent with subsection (g)) so that consumers may compare health insurance coverage and understand the terms of coverage (or exception to such coverage); ‘‘(B) a description of the coverage, including cost shar- ing for— ‘‘(i) each of the categories of the essential health benefits described in subparagraphs (A) through (J) of section 1302(b)(1) of the Patient Protection and Afford- able Care Act; and ‘‘(ii) other benefits, as identified by the Secretary; ‘‘(C) the exceptions, reductions, and limitations on cov- erage; ‘‘(D) the cost-sharing provisions, including deductible, coinsurance, and co-payment obligations; ‘‘(E) the renewability and continuation of coverage pro- visions; ‘‘(F) a coverage facts label that includes examples to il- lustrate common benefits scenarios, including pregnancy and serious or chronic medical conditions and related cost June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00016 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

36 17 Sec. 1001 2715 PHSA PPACA (Consolidated) \ sharing, such scenarios to be based on recognized clinical practice guidelines; ‘‘(G) a statement of whether the plan or coverage— ‘‘(i) provides minimum essential coverage (as de- fined under section 5000A(f) of the Internal Revenue Code 1986); and ‘‘(ii) ensures that the plan or coverage share of the total allowed costs of benefits provided under the plan or coverage is not less than 60 percent of such costs; ‘‘(H) a statement that the outline is a summary of the policy or certificate and that the coverage document itself should be consulted to determine the governing contrac- tual provisions; and ‘‘(I) a contact number for the consumer to call with ad- ditional questions and an Internet web address where a copy of the actual individual coverage policy or group cer- tificate of coverage can be reviewed and obtained. ‘‘(c) P R U PDATING .—The Secretary shall pe- ERIODIC EVIEW AND riodically review and update, as appropriate, the standards devel- oped under this section. ‘‘(d) R EQUIREMENT T O P ROVIDE .— ‘‘(1) I N GENERAL .—Not later than 24 months after the date of enactment of the Patient Protection and Affordable Care Act, each entity described in paragraph (3) shall provide, prior to any enrollment restriction, a summary of benefits and cov- erage explanation pursuant to the standards developed by the Secretary under subsection (a) to— ‘‘(A) an applicant at the time of application; ‘‘(B) an enrollee prior to the time of enrollment or re- enrollment, as applicable; and ‘‘(C) a policyholder or certificate holder at the time of issuance of the policy or delivery of the certificate. OMPLIANCE .—An entity described in paragraph (3) is ‘‘(2) C deemed to be in compliance with this section if the summary of benefits and coverage described in subsection (a) is provided in paper or electronic form. ‘‘(3) E NTITIES IN GENERAL .—An entity described in this paragraph is— ‘‘(A) a health insurance issuer (including a group health plan that is not a self-insured plan) offering health insurance coverage within the United States; or ‘‘(B) in the case of a self-insured group health plan, the plan sponsor or designated administrator of the plan (as such terms are defined in section 3(16) of the Employee Retirement Income Security Act of 1974). ‘‘(4) N OTICE OF MODIFICATIONS .—If a group health plan or health insurance issuer makes any material modification in any of the terms of the plan or coverage involved (as defined for purposes of section 102 of the Employee Retirement Income Security Act of 1974) that is not reflected in the most recently provided summary of benefits and coverage, the plan or issuer shall provide notice of such modification to enrollees not later than 60 days prior to the date on which such modification will become effective. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00017 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

37 18 Sec. 1001 2715A PHSA PPACA (Consolidated) \ REEMPTION .—The standards developed under subsection ‘‘(e) P (a) shall preempt any related State standards that require a sum- mary of benefits and coverage that provides less information to consumers than that required to be provided under this section, as determined by the Secretary. T O P AILURE .—An entity described in subsection ROVIDE ‘‘(f) F (d)(3) that willfully fails to provide the information required under this section shall be subject to a fine of not more than $1,000 for each such failure. Such failure with respect to each enrollee shall constitute a separate offense for purposes of this subsection. EVELOPMENT OF S TANDARD D .— EFINITIONS ‘‘(g) D N GENERAL .—The Secretary shall, by regulation, pro- ‘‘(1) I vide for the development of standards for the definitions of terms used in health insurance coverage, including the insur- ance-related terms described in paragraph (2) and the medical terms described in paragraph (3). NSURANCE - RELATED TERMS .—The insurance-related ‘‘(2) I terms described in this paragraph are premium, deductible, co- insurance, co-payment, out-of-pocket limit, preferred provider, non-preferred provider, out-of-network co-payments, UCR (usual, customary and reasonable) fees, excluded services, grievance and appeals, and such other terms as the Secretary determines are important to define so that consumers may compare health insurance coverage and understand the terms of their coverage. .—The medical terms described in this EDICAL TERMS ‘‘(3) M paragraph are hospitalization, hospital outpatient care, emer- gency room care, physician services, prescription drug cov- erage, durable medical equipment, home health care, skilled nursing care, rehabilitation services, hospice services, emer- gency medical transportation, and such other terms as the Sec- retary determines are important to define so that consumers may compare the medical benefits offered by health insurance and understand the extent of those medical benefits (or excep- tions to those benefits). ø 42 U.S.C. 300gg–15a ¿ . PROVISION OF ADDITIONAL INFOR- ‘‘SEC. 2715A MATION. ‘‘ As added by section 10101(c) ¿ A group health plan and a ø health insurance issuer offering group or individual health insur- ance coverage shall comply with the provisions of section 1311(e)(3) of the Patient Protection and Affordable Care Act, except that a plan or coverage that is not offered through an Exchange shall only be required to submit the information required to the Secretary and the State insurance commissioner, and make such information available to the public. ø 42 U.S.C. 300gg–16 ¿ . PROHIBITION ON DISCRIMINATION IN ‘‘SEC. 2716 FAVOR OF HIGHLY COMPENSATED INDIVIDUALS. ø Replaced by section 10101(d) ¿ ‘‘(a) I N G ENERAL .—A group health plan (other than a self-in- sured plan) shall satisfy the requirements of section 105(h)(2) of the Internal Revenue Code of 1986 (relating to prohibition on dis- crimination in favor of highly compensated individuals). ‘‘(b) R ULES AND D EFINITIONS .—For purposes of this section— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00018 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

38 19 Sec. 1001 2717 PHSA PPACA (Consolidated) \ ERTAIN RULES TO APPLY .—Rules similar to the rules ‘‘(1) C contained in paragraphs (3), (4), and (8) of section 105(h) of such Code shall apply. ‘‘(2) H .—The term ‘highly IGHLY COMPENSATED INDIVIDUAL compensated individual’ has the meaning given such term by section 105(h)(5) of such Code. 42 U.S.C. 300gg–17 ¿ . ENSURING THE QUALITY OF CARE. ‘‘SEC. 2717 ø UALITY R EPORTING ‘‘(a) Q .— ‘‘(1) I .—Not later than 2 years after the date of N GENERAL enactment of the Patient Protection and Affordable Care Act, the Secretary, in consultation with experts in health care qual- ity and stakeholders, shall develop reporting requirements for use by a group health plan, and a health insurance issuer of- fering group or individual health insurance coverage, with re- spect to plan or coverage benefits and health care provider re- imbursement structures that— ‘‘(A) improve health outcomes through the implemen- tation of activities such as quality reporting, effective case management, care coordination, chronic disease manage- ment, and medication and care compliance initiatives, in- cluding through the use of the medical homes model as de- fined for purposes of section 3602 of the Patient Protection and Affordable Care Act, for treatment or services under the plan or coverage; ‘‘(B) implement activities to prevent hospital readmis- sions through a comprehensive program for hospital dis- charge that includes patient-centered education and coun- seling, comprehensive discharge planning, and post dis- charge reinforcement by an appropriate health care profes- sional; ‘‘(C) implement activities to improve patient safety and reduce medical errors through the appropriate use of best clinical practices, evidence based medicine, and health information technology under the plan or coverage; and ‘‘(D) implement wellness and health promotion activi- ties. EPORTING REQUIREMENTS .— ‘‘(2) R N GENERAL .—A group health plan and a health ‘‘(A) I insurance issuer offering group or individual health insur- ance coverage shall annually submit to the Secretary, and to enrollees under the plan or coverage, a report on wheth- er the benefits under the plan or coverage satisfy the ele- ments described in subparagraphs (A) through (D) of para- graph (1). ‘‘(B) T IMING OF REPORTS .—A report under subpara- graph (A) shall be made available to an enrollee under the plan or coverage during each open enrollment period. ‘‘(C) A VAILABILITY OF REPORTS .—The Secretary shall make reports submitted under subparagraph (A) available to the public through an Internet website. ‘‘(D) P ENALTIES .—In developing the reporting require- ments under paragraph (1), the Secretary may develop and June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00019 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

39 20 Sec. 1001 2717 PHSA PPACA (Consolidated) \ impose appropriate penalties for non-compliance with such requirements. XCEPTIONS .—In developing the reporting re- ‘‘(E) E quirements under paragraph (1), the Secretary may pro- vide for exceptions to such requirements for group health plans and health insurance issuers that substantially meet the goals of this section. ‘‘(b) W P REVENTION P ROGRAMS .—For purposes of ELLNESS AND subsection (a)(1)(D), wellness and health promotion activities may include personalized wellness and prevention services, which are coordinated, maintained or delivered by a health care provider, a wellness and prevention plan manager, or a health, wellness or prevention services organization that conducts health risk assess- ments or offers ongoing face-to-face, telephonic or web-based inter- vention efforts for each of the program’s participants, and which may include the following wellness and prevention efforts: ‘‘(1) Smoking cessation. ‘‘(2) Weight management. ‘‘(3) Stress management. ‘‘(4) Physical fitness. ‘‘(5) Nutrition. ‘‘(6) Heart disease prevention. ‘‘(7) Healthy lifestyle support. ‘‘(8) Diabetes prevention. As ROTECTION OF S ECOND A MENDMENT G UN R IGHTS .— ø ‘‘(c) P added by section 10101(e)(2) ¿ ELLNESS AND PREVENTION PROGRAMS ‘‘(1) W .—A wellness and health promotion activity implemented under subsection (a)(1)(D) may not require the disclosure or collection of any in- formation relating to— ‘‘(A) the presence or storage of a lawfully-possessed firearm or ammunition in the residence or on the property of an individual; or ‘‘(B) the lawful use, possession, or storage of a firearm or ammunition by an individual. ‘‘(2) L IMITATION ON DATA COLLECTION .—None of the au- thorities provided to the Secretary under the Patient Protec- tion and Affordable Care Act or an amendment made by that Act shall be construed to authorize or may be used for the col- lection of any information relating to— ‘‘(A) the lawful ownership or possession of a firearm or ammunition; ‘‘(B) the lawful use of a firearm or ammunition; or ‘‘(C) the lawful storage of a firearm or ammunition. ‘‘(3) L IMITATION ON DATABASES OR DATA BANKS .—None of the authorities provided to the Secretary under the Patient Protection and Affordable Care Act or an amendment made by that Act shall be construed to authorize or may be used to maintain records of individual ownership or possession of a firearm or ammunition. ‘‘(4) L IMITATION ON DETERMINATION OF PREMIUM RATES OR ELIGIBILITY FOR HEALTH INSURANCE .—A premium rate may not be increased, health insurance coverage may not be denied, and a discount, rebate, or reward offered for participation in a June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00020 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

40 21 Sec. 1001 2718 PHSA PPACA (Consolidated) \ wellness program may not be reduced or withheld under any health benefit plan issued pursuant to or in accordance with the Patient Protection and Affordable Care Act or an amend- ment made by that Act on the basis of, or on reliance upon— ‘‘(A) the lawful ownership or possession of a firearm or ammunition; or ‘‘(B) the lawful use or storage of a firearm or ammuni- tion. ‘‘(5) L IMITATION ON DATA COLLECTION REQUIREMENTS FOR INDIVIDUALS .—No individual shall be required to disclose any information under any data collection activity authorized under the Patient Protection and Affordable Care Act or an amendment made by that Act relating to— ‘‘(A) the lawful ownership or possession of a firearm or ammunition; or ‘‘(B) the lawful use, possession, or storage of a firearm or ammunition. ‘‘(d) R .—Not later than 2 years after the date of en- EGULATIONS actment of the Patient Protection and Affordable Care Act, the Sec- retary shall promulgate regulations that provide criteria for deter- mining whether a reimbursement structure is described in sub- section (a). ‘‘(e) S TUDY AND R EPORT .—Not later than 180 days after the date on which regulations are promulgated under subsection (c), the Government Accountability Office shall review such regulations and conduct a study and submit to the Committee on Health, Edu- cation, Labor, and Pensions of the Senate and the Committee on Energy and Commerce of the House of Representatives a report re- garding the impact the activities under this section have had on the quality and cost of health care. ‘‘SEC. 2718 ø 42 U.S.C. 300gg–18 ¿ . BRINGING DOWN THE COST OF HEALTH CARE COVERAGE. ø Replaced by section 10101(f) ¿ LEAR CCOUNTING FOR C OSTS .—A health insurance ‘‘(a) C A issuer offering group or individual health insurance coverage (in- cluding a grandfathered health plan) shall, with respect to each plan year, submit to the Secretary a report concerning the ratio of the incurred loss (or incurred claims) plus the loss adjustment ex- pense (or change in contract reserves) to earned premiums. Such report shall include the percentage of total premium revenue, after accounting for collections or receipts for risk adjustment and risk corridors and payments of reinsurance, that such coverage ex- pends— ‘‘(1) on reimbursement for clinical services provided to en- rollees under such coverage; ‘‘(2) for activities that improve health care quality; and ‘‘(3) on all other non-claims costs, including an explanation of the nature of such costs, and excluding Federal and State taxes and licensing or regulatory fees. The Secretary shall make reports received under this section avail- able to the public on the Internet website of the Department of Health and Human Services. NSURING T HAT C ONSUMERS R ECEIVE V ALUE FOR T HEIR ‘‘(b) E P REMIUM P AYMENTS .— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00021 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

41 22 Sec. 1001 2718 PHSA PPACA (Consolidated) \ EQUIREMENT TO PROVIDE VALUE FOR PREMIUM PAY - ‘‘(1) R MENTS .— ‘‘(A) R .—Beginning not later than January EQUIREMENT 1, 2011, a health insurance issuer offering group or indi- vidual health insurance coverage (including a grand- fathered health plan) shall, with respect to each plan year, provide an annual rebate to each enrollee under such cov- erage, on a pro rata basis, if the ratio of the amount of pre- mium revenue expended by the issuer on costs described in paragraphs (1) and (2) of subsection (a) to the total amount of premium revenue (excluding Federal and State taxes and licensing or regulatory fees and after accounting for payments or receipts for risk adjustment, risk cor- ridors, and reinsurance under sections 1341, 1342, and 1343 of the Patient Protection and Affordable Care Act) for the plan year (except as provided in subparagraph (B)(ii)), is less than— ‘‘(i) with respect to a health insurance issuer offer- ing coverage in the large group market, 85 percent, or such higher percentage as a State may by regulation determine; or ‘‘(ii) with respect to a health insurance issuer of- fering coverage in the small group market or in the in- dividual market, 80 percent, or such higher percentage as a State may by regulation determine, except that the Secretary may adjust such percentage with respect to a State if the Secretary determines that the applica- tion of such 80 percent may destabilize the individual market in such State. .— EBATE AMOUNT ‘‘(B) R ALCULATION OF AMOUNT ‘‘(i) C .—The total amount of an annual rebate required under this paragraph shall be in an amount equal to the product of— ‘‘(I) the amount by which the percentage de- scribed in clause (i) or (ii) of subparagraph (A) ex- ceeds the ratio described in such subparagraph; and ‘‘(II) the total amount of premium revenue (excluding Federal and State taxes and licensing or regulatory fees and after accounting for pay- ments or receipts for risk adjustment, risk cor- ridors, and reinsurance under sections 1341, 1342, and 1343 of the Patient Protection and Affordable Care Act) for such plan year. ‘‘(ii) C ALCULATION BASED ON AVERAGE RATIO .—Be- ginning on January 1, 2014, the determination made under subparagraph (A) for the year involved shall be based on the averages of the premiums expended on the costs described in such subparagraph and total premium revenue for each of the previous 3 years for the plan. ‘‘(2) C ONSIDERATION IN SETTING PERCENTAGES .—In deter- mining the percentages under paragraph (1), a State shall seek to ensure adequate participation by health insurance issuers, June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00022 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

42 23 Sec. 1001 2719 PHSA PPACA (Consolidated) \ competition in the health insurance market in the State, and value for consumers so that premiums are used for clinical services and quality improvements. .—The Secretary shall promulgate regu- NFORCEMENT ‘‘(3) E lations for enforcing the provisions of this section and may pro- vide for appropriate penalties. .—Not later than December 31, 2010, and sub- ‘‘(c) D EFINITIONS ject to the certification of the Secretary, the National Association of Insurance Commissioners shall establish uniform definitions of the activities reported under subsection (a) and standardized meth- odologies for calculating measures of such activities, including defi- nitions of which activities, and in what regard such activities, con- stitute activities described in subsection (a)(2). Such methodologies shall be designed to take into account the special circumstances of smaller plans, different types of plans, and newer plans. DJUSTMENTS .—The Secretary may adjust the rates de- ‘‘(d) A scribed in subsection (b) if the Secretary determines appropriate on account of the volatility of the individual market due to the estab- lishment of State Exchanges. TANDARD H OSPITAL C HARGES .—Each hospital operating ‘‘(e) S within the United States shall for each year establish (and update) and make public (in accordance with guidelines developed by the Secretary) a list of the hospital’s standard charges for items and services provided by the hospital, including for diagnosis-related groups established under section 1886(d)(4) of the Social Security Act. ‘‘SEC. 2719 ø 42 U.S.C. 300gg–19 ¿ . APPEALS PROCESS. ø Replaced by section 10101(g) ¿ NTERNAL LAIMS A PPEALS .— C ‘‘(a) I N GENERAL .—A group health plan and a health insur- ‘‘(1) I ance issuer offering group or individual health insurance cov- erage shall implement an effective appeals process for appeals of coverage determinations and claims, under which the plan or issuer shall, at a minimum— ‘‘(A) have in effect an internal claims appeal process; ‘‘(B) provide notice to enrollees, in a culturally and lin- guistically appropriate manner, of available internal and external appeals processes, and the availability of any ap- plicable office of health insurance consumer assistance or ombudsman established under section 2793 to assist such enrollees with the appeals processes; and ‘‘(C) allow an enrollee to review their file, to present evidence and testimony as part of the appeals process, and to receive continued coverage pending the outcome of the appeals process. ‘‘(2) E STABLISHED PROCESSES .—To comply with paragraph (1)— ‘‘(A) a group health plan and a health insurance issuer offering group health coverage shall provide an internal claims and appeals process that initially incorporates the claims and appeals procedures (including urgent claims) set forth at section 2560.503–1 of title 29, Code of Federal Regulations, as published on November 21, 2000 (65 Fed. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00023 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

43 24 Sec. 1001 2719A PHSA PPACA (Consolidated) \ Reg. 70256), and shall update such process in accordance with any standards established by the Secretary of Labor for such plans and issuers; and ‘‘(B) a health insurance issuer offering individual health coverage, and any other issuer not subject to sub- paragraph (A), shall provide an internal claims and ap- peals process that initially incorporates the claims and ap- peals procedures set forth under applicable law (as in ex- istence on the date of enactment of this section), and shall update such process in accordance with any standards es- tablished by the Secretary of Health and Human Services for such issuers. XTERNAL R EVIEW .—A group health plan and a health in- ‘‘(b) E surance issuer offering group or individual health insurance cov- erage— ‘‘(1) shall comply with the applicable State external review process for such plans and issuers that, at a minimum, in- cludes the consumer protections set forth in the Uniform Ex- ternal Review Model Act promulgated by the National Associa- tion of Insurance Commissioners and is binding on such plans; or ‘‘(2) shall implement an effective external review process that meets minimum standards established by the Secretary through guidance and that is similar to the process described under paragraph (1)— ‘‘(A) if the applicable State has not established an ex- ternal review process that meets the requirements of para- graph (1); or ‘‘(B) if the plan is a self-insured plan that is not sub- ject to State insurance regulation (including a State law that establishes an external review process described in paragraph (1)). ‘‘(c) S ECRETARY A UTHORITY .—The Secretary may deem the ex- ternal review process of a group health plan or health insurance issuer, in operation as of the date of enactment of this section, to be in compliance with the applicable process established under sub- section (b), as determined appropriate by the Secretary. ø 42 U.S.C. 300gg–19a ¿ . PATIENT PROTECTIONS. ‘‘SEC. 2719A ø Section inserted by section 10101(h) ¿ ‘‘(a) C H EALTH C ARE P ROFESSIONAL .—If a group HOICE OF health plan, or a health insurance issuer offering group or indi- vidual health insurance coverage, requires or provides for designa- tion by a participant, beneficiary, or enrollee of a participating pri- mary care provider, then the plan or issuer shall permit each par- ticipant, beneficiary, and enrollee to designate any participating primary care provider who is available to accept such individual. ‘‘(b) C OVERAGE OF E MERGENCY S ERVICES .— ‘‘(1) I N GENERAL .—If a group health plan, or a health in- surance issuer offering group or individual health insurance issuer, provides or covers any benefits with respect to services in an emergency department of a hospital, the plan or issuer shall cover emergency services (as defined in paragraph (2)(B))— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00024 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

44 25 Sec. 1001 2719A PHSA PPACA (Consolidated) \ ‘‘(A) without the need for any prior authorization de- termination; ‘‘(B) whether the health care provider furnishing such services is a participating provider with respect to such services; ‘‘(C) in a manner so that, if such services are provided to a participant, beneficiary, or enrollee— ‘‘(i) by a nonparticipating health care provider with or without prior authorization; or ‘‘(ii)(I) such services will be provided without im- posing any requirement under the plan for prior au- thorization of services or any limitation on coverage where the provider of services does not have a contrac- tual relationship with the plan for the providing of services that is more restrictive than the requirements or limitations that apply to emergency department services received from providers who do have such a contractual relationship with the plan; and ‘‘(II) if such services are provided out-of-network, the cost-sharing requirement (expressed as a copay- ment amount or coinsurance rate) is the same require- ment that would apply if such services were provided in-network; ‘‘(D) without regard to any other term or condition of such coverage (other than exclusion or coordination of ben- efits, or an affiliation or waiting period, permitted under section 2701 of this Act, section 701 of the Employee Re- tirement Income Security Act of 1974, or section 9801 of the Internal Revenue Code of 1986, and other than appli- cable cost-sharing). EFINITIONS .—In this subsection: ‘‘(2) D MERGENCY CONDITION .—The term MEDICAL ‘‘(A) E ‘emergency medical condition’ means a medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain) such that a prudent layperson, who possesses an average knowledge of health and medicine, could reasonably expect the absence of immediate medical attention to result in a condition described in clause (i), (ii), or (iii) of section 1867(e)(1)(A) of the Social Security Act. .—The term ‘emergency MERGENCY SERVICES ‘‘(B) E services’ means, with respect to an emergency medical con- dition— ‘‘(i) a medical screening examination (as required under section 1867 of the Social Security Act) that is within the capability of the emergency department of a hospital, including ancillary services routinely avail- able to the emergency department to evaluate such emergency medical condition, and ‘‘(ii) within the capabilities of the staff and facili- ties available at the hospital, such further medical ex- amination and treatment as are required under sec- tion 1867 of such Act to stabilize the patient. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00025 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

45 26 Sec. 1001 2719A PHSA PPACA (Consolidated) \ TABILIZE .—The term ‘to stabilize’, with respect to ‘‘(C) S an emergency medical condition (as defined in subpara- graph (A)), has the meaning give in section 1867(e)(3) of the Social Security Act (42 U.S.C. 1395dd(e)(3)). P EDIATRIC C ARE CCESS TO .— ‘‘(c) A ‘‘(1) P EDIATRIC CARE .—In the case of a person who has a child who is a participant, beneficiary, or enrollee under a group health plan, or health insurance coverage offered by a health insurance issuer in the group or individual market, if the plan or issuer requires or provides for the designation of a participating primary care provider for the child, the plan or issuer shall permit such person to designate a physician (allopathic or osteopathic) who specializes in pediatrics as the child’s primary care provider if such provider participates in the network of the plan or issuer. ONSTRUCTION .—Nothing in paragraph (1) shall be ‘‘(2) C construed to waive any exclusions of coverage under the terms and conditions of the plan or health insurance coverage with respect to coverage of pediatric care. ‘‘(d) P A CCESS TO O BSTETRICAL AND G YNECOLOGICAL ATIENT C ARE .— ‘‘(1) G ENERAL RIGHTS .— IRECT ACCESS ‘‘(A) D .—A group health plan, or health insurance issuer offering group or individual health insur- ance coverage, described in paragraph (2) may not require authorization or referral by the plan, issuer, or any person (including a primary care provider described in paragraph (2)(B)) in the case of a female participant, beneficiary, or enrollee who seeks coverage for obstetrical or gynecological care provided by a participating health care professional who specializes in obstetrics or gynecology. Such profes- sional shall agree to otherwise adhere to such plan’s or issuer’s policies and procedures, including procedures re- garding referrals and obtaining prior authorization and providing services pursuant to a treatment plan (if any) approved by the plan or issuer. .—A group BSTETRICAL AND GYNECOLOGICAL CARE ‘‘(B) O health plan or health insurance issuer described in para- graph (2) shall treat the provision of obstetrical and gyne- cological care, and the ordering of related obstetrical and gynecological items and services, pursuant to the direct ac- cess described under subparagraph (A), by a participating health care professional who specializes in obstetrics or gynecology as the authorization of the primary care pro- vider. ‘‘(2) A PPLICATION OF PARAGRAPH .—A group health plan, or health insurance issuer offering group or individual health in- surance coverage, described in this paragraph is a group health plan or coverage that— ‘‘(A) provides coverage for obstetric or gynecologic care; and ‘‘(B) requires the designation by a participant, bene- ficiary, or enrollee of a participating primary care provider. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00026 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

46 27 Sec. 1002 2713 PHSA PPACA (Consolidated) \ ONSTRUCTION .—Nothing in paragraph (1) shall be ‘‘(3) C construed to— ‘‘(A) waive any exclusions of coverage under the terms and conditions of the plan or health insurance coverage with respect to coverage of obstetrical or gynecological care; or ‘‘(B) preclude the group health plan or health insur- ance issuer involved from requiring that the obstetrical or gynecological provider notify the primary care health care professional or the plan or issuer of treatment decisions.’’. SEC. 1002. HEALTH INSURANCE CONSUMER INFORMATION. Part C of title XXVII of the Public Health Service Act (42 U.S.C. 300gg–91 et seq.) is amended by adding at the end the fol- lowing: ø 42 U.S.C. 300gg–93 ¿ . HEALTH INSURANCE CONSUMER IN- ‘‘SEC. 2793 FORMATION. ‘‘(a) I G ENERAL .—The Secretary shall award grants to States N to enable such States (or the Exchanges operating in such States) to establish, expand, or provide support for— ‘‘(1) offices of health insurance consumer assistance; or ‘‘(2) health insurance ombudsman programs. LIGIBILITY .— ‘‘(b) E ‘‘(1) I N GENERAL .—To be eligible to receive a grant, a State shall designate an independent office of health insurance con- sumer assistance, or an ombudsman, that, directly or in coordi- nation with State health insurance regulators and consumer assistance organizations, receives and responds to inquiries and complaints concerning health insurance coverage with re- spect to Federal health insurance requirements and under State law. ‘‘(2) C RITERIA .—A State that receives a grant under this section shall comply with criteria established by the Secretary for carrying out activities under such grant. UTIES .—The office of health insurance consumer assist- ‘‘(c) D ance or health insurance ombudsman shall— ‘‘(1) assist with the filing of complaints and appeals, in- cluding filing appeals with the internal appeal or grievance process of the group health plan or health insurance issuer in- volved and providing information about the external appeal process; ‘‘(2) collect, track, and quantify problems and inquiries en- countered by consumers; ‘‘(3) educate consumers on their rights and responsibilities with respect to group health plans and health insurance cov- erage; ‘‘(4) assist consumers with enrollment in a group health plan or health insurance coverage by providing information, re- ferral, and assistance; and ‘‘(5) resolve problems with obtaining premium tax credits under section 36B of the Internal Revenue Code of 1986. ‘‘(d) D ATA C OLLECTION .—As a condition of receiving a grant under subsection (a), an office of health insurance consumer assist- ance or ombudsman program shall be required to collect and report June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00027 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

47 28 Sec. 1003 PPACA (Consolidated) data to the Secretary on the types of problems and inquiries en- countered by consumers. The Secretary shall utilize such data to identify areas where more enforcement action is necessary and shall share such information with State insurance regulators, the Secretary of Labor, and the Secretary of the Treasury for use in the enforcement activities of such agencies. UNDING .— ‘‘(e) F NITIAL FUNDING .—There is hereby appropriated to the ‘‘(1) I Secretary, out of any funds in the Treasury not otherwise ap- propriated, $30,000,000 for the first fiscal year for which this section applies to carry out this section. Such amount shall re- main available without fiscal year limitation. UTHORIZATION FOR SUBSEQUENT YEARS .—There is au- ‘‘(2) A thorized to be appropriated to the Secretary for each fiscal year following the fiscal year described in paragraph (1), such sums as may be necessary to carry out this section.’’. SEC. 1003. ENSURING THAT CONSUMERS GET VALUE FOR THEIR DOL- LARS. Part C of title XXVII of the Public Health Service Act (42 U.S.C. 300gg–91 et seq.), as amended by section 1002, is further amended by adding at the end the following: ‘‘SEC. 2794 ø 42 U.S.C. 300gg–94 ¿ . ENSURING THAT CONSUMERS GET VALUE FOR THEIR DOLLARS. NITIAL P REMIUM R EVIEW P ROCESS .— ‘‘(a) I ‘‘(1) I N GENERAL .—The Secretary, in conjunction with States, shall establish a process for the annual review, begin- ning with the 2010 plan year and subject to subsection (b)(2)(A), of unreasonable increases in premiums for health in- surance coverage. USTIFICATION AND DISCLOSURE .—The process estab- ‘‘(2) J lished under paragraph (1) shall require health insurance issuers to submit to the Secretary and the relevant State a jus- tification for an unreasonable premium increase prior to the implementation of the increase. Such issuers shall prominently post such information on their Internet websites. The Sec- retary shall ensure the public disclosure of information on such increases and justifications for all health insurance issuers. ‘‘(b) C ONTINUING P REMIUM R EVIEW P ROCESS .— ‘‘(1) I NFORMING SECRETARY OF PREMIUM INCREASE PAT - TERNS .—As a condition of receiving a grant under subsection (c)(1), a State, through its Commissioner of Insurance, shall— ‘‘(A) provide the Secretary with information about trends in premium increases in health insurance coverage in premium rating areas in the State; and ‘‘(B) make recommendations, as appropriate, to the State Exchange about whether particular health insurance issuers should be excluded from participation in the Ex- change based on a pattern or practice of excessive or un- justified premium increases. ‘‘(2) M ONITORING BY SECRETARY OF PREMIUM INCREASES .— ‘‘(A) I N GENERAL .—Beginning with plan years begin- ning in 2014, the Secretary, in conjunction with the States and consistent with the provisions of subsection (a)(2), June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00028 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

48 29 Sec. 1003 2794 PHSA PPACA (Consolidated) \ shall monitor premium increases of health insurance cov- erage offered through an Exchange and outside of an Ex- change. ‘‘(B) C .—In deter- ONSIDERATION IN OPENING EXCHANGE mining under section 1312(f)(2)(B) of the Patient Protec- tion and Affordable Care Act whether to offer qualified health plans in the large group market through an Ex- change, the State shall take into account any excess of pre- mium growth outside of the Exchange as compared to the rate of such growth inside the Exchange. ‘‘(c) G S UPPORT OF P ROCESS .— RANTS IN REMIUM REVIEW GRANTS DURING 2010 THROUGH 2014 .— ‘‘(1) P The Secretary shall carry out a program to award grants to States during the 5-year period beginning with fiscal year 2010 to assist such States in carrying out subsection (a), including— ‘‘(A) in reviewing and, if appropriate under State law, approving premium increases for health insurance cov- erage; ‘‘(B) in providing information and recommendations to the Secretary under subsection (b)(1); and ø As added by section 10101(i)(1)(C) ¿ ‘‘(C) in estab- lishing centers (consistent with subsection (d)) at academic or other nonprofit institutions to collect medical reimburse- ment information from health insurance issuers, to ana- lyze and organize such information, and to make such in- formation available to such issuers, health care providers, health researchers, health care policy makers, and the general public. .— UNDING ‘‘(2) F ‘‘(A) I .—Out of all funds in the Treasury not N GENERAL otherwise appropriated, there are appropriated to the Sec- retary $250,000,000, to be available for expenditure for grants under paragraph (1) and subparagraph (B). ‘‘(B) F URTHER AVAILABILITY FOR INSURANCE REFORM AND CONSUMER PROTECTION .—If the amounts appropriated under subparagraph (A) are not fully obligated under grants under paragraph (1) by the end of fiscal year 2014, any remaining funds shall remain available to the Sec- retary for grants to States for planning and implementing the insurance reforms and consumer protections under part A. ‘‘(C) A LLOCATION .—The Secretary shall establish a for- mula for determining the amount of any grant to a State under this subsection. Under such formula— ‘‘(i) the Secretary shall consider the number of plans of health insurance coverage offered in each State and the population of the State; and ‘‘(ii) no State qualifying for a grant under para- graph (1) shall receive less than $1,000,000, or more than $5,000,000 for a grant year. ‘‘(d) M EDICAL R EIMBURSEMENT D ATA C ENTERS .— ø As added by section 10101(i)(2) ¿ UNCTIONS .—A center established under subsection ‘‘(1) F (c)(1)(C) shall— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00029 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

49 30 Sec. 1004 PPACA (Consolidated) ‘‘(A) develop fee schedules and other database tools that fairly and accurately reflect market rates for medical services and the geographic differences in those rates; ‘‘(B) use the best available statistical methods and data processing technology to develop such fee schedules and other database tools; ‘‘(C) regularly update such fee schedules and other database tools to reflect changes in charges for medical services; ‘‘(D) make health care cost information readily avail- able to the public through an Internet website that allows consumers to understand the amounts that health care providers in their area charge for particular medical serv- ices; and ‘‘(E) regularly publish information concerning the sta- tistical methodologies used by the center to analyze health charge data and make such data available to researchers and policy makers. ‘‘(2) C .—A center established under ONFLICTS OF INTEREST subsection (c)(1)(C) shall adopt by-laws that ensures that the center (and all members of the governing board of the center) is independent and free from all conflicts of interest. Such by- laws shall ensure that the center is not controlled or influenced by, and does not have any corporate relation to, any individual or entity that may make or receive payments for health care services based on the center’s analysis of health care costs. ‘‘(3) R ULE OF CONSTRUCTION .—Nothing in this subsection shall be construed to permit a center established under sub- section (c)(1)(C) to compel health insurance issuers to provide data to the center.’’. SEC. 1004 ø 42 U.S.C. 300gg–11 note ¿ . EFFECTIVE DATES. (a) I N ENERAL .—Except as provided for in subsection (b), this G subtitle (and the amendments made by this subtitle) shall become effective for plan years beginning on or after the date that is 6 months after the date of enactment of this Act, except that the amendments made by sections 1002 and 1003 shall become effec- tive for fiscal years beginning with fiscal year 2010. PECIAL (b) S ULE .—The amendments made by sections 1002 R and 1003 shall take effect on the date of enactment of this Act. Subtitle B—Immediate Actions to Preserve and Expand Coverage SEC. 1101 ø 42 U.S.C. 18001 ¿ . IMMEDIATE ACCESS TO INSURANCE FOR UNINSURED INDIVIDUALS WITH A PREEXISTING CONDI- TION. (a) I N G ENERAL .—Not later than 90 days after the date of en- actment of this Act, the Secretary shall establish a temporary high risk health insurance pool program to provide health insurance coverage for eligible individuals during the period beginning on the date on which such program is established and ending on January 1, 2014. (b) A DMINISTRATION .— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00030 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

50 31 Sec. 1101 PPACA (Consolidated) N GENERAL .—The Secretary may carry out the pro- (1) I gram under this section directly or through contracts to eligible entities. (2) E .—To be eligible for a contract under LIGIBLE ENTITIES paragraph (1), an entity shall— (A) be a State or nonprofit private entity; (B) submit to the Secretary an application at such time, in such manner, and containing such information as the Secretary may require; and (C) agree to utilize contract funding to establish and administer a qualified high risk pool for eligible individ- uals. (3) M .—To be eligible to enter into AINTENANCE OF EFFORT a contract with the Secretary under this subsection, a State shall agree not to reduce the annual amount the State ex- pended for the operation of one or more State high risk pools during the year preceding the year in which such contract is entered into. (c) Q H IGH R ISK UALIFIED OOL .— P (1) I N GENERAL .—Amounts made available under this sec- tion shall be used to establish a qualified high risk pool that meets the requirements of paragraph (2). (2) R EQUIREMENTS .—A qualified high risk pool meets the requirements of this paragraph if such pool— (A) provides to all eligible individuals health insurance coverage that does not impose any preexisting condition exclusion with respect to such coverage; (B) provides health insurance coverage— (i) in which the issuer’s share of the total allowed costs of benefits provided under such coverage is not less than 65 percent of such costs; and (ii) that has an out of pocket limit not greater than the applicable amount described in section 223(c)(2) of the Internal Revenue Code of 1986 for the year involved, except that the Secretary may modify such limit if necessary to ensure the pool meets the ac- tuarial value limit under clause (i); (C) ensures that with respect to the premium rate charged for health insurance coverage offered to eligible individuals through the high risk pool, such rate shall— (i) except as provided in clause (ii), vary only as provided for under section 2701 of the Public Health Service Act (as amended by this Act and notwith- standing the date on which such amendments take ef- fect); (ii) vary on the basis of age by a factor of not greater than 4 to 1; and (iii) be established at a standard rate for a stand- ard population; and (D) meets any other requirements determined appro- priate by the Secretary. (d) E LIGIBLE I NDIVIDUAL .—An individual shall be deemed to be an eligible individual for purposes of this section if such indi- vidual— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00031 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

51 32 Sec. 1101 PPACA (Consolidated) (1) is a citizen or national of the United States or is law- fully present in the United States (as determined in accordance with section 1411); (2) has not been covered under creditable coverage (as de- fined in section 2701(c)(1) of the Public Health Service Act as in effect on the date of enactment of this Act) during the 6- month period prior to the date on which such individual is ap- plying for coverage through the high risk pool; and (3) has a pre-existing condition, as determined in a man- ner consistent with guidance issued by the Secretary. (e) P A GAINST D UMPING R ISK BY I NSURERS ROTECTION .— (1) I .—The Secretary shall establish criteria for N GENERAL determining whether health insurance issuers and employ- ment-based health plans have discouraged an individual from remaining enrolled in prior coverage based on that individual’s health status. (2) S .—An issuer or employment-based health ANCTIONS plan shall be responsible for reimbursing the program under this section for the medical expenses incurred by the program for an individual who, based on criteria established by the Sec- retary, the Secretary finds was encouraged by the issuer to disenroll from health benefits coverage prior to enrolling in coverage through the program. The criteria shall include at least the following circumstances: (A) In the case of prior coverage obtained through an employer, the provision by the employer, group health plan, or the issuer of money or other financial consider- ation for disenrolling from the coverage. (B) In the case of prior coverage obtained directly from an issuer or under an employment-based health plan— (i) the provision by the issuer or plan of money or other financial consideration for disenrolling from the coverage; or (ii) in the case of an individual whose premium for the prior coverage exceeded the premium required by the program (adjusted based on the age factors applied to the prior coverage)— (I) the prior coverage is a policy that is no longer being actively marketed (as defined by the Secretary) by the issuer; or (II) the prior coverage is a policy for which duration of coverage form issue or health status are factors that can be considered in determining premiums at renewal. (3) C ONSTRUCTION .—Nothing in this subsection shall be construed as constituting exclusive remedies for violations of criteria established under paragraph (1) or as preventing States from applying or enforcing such paragraph or other pro- visions under law with respect to health insurance issuers. VERSIGHT .—The Secretary shall establish— (f) O (1) an appeals process to enable individuals to appeal a de- termination under this section; and (2) procedures to protect against waste, fraud, and abuse. (g) F UNDING ; T ERMINATION OF A UTHORITY .— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00032 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

52 33 Sec. 1102 PPACA (Consolidated) N GENERAL .—There is appropriated to the Secretary, (1) I out of any moneys in the Treasury not otherwise appropriated, $5,000,000,000 to pay claims against (and the administrative costs of) the high risk pool under this section that are in excess of the amount of premiums collected from eligible individuals enrolled in the high risk pool. Such funds shall be available without fiscal year limitation. NSUFFICIENT FUNDS .—If the Secretary estimates for (2) I any fiscal year that the aggregate amounts available for the payment of the expenses of the high risk pool will be less than the actual amount of such expenses, the Secretary shall make such adjustments as are necessary to eliminate such deficit. ERMINATION OF AUTHORITY .— (3) T (A) I N GENERAL .—Except as provided in subparagraph (B), coverage of eligible individuals under a high risk pool in a State shall terminate on January 1, 2014. .—The Secretary shall RANSITION TO EXCHANGE (B) T develop procedures to provide for the transition of eligible individuals enrolled in health insurance coverage offered through a high risk pool established under this section into qualified health plans offered through an Exchange. Such procedures shall ensure that there is no lapse in coverage with respect to the individual and may extend coverage after the termination of the risk pool involved, if the Sec- retary determines necessary to avoid such a lapse. IMITATIONS .—The Secretary has the authority to stop (4) L taking applications for participation in the program under this section to comply with the funding limitation provided for in paragraph (1). .—The standards established ELATION TO STATE LAWS (5) R under this section shall supersede any State law or regulation (other than State licensing laws or State laws relating to plan solvency) with respect to qualified high risk pools which are es- tablished in accordance with this section. SEC. 1102 ø 42 U.S.C. 18002 ¿ . REINSURANCE FOR EARLY RETIREES. DMINISTRATION .— (a) A N GENERAL .—Not later than 90 days after the date of (1) I enactment of this Act, the Secretary shall establish a tem- porary reinsurance program to provide reimbursement to par- ticipating employment-based plans for a portion of the cost of providing health insurance coverage to early retirees (and to the eligible spouses, surviving spouses, and dependents of such retirees) during the period beginning on the date on which such program is established and ending on January 1, 2014. (2) R EFERENCE .—In this section: (A) H .—The term ‘‘health benefits’’ EALTH BENEFITS means medical, surgical, hospital, prescription drug, and such other benefits as shall be determined by the Sec- retary, whether self-funded, or delivered through the pur- chase of insurance or otherwise. (B) E MPLOYMENT - BASED PLAN .— ø As revised by section 101012(a) ¿ The term ‘‘employment-based plan’’ means a group benefits plan providing health benefits that— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00033 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

53 34 Sec. 1102 PPACA (Consolidated) (i) is— (I) maintained by one or more current or former employers (including without limitation any State or local government or political subdivi- sion thereof or any agency or instrumentality of any of the foregoing), employee organization, a voluntary employees’ beneficiary association, or a committee or board of individuals appointed to ad- minister such plan; or (II) a multiemployer plan (as defined in sec- tion 3(37) of the Employee Retirement Income Se- curity Act of 1974); and (ii) provides health benefits to early retirees. (C) E ARLY RETIREES .—The term ‘‘early retirees’’ means individuals who are age 55 and older but are not eligible for coverage under title XVIII of the Social Security Act, and who are not active employees of an employer main- taining, or currently contributing to, the employment- based plan or of any employer that has made substantial contributions to fund such plan. (b) P .— ARTICIPATION (1) E MPLOYMENT BASED PLAN ELIGIBILITY .—A participating - employment-based plan is an employment-based plan that— (A) meets the requirements of paragraph (2) with re- spect to health benefits provided under the plan; and (B) submits to the Secretary an application for partici- pation in the program, at such time, in such manner, and containing such information as the Secretary shall require. MPLOYMENT - BASED HEALTH BENEFITS .—An employ- (2) E ment-based plan meets the requirements of this paragraph if the plan— (A) implements programs and procedures to generate cost-savings with respect to participants with chronic and high-cost conditions; (B) provides documentation of the actual cost of med- ical claims involved; and (C) is certified by the Secretary. (c) P AYMENTS .— UBMISSION OF CLAIMS .— (1) S (A) I N GENERAL .—A participating employment-based plan shall submit claims for reimbursement to the Sec- retary which shall contain documentation of the actual costs of the items and services for which each claim is being submitted. (B) B ASIS FOR CLAIMS .—Claims submitted under sub- paragraph (A) shall be based on the actual amount ex- pended by the participating employment-based plan in- volved within the plan year for the health benefits pro- vided to an early retiree or the spouse, surviving spouse, or dependent of such retiree. In determining the amount of a claim for purposes of this subsection, the participating employment-based plan shall take into account any nego- tiated price concessions (such as discounts, direct or indi- rect subsidies, rebates, and direct or indirect remunera- June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00034 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

54 35 Sec. 1102 PPACA (Consolidated) tions) obtained by such plan with respect to such health benefit. For purposes of determining the amount of any such claim, the costs paid by the early retiree or the retir- ee’s spouse, surviving spouse, or dependent in the form of deductibles, co-payments, or co-insurance shall be included in the amounts paid by the participating employment- based plan. .—If the Secretary determines that ROGRAM PAYMENTS (2) P a participating employment-based plan has submitted a valid claim under paragraph (1), the Secretary shall reimburse such plan for 80 percent of that portion of the costs attributable to such claim that exceed $15,000, subject to the limits contained in paragraph (3). IMIT .—To be eligible for reimbursement under the pro- (3) L gram, a claim submitted by a participating employment-based plan shall not be less than $15,000 nor greater than $90,000. Such amounts shall be adjusted each fiscal year based on the percentage increase in the Medical Care Component of the Consumer Price Index for all urban consumers (rounded to the nearest multiple of $1,000) for the year involved. (4) U .—Amounts paid to a participating SE OF PAYMENTS employment-based plan under this subsection shall be used to lower costs for the plan. Such payments may be used to reduce premium costs for an entity described in subsection (a)(2)(B)(i) or to reduce premium contributions, co-payments, deductibles, co-insurance, or other out-of-pocket costs for plan participants. Such payments shall not be used as general revenues for an entity described in subsection (a)(2)(B)(i). The Secretary shall develop a mechanism to monitor the appropriate use of such payments by such entities. (5) P .—Payments re- AYMENTS NOT TREATED AS INCOME ceived under this subsection shall not be included in deter- mining the gross income of an entity described in subsection (a)(2)(B)(i) that is maintaining or currently contributing to a participating employment-based plan. PPEALS .—The Secretary shall establish— (6) A (A) an appeals process to permit participating employ- ment-based plans to appeal a determination of the Sec- retary with respect to claims submitted under this section; and (B) procedures to protect against fraud, waste, and abuse under the program. .—The Secretary shall conduct annual audits of UDITS (d) A claims data submitted by participating employment-based plans under this section to ensure that such plans are in compliance with the requirements of this section. (e) F UNDING .—There is appropriated to the Secretary, out of any moneys in the Treasury not otherwise appropriated, $5,000,000,000 to carry out the program under this section. Such funds shall be available without fiscal year limitation. (f) L IMITATION .—The Secretary has the authority to stop taking applications for participation in the program based on the avail- ability of funding under subsection (e). June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00035 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

55 36 Sec. 1103 PPACA (Consolidated) ø 42 U.S.C. 18003 . IMMEDIATE INFORMATION THAT ALLOWS SEC. 1103 ¿ CONSUMERS TO IDENTIFY AFFORDABLE COVERAGE OP- TIONS. OVERAGE ORTAL TO (a) I FFORDABLE C NTERNET O PTIONS .— P A (1) I .— ø As revised by section MMEDIATE ESTABLISHMENT ¿ 10102(b)(1) Not later than July 1, 2010, the Secretary, in con- sultation with the States, shall establish a mechanism, includ- ing an Internet website, through which a resident of any, or small business in, State may identify affordable health insur- ance coverage options in that State. (2) C ONNECTING TO AFFORDABLE COVERAGE .— ø Replaced by section 10102(b)(2) An Internet website established under ¿ paragraph (1) shall, to the extent practicable, provide ways for residents of, and small businesses in, any State to receive in- formation on at least the following coverage options: (A) Health insurance coverage offered by health insur- ance issuers, other than coverage that provides reimburse- ment only for the treatment or mitigation of— (i) a single disease or condition; or (ii) an unreasonably limited set of diseases or con- ditions (as determined by the Secretary). (B) Medicaid coverage under title XIX of the Social Se- curity Act. (C) Coverage under title XXI of the Social Security Act. (D) A State health benefits high risk pool, to the ex- tent that such high risk pool is offered in such State; and (E) Coverage under a high risk pool under section 1101. (F) Coverage within the small group market for small businesses and their employees, including reinsurance for early retirees under section 1102, tax credits available under section 45R of the Internal Revenue Code of 1986 (as added by section 1421), and other information specifi- cally for small businesses regarding affordable health care options. (b) E NHANCING C OMPARATIVE P URCHASING O PTIONS .— N GENERAL .—Not later than 60 days after the date of (1) I enactment of this Act, the Secretary shall develop a standard- ized format to be used for the presentation of information re- lating to the coverage options described in subsection (a)(2). Such format shall, at a minimum, require the inclusion of in- formation on the percentage of total premium revenue ex- pended on nonclinical costs (as reported under section 2718(a) of the Public Health Service Act), eligibility, availability, pre- mium rates, and cost sharing with respect to such coverage op- tions and be consistent with the standards adopted for the uni- form explanation of coverage as provided for in section 2715 of the Public Health Service Act. (2) U SE OF FORMAT .—The Secretary shall utilize the for- mat developed under paragraph (1) in compiling information concerning coverage options on the Internet website estab- lished under subsection (a). June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00036 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

56 37 Sec. 1104 PPACA (Consolidated) UTHORITY T C ONTRACT .—The Secretary may carry out (c) A O this section through contracts entered into with qualified entities. SEC. 1104. ADMINISTRATIVE SIMPLIFICATION. (a) P DMINISTRATIVE S IMPLIFICATION .—Section 261 URPOSE OF A of the Health Insurance Portability and Accountability Act of 1996 (42 U.S.C. 1320d note) is amended— (1) by inserting ‘‘uniform’’ before ‘‘standards’’; and (2) by inserting ‘‘and to reduce the clerical burden on pa- tients, health care providers, and health plans’’ before the pe- riod at the end. (b) O R PERATING FOR H EALTH I NFORMATION T RANS - ULES ACTIONS .— (1) D EFINITION OF OPERATING RULES .—Section 1171 of the Social Security Act (42 U.S.C. 1320d) is amended by adding at the end the following: ‘‘(9) O PERATING RULES .—The term ‘operating rules’ means the necessary business rules and guidelines for the electronic exchange of information that are not defined by a standard or its implementation specifications as adopted for purposes of this part.’’. RANSACTION STANDARDS ; - OPERATING RULES AND COM (2) T .—Section 1173 of the Social Security Act (42 U.S.C. PLIANCE 1320d–2) is amended— (A) in subsection (a)(2), by adding at the end the fol- lowing new subparagraph: ‘‘(J) Electronic funds transfers.’’; (B) in subsection (a), by adding at the end the fol- lowing new paragraph: EQUIREMENTS FOR FINANCIAL AND ADMINISTRATIVE ‘‘(4) R TRANSACTIONS .— ‘‘(A) I N GENERAL .—The standards and associated oper- ating rules adopted by the Secretary shall— ‘‘(i) to the extent feasible and appropriate, enable determination of an individual’s eligibility and finan- cial responsibility for specific services prior to or at the point of care; ‘‘(ii) be comprehensive, requiring minimal aug- mentation by paper or other communications; ‘‘(iii) provide for timely acknowledgment, response, and status reporting that supports a transparent claims and denial management process (including ad- judication and appeals); and ‘‘(iv) describe all data elements (including reason and remark codes) in unambiguous terms, require that such data elements be required or conditioned upon set values in other fields, and prohibit additional con- ditions (except where necessary to implement State or Federal law, or to protect against fraud and abuse). ‘‘(B) R EDUCTION OF CLERICAL BURDEN .—In adopting standards and operating rules for the transactions referred to under paragraph (1), the Secretary shall seek to reduce the number and complexity of forms (including paper and June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00037 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

57 38 Sec. 1104 PPACA (Consolidated) electronic forms) and data entry required by patients and providers. ø Section 10109(a), p. 838, added a paragraph (5) relating to ¿ consideration of standardization of activities and items (C) by adding at the end the following new sub- sections: ‘‘(g) O ULES PERATING R .— N GENERAL .—The Secretary shall adopt a single set of ‘‘(1) I operating rules for each transaction referred to under sub- section (a)(1) with the goal of creating as much uniformity in the implementation of the electronic standards as possible. Such operating rules shall be consensus-based and reflect the necessary business rules affecting health plans and health care providers and the manner in which they operate pursuant to standards issued under Health Insurance Portability and Ac- countability Act of 1996. ‘‘(2) O .—In adopting oper- PERATING RULES DEVELOPMENT ating rules under this subsection, the Secretary shall consider recommendations for operating rules developed by a qualified nonprofit entity that meets the following requirements: ‘‘(A) The entity focuses its mission on administrative simplification. ‘‘(B) The entity demonstrates a multi-stakeholder and consensus-based process for development of operating rules, including representation by or participation from health plans, health care providers, vendors, relevant Fed- eral agencies, and other standard development organiza- tions. ‘‘(C) The entity has a public set of guiding principles that ensure the operating rules and process are open and transparent, and supports nondiscrimination and conflict of interest policies that demonstrate a commitment to open, fair, and nondiscriminatory practices. ‘‘(D) The entity builds on the transaction standards issued under Health Insurance Portability and Account- ability Act of 1996. ‘‘(E) The entity allows for public review and updates of the operating rules. EVIEW AND RECOMMENDATIONS .—The National Com- ‘‘(3) R mittee on Vital and Health Statistics shall— ‘‘(A) advise the Secretary as to whether a nonprofit en- tity meets the requirements under paragraph (2); ‘‘(B) review the operating rules developed and rec- ommended by such nonprofit entity; ‘‘(C) determine whether such operating rules represent a consensus view of the health care stakeholders and are consistent with and do not conflict with other existing standards; ‘‘(D) evaluate whether such operating rules are con- sistent with electronic standards adopted for health infor- mation technology; and ‘‘(E) submit to the Secretary a recommendation as to whether the Secretary should adopt such operating rules. ‘‘(4) I MPLEMENTATION .— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00038 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

58 39 Sec. 1104 PPACA (Consolidated) N GENERAL .—The Secretary shall adopt operating ‘‘(A) I rules under this subsection, by regulation in accordance with subparagraph (C), following consideration of the oper- ating rules developed by the non-profit entity described in paragraph (2) and the recommendation submitted by the National Committee on Vital and Health Statistics under paragraph (3)(E) and having ensured consultation with providers. ‘‘(B) A EFFECTIVE DATES DOPTION REQUIREMENTS ; .— LIGIBILITY FOR A HEALTH PLAN AND HEALTH ‘‘(i) E CLAIM STATUS .—The set of operating rules for eligi- bility for a health plan and health claim status trans- actions shall be adopted not later than July 1, 2011, in a manner ensuring that such operating rules are ef- fective not later than January 1, 2013, and may allow for the use of a machine readable identification card. ‘‘(ii) E LECTRONIC FUNDS TRANSFERS AND HEALTH CARE PAYMENT AND REMITTANCE ADVICE .—The set of operating rules for electronic funds transfers and health care payment and remittance advice trans- actions shall— ‘‘(I) allow for automated reconciliation of the electronic payment with the remittance advice; and ‘‘(II) be adopted not later than July 1, 2012, in a manner ensuring that such operating rules are effective not later than January 1, 2014. EALTH CLAIMS OR EQUIVALENT ENCOUNTER ‘‘(iii) H INFORMATION , ENROLLMENT AND DISENROLLMENT IN A HEALTH PLAN , HEALTH PLAN PREMIUM PAYMENTS , RE - FERRAL CERTIFICATION AND AUTHORIZATION .—The set of operating rules for health claims or equivalent en- counter information, enrollment and disenrollment in a health plan, health plan premium payments, and re- ferral certification and authorization transactions shall be adopted not later than July 1, 2014, in a man- ner ensuring that such operating rules are effective not later than January 1, 2016. ‘‘(C) E XPEDITED RULEMAKING .—The Secretary shall promulgate an interim final rule applying any standard or operating rule recommended by the National Committee on Vital and Health Statistics pursuant to paragraph (3). The Secretary shall accept and consider public comments on any interim final rule published under this subpara- graph for 60 days after the date of such publication. ‘‘(h) C OMPLIANCE .— EALTH PLAN CERTIFICATION .— ‘‘(1) H ‘‘(A) E , HEALTH CLAIM LIGIBILITY FOR A HEALTH PLAN STATUS , ELECTRONIC FUNDS TRANSFERS , HEALTH CARE PAY - MENT AND REMITTANCE ADVICE .—Not later than December 31, 2013, a health plan shall file a statement with the Sec- retary, in such form as the Secretary may require, certi- fying that the data and information systems for such plan are in compliance with any applicable standards (as de- June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00039 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

59 40 Sec. 1104 PPACA (Consolidated) scribed under paragraph (7) of section 1171) and associ- ated operating rules (as described under paragraph (9) of such section) for electronic funds transfers, eligibility for a health plan, health claim status, and health care payment and remittance advice, respectively. ‘‘(B) H - EALTH CLAIMS OR EQUIVALENT ENCOUNTER IN ENROLLMENT FORMATION DISENROLLMENT IN A , AND , HEALTH PLAN PREMIUM PAYMENTS , HEALTH HEALTH PLAN CLAIMS ATTACHMENTS REFERRAL CERTIFICATION AND AU - , .—Not later than December 31, 2015, a health THORIZATION plan shall file a statement with the Secretary, in such form as the Secretary may require, certifying that the data and information systems for such plan are in compliance with any applicable standards and associated operating rules for health claims or equivalent encounter informa- tion, enrollment and disenrollment in a health plan, health plan premium payments, health claims attachments, and referral certification and authorization, respectively. A health plan shall provide the same level of documentation to certify compliance with such transactions as is required to certify compliance with the transactions specified in subparagraph (A). ‘‘(2) D OCUMENTATION OF COMPLIANCE .—A health plan shall provide the Secretary, in such form as the Secretary may re- quire, with adequate documentation of compliance with the standards and operating rules described under paragraph (1). A health plan shall not be considered to have provided ade- quate documentation and shall not be certified as being in com- pliance with such standards, unless the health plan— ‘‘(A) demonstrates to the Secretary that the plan con- ducts the electronic transactions specified in paragraph (1) in a manner that fully complies with the regulations of the Secretary; and ‘‘(B) provides documentation showing that the plan has completed end-to-end testing for such transactions with their partners, such as hospitals and physicians. ‘‘(3) S ERVICE CONTRACTS .—A health plan shall be required to ensure that any entities that provide services pursuant to a contract with such health plan shall comply with any applica- ble certification and compliance requirements (and provide the Secretary with adequate documentation of such compliance) under this subsection. ‘‘(4) C ERTIFICATION BY OUTSIDE ENTITY .—The Secretary may designate independent, outside entities to certify that a health plan has complied with the requirements under this subsection, provided that the certification standards employed by such entities are in accordance with any standards or oper- ating rules issued by the Secretary. ‘‘(5) C OMPLIANCE WITH REVISED STANDARDS AND OPERATING RULES .— ‘‘(A) I N GENERAL .—A health plan (including entities described under paragraph (3)) shall file a statement with the Secretary, in such form as the Secretary may require, certifying that the data and information systems for such June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00040 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

60 41 Sec. 1104 PPACA (Consolidated) plan are in compliance with any applicable revised stand- ards and associated operating rules under this subsection for any interim final rule promulgated by the Secretary under subsection (i) that— ‘‘(i) amends any standard or operating rule de- scribed under paragraph (1) of this subsection; or ‘‘(ii) establishes a standard (as described under subsection (a)(1)(B)) or associated operating rules (as described under subsection (i)(5)) for any other finan- cial and administrative transactions. ‘‘(B) D ATE OF COMPLIANCE .—A health plan shall com- ply with such requirements not later than the effective date of the applicable standard or operating rule. ‘‘(6) A UDITS OF HEALTH PLANS .—The Secretary shall con- duct periodic audits to ensure that health plans (including en- tities described under paragraph (3)) are in compliance with any standards and operating rules that are described under paragraph (1) or subsection (i)(5). ‘‘(i) R A S TANDARDS AND O PERATING EVIEW AND MENDMENT OF R ULES .— ‘‘(1) E STABLISHMENT .—Not later than January 1, 2014, the Secretary shall establish a review committee (as described under paragraph (4)). VALUATIONS AND REPORTS .— ‘‘(2) E ‘‘(A) H EARINGS .—Not later than April 1, 2014, and not less than biennially thereafter, the Secretary, acting through the review committee, shall conduct hearings to evaluate and review the adopted standards and operating rules established under this section. EPORT .—Not later than July 1, 2014, and not ‘‘(B) R less than biennially thereafter, the review committee shall provide recommendations for updating and improving such standards and operating rules. The review committee shall recommend a single set of operating rules per transaction standard and maintain the goal of creating as much uni- formity as possible in the implementation of the electronic standards. ‘‘(3) I NTERIM FINAL RULEMAKING .— N GENERAL .—Any recommendations to amend ‘‘(A) I adopted standards and operating rules that have been ap- proved by the review committee and reported to the Sec- retary under paragraph (2)(B) shall be adopted by the Sec- retary through promulgation of an interim final rule not later than 90 days after receipt of the committee’s report. ‘‘(B) P UBLIC COMMENT .— ‘‘(i) P COMMENT PERIOD .—The Secretary UBLIC shall accept and consider public comments on any in- terim final rule published under this paragraph for 60 days after the date of such publication. FFECTIVE DATE .—The effective date of any ‘‘(ii) E amendment to existing standards or operating rules that is adopted through an interim final rule pub- lished under this paragraph shall be 25 months fol- lowing the close of such public comment period. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00041 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

61 42 Sec. 1104 PPACA (Consolidated) EVIEW COMMITTEE .— ‘‘(4) R .—For the purposes of this subsection, ‘‘(A) D EFINITION the term ‘review committee’ means a committee chartered by or within the Department of Health and Human serv- ices that has been designated by the Secretary to carry out this subsection, including— ‘‘(i) the National Committee on Vital and Health Statistics; or ‘‘(ii) any appropriate committee as determined by the Secretary. OORDINATION OF HIT STANDARDS .—In developing ‘‘(B) C recommendations under this subsection, the review com- mittee shall ensure coordination, as appropriate, with the standards that support the certified electronic health record technology approved by the Office of the National Coordinator for Health Information Technology. PERATING RULES FOR OTHER STANDARDS ADOPTED BY ‘‘(5) O THE SECRETARY .—The Secretary shall adopt a single set of op- erating rules (pursuant to the process described under sub- section (g)) for any transaction for which a standard had been adopted pursuant to subsection (a)(1)(B). ‘‘(j) P ENALTIES .— ‘‘(1) P ENALTY FEE .— ‘‘(A) I N GENERAL .—Not later than April 1, 2014, and annually thereafter, the Secretary shall assess a penalty fee (as determined under subparagraph (B)) against a health plan that has failed to meet the requirements under subsection (h) with respect to certification and docu- mentation of compliance with— ‘‘(i) the standards and associated operating rules described under paragraph (1) of such subsection; and ‘‘(ii) a standard (as described under subsection (a)(1)(B)) and associated operating rules (as described under subsection (i)(5)) for any other financial and ad- ministrative transactions. EE AMOUNT .—Subject to subparagraphs (C), (D), ‘‘(B) F and (E), the Secretary shall assess a penalty fee against a health plan in the amount of $1 per covered life until cer- tification is complete. The penalty shall be assessed per person covered by the plan for which its data systems for major medical policies are not in compliance and shall be imposed against the health plan for each day that the plan is not in compliance with the requirements under sub- section (h). DDITIONAL PENALTY FOR MISREPRESENTATION .—A ‘‘(C) A health plan that knowingly provides inaccurate or incom- plete information in a statement of certification or docu- mentation of compliance under subsection (h) shall be sub- ject to a penalty fee that is double the amount that would otherwise be imposed under this subsection. ‘‘(D) A NNUAL FEE INCREASE .—The amount of the pen- alty fee imposed under this subsection shall be increased on an annual basis by the annual percentage increase in June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00042 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

62 43 Sec. 1104 PPACA (Consolidated) total national health care expenditures, as determined by the Secretary. .—A penalty fee assessed against a ENALTY LIMIT ‘‘(E) P health plan under this subsection shall not exceed, on an annual basis— ‘‘(i) an amount equal to $20 per covered life under such plan; or ‘‘(ii) an amount equal to $40 per covered life under the plan if such plan has knowingly provided inac- curate or incomplete information (as described under subparagraph (C)). ETERMINATION OF COVERED INDIVIDUALS .—The ‘‘(F) D Secretary shall determine the number of covered lives under a health plan based upon the most recent state- ments and filings that have been submitted by such plan to the Securities and Exchange Commission. OTICE AND DISPUTE PROCEDURE ‘‘(2) N .—The Secretary shall establish a procedure for assessment of penalty fees under this subsection that provides a health plan with reasonable notice and a dispute resolution procedure prior to provision of a no- tice of assessment by the Secretary of the Treasury (as de- scribed under paragraph (4)(B)). ‘‘(3) P ENALTY FEE REPORT .—Not later than May 1, 2014, and annually thereafter, the Secretary shall provide the Sec- retary of the Treasury with a report identifying those health plans that have been assessed a penalty fee under this sub- section. ‘‘(4) C OLLECTION OF PENALTY FEE .— ‘‘(A) I N GENERAL .—The Secretary of the Treasury, act- ing through the Financial Management Service, shall ad- minister the collection of penalty fees from health plans that have been identified by the Secretary in the penalty fee report provided under paragraph (3). OTICE .—Not later than August 1, 2014, and an- ‘‘(B) N nually thereafter, the Secretary of the Treasury shall pro- vide notice to each health plan that has been assessed a penalty fee by the Secretary under this subsection. Such notice shall include the amount of the penalty fee assessed by the Secretary and the due date for payment of such fee to the Secretary of the Treasury (as described in subpara- graph (C)). .—Payment by a health plan AYMENT DUE DATE ‘‘(C) P for a penalty fee assessed under this subsection shall be made to the Secretary of the Treasury not later than No- vember 1, 2014, and annually thereafter. ‘‘(D) U NPAID PENALTY FEES .—Any amount of a penalty fee assessed against a health plan under this subsection for which payment has not been made by the due date pro- vided under subparagraph (C) shall be— ‘‘(i) increased by the interest accrued on such amount, as determined pursuant to the underpayment rate established under section 6621 of the Internal Revenue Code of 1986; and June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00043 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

63 44 Sec. 1105 PPACA (Consolidated) ‘‘(ii) treated as a past-due, legally enforceable debt owed to a Federal agency for purposes of section 6402(d) of the Internal Revenue Code of 1986. ‘‘(E) A .—Any fee charged or allo- DMINISTRATIVE FEES cated for collection activities conducted by the Financial Management Service will be passed on to a health plan on a pro-rata basis and added to any penalty fee collected from the plan.’’. R ULES .— ROMULGATION OF (c) P (1) U .—The Secretary shall NIQUE HEALTH PLAN IDENTIFIER promulgate a final rule to establish a unique health plan iden- tifier (as described in section 1173(b) of the Social Security Act (42 U.S.C. 1320d–2(b))) based on the input of the National Committee on Vital and Health Statistics. The Secretary may do so on an interim final basis and such rule shall be effective not later than October 1, 2012. LECTRONIC FUNDS TRANSFER .—The Secretary shall (2) E promulgate a final rule to establish a standard for electronic funds transfers (as described in section 1173(a)(2)(J) of the So- cial Security Act, as added by subsection (b)(2)(A)). The Sec- retary may do so on an interim final basis and shall adopt such standard not later than January 1, 2012, in a manner ensuring that such standard is effective not later than January 1, 2014. (3) H EALTH CLAIMS ATTACHMENTS .—The Secretary shall promulgate a final rule to establish a transaction standard and a single set of associated operating rules for health claims at- tachments (as described in section 1173(a)(2)(B) of the Social Security Act (42 U.S.C. 1320d–2(a)(2)(B))) that is consistent with the X12 Version 5010 transaction standards. The Sec- retary may do so on an interim final basis and shall adopt a transaction standard and a single set of associated operating rules not later than January 1, 2014, in a manner ensuring that such standard is effective not later than January 1, 2016. (d) E E XPANSION OF T RANSACTIONS IN M EDICARE .— LECTRONIC Section 1862(a) of the Social Security Act (42 U.S.C. 1395y(a)) is amended— (1) in paragraph (23), by striking the ‘‘or’’ at the end; (2) in paragraph (24), by striking the period and inserting ‘‘; or’’; and (3) by inserting after paragraph (24) the following new paragraph: ‘‘(25) not later than January 1, 2014, for which the pay- ment is other than by electronic funds transfer (EFT) or an electronic remittance in a form as specified in ASC X12 835 Health Care Payment and Remittance Advice or subsequent standard.’’. ø Section 10109, p. 838, provided for development of standards for financial and administrative transactions ¿ SEC. 1105. EFFECTIVE DATE. This subtitle shall take effect on the date of enactment of this Act. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00044 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

64 45 Sec. 1201 PPACA (Consolidated) Subtitle C—Quality Health Insurance Coverage for All Americans PART 1—HEALTH INSURANCE MARKET REFORMS SEC. 1201. AMENDMENT TO THE PUBLIC HEALTH SERVICE ACT. Part A of title XXVII of the Public Health Service Act (42 U.S.C. 300gg et seq.), as amended by section 1001, is further amended— (1) by striking the heading for subpart 1 and inserting the following: ‘‘Subpart I—General Reform’’; (2)(A) in section 2701 (42 U.S.C. 300gg), by striking the section heading and subsection (a) and inserting the following: ‘‘SEC. 2704 42 U.S.C. 300gg–3 ¿ . PROHIBITION OF PREEXISTING CONDI- ø TION EXCLUSIONS OR OTHER DISCRIMINATION BASED ON HEALTH STATUS. ‘‘(a) I N G ENERAL .—A group health plan and a health insurance issuer offering group or individual health insurance coverage may not impose any preexisting condition exclusion with respect to such plan or coverage.’’; and (B) by transferring such section (as amended by subpara- graph (A)) so as to appear after the section 2703 added by paragraph (4); (3)(A) in section 2702 (42 U.S.C. 300gg–1)— (i) by striking the section heading and all that follows through subsection (a); (ii) in subsection (b)— (I) by striking ‘‘health insurance issuer offering health insurance coverage in connection with a group health plan’’ each place that such appears and insert- ing ‘‘health insurance issuer offering group or indi- vidual health insurance coverage’’; and (II) in paragraph (2)(A)— (aa) by inserting ‘‘or individual’’ after ‘‘em- ployer’’; and (bb) by inserting ‘‘or individual health cov- erage, as the case may be’’ before the semicolon; and (iii) in subsection (e)— (I) by striking ‘‘(a)(1)(F)’’ and inserting ‘‘(a)(6)’’; (II) by striking ‘‘2701’’ and inserting ‘‘2704’’; and (III) by striking ‘‘2721(a)’’ and inserting ‘‘2735(a)’’; and (B) by transferring such section (as amended by sub- paragraph (A)) to appear after section 2705(a) as added by paragraph (4); and (4) by inserting after the subpart heading (as added by paragraph (1)) the following: June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00045 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

65 46 Sec. 1201 2702 PHSA PPACA (Consolidated) \ ø 42 U.S.C. 300gg . FAIR HEALTH INSURANCE PREMIUMS. ‘‘SEC. 2701 ¿ D .— P REMIUM R ATES ROHIBITING ‘‘(a) P ISCRIMINATORY N GENERAL ‘‘(1) I .—With respect to the premium rate charged by a health insurance issuer for health insurance cov- erage offered in the individual or small group market— ‘‘(A) such rate shall vary with respect to the particular plan or coverage involved only by— ‘‘(i) whether such plan or coverage covers an indi- vidual or family; ‘‘(ii) rating area, as established in accordance with paragraph (2); ‘‘(iii) age, except that such rate shall not vary by more than 3 to 1 for adults (consistent with section 2707(c)); and ‘‘(iv) tobacco use, except that such rate shall not vary by more than 1.5 to 1; and ‘‘(B) such rate shall not vary with respect to the par- ticular plan or coverage involved by any other factor not described in subparagraph (A). ‘‘(2) R ATING AREA .— N GENERAL ‘‘(A) I .—Each State shall establish 1 or more rating areas within that State for purposes of apply- ing the requirements of this title. ‘‘(B) S ECRETARIAL REVIEW .—The Secretary shall review the rating areas established by each State under subpara- graph (A) to ensure the adequacy of such areas for pur- poses of carrying out the requirements of this title. If the Secretary determines a State’s rating areas are not ade- quate, or that a State does not establish such areas, the Secretary may establish rating areas for that State. ‘‘(3) P ERMISSIBLE AGE BANDS .—The Secretary, in consulta- tion with the National Association of Insurance Commis- sioners, shall define the permissible age bands for rating pur- poses under paragraph (1)(A)(iii). - ‘‘(4) A PPLICATION OF VARIATIONS BASED ON AGE OR TO BACCO USE .—With respect to family coverage under a group health plan or health insurance coverage, the rating variations permitted under clauses (iii) and (iv) of paragraph (1)(A) shall be applied based on the portion of the premium that is attrib- utable to each family member covered under the plan or cov- erage. ‘‘(5) S .— ø As revised PECIAL RULE FOR LARGE GROUP MARKET by section 10103(a) If a State permits health insurance ¿ issuers that offer coverage in the large group market in the State to offer such coverage through the State Exchange (as provided for under section 1312(f)(2)(B) of the Patient Protec- tion and Affordable Care Act), the provisions of this subsection shall apply to all coverage offered in such market (other than self-insured group health plans offered in such market) in the State. ‘‘SEC. 2702 ø 42 U.S.C. 300gg–1 ¿ . GUARANTEED AVAILABILITY OF COV- ERAGE. ‘‘(a) G UARANTEED I SSUANCE OF C OVERAGE IN THE I NDIVIDUAL AND G ROUP M ARKET .—Subject to subsections (b) through (e), each June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00046 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

66 47 Sec. 1201 2705 PHSA PPACA (Consolidated) \ health insurance issuer that offers health insurance coverage in the individual or group market in a State must accept every employer and individual in the State that applies for such coverage. ‘‘(b) E .— NROLLMENT ESTRICTION .—A health insurance issuer described in ‘‘(1) R subsection (a) may restrict enrollment in coverage described in such subsection to open or special enrollment periods. .—A health insurance issuer described ‘‘(2) E STABLISHMENT in subsection (a) shall, in accordance with the regulations pro- mulgated under paragraph (3), establish special enrollment pe- riods for qualifying events (under section 603 of the Employee Retirement Income Security Act of 1974). ‘‘(3) R EGULATIONS .—The Secretary shall promulgate regu- lations with respect to enrollment periods under paragraphs (1) and (2). ‘‘SEC. 2703 42 U.S.C. 300gg–2 ¿ . GUARANTEED RENEWABILITY OF COV- ø ERAGE. ‘‘(a) I G ENERAL .—Except as provided in this section, if a N health insurance issuer offers health insurance coverage in the in- dividual or group market, the issuer must renew or continue in force such coverage at the option of the plan sponsor or the indi- vidual, as applicable. ‘‘SEC. 2705 ø 42 U.S.C. 300gg–4 ¿ . PROHIBITING DISCRIMINATION AGAINST INDIVIDUAL PARTICIPANTS AND BENE- FICIARIES BASED ON HEALTH STATUS. ‘‘(a) I N G ENERAL .—A group health plan and a health insurance issuer offering group or individual health insurance coverage may not establish rules for eligibility (including continued eligibility) of any individual to enroll under the terms of the plan or coverage based on any of the following health status-related factors in rela- tion to the individual or a dependent of the individual: ‘‘(1) Health status. ‘‘(2) Medical condition (including both physical and mental illnesses). ‘‘(3) Claims experience. ‘‘(4) Receipt of health care. ‘‘(5) Medical history. ‘‘(6) Genetic information. ‘‘(7) Evidence of insurability (including conditions arising out of acts of domestic violence). ‘‘(8) Disability. ‘‘(9) Any other health status-related factor determined ap- propriate by the Secretary. ‘‘(j) P ROGRAMS OF H EALTH P ROMOTION OR D ISEASE P REVEN - TION .— ‘‘(1) G ENERAL PROVISIONS .— ENERAL RULE .—For purposes of subsection ‘‘(A) G (b)(2)(B), a program of health promotion or disease preven- tion (referred to in this subsection as a ‘wellness program’) shall be a program offered by an employer that is designed to promote health or prevent disease that meets the appli- cable requirements of this subsection. ‘‘(B) N O CONDITIONS BASED ON HEALTH STATUS FAC - TOR .—If none of the conditions for obtaining a premium June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00047 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

67 48 Sec. 1201 2705 PHSA PPACA (Consolidated) \ discount or rebate or other reward for participation in a wellness program is based on an individual satisfying a standard that is related to a health status factor, such wellness program shall not violate this section if participa- tion in the program is made available to all similarly situ- ated individuals and the requirements of paragraph (2) are complied with. ‘‘(C) C ONDITIONS BASED ON HEALTH STATUS FACTOR .— If any of the conditions for obtaining a premium discount or rebate or other reward for participation in a wellness program is based on an individual satisfying a standard that is related to a health status factor, such wellness pro- gram shall not violate this section if the requirements of paragraph (3) are complied with. ‘‘(2) W PROGRAMS SUBJECT TO REQUIRE - ELLNESS NOT MENTS .—If none of the conditions for obtaining a premium dis- count or rebate or other reward under a wellness program as described in paragraph (1)(B) are based on an individual satis- fying a standard that is related to a health status factor (or if such a wellness program does not provide such a reward), the wellness program shall not violate this section if participation in the program is made available to all similarly situated indi- viduals. The following programs shall not have to comply with the requirements of paragraph (3) if participation in the pro- gram is made available to all similarly situated individuals: ‘‘(A) A program that reimburses all or part of the cost for memberships in a fitness center. ‘‘(B) A diagnostic testing program that provides a re- ward for participation and does not base any part of the reward on outcomes. ‘‘(C) A program that encourages preventive care re- lated to a health condition through the waiver of the co- payment or deductible requirement under group health plan for the costs of certain items or services related to a health condition (such as prenatal care or well-baby visits). ‘‘(D) A program that reimburses individuals for the costs of smoking cessation programs without regard to whether the individual quits smoking. ‘‘(E) A program that provides a reward to individuals for attending a periodic health education seminar. ‘‘(3) W ELLNESS PROGRAMS SUBJECT TO REQUIREMENTS .—If any of the conditions for obtaining a premium discount, rebate, or reward under a wellness program as described in paragraph (1)(C) is based on an individual satisfying a standard that is related to a health status factor, the wellness program shall not violate this section if the following requirements are com- plied with: ‘‘(A) The reward for the wellness program, together with the reward for other wellness programs with respect to the plan that requires satisfaction of a standard related to a health status factor, shall not exceed 30 percent of the cost of employee-only coverage under the plan. If, in addi- tion to employees or individuals, any class of dependents (such as spouses or spouses and dependent children) may June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00048 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

68 49 Sec. 1201 2705 PHSA PPACA (Consolidated) \ participate fully in the wellness program, such reward shall not exceed 30 percent of the cost of the coverage in which an employee or individual and any dependents are enrolled. For purposes of this paragraph, the cost of cov- erage shall be determined based on the total amount of employer and employee contributions for the benefit pack- age under which the employee is (or the employee and any dependents are) receiving coverage. A reward may be in the form of a discount or rebate of a premium or contribu- tion, a waiver of all or part of a cost-sharing mechanism (such as deductibles, copayments, or coinsurance), the ab- sence of a surcharge, or the value of a benefit that would otherwise not be provided under the plan. The Secretaries of Labor, Health and Human Services, and the Treasury may increase the reward available under this subpara- graph to up to 50 percent of the cost of coverage if the Sec- retaries determine that such an increase is appropriate. ‘‘(B) The wellness program shall be reasonably de- signed to promote health or prevent disease. A program complies with the preceding sentence if the program has a reasonable chance of improving the health of, or pre- venting disease in, participating individuals and it is not overly burdensome, is not a subterfuge for discriminating based on a health status factor, and is not highly suspect in the method chosen to promote health or prevent disease. ‘‘(C) The plan shall give individuals eligible for the program the opportunity to qualify for the reward under the program at least once each year. ‘‘(D) The full reward under the wellness program shall be made available to all similarly situated individuals. For such purpose, among other things: ‘‘(i) The reward is not available to all similarly sit- uated individuals for a period unless the wellness pro- gram allows— ‘‘(I) for a reasonable alternative standard (or waiver of the otherwise applicable standard) for obtaining the reward for any individual for whom, for that period, it is unreasonably difficult due to a medical condition to satisfy the otherwise appli- cable standard; and ‘‘(II) for a reasonable alternative standard (or waiver of the otherwise applicable standard) for obtaining the reward for any individual for whom, for that period, it is medically inadvisable to at- tempt to satisfy the otherwise applicable stand- ard. ‘‘(ii) If reasonable under the circumstances, the plan or issuer may seek verification, such as a state- ment from an individual’s physician, that a health sta- tus factor makes it unreasonably difficult or medically inadvisable for the individual to satisfy or attempt to satisfy the otherwise applicable standard. ‘‘(E) The plan or issuer involved shall disclose in all plan materials describing the terms of the wellness pro- June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00049 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

69 50 Sec. 1201 2705 PHSA PPACA (Consolidated) \ gram the availability of a reasonable alternative standard (or the possibility of waiver of the otherwise applicable standard) required under subparagraph (D). If plan mate- rials disclose that such a program is available, without de- scribing its terms, the disclosure under this subparagraph shall not be required. ‘‘(k) E ROGRAMS .—Nothing in this section shall pro- XISTING P hibit a program of health promotion or disease prevention that was established prior to the date of enactment of this section and ap- plied with all applicable regulations, and that is operating on such date, from continuing to be carried out for as long as such regula- tions remain in effect. ‘‘(l) W ELLNESS P D EMONSTRATION P ROJECT .— ROGRAM ‘‘(1) I N GENERAL .—Not later than July 1, 2014, the Sec- retary, in consultation with the Secretary of the Treasury and the Secretary of Labor, shall establish a 10-State demonstra- tion project under which participating States shall apply the provisions of subsection (j) to programs of health promotion of- fered by a health insurance issuer that offers health insurance coverage in the individual market in such State. ‘‘(2) E XPANSION OF DEMONSTRATION PROJECT .—If the Sec- retary, in consultation with the Secretary of the Treasury and the Secretary of Labor, determines that the demonstration project described in paragraph (1) is effective, such Secretaries may, beginning on July 1, 2017 expand such demonstration project to include additional participating States. EQUIREMENTS .— ‘‘(3) R ‘‘(A) M AINTENANCE OF COVERAGE .—The Secretary, in consultation with the Secretary of the Treasury and the Secretary of Labor, shall not approve the participation of a State in the demonstration project under this section un- less the Secretaries determine that the State’s project is designed in a manner that— ‘‘(i) will not result in any decrease in coverage; and ‘‘(ii) will not increase the cost to the Federal Gov- ernment in providing credits under section 36B of the Internal Revenue Code of 1986 or cost-sharing assist- ance under section 1402 of the Patient Protection and Affordable Care Act. ‘‘(B) O THER REQUIREMENTS .—States that participate in the demonstration project under this subsection— ‘‘(i) may permit premium discounts or rebates or the modification of otherwise applicable copayments or deductibles for adherence to, or participation in, a rea- sonably designed program of health promotion and disease prevention; ‘‘(ii) shall ensure that requirements of consumer protection are met in programs of health promotion in the individual market; ‘‘(iii) shall require verification from health insur- ance issuers that offer health insurance coverage in the individual market of such State that premium dis- counts— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00050 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

70 51 Sec. 1201 2706 PHSA PPACA (Consolidated) \ ‘‘(I) do not create undue burdens for individ- uals insured in the individual market; ‘‘(II) do not lead to cost shifting; and ‘‘(III) are not a subterfuge for discrimination; ‘‘(iv) shall ensure that consumer data is protected in accordance with the requirements of section 264(c) of the Health Insurance Portability and Accountability Act of 1996 (42 U.S.C. 1320d–2 note); and ‘‘(v) shall ensure and demonstrate to the satisfac- tion of the Secretary that the discounts or other re- wards provided under the project reflect the expected level of participation in the wellness program involved and the anticipated effect the program will have on utilization or medical claim costs. EPORT .— ‘‘(m) R ‘‘(1) I .—Not later than 3 years after the date of N GENERAL enactment of the Patient Protection and Affordable Care Act, the Secretary, in consultation with the Secretary of the Treas- ury and the Secretary of Labor, shall submit a report to the appropriate committees of Congress concerning— ‘‘(A) the effectiveness of wellness programs (as defined in subsection (j)) in promoting health and preventing dis- ease; ‘‘(B) the impact of such wellness programs on the ac- cess to care and affordability of coverage for participants and non-participants of such programs; ‘‘(C) the impact of premium-based and cost-sharing in- centives on participant behavior and the role of such pro- grams in changing behavior; and ‘‘(D) the effectiveness of different types of rewards. ATA COLLECTION .—In preparing the report described ‘‘(2) D in paragraph (1), the Secretaries shall gather relevant informa- tion from employers who provide employees with access to wellness programs, including State and Federal agencies. EGULATIONS .—Nothing in this section shall be construed ‘‘(n) R as prohibiting the Secretaries of Labor, Health and Human Serv- ices, or the Treasury from promulgating regulations in connection with this section. ‘‘SEC. 2706 ø 42 U.S.C. 300gg–5 ¿ . NON-DISCRIMINATION IN HEALTH CARE. ‘‘(a) P ROVIDERS .—A group health plan and a health insurance issuer offering group or individual health insurance coverage shall not discriminate with respect to participation under the plan or coverage against any health care provider who is acting within the scope of that provider’s license or certification under applicable State law. This section shall not require that a group health plan or health insurance issuer contract with any health care provider willing to abide by the terms and conditions for participation estab- lished by the plan or issuer. Nothing in this section shall be con- strued as preventing a group health plan, a health insurance issuer, or the Secretary from establishing varying reimbursement rates based on quality or performance measures. ‘‘(b) I NDIVIDUALS .—The provisions of section 1558 of the Pa- tient Protection and Affordable Care Act (relating to non-discrimi- June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00051 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

71 52 Sec. 1201 2707 PHSA PPACA (Consolidated) \ nation) shall apply with respect to a group health plan or health insurance issuer offering group or individual health insurance cov- erage. 42 U.S.C. 300gg–6 . COMPREHENSIVE HEALTH INSURANCE ‘‘SEC. 2707 ¿ ø COVERAGE. E SSENTIAL H EALTH ‘‘(a) C ENEFITS P ACKAGE .—A OVERAGE FOR B health insurance issuer that offers health insurance coverage in the individual or small group market shall ensure that such coverage includes the essential health benefits package required under sec- tion 1302(a) of the Patient Protection and Affordable Care Act. ‘‘(b) C - SHARING U NDER G ROUP H EALTH P LANS .—A group OST health plan shall ensure that any annual cost-sharing imposed under the plan does not exceed the limitations provided for under paragraphs (1) and (2) of section 1302(c). ‘‘(c) C HILD ONLY P LANS .—If a health insurance issuer offers - health insurance coverage in any level of coverage specified under section 1302(d) of the Patient Protection and Affordable Care Act, the issuer shall also offer such coverage in that level as a plan in which the only enrollees are individuals who, as of the beginning of a plan year, have not attained the age of 21. .—This section shall not apply to a plan de- ENTAL O NLY ‘‘(d) D scribed in section 1302(d)(2)(B)(ii)(I). ø 42 U.S.C. 300gg–7 . PROHIBITION ON EXCESSIVE WAITING ‘‘SEC. 2708 ¿ PERIODS. ø ‘‘ ¿ A group health plan and a As revised by section 10103(b) health insurance issuer offering group health insurance coverage shall not apply any waiting period (as defined in section 2704(b)(4)) that exceeds 90 days. ø ‘‘SEC. 2709 ¿ . COVERAGE FOR INDIVIDUALS PARTICI- 42 U.S.C. 300gg–8 PATING IN APPROVED CLINICAL TRIALS. ø ¿ Section added by section 10103(c) ‘‘(a) C OVERAGE .— ‘‘(1) I N GENERAL .—If a group health plan or a health insur- ance issuer offering group or individual health insurance cov- erage provides coverage to a qualified individual, then such plan or issuer— ‘‘(A) may not deny the individual participation in the clinical trial referred to in subsection (b)(2); ‘‘(B) subject to subsection (c), may not deny (or limit or impose additional conditions on) the coverage of routine patient costs for items and services furnished in connection with participation in the trial; and ‘‘(C) may not discriminate against the individual on the basis of the individual’s participation in such trial. ‘‘(2) R OUTINE PATIENT COSTS .— ‘‘(A) I .—For purposes of paragraph (1)(B), NCLUSION subject to subparagraph (B), routine patient costs include all items and services consistent with the coverage pro- vided in the plan (or coverage) that is typically covered for a qualified individual who is not enrolled in a clinical trial. ‘‘(B) E XCLUSION .—For purposes of paragraph (1)(B), routine patient costs does not include— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00052 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

72 53 Sec. 1201 2709 PHSA PPACA (Consolidated) \ ‘‘(i) the investigational item, device, or service, itself; ‘‘(ii) items and services that are provided solely to satisfy data collection and analysis needs and that are not used in the direct clinical management of the pa- tient; or ‘‘(iii) a service that is clearly inconsistent with widely accepted and established standards of care for a particular diagnosis. ‘‘(3) U NETWORK PROVIDERS SE OF IN - .—If one or more par- ticipating providers is participating in a clinical trial, nothing in paragraph (1) shall be construed as preventing a plan or issuer from requiring that a qualified individual participate in the trial through such a participating provider if the provider will accept the individual as a participant in the trial. ‘‘(4) U SE OF OUT - - NETWORK .—Notwithstanding para- OF graph (3), paragraph (1) shall apply to a qualified individual participating in an approved clinical trial that is conducted outside the State in which the qualified individual resides. ‘‘(b) Q I NDIVIDUAL D UALIFIED .—For purposes of sub- EFINED section (a), the term ‘qualified individual’ means an individual who is a participant or beneficiary in a health plan or with coverage de- scribed in subsection (a)(1) and who meets the following conditions: ‘‘(1) The individual is eligible to participate in an approved clinical trial according to the trial protocol with respect to treatment of cancer or other life-threatening disease or condi- tion. ‘‘(2) Either— ‘‘(A) the referring health care professional is a partici- pating health care provider and has concluded that the in- dividual’s participation in such trial would be appropriate based upon the individual meeting the conditions de- scribed in paragraph (1); or ‘‘(B) the participant or beneficiary provides medical and scientific information establishing that the individual’s participation in such trial would be appropriate based upon the individual meeting the conditions described in paragraph (1). IMITATIONS ON C OVERAGE .—This section shall not be con- ‘‘(c) L strued to require a group health plan, or a health insurance issuer offering group or individual health insurance coverage, to provide benefits for routine patient care services provided outside of the plan’s (or coverage’s) health care provider network unless out-of- network benefits are otherwise provided under the plan (or cov- erage). ‘‘(d) A EFINED PPROVED T RIAL D LINICAL .— C N GENERAL .—In this section, the term ‘approved clin- ‘‘(1) I ical trial’ means a phase I, phase II, phase III, or phase IV clinical trial that is conducted in relation to the prevention, de- tection, or treatment of cancer or other life-threatening disease or condition and is described in any of the following subpara- graphs: ‘‘(A) F EDERALLY FUNDED TRIALS .—The study or inves- tigation is approved or funded (which may include funding June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00053 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

73 54 Sec. 1201 2709 PHSA PPACA (Consolidated) \ through in-kind contributions) by one or more of the fol- lowing: ‘‘(i) The National Institutes of Health. ‘‘(ii) The Centers for Disease Control and Preven- tion. ‘‘(iii) The Agency for Health Care Research and Quality. ‘‘(iv) The Centers for Medicare & Medicaid Serv- ices. ‘‘(v) cooperative group or center of any of the enti- ties described in clauses (i) through (iv) or the Depart- ment of Defense or the Department of Veterans Af- fairs. ‘‘(vi) A qualified non-governmental research entity identified in the guidelines issued by the National In- stitutes of Health for center support grants. ‘‘(vii) Any of the following if the conditions de- scribed in paragraph (2) are met: ‘‘(I) The Department of Veterans Affairs. ‘‘(II) The Department of Defense. ‘‘(III) The Department of Energy. ‘‘(B) The study or investigation is conducted under an investigational new drug application reviewed by the Food and Drug Administration. ‘‘(C) The study or investigation is a drug trial that is exempt from having such an investigational new drug ap- plication. ONDITIONS FOR DEPARTMENTS .—The conditions de- ‘‘(2) C scribed in this paragraph, for a study or investigation con- ducted by a Department, are that the study or investigation has been reviewed and approved through a system of peer re- view that the Secretary determines— ‘‘(A) to be comparable to the system of peer review of studies and investigations used by the National Institutes of Health, and ‘‘(B) assures unbiased review of the highest scientific standards by qualified individuals who have no interest in the outcome of the review. ‘‘(e) L - THREATENING IFE ONDITION D EFINED .—In this section, C the term ‘life-threatening condition’ means any disease or condition from which the likelihood of death is probable unless the course of the disease or condition is interrupted. .—Nothing in this section shall be construed ONSTRUCTION ‘‘(f) C to limit a plan’s or issuer’s coverage with respect to clinical trials. PPLICATION TO FEHBP.—Notwithstanding any provision ‘‘(g) A of chapter 89 of title 5, United States Code, this section shall apply to health plans offered under the program under such chapter. ‘‘(h) P REEMPTION .—Notwithstanding any other provision of this Act, nothing in this section shall preempt State laws that require a clinical trials policy for State regulated health insurance plans that is in addition to the policy required under this section.’’. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00054 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

74 55 Sec. 1251 PPACA (Consolidated) PART 2—OTHER PROVISIONS SEC. 1251 ¿ . PRESERVATION OF RIGHT TO MAINTAIN ø 42 U.S.C. 18011 EXISTING COVERAGE. O HANGES TO E XISTING (a) N OVERAGE .— C C .—Nothing in this Act (or an amendment N GENERAL (1) I made by this Act) shall be construed to require that an indi- vidual terminate coverage under a group health plan or health insurance coverage in which such individual was enrolled on the date of enactment of this Act. (2) C ONTINUATION OF COVERAGE ø As revised by section .— ¿ 10103(d)(1) Except as provided in paragraph (3), with respect to a group health plan or health insurance coverage in which an individual was enrolled on the date of enactment of this Act, this subtitle and subtitle A (and the amendments made by such subtitles) shall not apply to such plan or coverage, regard- less of whether the individual renews such coverage after such date of enactment. (3) A .— ø As added by PPLICATION OF CERTAIN PROVISIONS section 10103(d)(1) ¿ The provisions of sections 2715 and 2718 of the Public Health Service Act (as added by subtitle A) shall apply to grandfathered health plans for plan years beginning on or after the date of enactment of this Act. (4) A .— As added by PPLICATION OF CERTAIN PROVISIONS ø section 2301(a) of HCERA ¿ (A) I N GENERAL .—The following provisions of the Pub- lic Health Service Act (as added by this title) shall apply to grandfathered health plans for plan years beginning with the first plan year to which such provisions would otherwise apply: (i) Section 2708 (relating to excessive waiting peri- ods). (ii) Those provisions of section 2711 relating to lifetime limits. (iii) Section 2712 (relating to rescissions). (iv) Section 2714 (relating to extension of depend- ent coverage). (B) P ROVISIONS APPLICABLE ONLY TO GROUP HEALTH PLANS .— (i) P ROVISIONS DESCRIBED .—Those provisions of section 2711 relating to annual limits and the provi- sions of section 2704 (relating to pre-existing condition exclusions) of the Public Health Service Act (as added by this subtitle) shall apply to grandfathered health plans that are group health plans for plan years begin- ning with the first plan year to which such provisions otherwise apply. (ii) A .—For plan years be- DULT CHILD COVERAGE ginning before January 1, 2014, the provisions of sec- tion 2714 of the Public Health Service Act (as added by this subtitle) shall apply in the case of an adult child with respect to a grandfathered health plan that is a group health plan only if such adult child is not eligible to enroll in an eligible employer-sponsored June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00055 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

75 56 Sec. 1252 PPACA (Consolidated) health plan (as defined in section 5000A(f)(2) of the In- ternal Revenue Code of 1986) other than such grand- fathered health plan. (b) A OV M EMBERS TO J OIN C F C AMILY - LLOWANCE FOR URRENT .—With respect to a group health plan or health insurance ERAGE coverage in which an individual was enrolled on the date of enact- ment of this Act and which is renewed after such date, family members of such individual shall be permitted to enroll in such plan or coverage if such enrollment is permitted under the terms of the plan in effect as of such date of enactment. (c) A N E MPLOYEES TO J OIN C URRENT LLOWANCE FOR EW LAN .—A group health plan that provides coverage on the date of P enactment of this Act may provide for the enrolling of new employ- ees (and their families) in such plan, and this subtitle and subtitle A (and the amendments made by such subtitles) shall not apply with respect to such plan and such new employees (and their fami- lies). (d) E FFECT ON C OLLECTIVE B ARGAINING A GREEMENTS .—In the case of health insurance coverage maintained pursuant to one or more collective bargaining agreements between employee rep- resentatives and one or more employers that was ratified before the date of enactment of this Act, the provisions of this subtitle and subtitle A (and the amendments made by such subtitles) shall not apply until the date on which the last of the collective bargaining agreements relating to the coverage terminates. Any coverage amendment made pursuant to a collective bargaining agreement relating to the coverage which amends the coverage solely to con- form to any requirement added by this subtitle or subtitle A (or amendments) shall not be treated as a termination of such collec- tive bargaining agreement. (e) D EFINITION .—In this title, the term ‘‘grandfathered health plan’’ means any group health plan or health insurance coverage to which this section applies. SEC. 1252 ø 42 U.S.C. 18012 ¿ . RATING REFORMS MUST APPLY UNI- FORMLY TO ALL HEALTH INSURANCE ISSUERS AND GROUP HEALTH PLANS. Any standard or requirement adopted by a State pursuant to this title, or any amendment made by this title, shall be applied uniformly to all health plans in each insurance market to which the standard and requirements apply. The preceding sentence shall also apply to a State standard or requirement relating to the stand- ard or requirement required by this title (or any such amendment) that is not the same as the standard or requirement but that is not preempted under section 1321(d). SEC. 1253 ø 42 U.S.C. 18013 ¿ . ANNUAL REPORT ON SELF-INSURED PLANS. Not later than 1 year after the date of enactment of this Act, and annually thereafter, the Secretary of Labor shall prepare an aggregate annual report, using data collected from the Annual Re- turn/Report of Employee Benefit Plan (Department of Labor Form 5500), that shall include general information on self-insured group health plans (including plan type, number of participants, benefits offered, funding arrangements, and benefit arrangements) as well as data from the financial filings of self-insured employers (includ- June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00056 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

76 57 Sec. 1255 PPACA (Consolidated) ing information on assets, liabilities, contributions, investments, and expenses). The Secretary shall submit such reports to the ap- propriate committees of Congress. ¿ ø Section 1253 added by section 10103(f)(2) SEC. 1254. STUDY OF LARGE GROUP MARKET. ø Section 1254 added by section 10103(f)(2) ¿ G ENERAL .—The Secretary of Health and Human Serv- (a) I N ices shall conduct a study of the fully-insured and self-insured group health plan markets to— (1) compare the characteristics of employers (including in- dustry, size, and other characteristics as determined appro- priate by the Secretary), health plan benefits, financial sol- vency, capital reserve levels, and the risks of becoming insol- vent; and (2) determine the extent to which new insurance market reforms are likely to cause adverse selection in the large group market or to encourage small and midsize employers to self-in- sure. (b) C I NFORMATION .—In conducting the study OLLECTION OF under subsection (a), the Secretary, in coordination with the Sec- retary of Labor, shall collect information and analyze— (1) the extent to which self-insured group health plans can offer less costly coverage and, if so, whether lower costs are due to more efficient plan administration and lower overhead or to the denial of claims and the offering very limited benefit packages; (2) claim denial rates, plan benefit fluctuations (to evalu- ate the extent that plans scale back health benefits during eco- nomic downturns), and the impact of the limited recourse op- tions on consumers; and (3) any potential conflict of interest as it relates to the health care needs of self-insured enrollees and self-insured em- ployer’s financial contribution or profit margin, and the impact of such conflict on administration of the health plan. (c) R EPORT .—Not later than 1 year after the date of enactment of this Act, the Secretary shall submit to the appropriate commit- tees of Congress a report concerning the results of the study con- ducted under subsection (a). SEC. 1255. EFFECTIVE DATES. As revised by section 10103(e) and redesignated by section ø 10103(f)(1) ¿ This subtitle (and the amendments made by this sub- title) shall become effective for plan years beginning on or after January 1, 2014, except that— (1) section 1251 shall take effect on the date of enactment of this Act; and (2) the provisions of section 2704 of the Public Health Service Act (as amended by section 1201), as they apply to en- rollees who are under 19 years of age, shall become effective for plan years beginning on or after the date that is 6 months after the date of enactment of this Act. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00057 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

77 58 Sec. 1301 PPACA (Consolidated) Subtitle D—Available Coverage Choices for All Americans PART 1—ESTABLISHMENT OF QUALIFIED HEALTH PLANS ø ¿ . QUALIFIED HEALTH PLAN DEFINED. 42 U.S.C. 18021 SEC. 1301 (a) Q EALTH P LAN .—In this title: UALIFIED H N GENERAL .—The term ‘‘qualified health plan’’ means (1) I a health plan that— (A) has in effect a certification (which may include a seal or other indication of approval) that such plan meets the criteria for certification described in section 1311(c) issued or recognized by each Exchange through which such plan is offered; (B) provides the essential health benefits package de- scribed in section 1302(a); and (C) is offered by a health insurance issuer that— (i) is licensed and in good standing to offer health insurance coverage in each State in which such issuer offers health insurance coverage under this title; (ii) agrees to offer at least one qualified health plan in the silver level and at least one plan in the gold level in each such Exchange; (iii) agrees to charge the same premium rate for each qualified health plan of the issuer without regard to whether the plan is offered through an Exchange or whether the plan is offered directly from the issuer or through an agent; and (iv) complies with the regulations developed by the Secretary under section 1311(d) and such other re- quirements as an applicable Exchange may establish. ø Paragraphs (2)-(4) substituted for previous paragraph (2) by section 10104(a) ¿ (2) I - OP PLANS AND MULTI - NCLUSION OF CO STATE QUALIFIED HEALTH PLANS .—Any reference in this title to a qualified health plan shall be deemed to include a qualified health plan offered through the CO-OP program under section 1322, and a multi-State plan under section 1334, unless specifically pro- vided for otherwise. (3) T REATMENT OF QUALIFIED DIRECT PRIMARY CARE MED - ICAL HOME PLANS .—The Secretary of Health and Human Serv- ices shall permit a qualified health plan to provide coverage through a qualified direct primary care medical home plan that meets criteria established by the Secretary, so long as the qualified health plan meets all requirements that are other- wise applicable and the services covered by the medical home plan are coordinated with the entity offering the qualified health plan. ARIATION BASED ON RATING AREA .—A qualified health (4) V plan, including a multi-State qualified health plan, may as ap- propriate vary premiums by rating area (as defined in section 2701(a)(2) of the Public Health Service Act). June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00058 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

78 59 Sec. 1302 PPACA (Consolidated) ERMS R H EALTH P LANS .—In this title: (b) T ELATING TO .— (1) H EALTH PLAN .—The term ‘‘health plan’’ means (A) I N GENERAL health insurance coverage and a group health plan. (B) E - INSURED PLANS AND MEWAS .— XCEPTION FOR SELF Except to the extent specifically provided by this title, the term ‘‘health plan’’ shall not include a group health plan or multiple employer welfare arrangement to the extent the plan or arrangement is not subject to State insurance regulation under section 514 of the Employee Retirement Income Security Act of 1974. (2) H EALTH INSURANCE COVERAGE AND ISSUER .—The terms ‘‘health insurance coverage’’ and ‘‘health insurance issuer’’ have the meanings given such terms by section 2791(b) of the Public Health Service Act. (3) G ROUP HEALTH PLAN .—The term ‘‘group health plan’’ has the meaning given such term by section 2791(a) of the Public Health Service Act. SEC. 1302 ø 42 U.S.C. 18022 ¿ . ESSENTIAL HEALTH BENEFITS REQUIRE- MENTS. (a) E SSENTIAL H EALTH B ENEFITS P ACKAGE .—In this title, the term ‘‘essential health benefits package’’ means, with respect to any health plan, coverage that— (1) provides for the essential health benefits defined by the Secretary under subsection (b); (2) limits cost-sharing for such coverage in accordance with subsection (c); and (3) subject to subsection (e), provides either the bronze, sil- ver, gold, or platinum level of coverage described in subsection (d). (b) E H EALTH SSENTIAL ENEFITS .— B (1) I N GENERAL .—Subject to paragraph (2), the Secretary shall define the essential health benefits, except that such ben- efits shall include at least the following general categories and the items and services covered within the categories: (A) Ambulatory patient services. (B) Emergency services. (C) Hospitalization. (D) Maternity and newborn care. (E) Mental health and substance use disorder services, including behavioral health treatment. (F) Prescription drugs. (G) Rehabilitative and habilitative services and de- vices. (H) Laboratory services. (I) Preventive and wellness services and chronic dis- ease management. (J) Pediatric services, including oral and vision care. (2) L IMITATION .— N GENERAL .—The Secretary shall ensure that the (A) I scope of the essential health benefits under paragraph (1) is equal to the scope of benefits provided under a typical employer plan, as determined by the Secretary. To inform this determination, the Secretary of Labor shall conduct a June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00059 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

79 60 Sec. 1302 PPACA (Consolidated) survey of employer-sponsored coverage to determine the benefits typically covered by employers, including multiem- ployer plans, and provide a report on such survey to the Secretary. (B) C ERTIFICATION .—In defining the essential health benefits described in paragraph (1), and in revising the benefits under paragraph (4)(H), the Secretary shall sub- mit a report to the appropriate committees of Congress containing a certification from the Chief Actuary of the Centers for Medicare & Medicaid Services that such essen- tial health benefits meet the limitation described in para- graph (2). (3) N .—In defining the essential health OTICE AND HEARING benefits described in paragraph (1), and in revising the bene- fits under paragraph (4)(H), the Secretary shall provide notice and an opportunity for public comment. (4) R EQUIRED ELEMENTS FOR CONSIDERATION .—In defining the essential health benefits under paragraph (1), the Sec- retary shall— (A) ensure that such essential health benefits reflect an appropriate balance among the categories described in such subsection, so that benefits are not unduly weighted toward any category; (B) not make coverage decisions, determine reimburse- ment rates, establish incentive programs, or design bene- fits in ways that discriminate against individuals because of their age, disability, or expected length of life; (C) take into account the health care needs of diverse segments of the population, including women, children, persons with disabilities, and other groups; (D) ensure that health benefits established as essen- tial not be subject to denial to individuals against their wishes on the basis of the individuals’ age or expected length of life or of the individuals’ present or predicted dis- ability, degree of medical dependency, or quality of life; (E) provide that a qualified health plan shall not be treated as providing coverage for the essential health ben- efits described in paragraph (1) unless the plan provides that— (i) coverage for emergency department services will be provided without imposing any requirement under the plan for prior authorization of services or any limitation on coverage where the provider of serv- ices does not have a contractual relationship with the plan for the providing of services that is more restric- tive than the requirements or limitations that apply to emergency department services received from pro- viders who do have such a contractual relationship with the plan; and (ii) if such services are provided out-of-network, the cost-sharing requirement (expressed as a copay- ment amount or coinsurance rate) is the same require- ment that would apply if such services were provided in-network; June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00060 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

80 61 Sec. 1302 PPACA (Consolidated) (F) provide that if a plan described in section 1311(b)(2)(B)(ii) (relating to stand-alone dental benefits plans) is offered through an Exchange, another health plan offered through such Exchange shall not fail to be treated as a qualified health plan solely because the plan does not offer coverage of benefits offered through the stand-alone plan that are otherwise required under paragraph (1)(J); and (G) periodically review the essential health benefits under paragraph (1), and provide a report to Congress and the public that contains— (i) an assessment of whether enrollees are facing any difficulty accessing needed services for reasons of coverage or cost; (ii) an assessment of whether the essential health benefits needs to be modified or updated to account for changes in medical evidence or scientific advancement; (iii) information on how the essential health bene- fits will be modified to address any such gaps in access or changes in the evidence base; (iv) an assessment of the potential of additional or expanded benefits to increase costs and the inter- actions between the addition or expansion of benefits and reductions in existing benefits to meet actuarial limitations described in paragraph (2); and (H) periodically update the essential health benefits under paragraph (1) to address any gaps in access to cov- erage or changes in the evidence base the Secretary identi- fies in the review conducted under subparagraph (G). ULE OF CONSTRUCTION .—Nothing in this title shall be (5) R construed to prohibit a health plan from providing benefits in excess of the essential health benefits described in this sub- section. EQUIREMENTS ELATING TO C OST -S HARING .— R (c) R - SHARING .— NNUAL LIMITATION ON COST (1) A (A) 2014.—The cost-sharing incurred under a health plan with respect to self-only coverage or coverage other than self-only coverage for a plan year beginning in 2014 shall not exceed the dollar amounts in effect under section 223(c)(2)(A)(ii) of the Internal Revenue Code of 1986 for self-only and family coverage, respectively, for taxable years beginning in 2014. AND LATER .—In the case of any plan year be- (B) 2015 ginning in a calendar year after 2014, the limitation under this paragraph shall— (i) in the case of self-only coverage, be equal to the dollar amount under subparagraph (A) for self-only coverage for plan years beginning in 2014, increased by an amount equal to the product of that amount and the premium adjustment percentage under paragraph (4) for the calendar year; and (ii) in the case of other coverage, twice the amount in effect under clause (i). June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00061 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

81 62 Sec. 1302 PPACA (Consolidated) If the amount of any increase under clause (i) is not a mul- tiple of $50, such increase shall be rounded to the next lowest multiple of $50. (2) A - NNUAL LIMITATION ON DEDUCTIBLES FOR EMPLOYER .— SPONSORED PLANS (A) I N GENERAL .—In the case of a health plan offered in the small group market, the deductible under the plan shall not exceed— (i) $2,000 in the case of a plan covering a single individual; and (ii) $4,000 in the case of any other plan. The amounts under clauses (i) and (ii) may be increased by the maximum amount of reimbursement which is reason- ably available to a participant under a flexible spending arrangement described in section 106(c)(2) of the Internal Revenue Code of 1986 (determined without regard to any salary reduction arrangement). (B) I .—In the case of any plan year NDEXING OF LIMITS beginning in a calendar year after 2014— (i) the dollar amount under subparagraph (A)(i) shall be increased by an amount equal to the product of that amount and the premium adjustment percent- age under paragraph (4) for the calendar year; and (ii) the dollar amount under subparagraph (A)(ii) shall be increased to an amount equal to twice the amount in effect under subparagraph (A)(i) for plan years beginning in the calendar year, determined after application of clause (i). If the amount of any increase under clause (i) is not a mul- tiple of $50, such increase shall be rounded to the next lowest multiple of $50. CTUARIAL VALUE .—The limitation under this (C) A paragraph shall be applied in such a manner so as to not affect the actuarial value of any health plan, including a plan in the bronze level. (D) C OORDINATION WITH PREVENTIVE LIMITS .—Nothing in this paragraph shall be construed to allow a plan to have a deductible under the plan apply to benefits de- scribed in section 2713 of the Public Health Service Act. (3) C OST - SHARING .—In this title— (A) I N GENERAL .—The term ‘‘cost-sharing’’ includes— (i) deductibles, coinsurance, copayments, or simi- lar charges; and (ii) any other expenditure required of an insured individual which is a qualified medical expense (with- in the meaning of section 223(d)(2) of the Internal Revenue Code of 1986) with respect to essential health benefits covered under the plan. (B) E XCEPTIONS .—Such term does not include pre- miums, balance billing amounts for non-network providers, or spending for non-covered services. (4) P REMIUM ADJUSTMENT PERCENTAGE .—For purposes of paragraphs (1)(B)(i) and (2)(B)(i), the premium adjustment per- centage for any calendar year is the percentage (if any) by June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00062 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

82 63 Sec. 1302 PPACA (Consolidated) which the average per capita premium for health insurance coverage in the United States for the preceding calendar year (as estimated by the Secretary no later than October 1 of such preceding calendar year) exceeds such average per capita pre- mium for 2013 (as determined by the Secretary). (d) L C OVERAGE .— EVELS OF .—The levels of coverage (1) L EVELS OF COVERAGE DEFINED described in this subsection are as follows: (A) B RONZE LEVEL .—A plan in the bronze level shall provide a level of coverage that is designed to provide ben- efits that are actuarially equivalent to 60 percent of the full actuarial value of the benefits provided under the plan. (B) S .—A plan in the silver level shall pro- ILVER LEVEL vide a level of coverage that is designed to provide benefits that are actuarially equivalent to 70 percent of the full ac- tuarial value of the benefits provided under the plan. (C) G OLD LEVEL .—A plan in the gold level shall pro- vide a level of coverage that is designed to provide benefits that are actuarially equivalent to 80 percent of the full ac- tuarial value of the benefits provided under the plan. (D) P LATINUM LEVEL .—A plan in the platinum level shall provide a level of coverage that is designed to provide benefits that are actuarially equivalent to 90 percent of the full actuarial value of the benefits provided under the plan. .— CTUARIAL VALUE (2) A (A) I .—Under regulations issued by the Sec- N GENERAL retary, the level of coverage of a plan shall be determined on the basis that the essential health benefits described in subsection (b) shall be provided to a standard population (and without regard to the population the plan may actu- ally provide benefits to). (B) E MPLOYER CONTRIBUTIONS ø .— As revised by section 10104(b)(1) ¿ The Secretary shall issue regulations under which employer contributions to a health savings account (within the meaning of section 223 of the Internal Revenue Code of 1986) may be taken into account in determining the level of coverage for a plan of the employer. (C) A PPLICATION .—In determining under this title, the Public Health Service Act, or the Internal Revenue Code of 1986 the percentage of the total allowed costs of benefits provided under a group health plan or health insurance coverage that are provided by such plan or coverage, the rules contained in the regulations under this paragraph shall apply. LLOWABLE VARIANCE .—The Secretary shall develop (3) A guidelines to provide for a de minimis variation in the actu- arial valuations used in determining the level of coverage of a plan to account for differences in actuarial estimates. (4) P LAN REFERENCE .—In this title, any reference to a bronze, silver, gold, or platinum plan shall be treated as a ref- erence to a qualified health plan providing a bronze, silver, gold, or platinum level of coverage, as the case may be. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00063 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

83 64 Sec. 1303 PPACA (Consolidated) ATASTROPHIC (e) C .— P LAN .—A health plan not providing a bronze, sil- N GENERAL (1) I ver, gold, or platinum level of coverage shall be treated as meeting the requirements of subsection (d) with respect to any plan year if— (A) the only individuals who are eligible to enroll in the plan are individuals described in paragraph (2); and (B) the plan provides— (i) except as provided in clause (ii), the essential health benefits determined under subsection (b), ex- cept that the plan provides no benefits for any plan year until the individual has incurred cost-sharing ex- penses in an amount equal to the annual limitation in effect under subsection (c)(1) for the plan year (except as provided for in section 2713); and (ii) coverage for at least three primary care visits. NDIVIDUALS ELIGIBLE FOR ENROLLMENT .—An indi- (2) I vidual is described in this paragraph for any plan year if the individual— (A) has not attained the age of 30 before the beginning of the plan year; or (B) has a certification in effect for any plan year under this title that the individual is exempt from the require- ment under section 5000A of the Internal Revenue Code of 1986 by reason of— (i) section 5000A(e)(1) of such Code (relating to in- dividuals without affordable coverage); or (ii) section 5000A(e)(5) of such Code (relating to individuals with hardships). ESTRICTION TO INDIVIDUAL MARKET .—If a health in- (3) R surance issuer offers a health plan described in this subsection, the issuer may only offer the plan in the individual market. (f) C HILD - ONLY P LANS .—If a qualified health plan is offered through the Exchange in any level of coverage specified under sub- section (d), the issuer shall also offer that plan through the Ex- change in that level as a plan in which the only enrollees are indi- viduals who, as of the beginning of a plan year, have not attained the age of 21, and such plan shall be treated as a qualified health plan. AYMENTS TO F EDERALLY - QUALIFIED H EALTH C ENTERS .— (g) P As added by section 10104(b)(2) ¿ If any item or service covered by ø a qualified health plan is provided by a Federally-qualified health center (as defined in section 1905(l)(2)(B) of the Social Security Act (42 U.S.C. 1396d(l)(2)(B)) to an enrollee of the plan, the offeror of the plan shall pay to the center for the item or service an amount that is not less than the amount of payment that would have been paid to the center under section 1902(bb) of such Act (42 U.S.C. 1396a(bb)) for such item or service. SEC. 1303 42 U.S.C. 18023 ¿ . SPECIAL RULES. ø ø Replaced by section 10104(c) ¿ (a) S TATE O PT - OUT OF A BORTION C OVERAGE .— (1) I N GENERAL .—A State may elect to prohibit abortion coverage in qualified health plans offered through an Exchange June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00064 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

84 65 Sec. 1303 PPACA (Consolidated) in such State if such State enacts a law to provide for such pro- hibition. .—A State may repeal a law (2) T ERMINATION OF OPT OUT described in paragraph (1) and provide for the offering of such services through the Exchange. (b) S ULES R ELATING TO C PECIAL A BORTION S ERV - R OVERAGE OF .— ICES OLUNTARY CHOICE OF COVERAGE OF ABORTION SERV (1) V - .— ICES N GENERAL .—Notwithstanding any other provision (A) I of this title (or any amendment made by this title)— (i) nothing in this title (or any amendment made by this title), shall be construed to require a qualified health plan to provide coverage of services described in subparagraph (B)(i) or (B)(ii) as part of its essential health benefits for any plan year; and (ii) subject to subsection (a), the issuer of a quali- fied health plan shall determine whether or not the plan provides coverage of services described in sub- paragraph (B)(i) or (B)(ii) as part of such benefits for the plan year. (B) A BORTION SERVICES .— (i) A BORTIONS FOR WHICH PUBLIC FUNDING IS PRO - .—The services described in this clause are HIBITED abortions for which the expenditure of Federal funds appropriated for the Department of Health and Human Services is not permitted, based on the law as in effect as of the date that is 6 months before the be- ginning of the plan year involved. BORTIONS FOR WHICH PUBLIC FUNDING IS AL - (ii) A LOWED .—The services described in this clause are abortions for which the expenditure of Federal funds appropriated for the Department of Health and Human Services is permitted, based on the law as in effect as of the date that is 6 months before the begin- ning of the plan year involved. (2) P ROHIBITION ON THE USE OF FEDERAL FUNDS .— (A) I N GENERAL .—If a qualified health plan provides coverage of services described in paragraph (1)(B)(i), the issuer of the plan shall not use any amount attributable to any of the following for purposes of paying for such services: (i) The credit under section 36B of the Internal Revenue Code of 1986 (and the amount (if any) of the advance payment of the credit under section 1412 of the Patient Protection and Affordable Care Act). (ii) Any cost-sharing reduction under section 1402 of the Patient Protection and Affordable Care Act (and the amount (if any) of the advance payment of the re- duction under section 1412 of the Patient Protection and Affordable Care Act). (B) E STABLISHMENT OF ALLOCATION ACCOUNTS .—In the case of a plan to which subparagraph (A) applies, the issuer of the plan shall— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00065 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

85 66 Sec. 1303 PPACA (Consolidated) (i) collect from each enrollee in the plan (without regard to the enrollee’s age, sex, or family status) a separate payment for each of the following: (I) an amount equal to the portion of the pre- mium to be paid directly by the enrollee for cov- erage under the plan of services other than serv- ices described in paragraph (1)(B)(i) (after reduc- tion for credits and cost-sharing reductions de- scribed in subparagraph (A)); and (II) an amount equal to the actuarial value of the coverage of services described in paragraph (1)(B)(i), and (ii) shall deposit all such separate payments into separate allocation accounts as provided in subpara- graph (C). In the case of an enrollee whose premium for coverage under the plan is paid through employee payroll deposit, the separate payments required under this subparagraph shall each be paid by a separate deposit. (C) S .— EGREGATION OF FUNDS (i) I N GENERAL .—The issuer of a plan to which subparagraph (A) applies shall establish allocation ac- counts described in clause (ii) for enrollees receiving amounts described in subparagraph (A). LLOCATION ACCOUNTS .—The issuer of a plan (ii) A to which subparagraph (A) applies shall deposit— (I) all payments described in subparagraph (B)(i)(I) into a separate account that consists sole- ly of such payments and that is used exclusively to pay for services other than services described in paragraph (1)(B)(i); and (II) all payments described in subparagraph (B)(i)(II) into a separate account that consists sole- ly of such payments and that is used exclusively to pay for services described in paragraph (1)(B)(i). (D) A .— CTUARIAL VALUE (i) I N GENERAL .—The issuer of a qualified health plan shall estimate the basic per enrollee, per month cost, determined on an average actuarial basis, for in- cluding coverage under the qualified health plan of the services described in paragraph (1)(B)(i). ONSIDERATIONS .—In making such estimate, (ii) C the issuer— (I) may take into account the impact on over- all costs of the inclusion of such coverage, but may not take into account any cost reduction estimated to result from such services, including prenatal care, delivery, or postnatal care; (II) shall estimate such costs as if such cov- erage were included for the entire population cov- ered; and (III) may not estimate such a cost at less than $1 per enrollee, per month. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00066 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

86 67 Sec. 1303 PPACA (Consolidated) NSURING COMPLIANCE WITH SEGREGATION RE - (E) E QUIREMENTS .— (i) I .—Subject to clause (ii), State N GENERAL health insurance commissioners shall ensure that health plans comply with the segregation require- ments in this subsection through the segregation of plan funds in accordance with applicable provisions of generally accepted accounting requirements, circulars on funds management of the Office of Management and Budget, and guidance on accounting of the Gov- ernment Accountability Office. (ii) C LARIFICATION .—Nothing in clause (i) shall prohibit the right of an individual or health plan to appeal such action in courts of competent jurisdiction. (3) R ULES RELATING TO NOTICE .— OTICE (A) N .—A qualified health plan that provides for coverage of the services described in paragraph (1)(B)(i) shall provide a notice to enrollees, only as part of the sum- mary of benefits and coverage explanation, at the time of enrollment, of such coverage. (B) R ULES RELATING TO PAYMENTS .—The notice de- scribed in subparagraph (A), any advertising used by the issuer with respect to the plan, any information provided by the Exchange, and any other information specified by the Secretary shall provide information only with respect to the total amount of the combined payments for services described in paragraph (1)(B)(i) and other services covered by the plan. O DISCRIMINATION ON BASIS OF PROVISION OF ABOR - (4) N TION .—No qualified health plan offered through an Exchange may discriminate against any individual health care provider or health care facility because of its unwillingness to provide, pay for, provide coverage of, or refer for abortions (c) A PPLICATION OF TATE AND F EDERAL L AWS R EGARDING S A BORTION .— (1) N O PREEMPTION OF STATE LAWS REGARDING ABOR - TION .—Nothing in this Act shall be construed to preempt or otherwise have any effect on State laws regarding the prohibi- tion of (or requirement of) coverage, funding, or procedural re- quirements on abortions, including parental notification or con- sent for the performance of an abortion on a minor. O EFFECT ON FEDERAL LAWS REGARDING ABORTION .— (2) N (A) I .—Nothing in this Act shall be con- N GENERAL strued to have any effect on Federal laws regarding— (i) conscience protection; (ii) willingness or refusal to provide abortion; and (iii) discrimination on the basis of the willingness or refusal to provide, pay for, cover, or refer for abor- tion or to provide or participate in training to provide abortion. (3) N O EFFECT ON FEDERAL CIVIL RIGHTS LAW .—Nothing in this subsection shall alter the rights and obligations of employ- ees and employers under title VII of the Civil Rights Act of 1964. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00067 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

87 68 Sec. 1304 PPACA (Consolidated) PPLICATION OF E S ERVICES L AWS .—Nothing in (d) A MERGENCY this Act shall be construed to relieve any health care provider from providing emergency services as required by State or Federal law, including section 1867 of the Social Security Act (popularly known as ‘‘EMTALA’’). SEC. 1304 ø 42 U.S.C. 18024 ¿ . RELATED DEFINITIONS. EFINITIONS R ELATING TO M (a) D .—In this title: ARKETS (1) G .—The term ‘‘group market’’ means the ROUP MARKET health insurance market under which individuals obtain health insurance coverage (directly or through any arrange- ment) on behalf of themselves (and their dependents) through a group health plan maintained by an employer. (2) I NDIVIDUAL MARKET .—The term ‘‘individual market’’ means the market for health insurance coverage offered to in- dividuals other than in connection with a group health plan. ARGE AND SMALL GROUP MARKETS .—The terms ‘‘large (3) L group market’’ and ‘‘small group market’’ mean the health in- surance market under which individuals obtain health insur- ance coverage (directly or through any arrangement) on behalf of themselves (and their dependents) through a group health plan maintained by a large employer (as defined in subsection (b)(1)) or by a small employer (as defined in subsection (b)(2)), respectively. .—In this title: MPLOYERS (b) E (1) L ARGE EMPLOYER .—The term ‘‘large employer’’ means, in connection with a group health plan with respect to a cal- endar year and a plan year, an employer who employed an av- erage of at least 101 employees on business days during the preceding calendar year and who employs at least 1 employee on the first day of the plan year. MALL EMPLOYER .—The term ‘‘small employer’’ means, (2) S in connection with a group health plan with respect to a cal- endar year and a plan year, an employer who employed an av- erage of at least 1 but not more than 100 employees on busi- ness days during the preceding calendar year and who employs at least 1 employee on the first day of the plan year. TATE OPTION TO TREAT 50 EMPLOYEES AS SMALL .—In (3) S the case of plan years beginning before January 1, 2016, a State may elect to apply this subsection by substituting ‘‘51 employees’’ for ‘‘101 employees’’ in paragraph (1) and by sub- stituting ‘‘50 employees’’ for ‘‘100 employees’’ in paragraph (2). ULES FOR DETERMINING EMPLOYER SIZE .—For pur- (4) R poses of this subsection— (A) A PPLICATION OF AGGREGATION RULE FOR EMPLOY - ERS .—All persons treated as a single employer under sub- section (b), (c), (m), or (o) of section 414 of the Internal Revenue Code of 1986 shall be treated as 1 employer. (B) E MPLOYERS NOT IN EXISTENCE IN PRECEDING YEAR .—In the case of an employer which was not in exist- ence throughout the preceding calendar year, the deter- mination of whether such employer is a small or large em- ployer shall be based on the average number of employees June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00068 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

88 69 Sec. 1311 PPACA (Consolidated) that it is reasonably expected such employer will employ on business days in the current calendar year. (C) P REDECESSORS .—Any reference in this subsection to an employer shall include a reference to any predecessor of such employer. (D) C ONTINUATION OF PARTICIPATION FOR GROWING SMALL EMPLOYERS .—If— (i) a qualified employer that is a small employer makes enrollment in qualified health plans offered in the small group market available to its employees through an Exchange; and (ii) the employer ceases to be a small employer by reason of an increase in the number of employees of such employer; the employer shall continue to be treated as a small em- ployer for purposes of this subtitle for the period beginning with the increase and ending with the first day on which the employer does not make such enrollment available to its employees. (c) S ECRETARY .—In this title, the term ‘‘Secretary’’ means the Secretary of Health and Human Services. (d) S .—In this title, the term ‘‘State’’ means each of the 50 TATE States and the District of Columbia. DUCATED H EALTH C ARE As added by sec- ONSUMERS .— ø C (e) E tion 10104(d) ¿ The term ‘‘educated health care consumer’’ means an individual who is knowledgeable about the health care system, and has background or experience in making informed decisions re- garding health, medical, and scientific matters. PART 2—CONSUMER CHOICES AND INSUR- ANCE COMPETITION THROUGH HEALTH BENEFIT EXCHANGES SEC. 1311 ø 42 U.S.C. 13031 ¿ . AFFORDABLE CHOICES OF HEALTH BEN- EFIT PLANS. SSISTANCE TO S TATES TO E STABLISH A MERICAN H EALTH (a) A B ENEFIT E XCHANGES .— LANNING AND ESTABLISHMENT GRANTS .—There shall (1) P be appropriated to the Secretary, out of any moneys in the Treasury not otherwise appropriated, an amount necessary to enable the Secretary to make awards, not later than 1 year after the date of enactment of this Act, to States in the amount specified in paragraph (2) for the uses described in paragraph (3). (2) A MOUNT SPECIFIED .—For each fiscal year, the Secretary shall determine the total amount that the Secretary will make available to each State for grants under this subsection. (3) U SE OF FUNDS .—A State shall use amounts awarded under this subsection for activities (including planning activi- ties) related to establishing an American Health Benefit Ex- change, as described in subsection (b). (4) R ENEWABILITY OF GRANT .— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00069 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

89 70 Sec. 1311 PPACA (Consolidated) N GENERAL .—Subject to subsection (d)(4), the Sec- (A) I retary may renew a grant awarded under paragraph (1) if the State recipient of such grant— (i) is making progress, as determined by the Sec- retary, toward— (I) establishing an Exchange; and (II) implementing the reforms described in subtitles A and C (and the amendments made by such subtitles); and (ii) is meeting such other benchmarks as the Sec- retary may establish. (B) L IMITATION .—No grant shall be awarded under this subsection after January 1, 2015. (5) T ECHNICAL ASSISTANCE TO FACILITATE PARTICIPATION IN .—The Secretary shall provide technical as- SHOP EXCHANGES sistance to States to facilitate the participation of qualified small businesses in such States in SHOP Exchanges. (b) A H EALTH B ENEFIT E MERICAN .— XCHANGES (1) I N GENERAL .—Each State shall, not later than January 1, 2014, establish an American Health Benefit Exchange (re- ferred to in this title as an ‘‘Exchange’’) for the State that— (A) facilitates the purchase of qualified health plans; (B) provides for the establishment of a Small Business Health Options Program (in this title referred to as a ‘‘SHOP Exchange’’) that is designed to assist qualified em- ployers in the State who are small employers in facili- tating the enrollment of their employees in qualified health plans offered in the small group market in the State; and (C) meets the requirements of subsection (d). ERGER OF INDIVIDUAL AND SHOP EXCHANGES .—A State (2) M may elect to provide only one Exchange in the State for pro- viding both Exchange and SHOP Exchange services to both qualified individuals and qualified small employers, but only if the Exchange has adequate resources to assist such individuals and employers. (c) R ESPONSIBILITIES OF THE S ECRETARY .— (1) I N GENERAL .—The Secretary shall, by regulation, estab- lish criteria for the certification of health plans as qualified health plans. Such criteria shall require that, to be certified, a plan shall, at a minimum— (A) meet marketing requirements, and not employ marketing practices or benefit designs that have the effect of discouraging the enrollment in such plan by individuals with significant health needs; (B) ensure a sufficient choice of providers (in a manner consistent with applicable network adequacy provisions under section 2702(c) of the Public Health Service Act), and provide information to enrollees and prospective en- rollees on the availability of in-network and out-of-network providers; (C) include within health insurance plan networks those essential community providers, where available, that serve predominately low-income, medically-underserved in- June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00070 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

90 71 Sec. 1311 PPACA (Consolidated) dividuals, such as health care providers defined in section 340B(a)(4) of the Public Health Service Act and providers described in section 1927(c)(1)(D)(i)(IV) of the Social Secu- rity Act as set forth by section 221 of Public Law 111–8, except that nothing in this subparagraph shall be con- strued to require any health plan to provide coverage for any specific medical procedure; (D)(i) be accredited with respect to local performance on clinical quality measures such as the Healthcare Effec- tiveness Data and Information Set, patient experience rat- ings on a standardized Consumer Assessment of Healthcare Providers and Systems survey, as well as con- sumer access, utilization management, quality assurance, provider credentialing, complaints and appeals, network adequacy and access, and patient information programs by any entity recognized by the Secretary for the accredita- tion of health insurance issuers or plans (so long as any such entity has transparent and rigorous methodological and scoring criteria); or (ii) receive such accreditation within a period estab- lished by an Exchange for such accreditation that is appli- cable to all qualified health plans; (E) implement a quality improvement strategy de- scribed in subsection (g)(1); (F) utilize a uniform enrollment form that qualified in- dividuals and qualified employers may use (either elec- tronically or on paper) in enrolling in qualified health plans offered through such Exchange, and that takes into account criteria that the National Association of Insurance Commissioners develops and submits to the Secretary; (G) utilize the standard format established for pre- senting health benefits plan options; (H) provide information to enrollees and prospective enrollees, and to each Exchange in which the plan is of- fered, on any quality measures for health plan perform- ance endorsed under section 399JJ of the Public Health Service Act, as applicable; and (I) report to the Secretary at least annually and in such manner as the Secretary shall require, pediatric qual- ity reporting measures consistent with the pediatric qual- ity reporting measures established under section 1139A of the Social Security Act. ø As added by section 10203(a) ¿ .—Nothing in paragraph (1)(C) ULE OF CONSTRUCTION (2) R shall be construed to require a qualified health plan to contract with a provider described in such paragraph if such provider refuses to accept the generally applicable payment rates of such plan. .—The Secretary shall develop a rating ATING SYSTEM (3) R system that would rate qualified health plans offered through an Exchange in each benefits level on the basis of the relative quality and price. The Exchange shall include the quality rat- ing in the information provided to individuals and employers through the Internet portal established under paragraph (4). June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00071 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

91 72 Sec. 1311 PPACA (Consolidated) .—The Secretary shall (4) E NROLLEE SATISFACTION SYSTEM develop an enrollee satisfaction survey system that would evaluate the level of enrollee satisfaction with qualified health plans offered through an Exchange, for each such qualified health plan that had more than 500 enrollees in the previous year. The Exchange shall include enrollee satisfaction informa- tion in the information provided to individuals and employers through the Internet portal established under paragraph (5) in a manner that allows individuals to easily compare enrollee satisfaction levels between comparable plans. (5) I NTERNET PORTALS .—The Secretary shall— (A) continue to operate, maintain, and update the Internet portal developed under section 1103(a) and to as- sist States in developing and maintaining their own such portal; and (B) make available for use by Exchanges a model tem- plate for an Internet portal that may be used to direct qualified individuals and qualified employers to qualified health plans, to assist such individuals and employers in determining whether they are eligible to participate in an Exchange or eligible for a premium tax credit or cost-shar- ing reduction, and to present standardized information (in- cluding quality ratings) regarding qualified health plans offered through an Exchange to assist consumers in mak- ing easy health insurance choices. Such template shall include, with respect to each qualified health plan offered through the Exchange in each rating area, access to the uniform outline of coverage the plan is required to provide under section 2716 of the Public Health Service Act and to a copy of the plan’s written policy. NROLLMENT PERIODS .—The Secretary shall require an (6) E Exchange to provide for— (A) an initial open enrollment, as determined by the Secretary (such determination to be made not later than July 1, 2012); (B) annual open enrollment periods, as determined by the Secretary for calendar years after the initial enroll- ment period; (C) special enrollment periods specified in section 9801 of the Internal Revenue Code of 1986 and other special en- rollment periods under circumstances similar to such peri- ods under part D of title XVIII of the Social Security Act; and (D) special monthly enrollment periods for Indians (as defined in section 4 of the Indian Health Care Improve- ment Act). .— EQUIREMENTS (d) R (1) I N GENERAL .—An Exchange shall be a governmental agency or nonprofit entity that is established by a State. FFERING OF COVERAGE .— (2) O (A) I N GENERAL .—An Exchange shall make available qualified health plans to qualified individuals and quali- fied employers. (B) L IMITATION .— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00072 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

92 73 Sec. 1311 PPACA (Consolidated) N GENERAL .—An Exchange may not make (i) I available any health plan that is not a qualified health plan. (ii) O - ALONE DENTAL BENE - FFERING OF STAND FITS .—Each Exchange within a State shall allow an issuer of a plan that only provides limited scope dental benefits meeting the requirements of section 9832(c)(2)(A) of the Internal Revenue Code of 1986 to offer the plan through the Exchange (either separately or in conjunction with a qualified health plan) if the plan provides pediatric dental benefits meeting the re- quirements of section 1302(b)(1)(J)). (3) R ULES RELATING TO ADDITIONAL REQUIRED BENEFITS .— (A) I N GENERAL .—Except as provided in subparagraph (B), an Exchange may make available a qualified health plan notwithstanding any provision of law that may re- quire benefits other than the essential health benefits specified under section 1302(b). (B) S TATES MAY REQUIRE ADDITIONAL BENEFITS .— (i) I N GENERAL .—Subject to the requirements of clause (ii), a State may require that a qualified health plan offered in such State offer benefits in addition to the essential health benefits specified under section 1302(b). TATE MUST ASSUME COST ø Replaced by sec- .— (ii) S ¿ tion 10104(e)(1) A State shall make payments— (I) to an individual enrolled in a qualified health plan offered in such State; or (II) on behalf of an individual described in subclause (I) directly to the qualified health plan in which such individual is enrolled; to defray the cost of any additional benefits described in clause (i). (4) F UNCTIONS .—An Exchange shall, at a minimum— (A) implement procedures for the certification, recer- tification, and decertification, consistent with guidelines developed by the Secretary under subsection (c), of health plans as qualified health plans; (B) provide for the operation of a toll-free telephone hotline to respond to requests for assistance; (C) maintain an Internet website through which en- rollees and prospective enrollees of qualified health plans may obtain standardized comparative information on such plans; (D) assign a rating to each qualified health plan of- fered through such Exchange in accordance with the cri- teria developed by the Secretary under subsection (c)(3); (E) utilize a standardized format for presenting health benefits plan options in the Exchange, including the use of the uniform outline of coverage established under section 2715 of the Public Health Service Act; (F) in accordance with section 1413, inform individuals of eligibility requirements for the medicaid program under title XIX of the Social Security Act, the CHIP program June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00073 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

93 74 Sec. 1311 PPACA (Consolidated) under title XXI of such Act, or any applicable State or local public program and if through screening of the application by the Exchange, the Exchange determines that such indi- viduals are eligible for any such program, enroll such indi- viduals in such program; (G) establish and make available by electronic means a calculator to determine the actual cost of coverage after the application of any premium tax credit under section 36B of the Internal Revenue Code of 1986 and any cost- sharing reduction under section 1402; (H) subject to section 1411, grant a certification attest- ing that, for purposes of the individual responsibility pen- alty under section 5000A of the Internal Revenue Code of 1986, an individual is exempt from the individual require- ment or from the penalty imposed by such section be- cause— (i) there is no affordable qualified health plan available through the Exchange, or the individual’s employer, covering the individual; or (ii) the individual meets the requirements for any other such exemption from the individual responsi- bility requirement or penalty; (I) transfer to the Secretary of the Treasury— (i) a list of the individuals who are issued a certifi- cation under subparagraph (H), including the name and taxpayer identification number of each individual; (ii) the name and taxpayer identification number of each individual who was an employee of an em- ployer but who was determined to be eligible for the premium tax credit under section 36B of the Internal Revenue Code of 1986 because— (I) the employer did not provide minimum es- sential coverage; or (II) the employer provided such minimum es- sential coverage but it was determined under sec- tion 36B(c)(2)(C) of such Code to either be unaffordable to the employee or not provide the required minimum actuarial value; and (iii) the name and taxpayer identification number of each individual who notifies the Exchange under section 1411(b)(4) that they have changed employers and of each individual who ceases coverage under a qualified health plan during a plan year (and the ef- fective date of such cessation); (J) provide to each employer the name of each em- ployee of the employer described in subparagraph (I)(ii) who ceases coverage under a qualified health plan during a plan year (and the effective date of such cessation); and (K) establish the Navigator program described in sub- section (i). (5) F UNDING LIMITATIONS .— (A) N O FEDERAL FUNDS FOR CONTINUED OPERATIONS .— In establishing an Exchange under this section, the State shall ensure that such Exchange is self-sustaining begin- June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00074 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

94 75 Sec. 1311 PPACA (Consolidated) ning on January 1, 2015, including allowing the Exchange to charge assessments or user fees to participating health insurance issuers, or to otherwise generate funding, to support its operations. (B) P ROHIBITING WASTEFUL USE OF FUNDS .—In car- rying out activities under this subsection, an Exchange shall not utilize any funds intended for the administrative and operational expenses of the Exchange for staff re- treats, promotional giveaways, excessive executive com- pensation, or promotion of Federal or State legislative and regulatory modifications. (6) C ONSULTATION .—An Exchange shall consult with stake- holders relevant to carrying out the activities under this sec- tion, including— (A) ø ¿ educated health As revised by section 10104(e)(2) care consumers who are enrollees in qualified health plans; (B) individuals and entities with experience in facili- tating enrollment in qualified health plans; (C) representatives of small businesses and self-em- ployed individuals; (D) State Medicaid offices; and (E) advocates for enrolling hard to reach populations. UBLICATION OF COSTS .—An Exchange shall publish (7) P the average costs of licensing, regulatory fees, and any other payments required by the Exchange, and the administrative costs of such Exchange, on an Internet website to educate con- sumers on such costs. Such information shall also include mon- ies lost to waste, fraud, and abuse. ERTIFICATION (e) C .— (1) I N GENERAL .—An Exchange may certify a health plan as a qualified health plan if— (A) such health plan meets the requirements for cer- tification as promulgated by the Secretary under sub- section (c)(1); and (B) the Exchange determines that making available such health plan through such Exchange is in the interests of qualified individuals and qualified employers in the State or States in which such Exchange operates, except that the Exchange may not exclude a health plan— (i) on the basis that such plan is a fee-for-service plan; (ii) through the imposition of premium price con- trols; or (iii) on the basis that the plan provides treatments necessary to prevent patients’ deaths in circumstances the Exchange determines are inappropriate or too costly. (2) P REMIUM CONSIDERATIONS .— ø As amended by section 10104(f)(1) ¿ The Exchange shall require health plans seeking certification as qualified health plans to submit a justification for any premium increase prior to implementation of the in- crease. Such plans shall prominently post such information on their websites. The Exchange shall take this information, and June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00075 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

95 76 Sec. 1311 PPACA (Consolidated) the information and the recommendations provided to the Ex- change by the State under section 2794(b)(1) of the Public Health Service Act (relating to patterns or practices of exces- sive or unjustified premium increases), into consideration when determining whether to make such health plan available through the Exchange. The Exchange shall take into account any excess of premium growth outside the Exchange as com- pared to the rate of such growth inside the Exchange, includ- ing information reported by the States. (3) T ø As added by section RANSPARENCY IN COVERAGE .— ¿ 10104(f)(2) N GENERAL (A) I .—The Exchange shall require health plans seeking certification as qualified health plans to sub- mit to the Exchange, the Secretary, the State insurance commissioner, and make available to the public, accurate and timely disclosure of the following information: (i) Claims payment policies and practices. (ii) Periodic financial disclosures. (iii) Data on enrollment. (iv) Data on disenrollment. (v) Data on the number of claims that are denied. (vi) Data on rating practices. (vii) Information on cost-sharing and payments with respect to any out-of-network coverage. (viii) Information on enrollee and participant rights under this title. (ix) Other information as determined appropriate by the Secretary. SE OF PLAIN LANGUAGE .—The information re- (B) U quired to be submitted under subparagraph (A) shall be provided in plain language. The term ‘‘plain language’’ means language that the intended audience, including in- dividuals with limited English proficiency, can readily un- derstand and use because that language is concise, well-or- ganized, and follows other best practices of plain language writing. The Secretary and the Secretary of Labor shall jointly develop and issue guidance on best practices of plain language writing. (C) C OST SHARING TRANSPARENCY .—The Exchange shall require health plans seeking certification as qualified health plans to permit individuals to learn the amount of cost-sharing (including deductibles, copayments, and coin- surance) under the individual’s plan or coverage that the individual would be responsible for paying with respect to the furnishing of a specific item or service by a partici- pating provider in a timely manner upon the request of the individual. At a minimum, such information shall be made available to such individual through an Internet website and such other means for individuals without access to the Internet. (D) G ROUP HEALTH PLANS .—The Secretary of Labor shall update and harmonize the Secretary’s rules con- cerning the accurate and timely disclosure to participants by group health plans of plan disclosure, plan terms and June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00076 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

96 77 Sec. 1311 PPACA (Consolidated) conditions, and periodic financial disclosure with the standards established by the Secretary under subpara- graph (A). (f) F .— LEXIBILITY EGIONAL OR OTHER INTERSTATE EXCHANGES .—An Ex- (1) R change may operate in more than one State if— (A) each State in which such Exchange operates per- mits such operation; and (B) the Secretary approves such regional or interstate Exchange. (2) S UBSIDIARY EXCHANGES .—A State may establish one or more subsidiary Exchanges if— (A) each such Exchange serves a geographically dis- tinct area; and (B) the area served by each such Exchange is at least as large as a rating area described in section 2701(a) of the Public Health Service Act. (3) A .— UTHORITY TO CONTRACT (A) I N GENERAL .—A State may elect to authorize an Exchange established by the State under this section to enter into an agreement with an eligible entity to carry out 1 or more responsibilities of the Exchange. (B) E LIGIBLE ENTITY .—In this paragraph, the term ‘‘el- igible entity’’ means— (i) a person— (I) incorporated under, and subject to the laws of, 1 or more States; (II) that has demonstrated experience on a State or regional basis in the individual and small group health insurance markets and in benefits coverage; and (III) that is not a health insurance issuer or that is treated under subsection (a) or (b) of sec- tion 52 of the Internal Revenue Code of 1986 as a member of the same controlled group of corpora- tions (or under common control with) as a health insurance issuer; or (ii) the State medicaid agency under title XIX of the Social Security Act. (g) R EWARDING Q UALITY T HROUGH M ARKET -B ASED I NCEN - TIVES .— (1) S TRATEGY DESCRIBED .—A strategy described in this paragraph is a payment structure that provides increased re- imbursement or other incentives for— (A) improving health outcomes through the implemen- tation of activities that shall include quality reporting, ef- fective case management, care coordination, chronic dis- ease management, medication and care compliance initia- tives, including through the use of the medical home model, for treatment or services under the plan or cov- erage; (B) the implementation of activities to prevent hospital readmissions through a comprehensive program for hos- pital discharge that includes patient-centered education June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00077 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

97 78 Sec. 1311 PPACA (Consolidated) and counseling, comprehensive discharge planning, and post discharge reinforcement by an appropriate health care professional; (C) the implementation of activities to improve patient safety and reduce medical errors through the appropriate use of best clinical practices, evidence based medicine, and health information technology under the plan or coverage; (D) the implementation of wellness and health pro- motion activities; and (E) ¿ the implementa- ø As added by section 10104(g) tion of activities to reduce health and health care dispari- ties, including through the use of language services, com- munity outreach, and cultural competency trainings. UIDELINES .—The Secretary, in consultation with ex- (2) G perts in health care quality and stakeholders, shall develop guidelines concerning the matters described in paragraph (1). (3) R .—The guidelines developed under para- EQUIREMENTS graph (2) shall require the periodic reporting to the applicable Exchange of the activities that a qualified health plan has con- ducted to implement a strategy described in paragraph (1). (h) Q I UALITY .— MPROVEMENT (1) E NHANCING PATIENT SAFETY .—Beginning on January 1, 2015, a qualified health plan may contract with— (A) a hospital with greater than 50 beds only if such hospital— (i) utilizes a patient safety evaluation system as described in part C of title IX of the Public Health Service Act; and (ii) implements a mechanism to ensure that each patient receives a comprehensive program for hospital discharge that includes patient-centered education and counseling, comprehensive discharge planning, and post discharge reinforcement by an appropriate health care professional; or (B) a health care provider only if such provider imple- ments such mechanisms to improve health care quality as the Secretary may by regulation require. XCEPTIONS .—The Secretary may establish reasonable (2) E exceptions to the requirements described in paragraph (1). (3) A DJUSTMENT .—The Secretary may by regulation adjust the number of beds described in paragraph (1)(A). (i) N AVIGATORS .— (1) I .—An Exchange shall establish a program N GENERAL under which it awards grants to entities described in para- graph (2) to carry out the duties described in paragraph (3). (2) E LIGIBILITY .— (A) I N GENERAL .—To be eligible to receive a grant under paragraph (1), an entity shall demonstrate to the Exchange involved that the entity has existing relation- ships, or could readily establish relationships, with em- ployers and employees, consumers (including uninsured and underinsured consumers), or self-employed individuals likely to be qualified to enroll in a qualified health plan. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00078 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

98 79 Sec. 1311 PPACA (Consolidated) YPES .— As amended by section 10104(h) ¿ Enti- (B) T ø ties described in subparagraph (A) may include trade, in- dustry, and professional associations, commercial fishing industry organizations, ranching and farming organiza- tions, community and consumer-focused nonprofit groups, chambers of commerce, unions, resource partners of the Small Business Administration, other licensed insurance agents and brokers, and other entities that— (i) are capable of carrying out the duties described in paragraph (3); (ii) meet the standards described in paragraph (4); and (iii) provide information consistent with the stand- ards developed under paragraph (5). (3) D .—An entity that serves as a navigator under a UTIES grant under this subsection shall— (A) conduct public education activities to raise aware- ness of the availability of qualified health plans; (B) distribute fair and impartial information con- cerning enrollment in qualified health plans, and the availability of premium tax credits under section 36B of the Internal Revenue Code of 1986 and cost-sharing reduc- tions under section 1402; (C) facilitate enrollment in qualified health plans; (D) provide referrals to any applicable office of health insurance consumer assistance or health insurance om- budsman established under section 2793 of the Public Health Service Act, or any other appropriate State agency or agencies, for any enrollee with a grievance, complaint, or question regarding their health plan, coverage, or a de- termination under such plan or coverage; and (E) provide information in a manner that is culturally and linguistically appropriate to the needs of the popu- lation being served by the Exchange or Exchanges. (4) S TANDARDS .— (A) I .—The Secretary shall establish stand- N GENERAL ards for navigators under this subsection, including provi- sions to ensure that any private or public entity that is se- lected as a navigator is qualified, and licensed if appro- priate, to engage in the navigator activities described in this subsection and to avoid conflicts of interest. Under such standards, a navigator shall not— (i) be a health insurance issuer; or (ii) receive any consideration directly or indirectly from any health insurance issuer in connection with the enrollment of any qualified individuals or employ- ees of a qualified employer in a qualified health plan. (5) F AIR AND IMPARTIAL INFORMATION AND SERVICES .—The Secretary, in collaboration with States, shall develop standards to ensure that information made available by navigators is fair, accurate, and impartial. (6) F UNDING .—Grants under this subsection shall be made from the operational funds of the Exchange and not Federal funds received by the State to establish the Exchange. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00079 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

99 80 Sec. 1312 PPACA (Consolidated) PPLICABILITY OF M H EALTH P ARITY .—Section 2726 of (j) A ENTAL the Public Health Service Act shall apply to qualified health plans in the same manner and to the same extent as such section applies to health insurance issuers and group health plans. .—An Exchange may not establish rules that con- ONFLICT (k) C flict with or prevent the application of regulations promulgated by the Secretary under this subtitle. 42 U.S.C. 18032 ¿ SEC. 1312 ø . CONSUMER CHOICE. HOICE .— (a) C UALIFIED (1) Q .— ø As revised by section INDIVIDUALS 10104(i)(1) A qualified individual may enroll in any qualified ¿ health plan available to such individual and for which such in- dividual is eligible. UALIFIED EMPLOYERS .— (2) Q (A) E MPLOYER MAY SPECIFY LEVEL .—A qualified em- ployer may provide support for coverage of employees under a qualified health plan by selecting any level of cov- erage under section 1302(d) to be made available to em- ployees through an Exchange. MPLOYEE MAY CHOOSE PLANS WITHIN A LEVEL .— (B) E Each employee of a qualified employer that elects a level of coverage under subparagraph (A) may choose to enroll in a qualified health plan that offers coverage at that level. .—A AYMENT OF P REMIUMS BY Q UALIFIED I NDIVIDUALS (b) P qualified individual enrolled in any qualified health plan may pay any applicable premium owed by such individual to the health in- surance issuer issuing such qualified health plan. (c) S ISK OOL .— INGLE P R .—A health insurance issuer shall NDIVIDUAL MARKET (1) I consider all enrollees in all health plans (other than grand- fathered health plans) offered by such issuer in the individual market, including those enrollees who do not enroll in such plans through the Exchange, to be members of a single risk pool. MALL GROUP MARKET .—A health insurance issuer (2) S shall consider all enrollees in all health plans (other than grandfathered health plans) offered by such issuer in the small group market, including those enrollees who do not enroll in such plans through the Exchange, to be members of a single risk pool. ERGER OF MARKETS .—A State may require the indi- (3) M vidual and small group insurance markets within a State to be merged if the State determines appropriate. (4) S .—A State law requiring grandfathered TATE LAW health plans to be included in a pool described in paragraph (1) or (2) shall not apply. (d) E C ONSUMER C HOICE .— MPOWERING (1) C ONTINUED OPERATION OF MARKET OUTSIDE EX - CHANGES .—Nothing in this title shall be construed to pro- hibit— (A) a health insurance issuer from offering outside of an Exchange a health plan to a qualified individual or qualified employer; and June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00080 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

100 81 Sec. 1312 PPACA (Consolidated) (B) a qualified individual from enrolling in, or a quali- fied employer from selecting for its employees, a health plan offered outside of an Exchange. (2) C - ONTINUED OPERATION OF STATE BENEFIT REQUIRE .—Nothing in this title shall be construed to terminate, MENTS abridge, or limit the operation of any requirement under State law with respect to any policy or plan that is offered outside of an Exchange to offer benefits. (3) V .— OLUNTARY NATURE OF AN EXCHANGE (A) C HOICE TO ENROLL OR NOT TO ENROLL .—Nothing in this title shall be construed to restrict the choice of a qualified individual to enroll or not to enroll in a qualified health plan or to participate in an Exchange. (B) P .— ROHIBITION AGAINST COMPELLED ENROLLMENT Nothing in this title shall be construed to compel an indi- vidual to enroll in a qualified health plan or to participate in an Exchange. (C) I NDIVIDUALS ALLOWED TO ENROLL IN ANY PLAN .— A qualified individual may enroll in any qualified health plan, except that in the case of a catastrophic plan de- scribed in section 1302(e), a qualified individual may enroll in the plan only if the individual is eligible to enroll in the plan under section 1302(e)(2). EMBERS OF CONGRESS IN THE EXCHANGE .— (D) M (i) R EQUIREMENT .—Notwithstanding any other provision of law, after the effective date of this sub- title, the only health plans that the Federal Govern- ment may make available to Members of Congress and congressional staff with respect to their service as a Member of Congress or congressional staff shall be health plans that are— (I) created under this Act (or an amendment made by this Act); or (II) offered through an Exchange established under this Act (or an amendment made by this Act). (ii) D EFINITIONS .—In this section: (I) M EMBER OF CONGRESS .—The term ‘‘Mem- ber of Congress’’ means any member of the House of Representatives or the Senate. (II) C ONGRESSIONAL STAFF .—The term ‘‘con- gressional staff’’ means all full-time and part-time employees employed by the official office of a Member of Congress, whether in Washington, DC or outside of Washington, DC. (4) N O PENALTY FOR TRANSFERRING TO MINIMUM ESSENTIAL COVERAGE OUTSIDE EXCHANGE .—An Exchange, or a qualified health plan offered through an Exchange, shall not impose any penalty or other fee on an individual who cancels enrollment in a plan because the individual becomes eligible for minimum essential coverage (as defined in section 5000A(f) of the Inter- nal Revenue Code of 1986 without regard to paragraph (1)(C) or (D) thereof) or such coverage becomes affordable (within the meaning of section 36B(c)(2)(C) of such Code). June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00081 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

101 82 Sec. 1312 PPACA (Consolidated) NROLLMENT T A GENTS OR B ROKERS .— ø As revised (e) E HROUGH The Secretary shall establish procedures by section 10104(i)(2) ¿ under which a State may allow agents or brokers— (1) to enroll individuals and employers in any qualified health plans in the individual or small group market as soon as the plan is offered through an Exchange in the State; and (2) to assist individuals in applying for premium tax cred- its and cost-sharing reductions for plans sold through an Ex- change. UALIFIED I NDIVIDUALS AND E ; A CCESS L IMITED MPLOYERS (f) Q C L AWFUL R ESIDENTS .— TO ITIZENS AND UALIFIED INDIVIDUALS (1) Q .—In this title: N GENERAL .—The term ‘‘qualified individual’’ (A) I means, with respect to an Exchange, an individual who— (i) is seeking to enroll in a qualified health plan in the individual market offered through the Ex- change; and (ii) ø As revised by section 10104(i)(3) ¿ resides in the State that established the Exchange. (B) I .—An indi- NCARCERATED INDIVIDUALS EXCLUDED vidual shall not be treated as a qualified individual if, at the time of enrollment, the individual is incarcerated, other than incarceration pending the disposition of charges. (2) Q UALIFIED EMPLOYER .—In this title: N GENERAL .—The term ‘‘qualified employer’’ (A) I means a small employer that elects to make all full-time employees of such employer eligible for 1 or more qualified health plans offered in the small group market through an Exchange that offers qualified health plans. (B) E XTENSION TO LARGE GROUPS .— N GENERAL .—Beginning in 2017, each State (i) I may allow issuers of health insurance coverage in the large group market in the State to offer qualified health plans in such market through an Exchange. Nothing in this subparagraph shall be construed as re- quiring the issuer to offer such plans through an Ex- change. ARGE EMPLOYERS ELIGIBLE .—If a State under (ii) L clause (i) allows issuers to offer qualified health plans in the large group market through an Exchange, the term ‘‘qualified employer’’ shall include a large em- ployer that elects to make all full-time employees of such employer eligible for 1 or more qualified health plans offered in the large group market through the Exchange. (3) A CCESS LIMITED TO LAWFUL RESIDENTS .—If an indi- vidual is not, or is not reasonably expected to be for the entire period for which enrollment is sought, a citizen or national of the United States or an alien lawfully present in the United States, the individual shall not be treated as a qualified indi- vidual and may not be covered under a qualified health plan in the individual market that is offered through an Exchange. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00082 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

102 83 Sec. 1313 PPACA (Consolidated) ø 42 U.S.C. 18033 . FINANCIAL INTEGRITY. SEC. 1313 ¿ E .— (a) A CCOUNTING FOR XPENDITURES G ENERAL .—An Exchange shall keep an accurate ac- N (1) I counting of all activities, receipts, and expenditures and shall annually submit to the Secretary a report concerning such ac- countings. NVESTIGATIONS .—The Secretary, in coordination with (2) I the Inspector General of the Department of Health and Human Services, may investigate the affairs of an Exchange, may ex- amine the properties and records of an Exchange, and may re- quire periodic reports in relation to activities undertaken by an Exchange. An Exchange shall fully cooperate in any investiga- tion conducted under this paragraph. UDITS .—An Exchange shall be subject to annual au- (3) A dits by the Secretary. ATTERN OF A BUSE .—If the Secretary determines that (4) P an Exchange or a State has engaged in serious misconduct with respect to compliance with the requirements of, or car- rying out of activities required under, this title, the Secretary may rescind from payments otherwise due to such State in- volved under this or any other Act administered by the Sec- retary an amount not to exceed 1 percent of such payments per year until corrective actions are taken by the State that are de- termined to be adequate by the Secretary. (5) P ROTECTIONS A GAINST F RAUD AND A BUSE .—With re- spect to activities carried out under this title, the Secretary shall provide for the efficient and non-discriminatory adminis- tration of Exchange activities and implement any measure or procedure that— (A) the Secretary determines is appropriate to reduce fraud and abuse in the administration of this title; and (B) the Secretary has authority to implement under this title or any other Act. (6) A F ALSE C PPLICATION OF THE A CT .— LAIMS (A) I N GENERAL .—Payments made by, through, or in connection with an Exchange are subject to the False Claims Act (31 U.S.C. 3729 et seq.) if those payments in- clude any Federal funds. Compliance with the require- ments of this Act concerning eligibility for a health insur- ance issuer to participate in the Exchange shall be a mate- rial condition of an issuer’s entitlement to receive pay- ments, including payments of premium tax credits and cost-sharing reductions, through the Exchange. ø Section 10104(j)(1), p. 834, provides that subparagraph (B) is deemed ‘‘null, void, and of no effect’’ ¿ ø (B) D AMAGES .—Notwithstanding paragraph (1) of sec- tion 3729(a) of title 31, United States Code, and subject to paragraph (2) of such section, the civil penalty assessed under the False Claims Act on any person found liable under such Act as described in subparagraph (A) shall be increased by not less than 3 times and not more than 6 times the amount of damages which the Government sus- tains because of the act of that person. ¿ June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00083 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

103 84 Sec. 1313 PPACA (Consolidated) Section 10104(j)(2),p. 834, replaced paragraph (4) of section ø ¿ 3730(e) of title 31, United States Code , as follows: sec. 10104(j)(2) of PPACA: ¿ ø (2) Section 3730(e) of title 31, United States Code, is amended by striking paragraph (4) and in- serting the following: ‘‘(4)(A) The court shall dismiss an action or claim under this section, unless opposed by the Government, if substan- tially the same allegations or transactions as alleged in the ac- tion or claim were publicly disclosed— ‘‘(i) in a Federal criminal, civil, or administrative hear- ing in which the Government or its agent is a party; ‘‘(ii) in a congressional, Government Accountability Of- fice, or other Federal report, hearing, audit, or investiga- tion; or ‘‘(iii) from the news media, unless the action is brought by the Attorney General or the person bringing the action is an original source of the informa- tion. ‘‘(B) For purposes of this paragraph, ‘‘original source’’ means an individual who either (i) prior to a public disclosure under subsection (e)(4)(a), has voluntarily disclosed to the Gov- ernment the information on which allegations or transactions in a claim are based, or (2) who has knowledge that is inde- pendent of and materially adds to the publicly disclosed allega- tions or transactions, and who has voluntarily provided the in- formation to the Government before filing an action under this section.’’. .—Not later than 5 years after the first VERSIGHT (b) GAO O date on which Exchanges are required to be operational under this title, the Comptroller General shall conduct an ongoing study of Exchange activities and the enrollees in qualified health plans of- fered through Exchanges. Such study shall review— (1) the operations and administration of Exchanges, in- cluding surveys and reports of qualified health plans offered through Exchanges and on the experience of such plans (in- cluding data on enrollees in Exchanges and individuals pur- chasing health insurance coverage outside of Exchanges), the expenses of Exchanges, claims statistics relating to qualified health plans, complaints data relating to such plans, and the manner in which Exchanges meet their goals; (2) any significant observations regarding the utilization and adoption of Exchanges; (3) where appropriate, recommendations for improvements in the operations or policies of Exchanges; (4) ø As added by section 10104(k)(3) ¿ a survey of the cost and affordability of health care insurance provided under the Exchanges for owners and employees of small business con- cerns (as defined under section 3 of the Small Business Act (15 U.S.C. 632)), including data on enrollees in Exchanges and in- dividuals purchasing health insurance coverage outside of Ex- changes; and (5) how many physicians, by area and specialty, are not taking or accepting new patients enrolled in Federal Govern- June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00084 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

104 85 Sec. 1321 PPACA (Consolidated) ment health care programs, and the adequacy of provider net- works of Federal Government health care programs. PART 3—STATE FLEXIBILITY RELATING TO EXCHANGES ø ¿ . STATE FLEXIBILITY IN OPERATION AND 42 U.S.C. 18041 SEC. 1321 ENFORCEMENT OF EXCHANGES AND RELATED REQUIRE- MENTS. (a) E TANDARDS .— STABLISHMENT OF S N GENERAL .—The Secretary shall, as soon as prac- (1) I ticable after the date of enactment of this Act, issue regula- tions setting standards for meeting the requirements under this title, and the amendments made by this title, with respect to— (A) the establishment and operation of Exchanges (in- cluding SHOP Exchanges); (B) the offering of qualified health plans through such Exchanges; (C) the establishment of the reinsurance and risk ad- justment programs under part V; and (D) such other requirements as the Secretary deter- mines appropriate. The preceding sentence shall not apply to standards for re- quirements under subtitles A and C (and the amendments made by such subtitles) for which the Secretary issues regula- tions under the Public Health Service Act. ONSULTATION .—In issuing the regulations under para- (2) C graph (1), the Secretary shall consult with the National Asso- ciation of Insurance Commissioners and its members and with health insurance issuers, consumer organizations, and such other individuals as the Secretary selects in a manner de- signed to ensure balanced representation among interested parties. A CTION .—Each State that elects, at such time and in TATE (b) S such manner as the Secretary may prescribe, to apply the require- ments described in subsection (a) shall, not later than January 1, 2014, adopt and have in effect— (1) the Federal standards established under subsection (a); or (2) a State law or regulation that the Secretary determines implements the standards within the State. - AILURE T O E STABLISH E XCHANGE OR I MPLEMENT R EQUIRE (c) F .— MENTS N GENERAL .—If— (1) I (A) a State is not an electing State under subsection (b); or (B) the Secretary determines, on or before January 1, 2013, that an electing State— (i) will not have any required Exchange oper- ational by January 1, 2014; or (ii) has not taken the actions the Secretary deter- mines necessary to implement— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00085 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

105 86 Sec. 1322 PPACA (Consolidated) (I) the other requirements set forth in the standards under subsection (a); or (II) the requirements set forth in subtitles A and C and the amendments made by such sub- titles; the Secretary shall (directly or through agreement with a not- for-profit entity) establish and operate such Exchange within the State and the Secretary shall take such actions as are nec- essary to implement such other requirements. (2) E NFORCEMENT AUTHORITY .—The provisions of section 2736(b) of the Public Health Services Act shall apply to the en- forcement under paragraph (1) of requirements of subsection (a)(1) (without regard to any limitation on the application of those provisions to group health plans). (d) N I NTERFERENCE W ITH S TATE R EGULATORY A O .— UTHORITY Nothing in this title shall be construed to preempt any State law that does not prevent the application of the provisions of this title. (e) P C ERTAIN S TATE -O PERATED E XCHANGES .— RESUMPTION FOR N GENERAL .—In the case of a State operating an Ex- (1) I change before January 1, 2010, and which has insured a per- centage of its population not less than the percentage of the population projected to be covered nationally after the imple- mentation of this Act, that seeks to operate an Exchange under this section, the Secretary shall presume that such Exchange meets the standards under this section unless the Secretary determines, after completion of the process established under paragraph (2), that the Exchange does not comply with such standards. .—The Secretary shall establish a process to ROCESS (2) P work with a State described in paragraph (1) to provide assist- ance necessary to assist the State’s Exchange in coming into compliance with the standards for approval under this section. SEC. 1322 ø 42 U.S.C. 18042 ¿ . FEDERAL PROGRAM TO ASSIST ESTABLISH- MENT AND OPERATION OF NONPROFIT, MEMBER-RUN HEALTH INSURANCE ISSUERS. STABLISHMENT OF (a) E ROGRAM .— P (1) I N GENERAL .—The Secretary shall establish a program to carry out the purposes of this section to be known as the Consumer Operated and Oriented Plan (CO-OP) program. (2) P URPOSE .—It is the purpose of the CO-OP program to foster the creation of qualified nonprofit health insurance issuers to offer qualified health plans in the individual and small group markets in the States in which the issuers are li- censed to offer such plans. (b) L OANS AND G RANTS NDER THE CO-OP P ROGRAM .— U (1) I N GENERAL .—The Secretary shall provide through the CO-OP program for the awarding to persons applying to be- come qualified nonprofit health insurance issuers of— (A) loans to provide assistance to such person in meet- ing its start-up costs; and (B) grants to provide assistance to such person in meeting any solvency requirements of States in which the person seeks to be licensed to issue qualified health plans. (2) R EQUIREMENTS FOR AWARDING LOANS AND GRANTS .— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00086 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

106 87 Sec. 1322 PPACA (Consolidated) N GENERAL .—In awarding loans and grants under (A) I the CO-OP program, the Secretary shall— (i) take into account the recommendations of the advisory board established under paragraph (3); (ii) give priority to applicants that will offer quali- fied health plans on a Statewide basis, will utilize in- tegrated care models, and have significant private sup- port; and (iii) ensure that there is sufficient funding to es- tablish at least 1 qualified nonprofit health insurance issuer in each State, except that nothing in this clause shall prohibit the Secretary from funding the estab- lishment of multiple qualified nonprofit health insur- ance issuers in any State if the funding is sufficient to do so. TATES WITHOUT ISSUERS IN PROGRAM .—If no (B) S health insurance issuer applies to be a qualified nonprofit health insurance issuer within a State, the Secretary may use amounts appropriated under this section for the awarding of grants to encourage the establishment of a qualified nonprofit health insurance issuer within the State or the expansion of a qualified nonprofit health in- surance issuer from another State to the State. (C) A GREEMENT .— (i) I N GENERAL .—The Secretary shall require any person receiving a loan or grant under the CO-OP pro- gram to enter into an agreement with the Secretary which requires such person to meet (and to continue to meet)— (I) any requirement under this section for such person to be treated as a qualified nonprofit health insurance issuer; and (II) any requirements contained in the agree- ment for such person to receive such loan or grant. ESTRICTIONS ON USE OF FEDERAL FUNDS .— (ii) R The agreement shall include a requirement that no portion of the funds made available by any loan or grant under this section may be used— (I) for carrying on propaganda, or otherwise attempting, to influence legislation; or (II) for marketing. Nothing in this clause shall be construed to allow a person to take any action prohibited by section 501(c)(29) of the Internal Revenue Code of 1986. (iii) F AILURE TO MEET REQUIREMENTS .—If the Sec- retary determines that a person has failed to meet any requirement described in clause (i) or (ii) and has failed to correct such failure within a reasonable pe- riod of time of when the person first knows (or reason- ably should have known) of such failure, such person shall repay to the Secretary an amount equal to the sum of— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00087 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

107 88 Sec. 1322 PPACA (Consolidated) (I) 110 percent of the aggregate amount of loans and grants received under this section; plus (II) interest on the aggregate amount of loans and grants received under this section for the pe- riod the loans or grants were outstanding. The Secretary shall notify the Secretary of the Treas- ury of any determination under this section of a fail- ure that results in the termination of an issuer’s tax- exempt status under section 501(c)(29) of such Code. IME FOR AWARDING LOANS AND GRANTS .—The Sec- (D) T retary shall not later than July 1, 2013, award the loans and grants under the CO-OP program and begin the dis- tribution of amounts awarded under such loans and grants. EPAYMENT OF LOANS AND GRANTS .— ø As added by sec- (3) R ¿ tion 10104(l)(2) Not later than July 1, 2013, and prior to awarding loans and grants under the CO-OP program, the Sec- retary shall promulgate regulations with respect to the repay- ment of such loans and grants in a manner that is consistent with State solvency regulations and other similar State laws that may apply. In promulgating such regulations, the Sec- retary shall provide that such loans shall be repaid within 5 years and such grants shall be repaid within 15 years, taking into consideration any appropriate State reserve requirements, solvency regulations, and requisite surplus note arrangements that must be constructed in a State to provide for such repay- ment prior to awarding such loans and grants. (4) A DVISORY BOARD .— ø As redesignated by section 10104(l)(1) ¿ (A) I N GENERAL .—The advisory board under this para- graph shall consist of 15 members appointed by the Comp- troller General of the United States from among individ- uals with qualifications described in section 1805(c)(2) of the Social Security Act. ULES RELATING TO APPOINTMENTS .— (B) R TANDARDS .—Any individual appointed under (i) S subparagraph (A) shall meet ethics and conflict of in- terest standards protecting against insurance industry involvement and interference. RIGINAL APPOINTMENTS .—The original ap- (ii) O pointment of board members under subparagraph (A)(ii) shall be made no later than 3 months after the date of enactment of this Act. (C) V .—Any vacancy on the advisory board ACANCY shall be filled in the same manner as the original appoint- ment. (D) P AY AND REIMBURSEMENT .— O COMPENSATION FOR MEMBERS OF ADVISORY (i) N .—Except as provided in clause (ii), a member of BOARD the advisory board may not receive pay, allowances, or benefits by reason of their service on the board. (ii) T RAVEL EXPENSES .—Each member shall re- ceive travel expenses, including per diem in lieu of June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00088 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

108 89 Sec. 1322 PPACA (Consolidated) subsistence under subchapter I of chapter 57 of title 5, United States Code. .—The Federal Advisory (E) A PPLICATION OF FACA Committee Act (5 U.S.C. App.) shall apply to the advisory board, except that section 14 of such Act shall not apply. (F) T .—The advisory board shall terminate ERMINATION on the earlier of the date that it completes its duties under this section or December 31, 2015. (c) Q N ONPROFIT H EALTH I NSURANCE UALIFIED SSUER .—For I purposes of this section— N GENERAL (1) I .—The term ‘‘qualified nonprofit health in- surance issuer’’ means a health insurance issuer that is an or- ganization— (A) that is organized under State law as a nonprofit, member corporation; (B) substantially all of the activities of which consist of the issuance of qualified health plans in the individual and small group markets in each State in which it is li- censed to issue such plans; and (C) that meets the other requirements of this sub- section. (2) C ERTAIN ORGANIZATIONS PROHIBITED .—An organization shall not be treated as a qualified nonprofit health insurance issuer if— (A) the organization or a related entity (or any prede- cessor of either) was a health insurance issuer on July 16, 2009; or (B) the organization is sponsored by a State or local government, any political subdivision thereof, or any in- strumentality of such government or political subdivision. OVERNANCE REQUIREMENTS .—An organization shall (3) G not be treated as a qualified nonprofit health insurance issuer unless— (A) the governance of the organization is subject to a majority vote of its members; (B) its governing documents incorporate ethics and conflict of interest standards protecting against insurance industry involvement and interference; and (C) as provided in regulations promulgated by the Sec- retary, the organization is required to operate with a strong consumer focus, including timeliness, responsive- ness, and accountability to members. (4) P ROFITS INURE TO BENEFIT OF MEMBERS .—An organiza- tion shall not be treated as a qualified nonprofit health insur- ance issuer unless any profits made by the organization are re- quired to be used to lower premiums, to improve benefits, or for other programs intended to improve the quality of health care delivered to its members. (5) C OMPLIANCE WITH STATE INSURANCE LAWS .—An organi- zation shall not be treated as a qualified nonprofit health in- surance issuer unless the organization meets all the require- ments that other issuers of qualified health plans are required to meet in any State where the issuer offers a qualified health plan, including solvency and licensure requirements, rules on June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00089 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

109 90 Sec. 1322 PPACA (Consolidated) payments to providers, and compliance with network adequacy rules, rate and form filing rules, any applicable State premium assessments and any other State law described in section 1324(b). (6) C OORDINATION WITH STATE INSURANCE REFORMS .—An organization shall not be treated as a qualified nonprofit health insurance issuer unless the organization does not offer a health plan in a State until that State has in effect (or the Secretary has implemented for the State) the market reforms required by part A of title XXVII of the Public Health Service Act (as amended by subtitles A and C of this Act). (d) E P RIVATE P URCHASING C OUNCIL STABLISHMENT OF .— (1) I .—Qualified nonprofit health insurance N GENERAL issuers participating in the CO-OP program under this section may establish a private purchasing council to enter into collec- tive purchasing arrangements for items and services that in- crease administrative and other cost efficiencies, including claims administration, administrative services, health informa- tion technology, and actuarial services. (2) C .—The private OUNCIL MAY NOT SET PAYMENT RATES purchasing council established under paragraph (1) shall not set payment rates for health care facilities or providers partici- pating in health insurance coverage provided by qualified non- profit health insurance issuers. ONTINUED APPLICATION OF ANTITRUST LAWS .— (3) C (A) I N GENERAL .—Nothing in this section shall be con- strued to limit the application of the antitrust laws to any private purchasing council (whether or not established under this subsection) or to any qualified nonprofit health insurance issuer participating in such a council. NTITRUST LAWS .—For purposes of this subpara- (B) A graph, the term ‘‘antitrust laws’’ has the meaning given the term in subsection (a) of the first section of the Clay- ton Act (15 U.S.C. 12(a)). Such term also includes section 5 of the Federal Trade Commission Act (15 U.S.C. 45) to the extent that such section 5 applies to unfair methods of competition. (e) L IMITATION ON P ARTICIPATION .—No representative of any Federal, State, or local government (or of any political subdivision or instrumentality thereof), and no representative of a person de- scribed in subsection (c)(2)(A), may serve on the board of directors of a qualified nonprofit health insurance issuer or with a private purchasing council established under subsection (d). (f) L S ECRETARY .— IMITATIONS ON (1) I N GENERAL .—The Secretary shall not— (A) participate in any negotiations between 1 or more qualified nonprofit health insurance issuers (or a private purchasing council established under subsection (d)) and any health care facilities or providers, including any drug manufacturer, pharmacy, or hospital; and (B) establish or maintain a price structure for reim- bursement of any health benefits covered by such issuers. OMPETITION .—Nothing in this section shall be con- (2) C strued as authorizing the Secretary to interfere with the com- June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00090 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

110 91 Sec. 1322 PPACA (Consolidated) petitive nature of providing health benefits through qualified nonprofit health insurance issuers. .—There are hereby appropriated, out of (g) A PPROPRIATIONS any funds in the Treasury not otherwise appropriated, $6,000,000,000 to carry out this section. (h) T XEMPTION FOR Q UALIFIED N ONPROFIT H AX I NSUR - E EALTH I SSUER .— ANCE N GENERAL .—Section 501(c) of the Internal Revenue (1) I Code of 1986 (relating to list of exempt organizations) is amended by adding at the end the following: ‘‘(29) CO-OP HEALTH INSURANCE ISSUERS .— .—A qualified nonprofit health insur- ‘‘(A) I N GENERAL ance issuer (within the meaning of section 1322 of the Pa- tient Protection and Affordable Care Act) which has re- ceived a loan or grant under the CO-OP program under such section, but only with respect to periods for which the issuer is in compliance with the requirements of such sec- tion and any agreement with respect to the loan or grant. ‘‘(B) C .—Subparagraph (A) ONDITIONS FOR EXEMPTION shall apply to an organization only if— ‘‘(i) the organization has given notice to the Sec- retary, in such manner as the Secretary may by regu- lations prescribe, that it is applying for recognition of its status under this paragraph, ‘‘(ii) except as provided in section 1322(c)(4) of the Patient Protection and Affordable Care Act, no part of the net earnings of which inures to the benefit of any private shareholder or individual, ‘‘(iii) no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation, and ‘‘(iv) the organization does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.’’. (2) A DDITIONAL REPORTING REQUIREMENT .—Section 6033 of such Code (relating to returns by exempt organizations) is amended by redesignating subsection (m) as subsection (n) and by inserting after subsection (l) the following: DDITIONAL I ‘‘(m) A R EQUIRED F ROM CO-OP I NSUR - NFORMATION ERS .—An organization described in section 501(c)(29) shall include on the return required under subsection (a) the following informa- tion: ‘‘(1) The amount of the reserves required by each State in which the organization is licensed to issue qualified health plans. ‘‘(2) The amount of reserves on hand.’’. (3) A PPLICATION OF TAX EXCESS BENEFIT TRANS - ON ACTIONS .—Section 4958(e)(1) of such Code (defining applicable tax-exempt organization) is amended by striking ‘‘paragraph (3) or (4)’’ and inserting ‘‘paragraph (3), (4), or (29)’’. (i) GAO S TUDY AND R EPORT .— TUDY .—The Comptroller General of the General Ac- (1) S countability Office shall conduct an ongoing study on competi- June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00091 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

111 92 Sec. 1323 PPACA (Consolidated) tion and market concentration in the health insurance market in the United States after the implementation of the reforms in such market under the provisions of, and the amendments made by, this Act. Such study shall include an analysis of new issuers of health insurance in such market. (2) R .—The Comptroller General shall, not later EPORT than December 31 of each even-numbered year (beginning with 2014), report to the appropriate committees of the Congress the results of the study conducted under paragraph (1), includ- ing any recommendations for administrative or legislative changes the Comptroller General determines necessary or ap- propriate to increase competition in the health insurance mar- ket. ø STRICKEN ¿ . SEC. 1323. COMMUNITY HEALTH INSURANCE OPTION ø Section stricken by section 10104(m) ¿ ø ¿ . FUNDING FOR THE TERRITORIES. SEC. 1323 42 U.S.C. 18043 ø New section 1323 inserted by section 1204(a) of HCERA ¿ (a) I G ENERAL .—A territory that— N (1) elects consistent with subsection (b) to establish an Ex- change in accordance with part II of this subtitle and estab- lishes such an Exchange in accordance with such part shall be treated as a State for purposes of such part and shall be enti- tled to payment from the amount allocated to the territory under subsection (c); or (2) does not make such election shall be entitled to an in- crease in the dollar limitation applicable to the territory under subsections (f) and (g) of section 1108 of the Social Security Act (42 U.S.C. 1308) for such period in such amount for such terri- tory and such increase shall not be taken into account in com- puting any other amount under such subsections. ERMS AND C ONDITIONS .—An election under subsection (b) T (a)(1) shall— (1) not be effective unless the election is consistent with section 1321 and is received not later than October 1, 2013; and (2) be contingent upon entering into an agreement between the territory and the Secretary that requires that— (A) funds provided under the agreement shall be used only to provide premium and cost-sharing assistance to residents of the territory obtaining health insurance cov- erage through the Exchange; and (B) the premium and cost-sharing assistance provided under such agreement shall be structured in such a man- ner so as to prevent any gap in assistance for individuals between the income level at which medical assistance is available through the territory’s Medicaid plan under title XIX of the Social Security Act and the income level at which premium and cost-sharing assistance is available under the agreement. .— PPROPRIATION AND A LLOCATION (c) A (1) A PPROPRIATION .—Out of any funds in the Treasury not otherwise appropriated, there is appropriated for purposes of payment pursuant to subsection (a) $1,000,000,000, to be avail- June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00092 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

112 93 Sec. 1331 PPACA (Consolidated) able during the period beginning with 2014 and ending with 2019. .—The Secretary shall allocate the amount (2) A LLOCATION appropriated under paragraph (1) among the territories for purposes of carrying out this section as follows: (A) For Puerto Rico, $925,000,000. (B) For another territory, the portion of $75,000,000 specified by the Secretary. SEC. 1324 ø 42 U.S.C. 18044 ¿ . LEVEL PLAYING FIELD. N G ENERAL .— ø (a) I ¿ Notwith- As revised by section 10104(n) standing any other provision of law, any health insurance coverage offered by a private health insurance issuer shall not be subject to any Federal or State law described in subsection (b) if a qualified health plan offered under the Consumer Operated and Oriented Plan program under section 1322, or a multi-State qualified health plan under section 1334, is not subject to such law. AWS D .—The Federal and State laws described in ESCRIBED (b) L this subsection are those Federal and State laws relating to— (1) guaranteed renewal; (2) rating; (3) preexisting conditions; (4) non-discrimination; (5) quality improvement and reporting; (6) fraud and abuse; (7) solvency and financial requirements; (8) market conduct; (9) prompt payment; (10) appeals and grievances; (11) privacy and confidentiality; (12) licensure; and (13) benefit plan material or information. PART 4—STATE FLEXIBILITY TO ESTABLISH ALTERNATIVE PROGRAMS ø 42 U.S.C. 18051 ¿ . STATE FLEXIBILITY TO ESTABLISH BASIC SEC. 1331 HEALTH PROGRAMS FOR LOW-INCOME INDIVIDUALS NOT ELIGIBLE FOR MEDICAID. (a) E STABLISHMENT OF P ROGRAM .— (1) I .—The Secretary shall establish a basic N GENERAL health program meeting the requirements of this section under which a State may enter into contracts to offer 1 or more standard health plans providing at least the essential health benefits described in section 1302(b) to eligible individuals in lieu of offering such individuals coverage through an Exchange. (2) C ERTIFICATIONS AS TO BENEFIT COVERAGE AND COSTS .— Such program shall provide that a State may not establish a basic health program under this section unless the State estab- lishes to the satisfaction of the Secretary, and the Secretary certifies, that— (A) in the case of an eligible individual enrolled in a standard health plan offered through the program, the State provides— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00093 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

113 94 Sec. 1331 PPACA (Consolidated) (i) that the amount of the monthly premium an el- igible individual is required to pay for coverage under the standard health plan for the individual and the in- dividual’s dependents does not exceed the amount of the monthly premium that the eligible individual would have been required to pay (in the rating area in which the individual resides) if the individual had en- rolled in the applicable second lowest cost silver plan (as defined in section 36B(b)(3)(B) of the Internal Rev- enue Code of 1986) offered to the individual through an Exchange; and (ii) that the cost-sharing an eligible individual is required to pay under the standard health plan does not exceed— (I) the cost-sharing required under a platinum plan in the case of an eligible individual with household income not in excess of 150 percent of the poverty line for the size of the family involved; and (II) the cost-sharing required under a gold plan in the case of an eligible individual not de- scribed in subclause (I); and (B) the benefits provided under the standard health plans offered through the program cover at least the essen- tial health benefits described in section 1302(b). For purposes of subparagraph (A)(i), the amount of the month- ly premium an individual is required to pay under either the standard health plan or the applicable second lowest cost silver plan shall be determined after reduction for any premium tax credits and cost-sharing reductions allowable with respect to either plan. .—In this section, the term ‘‘stand- TANDARD H EALTH P LAN (b) S ard heath plan’’ means a health benefits plan that the State con- tracts with under this section— (1) under which the only individuals eligible to enroll are eligible individuals; (2) that provides at least the essential health benefits de- scribed in section 1302(b); and (3) in the case of a plan that provides health insurance coverage offered by a health insurance issuer, that has a med- ical loss ratio of at least 85 percent. (c) C ONTRACTING P ROCESS .— (1) I N GENERAL .—A State basic health program shall es- tablish a competitive process for entering into contracts with standard health plans under subsection (a), including negotia- tion of premiums and cost-sharing and negotiation of benefits in addition to the essential health benefits described in section 1302(b). (2) S PECIFIC ITEMS TO BE CONSIDERED .—A State shall, as part of its competitive process under paragraph (1), include at least the following: (A) I NNOVATION .—Negotiation with offerors of a stand- ard health plan for the inclusion of innovative features in the plan, including— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00094 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

114 95 Sec. 1331 PPACA (Consolidated) (i) care coordination and care management for en- rollees, especially for those with chronic health condi- tions; (ii) incentives for use of preventive services; and (iii) the establishment of relationships between providers and patients that maximize patient involve- ment in health care decision-making, including pro- viding incentives for appropriate utilization under the plan. (B) H EALTH AND RESOURCE DIFFERENCES .—Consider- ation of, and the making of suitable allowances for, dif- ferences in health care needs of enrollees and differences in local availability of, and access to, health care providers. Nothing in this subparagraph shall be construed as allow- ing discrimination on the basis of pre-existing conditions or other health status-related factors. (C) M ANAGED CARE .—Contracting with managed care systems, or with systems that offer as many of the at- tributes of managed care as are feasible in the local health care market. (D) P ERFORMANCE MEASURES .—Establishing specific performance measures and standards for issuers of stand- ard health plans that focus on quality of care and im- proved health outcomes, requiring such plans to report to the State with respect to the measures and standards, and making the performance and quality information available to enrollees in a useful form. NHANCED AVAILABILITY .— (3) E (A) M ULTIPLE PLANS .—A State shall, to the maximum extent feasible, seek to make multiple standard health plans available to eligible individuals within a State to en- sure individuals have a choice of such plans. (B) R .—A State may negotiate a re- EGIONAL COMPACTS gional compact with other States to include coverage of eli- gible individuals in all such States in agreements with issuers of standard health plans. (4) C OORDINATION WITH OTHER STATE PROGRAMS .—A State shall seek to coordinate the administration of, and provision of benefits under, its program under this section with the State medicaid program under title XIX of the Social Security Act, the State child health plan under title XXI of such Act, and other State-administered health programs to maximize the effi- ciency of such programs and to improve the continuity of care. (d) T RANSFER OF F UNDS TO S TATES .— (1) I .—If the Secretary determines that a State N GENERAL electing the application of this section meets the requirements of the program established under subsection (a), the Secretary shall transfer to the State for each fiscal year for which 1 or more standard health plans are operating within the State the amount determined under paragraph (3). (2) U SE OF FUNDS .—A State shall establish a trust for the deposit of the amounts received under paragraph (1) and amounts in the trust fund shall only be used to reduce the pre- miums and cost-sharing of, or to provide additional benefits June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00095 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

115 96 Sec. 1331 PPACA (Consolidated) for, eligible individuals enrolled in standard health plans with- in the State. Amounts in the trust fund, and expenditures of such amounts, shall not be included in determining the amount of any non-Federal funds for purposes of meeting any matching or expenditure requirement of any federally-funded program. MOUNT OF PAYMENT .— (3) A ECRETARIAL DETERMINATION .— (A) S N GENERAL .— ø As revised by section (i) I ¿ 10104(o)(1) The amount determined under this para- graph for any fiscal year is the amount the Secretary determines is equal to 95 percent of the premium tax credits under section 36B of the Internal Revenue Code of 1986, and the cost-sharing reductions under section 1402, that would have been provided for the fiscal year to eligible individuals enrolled in standard health plans in the State if such eligible individuals were allowed to enroll in qualified health plans through an Exchange established under this subtitle. PECIFIC REQUIREMENTS .—The Secretary shall (ii) S make the determination under clause (i) on a per en- rollee basis and shall take into account all relevant factors necessary to determine the value of the pre- mium tax credits and cost-sharing reductions that would have been provided to eligible individuals de- scribed in clause (i), including the age and income of the enrollee, whether the enrollment is for self-only or family coverage, geographic differences in average spending for health care across rating areas, the health status of the enrollee for purposes of deter- mining risk adjustment payments and reinsurance payments that would have been made if the enrollee had enrolled in a qualified health plan through an Ex- change, and whether any reconciliation of the credit or cost-sharing reductions would have occurred if the en- rollee had been so enrolled. This determination shall take into consideration the experience of other States with respect to participation in an Exchange and such credits and reductions provided to residents of the other States, with a special focus on enrollees with in- come below 200 percent of poverty. .—The Chief Actuary of the ERTIFICATION (iii) C Centers for Medicare & Medicaid Services, in consulta- tion with the Office of Tax Analysis of the Department of the Treasury, shall certify whether the methodology used to make determinations under this subpara- graph, and such determinations, meet the require- ments of clause (ii). Such certifications shall be based on sufficient data from the State and from comparable States about their experience with programs created by this Act. (B) C ORRECTIONS .—The Secretary shall adjust the payment for any fiscal year to reflect any error in the de- June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00096 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

116 97 Sec. 1331 PPACA (Consolidated) terminations under subparagraph (A) for any preceding fiscal year. .—The provisions of sec- (4) A PPLICATION OF SPECIAL RULES tion 1303 shall apply to a State basic health program, and to standard health plans offered through such program, in the same manner as such rules apply to qualified health plans. (e) E NDIVIDUAL .— LIGIBLE I .—In this section, the term ‘‘eligible indi- (1) I N GENERAL vidual’’ means, with respect to any State, an individual— (A) who a resident of the State who is not eligible to enroll in the State’s medicaid program under title XIX of the Social Security Act for benefits that at a minimum con- sist of the essential health benefits described in section 1302(b); ø ¿ whose house- (B) As revised by section 10104(o)(2) hold income exceeds 133 percent but does not exceed 200 percent of the poverty line for the size of the family in- volved, or, in the case of an alien lawfully present in the United States, whose income is not greater than 133 per- cent of the poverty line for the size of the family involved but who is not eligible for the Medicaid program under title XIX of the Social Security Act by reason of such alien status; (C) who is not eligible for minimum essential coverage (as defined in section 5000A(f) of the Internal Revenue Code of 1986) or is eligible for an employer-sponsored plan that is not affordable coverage (as determined under sec- tion 5000A(e)(2) of such Code); and (D) who has not attained age 65 as of the beginning of the plan year. Such term shall not include any individual who is not a quali- fied individual under section 1312 who is eligible to be covered by a qualified health plan offered through an Exchange. LIGIBLE INDIVIDUALS MAY NOT USE EXCHANGE (2) E .—An eli- gible individual shall not be treated as a qualified individual under section 1312 eligible for enrollment in a qualified health plan offered through an Exchange established under section 1311. ECRETARIAL O VERSIGHT .—The Secretary shall each year (f) S conduct a review of each State program to ensure compliance with the requirements of this section, including ensuring that the State program meets— (1) eligibility verification requirements for participation in the program; (2) the requirements for use of Federal funds received by the program; and (3) the quality and performance standards under this sec- tion. (g) S TANDARD H EALTH P LAN O FFERORS .—A State may provide that persons eligible to offer standard health plans under a basic health program established under this section may include a li- censed health maintenance organization, a licensed health insur- ance insurer, or a network of health care providers established to offer services under the program. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00097 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

117 98 Sec. 1332 PPACA (Consolidated) EFINITIONS .—Any term used in this section which is also (h) D used in section 36B of the Internal Revenue Code of 1986 shall have the meaning given such term by such section. SEC. 1332 42 U.S.C. 18052 ¿ . WAIVER FOR STATE INNOVATION. ø (a) A PPLICATION .— N GENERAL .—A State may apply to the Secretary for (1) I the waiver of all or any requirements described in paragraph (2) with respect to health insurance coverage within that State for plan years beginning on or after January 1, 2017. Such ap- plication shall— (A) be filed at such time and in such manner as the Secretary may require; (B) contain such information as the Secretary may re- quire, including— (i) a comprehensive description of the State legis- lation and program to implement a plan meeting the requirements for a waiver under this section; and (ii) a 10-year budget plan for such plan that is budget neutral for the Federal Government; and (C) provide an assurance that the State has enacted the law described in subsection (b)(2). EQUIREMENTS .—The requirements described in this (2) R paragraph with respect to health insurance coverage within the State for plan years beginning on or after January 1, 2014, are as follows: (A) Part I of subtitle D. (B) Part II of subtitle D. (C) Section 1402. (D) Sections 36B, 4980H, and 5000A of the Internal Revenue Code of 1986. ASS THROUGH OF FUNDING .—With respect to a State (3) P waiver under paragraph (1), under which, due to the structure of the State plan, individuals and small employers in the State would not qualify for the premium tax credits, cost-sharing re- ductions, or small business credits under sections 36B of the Internal Revenue Code of 1986 or under part I of subtitle E for which they would otherwise be eligible, the Secretary shall pro- vide for an alternative means by which the aggregate amount of such credits or reductions that would have been paid on be- half of participants in the Exchanges established under this title had the State not received such waiver, shall be paid to the State for purposes of implementing the State plan under the waiver. Such amount shall be determined annually by the Secretary, taking into consideration the experience of other States with respect to participation in an Exchange and credits and reductions provided under such provisions to residents of the other States. (4) W AIVER CONSIDERATION AND TRANSPARENCY .— (A) I N GENERAL .—An application for a waiver under this section shall be considered by the Secretary in accord- ance with the regulations described in subparagraph (B). (B) R EGULATIONS .—Not later than 180 days after the date of enactment of this Act, the Secretary shall promul- June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00098 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

118 99 Sec. 1332 PPACA (Consolidated) gate regulations relating to waivers under this section that provide— (i) a process for public notice and comment at the State level, including public hearings, sufficient to en- sure a meaningful level of public input; (ii) a process for the submission of an application that ensures the disclosure of— (I) the provisions of law that the State in- volved seeks to waive; and (II) the specific plans of the State to ensure that the waiver will be in compliance with sub- section (b); (iii) a process for providing public notice and com- ment after the application is received by the Sec- retary, that is sufficient to ensure a meaningful level of public input and that does not impose requirements that are in addition to, or duplicative of, requirements imposed under the Administrative Procedures Act, or requirements that are unreasonable or unnecessarily burdensome with respect to State compliance; (iv) a process for the submission to the Secretary of periodic reports by the State concerning the imple- mentation of the program under the waiver; and (v) a process for the periodic evaluation by the Secretary of the program under the waiver. EPORT .—The Secretary shall annually report to (C) R Congress concerning actions taken by the Secretary with respect to applications for waivers under this section. (5) C OORDINATED WAIVER PROCESS .—The Secretary shall develop a process for coordinating and consolidating the State waiver processes applicable under the provisions of this sec- tion, and the existing waiver processes applicable under titles XVIII, XIX, and XXI of the Social Security Act, and any other Federal law relating to the provision of health care items or services. Such process shall permit a State to submit a single application for a waiver under any or all of such provisions. (6) D .—In this section, the term ‘‘Secretary’’ EFINITION means— (A) the Secretary of Health and Human Services with respect to waivers relating to the provisions described in subparagraph (A) through (C) of paragraph (2); and (B) the Secretary of the Treasury with respect to waiv- ers relating to the provisions described in paragraph (2)(D). (b) G RANTING OF W AIVERS .— (1) I .—The Secretary may grant a request for a N GENERAL waiver under subsection (a)(1) only if the Secretary determines that the State plan— (A) will provide coverage that is at least as com- prehensive as the coverage defined in section 1302(b) and offered through Exchanges established under this title as certified by Office of the Actuary of the Centers for Medi- care & Medicaid Services based on sufficient data from the State and from comparable States about their experience June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00099 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

119 100 Sec. 1333 PPACA (Consolidated) with programs created by this Act and the provisions of this Act that would be waived; (B) will provide coverage and cost sharing protections against excessive out-of-pocket spending that are at least as affordable as the provisions of this title would provide; (C) will provide coverage to at least a comparable number of its residents as the provisions of this title would provide; and (D) will not increase the Federal deficit. (2) R EQUIREMENT TO ENACT A LAW .— .—A law described in this paragraph is (A) I N GENERAL a State law that provides for State actions under a waiver under this section, including the implementation of the State plan under subsection (a)(1)(B). (B) T ERMINATION OF OPT OUT .—A State may repeal a law described in subparagraph (A) and terminate the au- thority provided under the waiver with respect to the State. (c) S COPE OF AIVER .— W (1) I N GENERAL .—The Secretary shall determine the scope of a waiver of a requirement described in subsection (a)(2) granted to a State under subsection (a)(1). (2) L IMITATION .—The Secretary may not waive under this section any Federal law or requirement that is not within the authority of the Secretary. (d) D ETERMINATIONS BY S ECRETARY .— (1) T IME FOR DETERMINATION .—The Secretary shall make a determination under subsection (a)(1) not later than 180 days after the receipt of an application from a State under such subsection. (2) E .— FFECT OF DETERMINATION .—If the Secretary deter- (A) G RANTING OF WAIVERS mines to grant a waiver under subsection (a)(1), the Sec- retary shall notify the State involved of such determina- tion and the terms and effectiveness of such waiver. (B) D ENIAL OF WAIVER .—If the Secretary determines a waiver should not be granted under subsection (a)(1), the Secretary shall notify the State involved, and the appro- priate committees of Congress of such determination and the reasons therefore. (e) T ERM OF W .—No waiver under this section may ex- AIVER tend over a period of longer than 5 years unless the State requests continuation of such waiver, and such request shall be deemed granted unless the Secretary, within 90 days after the date of its submission to the Secretary, either denies such request in writing or informs the State in writing with respect to any additional infor- mation which is needed in order to make a final determination with respect to the request. SEC. 1333 ø 42 U.S.C. 18053 ¿ . PROVISIONS RELATING TO OFFERING OF PLANS IN MORE THAN ONE STATE. (a) H EALTH C ARE C HOICE C OMPACTS .— (1) I N GENERAL .—Not later than July 1, 2013, the Sec- retary shall, in consultation with the National Association of Insurance Commissioners, issue regulations for the creation of June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00100 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

120 101 Sec. 1334 PPACA (Consolidated) health care choice compacts under which 2 or more States may enter into an agreement under which— (A) 1 or more qualified health plans could be offered in the individual markets in all such States but, except as provided in subparagraph (B), only be subject to the laws and regulations of the State in which the plan was written or issued; (B) the issuer of any qualified health plan to which the compact applies— (i) would continue to be subject to market conduct, unfair trade practices, network adequacy, and con- sumer protection standards (including standards relat- ing to rating), including addressing disputes as to the performance of the contract, of the State in which the purchaser resides; (ii) would be required to be licensed in each State in which it offers the plan under the compact or to submit to the jurisdiction of each such State with re- gard to the standards described in clause (i) (including allowing access to records as if the insurer were li- censed in the State); and (iii) must clearly notify consumers that the policy may not be subject to all the laws and regulations of the State in which the purchaser resides. (2) S TATE AUTHORITY .—A State may not enter into an agreement under this subsection unless the State enacts a law after the date of the enactment of this title that specifically au- thorizes the State to enter into such agreements. PPROVAL OF COMPACTS .—The Secretary may approve (3) A interstate health care choice compacts under paragraph (1) only if the Secretary determines that such health care choice compact— (A) will provide coverage that is at least as com- prehensive as the coverage defined in section 1302(b) and offered through Exchanges established under this title; (B) will provide coverage and cost sharing protections against excessive out-of-pocket spending that are at least as affordable as the provisions of this title would provide; (C) will provide coverage to at least a comparable number of its residents as the provisions of this title would provide; (D) will not increase the Federal deficit; and (E) will not weaken enforcement of laws and regula- tions described in paragraph (1)(B)(i) in any State that is included in such compact. (4) E FFECTIVE DATE .—A health care choice compact de- scribed in paragraph (1) shall not take effect before January 1, 2016. ø Subsection (b) stricken by section 10104(p) ¿ SEC. 1334 42 U.S.C. 18054 ¿ . MULTI-STATE PLANS. ø ø Section added by section 10104(q) ¿ (a) O VERSIGHT BY THE O FFICE OF P ERSONNEL M ANAGEMENT .— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00101 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

121 102 Sec. 1334 PPACA (Consolidated) N GENERAL .—The Director of the Office of Personnel (1) I Management (referred to in this section as the ‘‘Director’’) shall enter into contracts with health insurance issuers (which may include a group of health insurance issuers affiliated either by common ownership and control or by the common use of a na- tionally licensed service mark), without regard to section 5 of title 41, United States Code, or other statutes requiring com- petitive bidding, to offer at least 2 multi-State qualified health plans through each Exchange in each State. Such plans shall provide individual, or in the case of small employers, group coverage. (2) T ERMS .—Each contract entered into under paragraph (1) shall be for a uniform term of at least 1 year, but may be made automatically renewable from term to term in the ab- sence of notice of termination by either party. In entering into such contracts, the Director shall ensure that health benefits coverage is provided in accordance with the types of coverage provided for under section 2701(a)(1)(A)(i) of the Public Health Service Act. (3) N - PROFIT ENTITIES .—In entering into contracts under ON paragraph (1), the Director shall ensure that at least one con- tract is entered into with a non-profit entity. (4) A DMINISTRATION .—The Director shall implement this subsection in a manner similar to the manner in which the Di- rector implements the contracting provisions with respect to carriers under the Federal employees health benefit program under chapter 89 of title 5, United States Code, including (through negotiating with each multi-state plan)— (A) a medical loss ratio; (B) a profit margin; (C) the premiums to be charged; and (D) such other terms and conditions of coverage as are in the interests of enrollees in such plans. UTHORITY TO PROTECT CONSUMERS (5) A .—The Director may prohibit the offering of any multi-State health plan that does not meet the terms and conditions defined by the Director with respect to the elements described in subparagraphs (A) through (D) of paragraph (4). SSURED AVAILABILITY OF VARIED COVERAGE .—In enter- (6) A ing into contracts under this subsection, the Director shall en- sure that with respect to multi-State qualified health plans of- fered in an Exchange, there is at least one such plan that does not provide coverage of services described in section 1303(b)(1)(B)(i). (7) W ITHDRAWAL .—Approval of a contract under this sub- section may be withdrawn by the Director only after notice and opportunity for hearing to the issuer concerned without regard to subchapter II of chapter 5 and chapter 7 of title 5, United States Code. LIGIBILITY .—A health insurance issuer shall be eligible to (b) E enter into a contract under subsection (a)(1) if such issuer— (1) agrees to offer a multi-State qualified health plan that meets the requirements of subsection (c) in each Exchange in each State; June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00102 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

122 103 Sec. 1334 PPACA (Consolidated) (2) is licensed in each State and is subject to all require- ments of State law not inconsistent with this section, including the standards and requirements that a State imposes that do not prevent the application of a requirement of part A of title XXVII of the Public Health Service Act or a requirement of this title; (3) otherwise complies with the minimum standards pre- scribed for carriers offering health benefits plans under section 8902(e) of title 5, United States Code, to the extent that such standards do not conflict with a provision of this title; and (4) meets such other requirements as determined appro- priate by the Director, in consultation with the Secretary. EQUIREMENTS FOR M ULTI -S TATE Q H EALTH UALIFIED (c) R P LAN .— (1) I N GENERAL .—A multi-State qualified health plan meets the requirements of this subsection if, in the determina- tion of the Director— (A) the plan offers a benefits package that is uniform in each State and consists of the essential benefits de- scribed in section 1302; (B) the plan meets all requirements of this title with respect to a qualified health plan, including requirements relating to the offering of the bronze, silver, and gold levels of coverage and catastrophic coverage in each State Ex- change; (C) except as provided in paragraph (5), the issuer pro- vides for determinations of premiums for coverage under the plan on the basis of the rating requirements of part A of title XXVII of the Public Health Service Act; and (D) the issuer offers the plan in all geographic regions, and in all States that have adopted adjusted community rating before the date of enactment of this Act. (2) S .—Nothing in TATES MAY OFFER ADDITIONAL BENEFITS paragraph (1)(A) shall preclude a State from requiring that benefits in addition to the essential health benefits required under such paragraph be provided to enrollees of a multi-State qualified health plan offered in such State. REDITS .— (3) C (A) I N GENERAL .—An individual enrolled in a multi- State qualified health plan under this section shall be eli- gible for credits under section 36B of the Internal Revenue Code of 1986 and cost sharing assistance under section 1402 in the same manner as an individual who is enrolled in a qualified health plan. O ADDITIONAL FEDERAL COST .—A requirement by (B) N a State under paragraph (2) that benefits in addition to the essential health benefits required under paragraph (1)(A) be provided to enrollees of a multi-State qualified health plan shall not affect the amount of a premium tax credit provided under section 36B of the Internal Revenue Code of 1986 with respect to such plan. (4) S TATE MUST ASSUME COST .—A State shall make pay- ments— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00103 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

123 104 Sec. 1334 PPACA (Consolidated) (A) to an individual enrolled in a multi-State qualified health plan offered in such State; or (B) on behalf of an individual described in subpara- graph (A) directly to the multi-State qualified health plan in which such individual is enrolled; to defray the cost of any additional benefits described in para- graph (2). (5) A CERTAIN STATE RATING REQUIRE PPLICATION OF - .—With respect to a multi-State qualified health plan MENTS that is offered in a State with age rating requirements that are lower than 3:1, the State may require that Exchanges oper- ating in such State only permit the offering of such multi-State qualified health plans if such plans comply with the State’s more protective age rating requirements. (d) P LANS EEMED T O B E C ERTIFIED .—A multi-State qualified D health plan that is offered under a contract under subsection (a) shall be deemed to be certified by an Exchange for purposes of sec- tion 1311(d)(4)(A). (e) P HASE - IN .—Notwithstanding paragraphs (1) and (2) of sub- section (b), the Director shall enter into a contract with a health insurance issuer for the offering of a multi-State qualified health plan under subsection (a) if— (1) with respect to the first year for which the issuer offers such plan, such issuer offers the plan in at least 60 percent of the States; (2) with respect to the second such year, such issuer offers the plan in at least 70 percent of the States; (3) with respect to the third such year, such issuer offers the plan in at least 85 percent of the States; and (4) with respect to each subsequent year, such issuer offers the plan in all States. PPLICABILITY .—The requirements under chapter 89 of title (f) A 5, United States Code, applicable to health benefits plans under such chapter shall apply to multi-State qualified health plans pro- vided for under this section to the extent that such requirements do not conflict with a provision of this title. (g) C ONTINUED S UPPORT FOR FEHBP.— (1) M AINTENANCE OF EFFORT .—Nothing in this section shall be construed to permit the Director to allocate fewer fi- nancial or personnel resources to the functions of the Office of Personnel Management related to the administration of the Federal Employees Health Benefit Program under chapter 89 of title 5, United States Code. (2) S .—Enrollees in multi-State quali- EPARATE RISK POOL fied health plans under this section shall be treated as a sepa- rate risk pool apart from enrollees in the Federal Employees Health Benefit Program under chapter 89 of title 5, United States Code. (3) A UTHORITY TO ESTABLISH SEPARATE ENTITIES .—The Di- rector may establish such separate units or offices within the Office of Personnel Management as the Director determines to be appropriate to ensure that the administration of multi-State qualified health plans under this section does not interfere with the effective administration of the Federal Employees June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00104 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

124 105 Sec. 1341 PPACA (Consolidated) Health Benefit Program under chapter 89 of title 5, United States Code. .—The Director may appoint such (4) E FFECTIVE OVERSIGHT additional personnel as may be necessary to enable the Direc- tor to carry out activities under this section. (5) A .—In carrying out SSURANCE OF SEPARATE PROGRAM this section, the Director shall ensure that the program under this section is separate from the Federal Employees Health Benefit Program under chapter 89 of title 5, United States Code. Premiums paid for coverage under a multi-State quali- fied health plan under this section shall not be considered to be Federal funds for any purposes. (6) FEHBP PLANS NOT REQUIRED TO PARTICIPATE .—Noth- ing in this section shall require that a carrier offering coverage under the Federal Employees Health Benefit Program under chapter 89 of title 5, United States Code, also offer a multi- State qualified health plan under this section. (h) A B OARD .—The Director shall establish an advisory DVISORY board to provide recommendations on the activities described in this section. A significant percentage of the members of such board shall be comprised of enrollees in a multi-State qualified health plan, or representatives of such enrollees. (i) A UTHORIZATION OF A PPROPRIATIONS .—There is authorized to be appropriated, such sums as may be necessary to carry out this section. PART 5—REINSURANCE AND RISK ADJUSTMENT SEC. 1341 ø ¿ . TRANSITIONAL REINSURANCE PROGRAM 42 U.S.C. 18061 FOR INDIVIDUAL MARKET IN EACH STATE. ø ¿ Section heading amended by section 10104(r)(1) N G ENERAL .—Each State shall, not later than January 1, (a) I 2014— (1) include in the Federal standards or State law or regula- tion the State adopts and has in effect under section 1321(b) the provisions described in subsection (b); and (2) establish (or enter into a contract with) 1 or more ap- plicable reinsurance entities to carry out the reinsurance pro- gram under this section. (b) M ODEL EGULATION .— R (1) I N GENERAL .—In establishing the Federal standards under section 1321(a), the Secretary, in consultation with the National Association of Insurance Commissioners (the ‘‘NAIC’’), shall include provisions that enable States to establish and maintain a program under which— (A) health insurance issuers, and third party adminis- trators on behalf of group health plans, are required to make payments to an applicable reinsurance entity for any plan year beginning in the 3-year period beginning Janu- ary 1, 2014 (as specified in paragraph (3); and (B) the applicable reinsurance entity collects payments under subparagraph (A) and uses amounts so collected to make reinsurance payments to health insurance issuers June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00105 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

125 106 Sec. 1341 PPACA (Consolidated) described in subparagraph (A) that cover high risk individ- uals in the individual market (excluding grandfathered health plans) for any plan year beginning in such 3-year period. (2) H IGH RISK INDIVIDUAL ; PAYMENT AMOUNTS .—The Sec- - retary shall include the following in the provisions under para- graph (1): ETERMINATION OF HIGH - RISK INDIVIDUALS .—The (A) D method by which individuals will be identified as high risk individuals for purposes of the reinsurance program estab- lished under this section. Such method shall provide for identification of individuals as high-risk individuals on the basis of— (i) a list of at least 50 but not more than 100 med- ical conditions that are identified as high-risk condi- tions and that may be based on the identification of di- agnostic and procedure codes that are indicative of in- dividuals with pre-existing, high-risk conditions; or (ii) any other comparable objective method of iden- tification recommended by the American Academy of Actuaries. (B) P AYMENT AMOUNT .— ø As revised by section 10104(r)(2) ¿ The formula for determining the amount of payments that will be paid to health insurance issuers de- scribed in paragraph (1)(B) that insure high-risk individ- uals. Such formula shall provide for the equitable alloca- tion of available funds through reconciliation and may be designed— (i) to provide a schedule of payments that specifies the amount that will be paid for each of the conditions identified under subparagraph (A); or (ii) to use any other comparable method for deter- mining payment amounts that is recommended by the American Academy of Actuaries and that encourages the use of care coordination and care management programs for high risk conditions. (3) D ETERMINATION OF REQUIRED CONTRIBUTIONS .— (A) I N GENERAL .—The Secretary shall include in the provisions under paragraph (1) the method for determining the amount each health insurance issuer and group health plan described in paragraph (1)(A) contributing to the rein- surance program under this section is required to con- tribute under such paragraph for each plan year beginning in the 36-month period beginning January 1, 2014. The contribution amount for any plan year may be based on the percentage of revenue of each issuer and the total costs of providing benefits to enrollees in self-insured plans or on a specified amount per enrollee and may be required to be paid in advance or periodically throughout the plan year. (B) S PECIFIC REQUIREMENTS .—The method under this paragraph shall be designed so that— (i) the contribution amount for each issuer propor- tionally reflects each issuer’s fully insured commercial June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00106 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

126 107 Sec. 1341 PPACA (Consolidated) book of business for all major medical products and the total value of all fees charged by the issuer and the costs of coverage administered by the issuer as a third party administrator; (ii) the contribution amount can include an addi- tional amount to fund the administrative expenses of the applicable reinsurance entity; (iii) the aggregate contribution amounts for all States shall, based on the best estimates of the NAIC and without regard to amounts described in clause (ii), equal $10,000,000,000 for plan years beginning in 2014, $6,000,000,000 for plan years beginning 2015, and $4,000,000,000 for plan years beginning in 2016; and (iv) in addition to the aggregate contribution amounts under clause (iii), each issuer’s contribution amount for any calendar year under clause (iii) re- flects its proportionate share of an additional $2,000,000,000 for 2014, an additional $2,000,000,000 for 2015, and an additional $1,000,000,000 for 2016. Nothing in this subparagraph shall be construed to pre- clude a State from collecting additional amounts from issuers on a voluntary basis. XPENDITURE OF FUNDS .—The provisions under para- (4) E graph (1) shall provide that— (A) the contribution amounts collected for any cal- endar year may be allocated and used in any of the three calendar years for which amounts are collected based on the reinsurance needs of a particular period or to reflect experience in a prior period; and (B) amounts remaining unexpended as of December, 2016, may be used to make payments under any reinsur- ance program of a State in the individual market in effect in the 2-year period beginning on January 1, 2017. Notwithstanding the preceding sentence, any contribution amounts described in paragraph (3)(B)(iv) shall be deposited into the general fund of the Treasury of the United States and may not be used for the program established under this sec- tion. PPLICABLE R .—For purposes of this E NTITY EINSURANCE (c) A section— (1) I N GENERAL .—The term ‘‘applicable reinsurance entity’’ means a not-for-profit organization— ø As revised by section 10104(r)(3) ¿ the purpose of (A) which is to help stabilize premiums for coverage in the in- dividual market in a State during the first 3 years of oper- ation of an Exchange for such markets within the State when the risk of adverse selection related to new rating rules and market changes is greatest; and (B) the duties of which shall be to carry out the rein- surance program under this section by coordinating the funding and operation of the risk-spreading mechanisms designed to implement the reinsurance program. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00107 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

127 108 Sec. 1342 PPACA (Consolidated) TATE DISCRETION .—A State may have more than 1 ap- (2) S plicable reinsurance entity to carry out the reinsurance pro- gram under this section within the State and 2 or more States may enter into agreements to provide for an applicable reinsur- ance entity to carry out such program in all such States. (3) E EXEMPT .—An applicable reinsurance NTITIES ARE TAX - entity established under this section shall be exempt from tax- ation under chapter 1 of the Internal Revenue Code of 1986. The preceding sentence shall not apply to the tax imposed by section 511 such Code (relating to tax on unrelated business taxable income of an exempt organization). (d) C W ITH OORDINATION TATE H IGH - RISK P OOLS .—The State S shall eliminate or modify any State high-risk pool to the extent necessary to carry out the reinsurance program established under this section. The State may coordinate the State high-risk pool with such program to the extent not inconsistent with the provisions of this section. SEC. 1342 42 U.S.C. 18062 ¿ . ESTABLISHMENT OF RISK CORRIDORS FOR ø PLANS IN INDIVIDUAL AND SMALL GROUP MARKETS. (a) I N G ENERAL .—The Secretary shall establish and administer a program of risk corridors for calendar years 2014, 2015, and 2016 under which a qualified health plan offered in the individual or small group market shall participate in a payment adjustment sys- tem based on the ratio of the allowable costs of the plan to the plan’s aggregate premiums. Such program shall be based on the program for regional participating provider organizations under part D of title XVIII of the Social Security Act. (b) P AYMENT M ETHODOLOGY .— (1) P .—The Secretary shall provide under the AYMENTS OUT program established under subsection (a) that if— (A) a participating plan’s allowable costs for any plan year are more than 103 percent but not more than 108 percent of the target amount, the Secretary shall pay to the plan an amount equal to 50 percent of the target amount in excess of 103 percent of the target amount; and (B) a participating plan’s allowable costs for any plan year are more than 108 percent of the target amount, the Secretary shall pay to the plan an amount equal to the sum of 2.5 percent of the target amount plus 80 percent of allowable costs in excess of 108 percent of the target amount. (2) P AYMENTS IN .—The Secretary shall provide under the program established under subsection (a) that if— (A) a participating plan’s allowable costs for any plan year are less than 97 percent but not less than 92 percent of the target amount, the plan shall pay to the Secretary an amount equal to 50 percent of the excess of 97 percent of the target amount over the allowable costs; and (B) a participating plan’s allowable costs for any plan year are less than 92 percent of the target amount, the plan shall pay to the Secretary an amount equal to the sum of 2.5 percent of the target amount plus 80 percent of the excess of 92 percent of the target amount over the allowable costs. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00108 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

128 109 Sec. 1343 PPACA (Consolidated) EFINITIONS .—In this section: (c) D .— (1) A LLOWABLE COSTS N GENERAL .—The amount of allowable costs of a (A) I plan for any year is an amount equal to the total costs (other than administrative costs) of the plan in providing benefits covered by the plan. (B) R - EDUCTION FOR RISK ADJUSTMENT AND REINSUR ANCE PAYMENTS .—Allowable costs shall reduced by any risk adjustment and reinsurance payments received under section 1341 and 1343. (2) T .—The target amount of a plan for any ARGET AMOUNT year is an amount equal to the total premiums (including any premium subsidies under any governmental program), reduced by the administrative costs of the plan. SEC. 1343 ø 42 U.S.C. 18063 ¿ . RISK ADJUSTMENT. (a) I G ENERAL .— N (1) L OW ACTUARIAL RISK PLANS .—Using the criteria and methods developed under subsection (b), each State shall as- sess a charge on health plans and health insurance issuers (with respect to health insurance coverage) described in sub- section (c) if the actuarial risk of the enrollees of such plans or coverage for a year is less than the average actuarial risk of all enrollees in all plans or coverage in such State for such year that are not self-insured group health plans (which are subject to the provisions of the Employee Retirement Income Security Act of 1974). IGH ACTUARIAL RISK PLANS .—Using the criteria and (2) H methods developed under subsection (b), each State shall pro- vide a payment to health plans and health insurance issuers (with respect to health insurance coverage) described in sub- section (c) if the actuarial risk of the enrollees of such plans or coverage for a year is greater than the average actuarial risk of all enrollees in all plans and coverage in such State for such year that are not self-insured group health plans (which are subject to the provisions of the Employee Retirement In- come Security Act of 1974). (b) C RITERIA AND M ETHODS .—The Secretary, in consultation with States, shall establish criteria and methods to be used in car- rying out the risk adjustment activities under this section. The Sec- retary may utilize criteria and methods similar to the criteria and methods utilized under part C or D of title XVIII of the Social Se- curity Act. Such criteria and methods shall be included in the standards and requirements the Secretary prescribes under section 1321. .—A health plan or a health insurance issuer is de- COPE (c) S scribed in this subsection if such health plan or health insurance issuer provides coverage in the individual or small group market within the State. This subsection shall not apply to a grand- fathered health plan or the issuer of a grandfathered health plan with respect to that plan. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00109 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

129 110 Sec. 1401 PPACA (Consolidated) Subtitle E—Affordable Coverage Choices for All Americans PART I—PREMIUM TAX CREDITS AND COST- SHARING REDUCTIONS Subpart A—Premium Tax Credits and Cost- sharing Reductions SEC. 1401. REFUNDABLE TAX CREDIT PROVIDING PREMIUM ASSIST- ANCE FOR COVERAGE UNDER A QUALIFIED HEALTH PLAN. G ENERAL (a) I N .—Subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to refund- able credits) is amended by inserting after section 36A the fol- lowing new section: ‘‘SEC. 36B. REFUNDABLE CREDIT FOR COVERAGE UNDER A QUALI- FIED HEALTH PLAN. N ‘‘(a) I ENERAL .—In the case of an applicable taxpayer, there G shall be allowed as a credit against the tax imposed by this subtitle for any taxable year an amount equal to the premium assistance credit amount of the taxpayer for the taxable year. REMIUM A SSISTANCE C REDIT .—For purposes of MOUNT A ‘‘(b) P this section— N GENERAL .—The term ‘premium assistance credit ‘‘(1) I amount’ means, with respect to any taxable year, the sum of the premium assistance amounts determined under paragraph (2) with respect to all coverage months of the taxpayer occur- ring during the taxable year. .—The premium assist- REMIUM ASSISTANCE AMOUNT ‘‘(2) P ance amount determined under this subsection with respect to any coverage month is the amount equal to the lesser of— ‘‘(A) the monthly premiums for such month for 1 or more qualified health plans offered in the individual mar- ket within a State which cover the taxpayer, the tax- payer’s spouse, or any dependent (as defined in section 152) of the taxpayer and which were enrolled in through an Exchange established by the State under 1311 of the Patient Protection and Affordable Care Act, or ‘‘(B) the excess (if any) of— ‘‘(i) the adjusted monthly premium for such month for the applicable second lowest cost silver plan with respect to the taxpayer, over ‘‘(ii) an amount equal to 1/12 of the product of the applicable percentage and the taxpayer’s household in- come for the taxable year. ‘‘(3) O - THER TERMS AND RULES RELATING TO PREMIUM AS SISTANCE AMOUNTS .—For purposes of paragraph (2)— ‘‘(A) A PPLICABLE PERCENTAGE .— ‘‘(i) I N GENERAL .— ø As revised by section 1001(a)(1)(A) of HCERA ¿ Except as provided in clause (ii), the applicable percentage for any taxable year June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00110 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

130 111 Sec. 1401 36B IRC PPACA (Consolidated) \ shall be the percentage such that the applicable per- centage for any taxpayer whose household income is within an income tier specified in the following table shall increase, on a sliding scale in a linear manner, from the initial premium percentage to the final pre- mium percentage specified in such table for such in- come tier: ‘‘In the case of household income (ex- The initial premium per- The final premium per- pressed as a percent of poverty line) centage is— centage is— within the following income tier: Up to 133% 2.0% 2.0% 3.0% 4.0% 133% up to 150% 4.0% 150% up to 200% 6.3% 6.3% 200% up to 250% 8.05% 250% up to 300% 8.05% 9.5% 9.5% 300% up to 400% 9.5% ‘‘(ii) I NDEXING .— ø As added by section 1001(a)(1)(B) of HCERA instead of clauses (ii) and (iii) previously here ¿ ‘‘(I) I N GENERAL .—Subject to subclause (II), in the case of taxable years beginning in any cal- endar year after 2014, the initial and final appli- cable percentages under clause (i) (as in effect for the preceding calendar year after application of this clause) shall be adjusted to reflect the excess of the rate of premium growth for the preceding calendar year over the rate of income growth for the preceding calendar year. ‘‘(II) A DDITIONAL .—Except as ADJUSTMENT provided in subclause (III), in the case of any cal- endar year after 2018, the percentages described in subclause (I) shall, in addition to the adjust- ment under subclause (I), be adjusted to reflect the excess (if any) of the rate of premium growth estimated under subclause (I) for the preceding calendar year over the rate of growth in the con- sumer price index for the preceding calendar year. ‘‘(III) F AILSAFE .—Subclause (II) shall apply for any calendar year only if the aggregate amount of premium tax credits under this section and cost- sharing reductions under section 1402 of the Pa- tient Protection and Affordable Care Act for the preceding calendar year exceeds an amount equal to 0.504 percent of the gross domestic product for the preceding calendar year. PPLICABLE SECOND LOWEST COST SILVER PLAN .— ‘‘(B) A The applicable second lowest cost silver plan with respect to any applicable taxpayer is the second lowest cost silver plan of the individual market in the rating area in which the taxpayer resides which— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00111 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

131 112 Sec. 1401 36B IRC PPACA (Consolidated) \ ‘‘(i) is offered through the same Exchange through which the qualified health plans taken into account under paragraph (2)(A) were offered, and ‘‘(ii) provides— ‘‘(I) self-only coverage in the case of an appli- cable taxpayer— ‘‘(aa) whose tax for the taxable year is de- termined under section 1(c) (relating to un- married individuals other than surviving spouses and heads of households) and who is not allowed a deduction under section 151 for the taxable year with respect to a dependent, or ‘‘(bb) who is not described in item (aa) but who purchases only self-only coverage, and ‘‘(II) family coverage in the case of any other applicable taxpayer. If a taxpayer files a joint return and no credit is allowed under this section with respect to 1 of the spouses by rea- son of subsection (e), the taxpayer shall be treated as de- scribed in clause (ii)(I) unless a deduction is allowed under section 151 for the taxable year with respect to a depend- ent other than either spouse and subsection (e) does not apply to the dependent. .—The adjusted DJUSTED MONTHLY PREMIUM ‘‘(C) A monthly premium for an applicable second lowest cost sil- ver plan is the monthly premium which would have been charged (for the rating area with respect to which the pre- miums under paragraph (2)(A) were determined) for the plan if each individual covered under a qualified health plan taken into account under paragraph (2)(A) were cov- ered by such silver plan and the premium was adjusted only for the age of each such individual in the manner al- lowed under section 2701 of the Public Health Service Act. In the case of a State participating in the wellness dis- count demonstration project under section 2705(d) of the Public Health Service Act, the adjusted monthly premium shall be determined without regard to any premium dis- count or rebate under such project. ‘‘(D) A DDITIONAL BENEFITS .—If— ‘‘(i) a qualified health plan under section 1302(b)(5) of the Patient Protection and Affordable Care Act offers benefits in addition to the essential health benefits required to be provided by the plan, or ‘‘(ii) a State requires a qualified health plan under section 1311(d)(3)(B) of such Act to cover benefits in addition to the essential health benefits required to be provided by the plan, the portion of the premium for the plan properly allocable (under rules prescribed by the Secretary of Health and Human Services) to such additional benefits shall not be taken into account in determining either the monthly pre- mium or the adjusted monthly premium under paragraph (2). June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00112 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

132 113 Sec. 1401 36B IRC PPACA (Consolidated) \ PECIAL RULE FOR PEDIATRIC DENTAL COVERAGE .— ‘‘(E) S For purposes of determining the amount of any monthly premium, if an individual enrolls in both a qualified health plan and a plan described in section 1311(d)(2)(B)(ii)(I) of the Patient Protection and Affordable Care Act for any plan year, the portion of the premium for the plan de- scribed in such section that (under regulations prescribed by the Secretary) is properly allocable to pediatric dental benefits which are included in the essential health benefits required to be provided by a qualified health plan under section 1302(b)(1)(J) of such Act shall be treated as a pre- mium payable for a qualified health plan. ‘‘(c) D R ULES R ELATING TO A PPLICABLE EFINITION AND AX - T PAYERS OVERAGE M ONTHS , AND Q UALIFIED , C EALTH P LAN .—For H purposes of this section— ‘‘(1) A PPLICABLE TAXPAYER .— ‘‘(A) I N GENERAL .— ø As revised by section 10105(b) ¿ The term ‘applicable taxpayer’ means, with respect to any taxable year, a taxpayer whose household income for the taxable year equals or exceeds 100 percent but does not ex- ceed 400 percent of an amount equal to the poverty line for a family of the size involved. ‘‘(B) S - PECIAL RULE FOR CERTAIN INDIVIDUALS LAW FULLY PRESENT IN THE UNITED STATES .—If— ‘‘(i) a taxpayer has a household income which is not greater than 100 percent of an amount equal to the poverty line for a family of the size involved, and ‘‘(ii) the taxpayer is an alien lawfully present in the United States, but is not eligible for the medicaid program under title XIX of the Social Security Act by reason of such alien status, the taxpayer shall, for purposes of the credit under this section, be treated as an applicable taxpayer with a house- hold income which is equal to 100 percent of the poverty line for a family of the size involved. ‘‘(C) M ARRIED COUPLES MUST FILE JOINT RETURN .—If the taxpayer is married (within the meaning of section 7703) at the close of the taxable year, the taxpayer shall be treated as an applicable taxpayer only if the taxpayer and the taxpayer’s spouse file a joint return for the taxable year. ‘‘(D) D ENIAL 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 allow- able to another taxpayer for a taxable year beginning in the calendar year in which such individual’s taxable year begins. ‘‘(2) C OVERAGE MONTH .—For purposes of this subsection— ‘‘(A) I N GENERAL .—The term ‘coverage month’ means, with respect to an applicable taxpayer, any month if— ‘‘(i) as of the first day of such month the taxpayer, the taxpayer’s spouse, or any dependent of the tax- payer is covered by a qualified health plan described in subsection (b)(2)(A) that was enrolled in through an June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00113 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

133 114 Sec. 1401 36B IRC PPACA (Consolidated) \ Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act, and ‘‘(ii) the premium for coverage under such plan for such month is paid by the taxpayer (or through ad- vance payment of the credit under subsection (a) under section 1412 of the Patient Protection and Af- fordable Care Act). ‘‘(B) E XCEPTION FOR MINIMUM ESSENTIAL COVERAGE .— ‘‘(i) I N GENERAL .—The term ‘coverage month’ shall not include any month with respect to an individual if for such month the individual is eligible for minimum essential coverage other than eligibility for coverage described in section 5000A(f)(1)(C) (relating to cov- erage in the individual market). ‘‘(ii) M INIMUM ESSENTIAL COVERAGE .—The term ‘minimum essential coverage’ has the meaning given such term by section 5000A(f). ‘‘(C) S PECIAL RULE FOR EMPLOYER - SPONSORED MINIMUM COVERAGE .—For purposes of subparagraph ESSENTIAL (B)— ‘‘(i) C OVERAGE MUST BE AFFORDABLE .—Except as provided in clause (iii), an employee shall not be treat- ed as eligible for minimum essential coverage if such coverage— ‘‘(I) consists of an eligible employer-sponsored plan (as defined in section 5000A(f)(2)), and ‘‘(II) the employee’s required contribution (within the meaning of section 5000A(e)(1)(B)) with respect to the plan exceeds 9.5 percent of the applicable taxpayer’s household income. As re- ø vised by section 1001(a)(2)(A) of HCERA ¿ This clause shall also apply to an individual who is eli- gible to enroll in the plan by reason of a relationship the individual bears to the employee. ‘‘(ii) C .— OVERAGE MUST PROVIDE MINIMUM VALUE Except as provided in clause (iii), an employee shall not be treated as eligible for minimum essential cov- erage if such coverage consists of an eligible employer- sponsored plan (as defined in section 5000A(f)(2)) and the plan’s share of the total allowed costs of benefits provided under the plan is less than 60 percent of such costs. ‘‘(iii) E MPLOYEE OR FAMILY MUST NOT BE COVERED UNDER EMPLOYER PLAN .—Clauses (i) and (ii) shall not apply if the employee (or any individual described in the last sentence of clause (i)) is covered under the eli- gible employer-sponsored plan or the grandfathered health plan. ‘‘(iv) I NDEXING .— ø As revised by section 10105(c) and sections 1001(a)(2)(A) and (B) of HCERA ¿ In the case of plan years beginning in any calendar year after 2014, the Secretary shall adjust the 9.5 percent under clause (i)(II) in the same manner as the percentages are adjusted under subsection (b)(3)(A)(ii). June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00114 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

134 115 Sec. 1401 36B IRC PPACA (Consolidated) \ XCEPTION FOR RECEIVING FREE ‘‘(D) E INDIVIDUAL ø .— CHOICE VOUCHERS As added by section 10107(h)(1), ef- fective for taxable year beginning after December 31, 2013 ¿ The term ‘coverage month’ shall not include any month in which such individual has a free choice voucher provided under section 10108 of the Patient Protection and Afford- able Care Act. ‘‘(3) D EFINITIONS AND OTHER RULES .— ‘‘(A) Q .—The term ‘qualified UALIFIED HEALTH PLAN health plan’ has the meaning given such term by section 1301(a) of the Patient Protection and Affordable Care Act, except that such term shall not include a qualified health plan which is a catastrophic plan described in section 1302(e) of such Act. ‘‘(B) G RANDFATHERED HEALTH PLAN .—The term ‘grand- fathered health plan’ has the meaning given such term by section 1251 of the Patient Protection and Affordable Care Act. ‘‘(d) T R ERMS I NCOME AND F AMILIES .—For purposes ELATING TO of this section— ‘‘(1) F AMILY SIZE .—The family size involved with respect to any taxpayer shall be equal to the number of individuals for whom the taxpayer is allowed a deduction under section 151 (relating to allowance of deduction for personal exemptions) for the taxable year. OUSEHOLD INCOME .— ‘‘(2) H .—The term ‘household in- OUSEHOLD INCOME ‘‘(A) H come’ means, with respect to any taxpayer, an amount equal to the sum of— ø Clauses (i) and (ii) revised by section 1004(a)(1)(A) of HCERA ¿ ‘‘(i) the modified adjusted gross income of the tax- payer, plus ‘‘(ii) the aggregate modified adjusted gross in- comes of all other individuals who— ‘‘(I) were taken into account in determining the taxpayer’s family size under paragraph (1), and ‘‘(II) were required to file a return of tax im- posed by section 1 for the taxable year. ‘‘(B) M ODIFIED ADJUSTED GROSS INCOME .— ø Replaced by section 1004(a)(2) of HCERA The term ‘modified ad- ¿ justed gross income’ means adjusted gross income in- creased by— ‘‘(i) any amount excluded from gross income under section 911, and ‘‘(ii) any amount of interest received or accrued by the taxpayer during the taxable year which is exempt from tax. ‘‘(3) P OVERTY LINE .— .—The term ‘poverty line’ has the N GENERAL ‘‘(A) I meaning given that term in section 2110(c)(5) of the Social Security Act (42 U.S.C. 1397jj(c)(5)). ‘‘(B) P OVERTY LINE USED .—In the case of any qualified health plan offered through an Exchange for coverage dur- June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00115 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

135 116 Sec. 1401 36B IRC PPACA (Consolidated) \ ing a taxable year beginning in a calendar year, the pov- erty line used shall be the most recently published poverty line as of the 1st day of the regular enrollment period for coverage during such calendar year. ‘‘(e) R P N OT L ULES FOR I RESENT .— NDIVIDUALS AWFULLY N GENERAL .—If 1 or more individuals for whom a tax- ‘‘(1) I payer is allowed a deduction under section 151 (relating to al- lowance of deduction for personal exemptions) for the taxable year (including the taxpayer or his spouse) are individuals who are not lawfully present— ‘‘(A) the aggregate amount of premiums otherwise taken into account under clauses (i) and (ii) of subsection (b)(2)(A) shall be reduced by the portion (if any) of such premiums which is attributable to such individuals, and ‘‘(B) for purposes of applying this section, the deter- mination as to what percentage a taxpayer’s household in- come bears to the poverty level for a family of the size in- volved shall be made under one of the following methods: ‘‘(i) A method under which— ‘‘(I) the taxpayer’s family size is determined by not taking such individuals into account, and ‘‘(II) the taxpayer’s household income is equal to the product of the taxpayer’s household income (determined without regard to this subsection) and a fraction— ‘‘(aa) the numerator of which is the pov- erty line for the taxpayer’s family size deter- mined after application of subclause (I), and ‘‘(bb) the denominator of which is the pov- erty line for the taxpayer’s family size deter- mined without regard to subclause (I). ‘‘(ii) A comparable method reaching the same re- sult as the method under clause (i). AWFULLY PRESENT ‘‘(2) L .—For purposes of this section, an individual shall be treated as lawfully present only if the indi- vidual is, and is reasonably expected to be for the entire period of enrollment for which the credit under this section is being claimed, a citizen or national of the United States or an alien lawfully present in the United States. ECRETARIAL AUTHORITY .—The Secretary of Health ‘‘(3) S and Human Services, in consultation with the Secretary, shall prescribe rules setting forth the methods by which calculations of family size and household income are made for purposes of this subsection. Such rules shall be designed to ensure that the least burden is placed on individuals enrolling in qualified health plans through an Exchange and taxpayers eligible for the credit allowable under this section. ‘‘(f) R C REDIT AND A DVANCE C REDIT .— ECONCILIATION OF ‘‘(1) I N GENERAL .—The amount of the credit allowed under this section for any taxable year shall be reduced (but not below zero) by the amount of any advance payment of such credit under section 1412 of the Patient Protection and Afford- able Care Act. ‘‘(2) E XCESS ADVANCE PAYMENTS .— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00116 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

136 117 Sec. 1401 36B IRC PPACA (Consolidated) \ N GENERAL .—If the advance payments to a tax- ‘‘(A) I payer under section 1412 of the Patient Protection and Af- fordable Care Act for a taxable year exceed the credit al- lowed by this section (determined without regard to para- graph (1)), the tax imposed by this chapter for the taxable year shall be increased by the amount of such excess. IMITATION ON INCREASE WHERE INCOME LESS ‘‘(B) L THAN 400 PERCENT OF POVERTY LINE .— N GENERAL .—In the case of an applicable tax- ‘‘(i) I payer whose household income is less than 400 per- cent of the poverty line for the size of the family in- volved for the taxable year, the amount of the increase under subparagraph (A) shall in no event exceed $400 ($250 in the case of a taxpayer whose tax is deter- mined under section 1(c) for the taxable year). NDEXING OF AMOUNT .—In the case of any cal- ‘‘(ii) I endar year beginning after 2014, each of the dollar amounts under clause (i) shall be increased by an amount equal to— ‘‘(I) such dollar amount, multiplied by ‘‘(II) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year, deter- mined by substituting ‘calendar year 2013’ for ‘cal- endar year 1992’ in subparagraph (B) thereof. ‘‘(3) I NFORMATION REQUIREMENT .— As revised by section ø ¿ 1004(c) of HCERA Each Exchange (or any person carrying out 1 or more responsibilities of an Exchange under section 1311(f)(3) or 1321(c) of the Patient Protection and Affordable Care Act) shall provide the following information to the Sec- retary and to the taxpayer with respect to any health plan pro- vided through the Exchange: ‘‘(A) The level of coverage described in section 1302(d) of the Patient Protection and Affordable Care Act and the period such coverage was in effect. ‘‘(B) The total premium for the coverage without re- gard to the credit under this section or cost-sharing reduc- tions under section 1402 of such Act. ‘‘(C) The aggregate amount of any advance payment of such credit or reductions under section 1412 of such Act. ‘‘(D) The name, address, and TIN of the primary in- sured and the name and TIN of each other individual ob- taining coverage under the policy. ‘‘(E) Any information provided to the Exchange, in- cluding any change of circumstances, necessary to deter- mine eligibility for, and the amount of, such credit. ‘‘(F) Information necessary to determine whether a taxpayer has received excess advance payments. If the amount of any increase under clause (i) is not a multiple of $50, such increase shall be rounded to the next lowest multiple of $50. EGULATIONS .—The Secretary shall prescribe such regula- ‘‘(g) R tions as may be necessary to carry out the provisions of this sec- tion, including regulations which provide for— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00117 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

137 118 Sec. 1401 PPACA (Consolidated) ‘‘(1) the coordination of the credit allowed under this sec- tion with the program for advance payment of the credit under section 1412 of the Patient Protection and Affordable Care Act, and ‘‘(2) the application of subsection (f) where the filing status of the taxpayer for a taxable year is different from such status used for determining the advance payment of the credit.’’. (b) D EDUCTION ISALLOWANCE OF D .—Section 280C of the Inter- nal Revenue Code of 1986 is amended by adding at the end the fol- lowing new subsection: ‘‘(g) C H EALTH I NSURANCE P REDIT FOR .—No deduction REMIUMS shall be allowed for the portion of the premiums paid by the tax- payer for coverage of 1 or more individuals under a qualified health plan which is equal to the amount of the credit determined for the taxable year under section 36B(a) with respect to such premiums.’’. (c) S A FFORDABLE C OVERAGE TUDY ON .— (1) S TUDY AND REPORT .— (A) I N GENERAL .—Not later than 5 years after the date of the enactment of this Act, the Comptroller General shall conduct a study on the affordability of health insurance coverage, including— (i) the impact of the tax credit for qualified health insurance coverage of individuals under section 36B of the Internal Revenue Code of 1986 and the tax credit for employee health insurance expenses of small em- ployers under section 45R of such Code on maintain- ing and expanding the health insurance coverage of in- dividuals; (ii) the availability of affordable health benefits plans, including a study of whether the percentage of household income used for purposes of section 36B(c)(2)(C) of the Internal Revenue Code of 1986 (as added by this section) is the appropriate level for de- termining whether employer-provided coverage is af- fordable for an employee and whether such level may be lowered without significantly increasing the costs to the Federal Government and reducing employer-pro- vided coverage; and (iii) the ability of individuals to maintain essential health benefits coverage (as defined in section 5000A(f) of the Internal Revenue Code of 1986). (B) R EPORT .—The Comptroller General shall submit to the appropriate committees of Congress a report on the study conducted under subparagraph (A), together with legislative recommendations relating to the matters stud- ied under such subparagraph. PPROPRIATE COMMITTEES OF CONGRESS .—In this sub- (2) A section, the term ‘‘appropriate committees of Congress’’ means the Committee on Ways and Means, the Committee on Edu- cation and Labor, and the Committee on Energy and Com- merce of the House of Representatives and the Committee on Finance and the Committee on Health, Education, Labor and Pensions of the Senate. (d) C ONFORMING A MENDMENTS .— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00118 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

138 119 Sec. 1402 PPACA (Consolidated) (1) Paragraph (2) of section 1324(b) of title 31, United States Code, is amended by inserting ‘‘36B,’’ after ‘‘36A,’’. (2) The table of sections for subpart C of part IV of sub- chapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 36A the following new item: ‘‘Sec. 36B. Refundable credit for coverage under a qualified health plan.’’. (3) ø As revised by section 10105(d) ¿ Section 6211(b)(4)(A) of the Internal Revenue Code of 1986 is amended by inserting ‘‘36B,’’ after ‘‘36A,’’. FFECTIVE D ATE .—The amendments made by this section (e) E shall apply to taxable years ending after December 31, 2013. ø 42 U.S.C. 18071 ¿ SEC. 1402 . REDUCED COST-SHARING FOR INDIVID- UALS ENROLLING IN QUALIFIED HEALTH PLANS. N ENERAL .—In the case of an eligible insured enrolled in (a) I G a qualified health plan— (1) the Secretary shall notify the issuer of the plan of such eligibility; and (2) the issuer shall reduce the cost-sharing under the plan at the level and in the manner specified in subsection (c). (b) E I NSURED .—In this section, the term ‘‘eligible in- LIGIBLE sured’’ means an individual— (1) who enrolls in a qualified health plan in the silver level of coverage in the individual market offered through an Ex- change; and (2) whose household income exceeds 100 percent but does not exceed 400 percent of the poverty line for a family of the size involved. In the case of an individual described in section 36B(c)(1)(B) of the Internal Revenue Code of 1986, the individual shall be treated as having household income equal to 100 percent for purposes of ap- plying this section. ETERMINATION OF R EDUCTION IN C OST - SHARING .— (c) D EDUCTION IN OUT (1) R - OF - POCKET LIMIT .— (A) I N GENERAL .—The reduction in cost-sharing under this subsection shall first be achieved by reducing the ap- plicable out-of pocket limit under section 1302(c)(1) in the case of— (i) an eligible insured whose household income is more than 100 percent but not more than 200 percent of the poverty line for a family of the size involved, by two-thirds; (ii) an eligible insured whose household income is more than 200 percent but not more than 300 percent of the poverty line for a family of the size involved, by one-half; and (iii) an eligible insured whose household income is more than 300 percent but not more than 400 percent of the poverty line for a family of the size involved, by one-third. OORDINATION WITH ACTUARIAL VALUE LIMITS .— (B) C (i) I N GENERAL .—The Secretary shall ensure the reduction under this paragraph shall not result in an June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00119 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

139 120 Sec. 1402 PPACA (Consolidated) increase in the plan’s share of the total allowed costs of benefits provided under the plan above— (I) 94 percent in the case of an eligible in- As revised sured described in paragraph (2)(A); ø ¿ by section 1001(b)(1)(A) of HCERA (II) 87 percent in the case of an eligible in- sured described in paragraph (2)(B); ø section 1001(a)(1)(C) of HCERA struck subclause (III) and in- serted new subclauses (III) and (IV) ¿ (III) 73 percent in the case of an eligible in- sured whose household income is more than 200 percent but not more than 250 percent of the pov- erty line for a family of the size involved; and (IV) 70 percent in the case of an eligible in- sured whose household income is more than 250 percent but not more than 400 percent of the pov- erty line for a family of the size involved. (ii) A .—The Secretary shall adjust the DJUSTMENT out-of pocket limits under paragraph (1) if necessary to ensure that such limits do not cause the respective actuarial values to exceed the levels specified in clause (i). (2) A REDUCTION FOR DDITIONAL INCOME IN - LOWER SUREDS .—The Secretary shall establish procedures under which the issuer of a qualified health plan to which this sec- tion applies shall further reduce cost-sharing under the plan in a manner sufficient to— (A) in the case of an eligible insured whose household income is not less than 100 percent but not more than 150 percent of the poverty line for a family of the size involved, increase the plan’s share of the total allowed costs of bene- fits provided under the plan to 94 percent of such costs; ø As revised by section 1001(a)(2)(A) of HCERA ¿ (B) in the case of an eligible insured whose household income is more than 150 percent but not more than 200 percent of the poverty line for a family of the size involved, increase the plan’s share of the total allowed costs of bene- fits provided under the plan to 87 percent of such costs; ø As revised by section 1001(a)(2)(B) of HCERA ¿ and (C) in the case of an eligible insured whose household income is more than 200 percent but not more than 250 percent of the poverty line for a family of the size involved, increase the plan’s share of the total allowed costs of bene- fits provided under the plan to 73 percent of such costs. ø As added by section 1001(a)(2)(C) of HCERA ¿ (3) M - SHARING .— ETHODS FOR REDUCING COST N GENERAL .—An issuer of a qualified health plan (A) I making reductions under this subsection shall notify the Secretary of such reductions and the Secretary shall make periodic and timely payments to the issuer equal to the value of the reductions. (B) C APITATED PAYMENTS .—The Secretary may estab- lish a capitated payment system to carry out the payment of cost-sharing reductions under this section. Any such sys- June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00120 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

140 121 Sec. 1402 PPACA (Consolidated) tem shall take into account the value of the reductions and make appropriate risk adjustments to such payments. (4) A DDITIONAL BENEFITS .—If a qualified health plan under section 1302(b)(5) offers benefits in addition to the essential health benefits required to be provided by the plan, or a State requires a qualified health plan under section 1311(d)(3)(B) to cover benefits in addition to the essential health benefits re- quired to be provided by the plan, the reductions in cost-shar- ing under this section shall not apply to such additional bene- fits. (5) S .—If an in- PECIAL RULE FOR PEDIATRIC DENTAL PLANS dividual enrolls in both a qualified health plan and a plan de- scribed in section 1311(d)(2)(B)(ii)(I) for any plan year, sub- section (a) shall not apply to that portion of any reduction in cost-sharing under subsection (c) that (under regulations pre- scribed by the Secretary) is properly allocable to pediatric den- tal benefits which are included in the essential health benefits required to be provided by a qualified health plan under sec- tion 1302(b)(1)(J). (d) S R ULES FOR I NDIANS .— PECIAL NDIANS UNDER 300 PERCENT OF POVERTY (1) I .—If an indi- vidual enrolled in any qualified health plan in the individual market through an Exchange is an Indian (as defined in sec- tion 4(d) of the Indian Self-Determination and Education As- sistance Act (25 U.S.C. 450b(d))) whose household income is not more than 300 percent of the poverty line for a family of the size involved, then, for purposes of this section— (A) such individual shall be treated as an eligible in- sured; and (B) the issuer of the plan shall eliminate any cost- sharing under the plan. TEMS OR SERVICES FURNISHED THROUGH INDIAN (2) I HEALTH PROVIDERS .—If an Indian (as so defined) enrolled in a qualified health plan is furnished an item or service directly by the Indian Health Service, an Indian Tribe, Tribal Organiza- tion, or Urban Indian Organization or through referral under contract health services— (A) no cost-sharing under the plan shall be imposed under the plan for such item or service; and (B) the issuer of the plan shall not reduce the payment to any such entity for such item or service by the amount of any cost-sharing that would be due from the Indian but for subparagraph (A). (3) P AYMENT .—The Secretary shall pay to the issuer of a qualified health plan the amount necessary to reflect the in- crease in actuarial value of the plan required by reason of this subsection. (e) R ULES FOR I NDIVIDUALS N OT L AWFULLY P RESENT .— (1) I N GENERAL .—If an individual who is an eligible in- sured is not lawfully present— (A) no cost-sharing reduction under this section shall apply with respect to the individual; and (B) for purposes of applying this section, the deter- mination as to what percentage a taxpayer’s household in- June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00121 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

141 122 Sec. 1402 PPACA (Consolidated) come bears to the poverty level for a family of the size in- volved shall be made under one of the following methods: (i) A method under which— (I) the taxpayer’s family size is determined by not taking such individuals into account, and (II) the taxpayer’s household income is equal to the product of the taxpayer’s household income (determined without regard to this subsection) and a fraction— (aa) the numerator of which is the pov- erty line for the taxpayer’s family size deter- mined after application of subclause (I), and (bb) the denominator of which is the pov- erty line for the taxpayer’s family size deter- mined without regard to subclause (I). (ii) A comparable method reaching the same result as the method under clause (i). AWFULLY PRESENT .—For purposes of this section, an (2) L individual shall be treated as lawfully present only if the indi- vidual is, and is reasonably expected to be for the entire period of enrollment for which the cost-sharing reduction under this section is being claimed, a citizen or national of the United States or an alien lawfully present in the United States. ECRETARIAL AUTHORITY .—The Secretary, in consulta- (3) S tion with the Secretary of the Treasury, shall prescribe rules setting forth the methods by which calculations of family size and household income are made for purposes of this sub- section. Such rules shall be designed to ensure that the least burden is placed on individuals enrolling in qualified health plans through an Exchange and taxpayers eligible for the cred- it allowable under this section. (f) D S PECIAL R ULES EFINITIONS AND .—In this section: (1) I N GENERAL .—Any term used in this section which is also used in section 36B of the Internal Revenue Code of 1986 shall have the meaning given such term by such section. (2) L IMITATIONS ON REDUCTION .—No cost-sharing reduction shall be allowed under this section with respect to coverage for any month unless the month is a coverage month with respect to which a credit is allowed to the insured (or an applicable taxpayer on behalf of the insured) under section 36B of such Code. (3) D ATA USED FOR ELIGIBILITY .—Any determination under this section shall be made on the basis of the taxable year for which the advance determination is made under section 1412 and not the taxable year for which the credit under section 36B of such Code is allowed. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00122 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

142 123 Sec. 1411 PPACA (Consolidated) Subpart B—Eligibility Determinations SEC. 1411 ¿ . PROCEDURES FOR DETERMINING ELIGI- ø 42 U.S.C. 18081 BILITY FOR EXCHANGE PARTICIPATION, PREMIUM TAX CREDITS AND REDUCED COST-SHARING, AND INDIVIDUAL RESPONSIBILITY EXEMPTIONS. P ROGRAM .—The Secretary shall estab- (a) E STABLISHMENT OF lish a program meeting the requirements of this section for deter- mining— (1) whether an individual who is to be covered in the indi- vidual market by a qualified health plan offered through an Exchange, or who is claiming a premium tax credit or reduced cost-sharing, meets the requirements of sections 1312(f)(3), 1402(e), and 1412(d) of this title and section 36B(e) of the In- ternal Revenue Code of 1986 that the individual be a citizen or national of the United States or an alien lawfully present in the United States; (2) in the case of an individual claiming a premium tax credit or reduced cost-sharing under section 36B of such Code or section 1402— (A) whether the individual meets the income and cov- erage requirements of such sections; and (B) the amount of the tax credit or reduced cost-shar- ing; (3) whether an individual’s coverage under an employer- sponsored health benefits plan is treated as unaffordable under sections 36B(c)(2)(C) and 5000A(e)(2); and (4) whether to grant a certification under section 1311(d)(4)(H) attesting that, for purposes of the individual re- sponsibility requirement under section 5000A of the Internal Revenue Code of 1986, an individual is entitled to an exemp- tion from either the individual responsibility requirement or the penalty imposed by such section. NFORMATION R EQUIRED T O B E P ROVIDED BY A PPLICANTS .— (b) I (1) I N GENERAL .—An applicant for enrollment in a quali- fied health plan offered through an Exchange in the individual market shall provide— (A) the name, address, and date of birth of each indi- vidual who is to be covered by the plan (in this subsection referred to as an ‘‘enrollee’’); and (B) the information required by any of the following paragraphs that is applicable to an enrollee. (2) C ITIZENSHIP OR IMMIGRATION STATUS .—The following information shall be provided with respect to every enrollee: (A) In the case of an enrollee whose eligibility is based on an attestation of citizenship of the enrollee, the enroll- ee’s social security number. (B) In the case of an individual whose eligibility is based on an attestation of the enrollee’s immigration sta- tus, the enrollee’s social security number (if applicable) and such identifying information with respect to the en- rollee’s immigration status as the Secretary, after con- sultation with the Secretary of Homeland Security, deter- mines appropriate. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00123 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

143 124 Sec. 1411 PPACA (Consolidated) LIGIBILITY AND AMOUNT OF TAX CREDIT OR REDUCED (3) E SHARING COST - .—In the case of an enrollee with respect to whom a premium tax credit or reduced cost-sharing under sec- tion 36B of such Code or section 1402 is being claimed, the fol- lowing information: (A) I NFORMATION REGARDING INCOME AND FAMILY SIZE .—The information described in section 6103(l)(21) for the taxable year ending with or within the second calendar year preceding the calendar year in which the plan year begins. (B) C HANGES IN CIRCUMSTANCES .—The information de- scribed in section 1412(b)(2), including information with respect to individuals who were not required to file an in- come tax return for the taxable year described in subpara- graph (A) or individuals who experienced changes in mar- ital status or family size or significant reductions in in- come. (4) E MPLOYER SPONSORED COVERAGE .—In the case of an - enrollee with respect to whom eligibility for a premium tax credit under section 36B of such Code or cost-sharing reduction under section 1402 is being established on the basis that the enrollee’s (or related individual’s) employer is not treated under section 36B(c)(2)(C) of such Code as providing minimum essential coverage or affordable minimum essential coverage, the following information: (A) The name, address, and employer identification number (if available) of the employer. (B) Whether the enrollee or individual is a full-time employee and whether the employer provides such min- imum essential coverage. (C) If the employer provides such minimum essential coverage, the lowest cost option for the enrollee’s or indi- vidual’s enrollment status and the enrollee’s or individual’s required contribution (within the meaning of section 5000A(e)(1)(B) of such Code) under the employer-sponsored plan. (D) If an enrollee claims an employer’s minimum es- sential coverage is unaffordable, the information described in paragraph (3). If an enrollee changes employment or obtains additional em- ployment while enrolled in a qualified health plan for which such credit or reduction is allowed, the enrollee shall notify the Exchange of such change or additional employment and pro- vide the information described in this paragraph with respect to the new employer. (5) E XEMPTIONS FROM INDIVIDUAL RESPONSIBILITY REQUIRE - MENTS .—In the case of an individual who is seeking an exemp- tion certificate under section 1311(d)(4)(H) from any require- ment or penalty imposed by section 5000A, the following infor- mation: (A) In the case of an individual seeking exemption based on the individual’s status as a member of an exempt religious sect or division, as a member of a health care sharing ministry, as an Indian, or as an individual eligible June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00124 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

144 125 Sec. 1411 PPACA (Consolidated) for a hardship exemption, such information as the Sec- retary shall prescribe. (B) In the case of an individual seeking exemption based on the lack of affordable coverage or the individual’s status as a taxpayer with household income less than 100 percent of the poverty line, the information described in paragraphs (3) and (4), as applicable. I NFORMATION ERIFICATION OF ONTAINED IN R ECORDS OF C (c) V PECIFIC F EDERAL O S .— FFICIALS .—An Ex- NFORMATION TRANSFERRED TO SECRETARY (1) I change shall submit the information provided by an applicant under subsection (b) to the Secretary for verification in accord- ance with the requirements of this subsection and subsection (d). ITIZENSHIP OR IMMIGRATION STATUS .— (2) C (A) C .—The Sec- OMMISSIONER OF SOCIAL SECURITY retary shall submit to the Commissioner of Social Security the following information for a determination as to wheth- er the information provided is consistent with the informa- tion in the records of the Commissioner: (i) The name, date of birth, and social security number of each individual for whom such information was provided under subsection (b)(2). (ii) The attestation of an individual that the indi- vidual is a citizen. (B) S ECRETARY OF HOMELAND SECURITY .— .—In the case of an individual— (i) I N GENERAL (I) who attests that the individual is an alien lawfully present in the United States; or (II) who attests that the individual is a citizen but with respect to whom the Commissioner of So- cial Security has notified the Secretary under sub- section (e)(3) that the attestation is inconsistent with information in the records maintained by the Commissioner; the Secretary shall submit to the Secretary of Home- land Security the information described in clause (ii) for a determination as to whether the information pro- vided is consistent with the information in the records of the Secretary of Homeland Security. NFORMATION .—The information described in (ii) I clause (ii) is the following: (I) The name, date of birth, and any identi- fying information with respect to the individual’s immigration status provided under subsection (b)(2). (II) The attestation that the individual is an alien lawfully present in the United States or in the case of an individual described in clause (i)(II), the attestation that the individual is a citizen. (3) E LIGIBILITY FOR TAX CREDIT AND COST - SHARING REDUC - TION .—The Secretary shall submit the information described in subsection (b)(3)(A) provided under paragraph (3), (4), or (5) of June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00125 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

145 126 Sec. 1411 PPACA (Consolidated) subsection (b) to the Secretary of the Treasury for verification of household income and family size for purposes of eligibility. .— ETHODS (4) M (A) I .—The Secretary, in consultation with N GENERAL the Secretary of the Treasury, the Secretary of Homeland Security, and the Commissioner of Social Security, shall provide that verifications and determinations under this subsection shall be done— (i) through use of an on-line system or otherwise for the electronic submission of, and response to, the information submitted under this subsection with re- spect to an applicant; or (ii) by determining the consistency of the informa- tion submitted with the information maintained in the records of the Secretary of the Treasury, the Secretary of Homeland Security, or the Commissioner of Social Security through such other method as is approved by the Secretary. .—The Secretary may modify the meth- LEXIBILITY (B) F ods used under the program established by this section for the Exchange and verification of information if the Sec- retary determines such modifications would reduce the ad- ministrative costs and burdens on the applicant, including allowing an applicant to request the Secretary of the Treasury to provide the information described in para- graph (3) directly to the Exchange or to the Secretary. The Secretary shall not make any such modification unless the Secretary determines that any applicable requirements under this section and section 6103 of the Internal Rev- enue Code of 1986 with respect to the confidentiality, dis- closure, maintenance, or use of information will be met. .—In the case of information ERIFICATION BY S ECRETARY (d) V provided under subsection (b) that is not required under subsection (c) to be submitted to another person for verification, the Secretary shall verify the accuracy of such information in such manner as the Secretary determines appropriate, including delegating responsi- bility for verification to the Exchange. (e) A R ELATING TO V CTIONS .— ERIFICATION N GENERAL .—Each person to whom the Secretary pro- (1) I vided information under subsection (c) shall report to the Sec- retary under the method established under subsection (c)(4) the results of its verification and the Secretary shall notify the Exchange of such results. Each person to whom the Secretary provided information under subsection (d) shall report to the Secretary in such manner as the Secretary determines appro- priate. ERIFICATION .— (2) V (A) E LIGIBILITY FOR ENROLLMENT AND PREMIUM TAX CREDITS AND COST - SHARING REDUCTIONS .—If information provided by an applicant under paragraphs (1), (2), (3), and (4) of subsection (b) is verified under subsections (c) and (d)— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00126 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

146 127 Sec. 1411 PPACA (Consolidated) (i) the individual’s eligibility to enroll through the Exchange and to apply for premium tax credits and cost-sharing reductions shall be satisfied; and (ii) the Secretary shall, if applicable, notify the Secretary of the Treasury under section 1412(c) of the amount of any advance payment to be made. (B) E XEMPTION FROM INDIVIDUAL RESPONSIBILITY .—If information provided by an applicant under subsection (b)(5) is verified under subsections (c) and (d), the Sec- retary shall issue the certification of exemption described in section 1311(d)(4)(H). (3) I NCONSISTENCIES INVOLVING ATTESTATION OF CITIZEN - .—If the information provided by SHIP OR LAWFUL PRESENCE any applicant under subsection (b)(2) is inconsistent with infor- mation in the records maintained by the Commissioner of So- cial Security or Secretary of Homeland Security, whichever is applicable, the applicant’s eligibility will be determined in the same manner as an individual’s eligibility under the medicaid program is determined under section 1902(ee) of the Social Se- curity Act (as in effect on January 1, 2010). (4) I NCONSISTENCIES INVOLVING OTHER INFORMATION .— (A) I .—If the information provided by an N GENERAL applicant under subsection (b) (other than subsection (b)(2)) is inconsistent with information in the records maintained by persons under subsection (c) or is not verified under subsection (d), the Secretary shall notify the Exchange and the Exchange shall take the following ac- tions: EASONABLE .—The Exchange shall EFFORT (i) R make a reasonable effort to identify and address the causes of such inconsistency, including through typo- graphical or other clerical errors, by contacting the ap- plicant to confirm the accuracy of the information, and by taking such additional actions as the Secretary, through regulation or other guidance, may identify. (ii) N OTICE AND OPPORTUNITY TO CORRECT .—In the case the inconsistency or inability to verify is not re- solved under subparagraph (A), the Exchange shall— (I) notify the applicant of such fact; (II) provide the applicant an opportunity to ei- ther present satisfactory documentary evidence or resolve the inconsistency with the person verifying the information under subsection (c) or (d) during the 90-day period beginning the date on which the notice required under subclause (I) is sent to the applicant. The Secretary may extend the 90-day period under subclause (II) for enrollments occurring during 2014. (B) S PECIFIC ACTIONS NOT INVOLVING CITIZENSHIP OR LAWFUL PRESENCE .— (i) I N GENERAL .—Except as provided in paragraph (3), the Exchange shall, during any period before the close of the period under subparagraph (A)(ii)(II), make any determination under paragraphs (2), (3), June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00127 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

147 128 Sec. 1411 PPACA (Consolidated) and (4) of subsection (a) on the basis of the informa- tion contained on the application. - LIGIBILITY OR AMOUNT OF CREDIT OR REDUC (ii) E .—If an inconsistency involving the eligibility for, TION or amount of, any premium tax credit or cost-sharing reduction is unresolved under this subsection as of the close of the period under subparagraph (A)(ii)(II), the Exchange shall notify the applicant of the amount (if any) of the credit or reduction that is determined on the basis of the records maintained by persons under subsection (c). MPLOYER AFFORDABILITY .—If the Secretary (iii) E notifies an Exchange that an enrollee is eligible for a premium tax credit under section 36B of such Code or cost-sharing reduction under section 1402 because the enrollee’s (or related individual’s) employer does not provide minimum essential coverage through an em- ployer-sponsored plan or that the employer does pro- vide that coverage but it is not affordable coverage, the Exchange shall notify the employer of such fact and that the employer may be liable for the payment assessed under section 4980H of such Code. (iv) E .—In any case where the inconsist- XEMPTION ency involving, or inability to verify, information pro- vided under subsection (b)(5) is not resolved as of the close of the period under subparagraph (A)(ii)(II), the Exchange shall notify an applicant that no certifi- cation of exemption from any requirement or payment under section 5000A of such Code will be issued. (C) A PPEALS PROCESS .—The Exchange shall also notify each person receiving notice under this paragraph of the appeals processes established under subsection (f). PPEALS AND R EDETERMINATIONS .— (f) A N GENERAL (1) I .—The Secretary, in consultation with the Secretary of the Treasury, the Secretary of Homeland Security, and the Commissioner of Social Security, shall establish proce- dures by which the Secretary or one of such other Federal offi- cers— (A) hears and makes decisions with respect to appeals of any determination under subsection (e); and (B) redetermines eligibility on a periodic basis in ap- propriate circumstances. MPLOYER LIABILITY .— (2) E (A) I N GENERAL .—The Secretary shall establish a sepa- rate appeals process for employers who are notified under subsection (e)(4)(C) that the employer may be liable for a tax imposed by section 4980H of the Internal Revenue Code of 1986 with respect to an employee because of a de- termination that the employer does not provide minimum essential coverage through an employer-sponsored plan or that the employer does provide that coverage but it is not affordable coverage with respect to an employee. Such process shall provide an employer the opportunity to— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00128 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

148 129 Sec. 1411 PPACA (Consolidated) (i) present information to the Exchange for review of the determination either by the Exchange or the person making the determination, including evidence of the employer-sponsored plan and employer contribu- tions to the plan; and (ii) have access to the data used to make the de- termination to the extent allowable by law. Such process shall be in addition to any rights of appeal the employer may have under subtitle F of such Code. .—Notwithstanding any provision ONFIDENTIALITY (B) C of this title (or the amendments made by this title) or sec- tion 6103 of the Internal Revenue Code of 1986, an em- ployer shall not be entitled to any taxpayer return infor- mation with respect to an employee for purposes of deter- mining whether the employer is subject to the penalty under section 4980H of such Code with respect to the em- ployee, except that— (i) the employer may be notified as to the name of an employee and whether or not the employee’s in- come is above or below the threshold by which the af- fordability of an employer’s health insurance coverage is measured; and (ii) this subparagraph shall not apply to an em- ployee who provides a waiver (at such time and in such manner as the Secretary may prescribe) author- izing an employer to have access to the employee’s tax- payer return information. .— ONFIDENTIALITY OF A PPLICANT I NFORMATION (g) C (1) I .—An applicant for insurance coverage or N GENERAL for a premium tax credit or cost-sharing reduction shall be re- quired to provide only the information strictly necessary to au- thenticate identity, determine eligibility, and determine the amount of the credit or reduction. ECEIPT OF INFORMATION .—Any person who receives (2) R information provided by an applicant under subsection (b) (whether directly or by another person at the request of the ap- plicant), or receives information from a Federal agency under subsection (c), (d), or (e), shall— (A) use the information only for the purposes of, and to the extent necessary in, ensuring the efficient operation of the Exchange, including verifying the eligibility of an in- dividual to enroll through an Exchange or to claim a pre- mium tax credit or cost-sharing reduction or the amount of the credit or reduction; and (B) not disclose the information to any other person except as provided in this section. (h) P ENALTIES .— ALSE OR FRAUDULENT INFORMATION .— (1) F IVIL PENALTY .— (A) C (i) I N GENERAL .—If— (I) any person fails to provides correct infor- mation under subsection (b); and June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00129 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

149 130 Sec. 1411 PPACA (Consolidated) (II) such failure is attributable to negligence or disregard of any rules or regulations of the Sec- retary, such person shall be subject, in addition to any other penalties that may be prescribed by law, to a civil pen- alty of not more than $25,000 with respect to any fail- ures involving an application for a plan year. For pur- poses of this subparagraph, the terms ‘‘negligence’’ and ‘‘disregard’’ shall have the same meanings as when used in section 6662 of the Internal Revenue Code of 1986. .—No penalty EASONABLE CAUSE EXCEPTION (ii) R shall be imposed under clause (i) if the Secretary de- termines that there was a reasonable cause for the failure and that the person acted in good faith. NOWING AND WILLFUL VIOLATIONS (B) K .—Any person who knowingly and willfully provides false or fraudulent information under subsection (b) shall be subject, in addi- tion to any other penalties that may be prescribed by law, to a civil penalty of not more than $250,000. (2) I MPROPER USE OR DISCLOSURE OF INFORMATION .—Any person who knowingly and willfully uses or discloses informa- tion in violation of subsection (g) shall be subject, in addition to any other penalties that may be prescribed by law, to a civil penalty of not more than $25,000. (3) L IMITATIONS ON LIENS AND LEVIES .—The Secretary (or, if applicable, the Attorney General of the United States) shall not— (A) file notice of lien with respect to any property of a person by reason of any failure to pay the penalty im- posed by this subsection; or (B) levy on any such property with respect to such fail- ure. TUDY OF A DMINISTRATION OF E MPLOYER R .— ESPONSIBILITY (i) S N GENERAL .—The Secretary of Health and Human (1) I Services shall, in consultation with the Secretary of the Treas- ury, conduct a study of the procedures that are necessary to ensure that in the administration of this title and section 4980H of the Internal Revenue Code of 1986 (as added by sec- tion 1513) that the following rights are protected: (A) The rights of employees to preserve their right to confidentiality of their taxpayer return information and their right to enroll in a qualified health plan through an Exchange if an employer does not provide affordable cov- erage. (B) The rights of employers to adequate due process and access to information necessary to accurately deter- mine any payment assessed on employers. (2) R EPORT .—Not later than January 1, 2013, the Sec- retary of Health and Human Services shall report the results of the study conducted under paragraph (1), including any rec- ommendations for legislative changes, to the Committees on Finance and Health, Education, Labor and Pensions of the June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00130 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

150 131 Sec. 1412 PPACA (Consolidated) Senate and the Committees of Education and Labor and Ways and Means of the House of Representatives. 42 U.S.C. 18082 ¿ . ADVANCE DETERMINATION AND PAYMENT SEC. 1412 ø OF PREMIUM TAX CREDITS AND COST-SHARING REDUC- TIONS. (a) I G ENERAL .—The Secretary, in consultation with the Sec- N retary of the Treasury, shall establish a program under which— (1) upon request of an Exchange, advance determinations are made under section 1411 with respect to the income eligi- bility of individuals enrolling in a qualified health plan in the individual market through the Exchange for the premium tax credit allowable under section 36B of the Internal Revenue Code of 1986 and the cost-sharing reductions under section 1402; (2) the Secretary notifies— (A) the Exchange and the Secretary of the Treasury of the advance determinations; and (B) the Secretary of the Treasury of the name and em- ployer identification number of each employer with respect to whom 1 or more employee of the employer were deter- mined to be eligible for the premium tax credit under sec- tion 36B of the Internal Revenue Code of 1986 and the cost-sharing reductions under section 1402 because— (i) the employer did not provide minimum essen- tial coverage; or (ii) the employer provided such minimum essen- tial coverage but it was determined under section 36B(c)(2)(C) of such Code to either be unaffordable to the employee or not provide the required minimum ac- tuarial value; and (3) the Secretary of the Treasury makes advance payments of such credit or reductions to the issuers of the qualified health plans in order to reduce the premiums payable by indi- viduals eligible for such credit. (b) A D ETERMINATIONS DVANCE .— (1) I N GENERAL .—The Secretary shall provide under the program established under subsection (a) that advance deter- mination of eligibility with respect to any individual shall be made— (A) during the annual open enrollment period applica- ble to the individual (or such other enrollment period as may be specified by the Secretary); and (B) on the basis of the individual’s household income for the most recent taxable year for which the Secretary, after consultation with the Secretary of the Treasury, de- termines information is available. HANGES IN CIRCUMSTANCES .—The Secretary shall pro- (2) C vide procedures for making advance determinations on the basis of information other than that described in paragraph (1)(B) in cases where information included with an application form demonstrates substantial changes in income, changes in family size or other household circumstances, change in filing status, the filing of an application for unemployment benefits, or other significant changes affecting eligibility, including— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00131 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

151 132 Sec. 1412 PPACA (Consolidated) (A) allowing an individual claiming a decrease of 20 percent or more in income, or filing an application for un- employment benefits, to have eligibility for the credit de- termined on the basis of household income for a later pe- riod or on the basis of the individual’s estimate of such in- come for the taxable year; and (B) the determination of household income in cases where the taxpayer was not required to file a return of tax imposed by this chapter for the second preceding taxable year. (c) P P REMIUM T AX C REDITS AND C OST - SHARING R E AYMENT OF - DUCTIONS .— N GENERAL (1) I .—The Secretary shall notify the Secretary of the Treasury and the Exchange through which the indi- vidual is enrolling of the advance determination under section 1411. (2) P REMIUM TAX CREDIT .— (A) I N GENERAL .—The Secretary of the Treasury shall make the advance payment under this section of any pre- mium tax credit allowed under section 36B of the Internal Revenue Code of 1986 to the issuer of a qualified health plan on a monthly basis (or such other periodic basis as the Secretary may provide). SSUER RESPONSIBILITIES .—An issuer of a qualified (B) I health plan receiving an advance payment with respect to an individual enrolled in the plan shall— (i) reduce the premium charged the insured for any period by the amount of the advance payment for the period; (ii) notify the Exchange and the Secretary of such reduction; (iii) include with each billing statement the amount by which the premium for the plan has been reduced by reason of the advance payment; and (iv) in the case of any nonpayment of premiums by the insured— (I) notify the Secretary of such nonpayment; and (II) allow a 3-month grace period for non- payment of premiums before discontinuing cov- erage. (3) C OST - SHARING REDUCTIONS .—The Secretary shall also notify the Secretary of the Treasury and the Exchange under paragraph (1) if an advance payment of the cost-sharing reduc- tions under section 1402 is to be made to the issuer of any qualified health plan with respect to any individual enrolled in the plan. The Secretary of the Treasury shall make such ad- vance payment at such time and in such amount as the Sec- retary specifies in the notice. O F EDERAL P AYMENTS FOR I NDIVIDUALS N OT L AWFULLY (d) N P RESENT .—Nothing in this subtitle or the amendments made by this subtitle allows Federal payments, credits, or cost-sharing re- ductions for individuals who are not lawfully present in the United States. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00132 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

152 133 Sec. 1413 PPACA (Consolidated) TATE F .—Nothing in this subtitle or the amend- (e) S LEXIBILITY ments made by this subtitle shall be construed to prohibit a State from making payments to or on behalf of an individual for coverage under a qualified health plan offered through an Exchange that are in addition to any credits or cost-sharing reductions allowable to the individual under this subtitle and such amendments. 42 U.S.C. 18083 SEC. 1413 . STREAMLINING OF PROCEDURES FOR EN- ø ¿ ROLLMENT THROUGH AN EXCHANGE AND STATE MED- ICAID, CHIP, AND HEALTH SUBSIDY PROGRAMS. N G ENERAL (a) I .—The Secretary shall establish a system meet- ing the requirements of this section under which residents of each State may apply for enrollment in, receive a determination of eligi- bility for participation in, and continue participation in, applicable State health subsidy programs. Such system shall ensure that if an individual applying to an Exchange is found through screening to be eligible for medical assistance under the State medicaid plan under title XIX, or eligible for enrollment under a State children’s health insurance program (CHIP) under title XXI of such Act, the individual is enrolled for assistance under such plan or program. (b) R R ELATING TO F ORMS AND N OTICE .— EQUIREMENTS (1) R EQUIREMENTS RELATING TO FORMS .— (A) I N GENERAL .—The Secretary shall develop and pro- vide to each State a single, streamlined form that— (i) may be used to apply for all applicable State health subsidy programs within the State; (ii) may be filed online, in person, by mail, or by telephone; (iii) may be filed with an Exchange or with State officials operating one of the other applicable State health subsidy programs; and (iv) is structured to maximize an applicant’s abil- ity to complete the form satisfactorily, taking into ac- count the characteristics of individuals who qualify for applicable State health subsidy programs. TATE AUTHORITY TO ESTABLISH FORM .—A State (B) S may develop and use its own single, streamlined form as an alternative to the form developed under subparagraph (A) if the alternative form is consistent with standards promulgated by the Secretary under this section. .—The Secretary UPPLEMENTAL ELIGIBILITY FORMS (C) S may allow a State to use a supplemental or alternative form in the case of individuals who apply for eligibility that is not determined on the basis of the household in- come (as defined in section 36B of the Internal Revenue Code of 1986). (2) N OTICE .—The Secretary shall provide that an applicant filing a form under paragraph (1) shall receive notice of eligi- bility for an applicable State health subsidy program without any need to provide additional information or paperwork un- less such information or paperwork is specifically required by law when information provided on the form is inconsistent with data used for the electronic verification under paragraph (3) or is otherwise insufficient to determine eligibility. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00133 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

153 134 Sec. 1413 PPACA (Consolidated) EQUIREMENTS R E LIGIBILITY B ASED ON D ATA ELATING TO (c) R .— XCHANGES E EVELOPMENT OF SECURE INTERFACES .—Each State (1) D shall develop for all applicable State health subsidy programs a secure, electronic interface allowing an exchange of data (in- cluding information contained in the application forms de- scribed in subsection (b)) that allows a determination of eligi- bility for all such programs based on a single application. Such interface shall be compatible with the method established for data verification under section 1411(c)(4). ATA MATCHING PROGRAM .—Each applicable State (2) D health subsidy program shall participate in a data matching arrangement for determining eligibility for participation in the program under paragraph (3) that— (A) provides access to data described in paragraph (3); (B) applies only to individuals who— (i) receive assistance from an applicable State health subsidy program; or (ii) apply for such assistance— (I) by filing a form described in subsection (b); or (II) by requesting a determination of eligi- bility and authorizing disclosure of the informa- tion described in paragraph (3) to applicable State health coverage subsidy programs for purposes of determining and establishing eligibility; and (C) consistent with standards promulgated by the Sec- retary, including the privacy and data security safeguards described in section 1942 of the Social Security Act or that are otherwise applicable to such programs. (3) D ETERMINATION OF ELIGIBILITY .— N GENERAL .—Each applicable State health sub- (A) I sidy program shall, to the maximum extent practicable— (i) establish, verify, and update eligibility for par- ticipation in the program using the data matching ar- rangement under paragraph (2); and (ii) determine such eligibility on the basis of reli- able, third party data, including information described in sections 1137, 453(i), and 1942(a) of the Social Se- curity Act, obtained through such arrangement. .—This paragraph shall not apply in cir- XCEPTION (B) E cumstances with respect to which the Secretary deter- mines that the administrative and other costs of use of the data matching arrangement under paragraph (2) outweigh its expected gains in accuracy, efficiency, and program par- ticipation. (4) S ECRETARIAL STANDARDS .—The Secretary shall, after consultation with persons in possession of the data to be matched and representatives of applicable State health subsidy programs, promulgate standards governing the timing, con- tents, and procedures for data matching described in this sub- section. Such standards shall take into account administrative and other costs and the value of data matching to the estab- June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00134 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

154 135 Sec. 1414 PPACA (Consolidated) lishment, verification, and updating of eligibility for applicable State health subsidy programs. A UTHORITY .— DMINISTRATIVE (d) A .—Subject to section 1411 and section GREEMENTS (1) A 6103(l)(21) of the Internal Revenue Code of 1986 and any other requirement providing safeguards of privacy and data integ- rity, the Secretary may establish model agreements, and enter into agreements, for the sharing of data under this section. UTHORITY OF EXCHANGE TO CONTRACT OUT .—Nothing (2) A in this section shall be construed to— (A) prohibit contractual arrangements through which a State medicaid agency determines eligibility for all appli- cable State health subsidy programs, but only if such agency complies with the Secretary’s requirements ensur- ing reduced administrative costs, eligibility errors, and dis- ruptions in coverage; or (B) change any requirement under title XIX that eligi- bility for participation in a State’s medicaid program must be determined by a public agency. PPLICABLE S TATE H EALTH S UBSIDY P .—In this sec- ROGRAM (e) A tion, the term ‘‘applicable State health subsidy program’’ means— (1) the program under this title for the enrollment in qualified health plans offered through an Exchange, including the premium tax credits under section 36B of the Internal Rev- enue Code of 1986 and cost-sharing reductions under section 1402; (2) a State medicaid program under title XIX of the Social Security Act; (3) a State children’s health insurance program (CHIP) under title XXI of such Act; and (4) a State program under section 1331 establishing quali- fied basic health plans. SEC. 1414. DISCLOSURES TO CARRY OUT ELIGIBILITY REQUIREMENTS FOR CERTAIN PROGRAMS. ISCLOSURE OF T AXPAYER R ETURN I NFORMATION AND (a) D O - S CIAL S ECURITY N UMBERS .— (1) T AXPAYER RETURN INFORMATION .—Subsection (l) of sec- tion 6103 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: ISCLOSURE OF RETURN INFORMATION TO CARRY OUT ‘‘(21) D ELIGIBILITY REQUIREMENTS FOR CERTAIN PROGRAMS .— ‘‘(A) I N GENERAL .—The Secretary, upon written re- quest from the Secretary of Health and Human Services, shall disclose to officers, employees, and contractors of the Department of Health and Human Services return infor- mation of any taxpayer whose income is relevant in deter- mining any premium tax credit under section 36B or any cost-sharing reduction under section 1402 of the Patient Protection and Affordable Care Act or eligibility for partici- pation in a State medicaid program under title XIX of the Social Security Act, a State’s children’s health insurance program under title XXI of the Social Security Act, or a basic health program under section 1331 of Patient Protec- June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00135 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

155 136 Sec. 1414 PPACA (Consolidated) tion and Affordable Care Act. Such return information shall be limited to— ‘‘(i) taxpayer identity information with respect to such taxpayer, ‘‘(ii) the filing status of such taxpayer, ‘‘(iii) the number of individuals for whom a deduc- tion is allowed under section 151 with respect to the taxpayer (including the taxpayer and the taxpayer’s spouse), ‘‘(iv) the modified adjusted gross income (as de- fined in section 36B) of such taxpayer and each of the other individuals included under clause (iii) who are required to file a return of tax imposed by chapter 1 ø As revised by section for the taxable year, ¿ 1004(a)(1)(B) of HCERA ‘‘(v) such other information as is prescribed by the Secretary by regulation as might indicate whether the taxpayer is eligible for such credit or reduction (and the amount thereof), and ‘‘(vi) the taxable year with respect to which the preceding information relates or, if applicable, the fact that such information is not available. NFORMATION TO EXCHANGE AND STATE AGEN - ‘‘(B) I CIES .—The Secretary of Health and Human Services may disclose to an Exchange established under the Patient Pro- tection and Affordable Care Act or its contractors, or to a State agency administering a State program described in subparagraph (A) or its contractors, any inconsistency be- tween the information provided by the Exchange or State agency to the Secretary and the information provided to the Secretary under subparagraph (A). ‘‘(C) R ESTRICTION ON USE OF DISCLOSED INFORMA - .—Return information disclosed under subparagraph TION (A) or (B) may be used by officers, employees, and contrac- tors of the Department of Health and Human Services, an Exchange, or a State agency only for the purposes of, and to the extent necessary in— ‘‘(i) establishing eligibility for participation in the Exchange, and verifying the appropriate amount of, any credit or reduction described in subparagraph (A), ‘‘(ii) determining eligibility for participation in the State programs described in subparagraph (A).’’. (2) S OCIAL SECURITY NUMBERS .—Section 205(c)(2)(C) of the Social Security Act is amended by adding at the end the fol- lowing new clause: ‘‘(x) The Secretary of Health and Human Services, and the Exchanges established under section 1311 of the Patient Protection and Affordable Care Act, are authorized to collect and use the names and social se- curity account numbers of individuals as required to administer the provisions of, and the amendments made by, the such Act.’’. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00136 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

156 137 Sec. 1416 PPACA (Consolidated) ONFIDENTIALITY AND D .—Paragraph (3) of sec- (b) C ISCLOSURE tion 6103(a) of such Code is amended by striking ‘‘or (20)’’ and in- serting ‘‘(20), or (21)’’. (c) P ECORDKEEPING R ELATED TO D ISCLO ROCEDURES AND R - .—Paragraph (4) of section 6103(p) of such Code is amend- SURES ed— (1) by inserting ‘‘, or any entity described in subsection (l)(21),’’ after ‘‘or (20)’’ in the matter preceding subparagraph (A), (2) by inserting ‘‘or any entity described in subsection (l)(21),’’ after ‘‘or (o)(1)(A)’’ in subparagraph (F)(ii), and (3) by inserting ‘‘or any entity described in subsection (l)(21),’’ after ‘‘or (20)’’ both places it appears in the matter after subparagraph (F). (d) U NAUTHORIZED D ISCLOSURE OR I NSPECTION .—Paragraph (2) of section 7213(a) of such Code is amended by striking ‘‘or (20)’’ and inserting ‘‘(20), or (21)’’. SEC. 1415 ø 42 U.S.C. 18084 ¿ . PREMIUM TAX CREDIT AND COST-SHARING REDUCTION PAYMENTS DISREGARDED FOR FEDERAL AND FEDERALLY-ASSISTED PROGRAMS. For purposes of determining the eligibility of any individual for benefits or assistance, or the amount or extent of benefits or assist- ance, under any Federal program or under any State or local pro- gram financed in whole or in part with Federal funds— (1) any credit or refund allowed or made to any individual by reason of section 36B of the Internal Revenue Code of 1986 (as added by section 1401) shall not be taken into account as income and shall not be taken into account as resources for the month of receipt and the following 2 months; and (2) any cost-sharing reduction payment or advance pay- ment of the credit allowed under such section 36B that is made under section 1402 or 1412 shall be treated as made to the qualified health plan in which an individual is enrolled and not to that individual. SEC. 1416. STUDY OF GEOGRAPHIC VARIATION IN APPLICATION OF FPL. ø Section added by section 10105(f) ¿ (a) I N G ENERAL .—The Secretary shall conduct a study to exam- ine the feasibility and implication of adjusting the application of the Federal poverty level under this subtitle (and the amendments made by this subtitle) for different geographic areas so as to reflect the variations in cost-of-living among different areas within the United States. If the Secretary determines that an adjustment is feasible, the study should include a methodology to make such an adjustment. Not later than January 1, 2013, the Secretary shall submit to Congress a report on such study and shall include such recommendations as the Secretary determines appropriate. .— NCLUSION OF T ERRITORIES (b) I N GENERAL .—The Secretary shall ensure that the (1) I study under subsection (a) covers the territories of the United States and that special attention is paid to the disparity that exists among poverty levels and the cost of living in such terri- tories and to the impact of such disparity on efforts to expand health coverage and ensure health care. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00137 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

157 138 Sec. 1421 PPACA (Consolidated) ERRITORIES DEFINED .—In this subsection, the term (2) T ‘‘territories of the United States’’ includes the Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, the Northern Mariana Islands, and any other territory or posses- sion of the United States. PART II—SMALL BUSINESS TAX CREDIT SEC. 1421. CREDIT FOR EMPLOYEE HEALTH INSURANCE EXPENSES OF SMALL BUSINESSES. G (a) I .—Subpart D of part IV of subchapter A of N ENERAL chapter 1 of the Internal Revenue Code of 1986 (relating to busi- ness-related credits) is amended by inserting after section 45Q the following: ‘‘SEC. 45R. EMPLOYEE HEALTH INSURANCE EXPENSES OF SMALL EM- PLOYERS. ENERAL R ‘‘(a) G .—For purposes of section 38, in the case of ULE an eligible small employer, the small employer health insurance credit determined under this section for any taxable year in the credit period is the amount determined under subsection (b). EALTH I NSURANCE C REDIT A MOUNT .—Subject to sub- ‘‘(b) H section (c), the amount determined under this subsection with re- spect to any eligible small employer is equal to 50 percent (35 per- cent in the case of a tax-exempt eligible small employer) of the less- er of— ‘‘(1) the aggregate amount of nonelective contributions the employer made on behalf of its employees during the taxable year under the arrangement described in subsection (d)(4) for premiums for qualified health plans offered by the employer to its employees through an Exchange, or ‘‘(2) the aggregate amount of nonelective contributions which the employer would have made during the taxable year under the arrangement if each employee taken into account under paragraph (1) had enrolled in a qualified health plan which had a premium equal to the average premium (as deter- mined by the Secretary of Health and Human Services) for the small group market in the rating area in which the employee enrolls for coverage. HASEOUT OF C REDIT - MOUNT B ASED ON N UMBER OF E M A ‘‘(c) P PLOYEES AND A VERAGE W AGES .—The amount of the credit deter- mined under subsection (b) without regard to this subsection shall be reduced (but not below zero) by the sum of the following amounts: ‘‘(1) Such amount multiplied by a fraction the numerator of which is the total number of full-time equivalent employees of the employer in excess of 10 and the denominator of which is 15. ‘‘(2) Such amount multiplied by a fraction the numerator of which is the average annual wages of the employer in excess of the dollar amount in effect under subsection (d)(3)(B) and the denominator of which is such dollar amount. ‘‘(d) E LIGIBLE S MALL E MPLOYER .—For purposes of this sec- tion— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00138 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

158 139 Sec. 1421 45R IRC PPACA (Consolidated) \ N GENERAL .—The term ‘eligible small employer’ ‘‘(1) I means, with respect to any taxable year, an employer— ‘‘(A) which has no more than 25 full-time equivalent employees for the taxable year, ‘‘(B) the average annual wages of which do not exceed an amount equal to twice the dollar amount in effect under paragraph (3)(B) for the taxable year, and ‘‘(C) which has in effect an arrangement described in paragraph (4). ‘‘(2) F TIME EQUIVALENT EMPLOYEES .— ULL - ‘‘(A) I N GENERAL .—The term ‘full-time equivalent em- ployees’ means a number of employees equal to the num- ber determined by dividing— ‘‘(i) the total number of hours of service for which wages were paid by the employer to employees during the taxable year, by ‘‘(ii) 2,080. Such number shall be rounded to the next lowest whole number if not otherwise a whole number. ‘‘(B) E XCESS HOURS NOT COUNTED .—If an employee works in excess of 2,080 hours of service during any tax- able year, such excess shall not be taken into account under subparagraph (A). OURS OF SERVICE .—The Secretary, in consulta- ‘‘(C) H tion with the Secretary of Labor, shall prescribe such regu- lations, rules, and guidance as may be necessary to deter- mine the hours of service of an employee, including rules for the application of this paragraph to employees who are not compensated on an hourly basis. ‘‘(3) A VERAGE ANNUAL WAGES .— ‘‘(A) I N GENERAL .—The average annual wages of an el- igible small employer for any taxable year is the amount determined by dividing— ‘‘(i) the aggregate amount of wages which were paid by the employer to employees during the taxable year, by ‘‘(ii) the number of full-time equivalent employees of the employee determined under paragraph (2) for the taxable year. Such amount shall be rounded to the next lowest multiple of $1,000 if not otherwise such a multiple. ‘‘(B) D OLLAR AMOUNT .— ø Replaced by section 10105(e)(1) ¿ For purposes of paragraph (1)(B) and sub- section (c)(2)— 2011 , 2012 , AND 2013 .—The dollar amount ‘‘(i) 2010, in effect under this paragraph for taxable years begin- ning in 2010, 2011, 2012, or 2013 is $25,000. ‘‘(ii) S UBSEQUENT YEARS .—In the case of a taxable year beginning in a calendar year after 2013, the dol- lar amount in effect under this paragraph shall be equal to $25,000, multiplied by the cost-of-living ad- justment under section 1(f)(3) for the calendar year, determined by substituting ‘calendar year 2012’ for ‘calendar year 1992’ in subparagraph (B) thereof. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00139 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

159 140 Sec. 1421 45R IRC PPACA (Consolidated) \ ONTRIBUTION ARRANGEMENT .—An arrangement is de- ‘‘(4) C scribed in this paragraph if it requires an eligible small em- ployer to make a nonelective contribution on behalf of each em- ployee who enrolls in a qualified health plan offered to employ- ees by the employer through an exchange in an amount equal to a uniform percentage (not less than 50 percent) of the pre- mium cost of the qualified health plan. ‘‘(5) S EASONAL WORKER HOURS AND WAGES NOT COUNTED .— For purposes of this subsection— ‘‘(A) I N GENERAL .—The number of hours of service worked by, and wages paid to, a seasonal worker of an em- ployer shall not be taken into account in determining the full-time equivalent employees and average annual wages of the employer unless the worker works for the employer on more than 120 days during the taxable year. ‘‘(B) D .—The term EFINITION OF SEASONAL WORKER ‘seasonal worker’ means a worker who performs labor or services on a seasonal basis as defined by the Secretary of Labor, including workers covered by section 500.20(s)(1) of title 29, Code of Federal Regulations and retail workers employed exclusively during holiday seasons. ‘‘(e) O THER R ULES AND D EFINITIONS .—For purposes of this sec- tion— .— MPLOYEE ‘‘(1) E ‘‘(A) C .—The term ‘em- ERTAIN EMPLOYEES EXCLUDED ployee’ shall not include— ‘‘(i) an employee within the meaning of section 401(c)(1), ‘‘(ii) any 2-percent shareholder (as defined in sec- tion 1372(b)) of an eligible small business which is an S corporation, ‘‘(iii) any 5-percent owner (as defined in section 416(i)(1)(B)(i)) of an eligible small business, or ‘‘(iv) any individual who bears any of the relation- ships described in subparagraphs (A) through (G) of section 152(d)(2) to, or is a dependent described in sec- tion 152(d)(2)(H) of, an individual described in clause (i), (ii), or (iii). ‘‘(B) L EASED EMPLOYEES .—The term ‘employee’ shall include a leased employee within the meaning of section 414(n). ‘‘(2) C REDIT PERIOD .—The term ‘credit period’ means, with respect to any eligible small employer, the 2-consecutive-tax- able year period beginning with the 1st taxable year in which the employer (or any predecessor) offers 1 or more qualified health plans to its employees through an Exchange. ONELECTIVE CONTRIBUTION .—The term ‘nonelective ‘‘(3) N contribution’ means an employer contribution other than an employer contribution pursuant to a salary reduction arrange- ment. ‘‘(4) W AGES .—The term ‘wages’ has the meaning given such term by section 3121(a) (determined without regard to any dollar limitation contained in such section). ‘‘(5) A GGREGATION AND OTHER RULES MADE APPLICABLE .— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00140 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

160 141 Sec. 1421 45R IRC PPACA (Consolidated) \ GGREGATION RULES ‘‘(A) A .—All employers treated as a single employer under subsection (b), (c), (m), or (o) of sec- tion 414 shall be treated as a single employer for purposes of this section. THER RULES .—Rules similar to the rules of sub- ‘‘(B) O sections (c), (d), and (e) of section 52 shall apply. REDIT M ADE A VAILABLE TO T AX - EXEMPT E LIGIBLE S MALL ‘‘(f) C MPLOYERS .— E N GENERAL ‘‘(1) I .—In the case of a tax-exempt eligible small employer, there shall be treated as a credit allowable under subpart C (and not allowable under this subpart) the lesser of— ‘‘(A) the amount of the credit determined under this section with respect to such employer, or ‘‘(B) the amount of the payroll taxes of the employer during the calendar year in which the taxable year begins. AX - EXEMPT ELIGIBLE SMALL EMPLOYER .—For purposes ‘‘(2) T of this section, the term ‘tax-exempt eligible small employer’ means an eligible small employer which is any organization de- scribed in section 501(c) which is exempt from taxation under section 501(a). ‘‘(3) P AYROLL TAXES .—For purposes of this subsection— ‘‘(A) I N GENERAL .—The term ‘payroll taxes’ means— ‘‘(i) amounts required to be withheld from the em- ployees of the tax-exempt eligible small employer under section 3401(a), ‘‘(ii) amounts required to be withheld from such employees under section 3101(b), and ‘‘(iii) amounts of the taxes imposed on the tax-ex- empt eligible small employer under section 3111(b). ‘‘(B) S PECIAL RULE .—A rule similar to the rule of sec- tion 24(d)(2)(C) shall apply for purposes of subparagraph (A). PPLICATION OF S ECTION FOR C ALENDAR Y EARS 2010, 2011, ‘‘(g) A In the case of AND 2013.— ø As revised by section 10105(e)(2) ¿ 2012, any taxable year beginning in 2010, 2011, 2012, or 2013, the fol- lowing modifications to this section shall apply in determining the amount of the credit under subsection (a): O CREDIT PERIOD REQUIRED .—The credit shall be de- ‘‘(1) N termined without regard to whether the taxable year is in a credit period and for purposes of applying this section to tax- able years beginning after 2013, no credit period shall be treat- ed as beginning with a taxable year beginning before 2014. ‘‘(2) A MOUNT OF CREDIT .—The amount of the credit deter- mined under subsection (b) shall be determined— ‘‘(A) by substituting ‘35 percent (25 percent in the case of a tax-exempt eligible small employer)’ for ‘50 percent (35 percent in the case of a tax-exempt eligible small em- ployer)’, ‘‘(B) by reference to an eligible small employer’s non- elective contributions for premiums paid for health insur- ance coverage (within the meaning of section 9832(b)(1)) of an employee, and June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00141 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

161 142 Sec. 1421 PPACA (Consolidated) ‘‘(C) by substituting for the average premium deter- mined under subsection (b)(2) the amount the Secretary of Health and Human Services determines is the average premium for the small group market in the State in which the employer is offering health insurance coverage (or for such area within the State as is specified by the Sec- retary). ONTRIBUTION ARRANGEMENT .—An arrangement shall ‘‘(3) C not fail to meet the requirements of subsection (d)(4) solely be- cause it provides for the offering of insurance outside of an Ex- change. D NSURANCE .—Any term used in this section EFINITIONS ‘‘(h) I which is also used in the Public Health Service Act or subtitle A of title I of the Patient Protection and Affordable Care Act shall have the meaning given such term by such Act or subtitle. ‘‘(i) R EGULATIONS .—The Secretary shall prescribe such regula- tions as may be necessary to carry out the provisions of this sec- tion, including regulations to prevent the avoidance of the 2-year limit on the credit period through the use of successor entities and the avoidance of the limitations under subsection (c) through the use of multiple entities.’’. (b) C T O B E P ART OF G ENERAL B USINESS REDIT REDIT .—Sec- C tion 38(b) of the Internal Revenue Code of 1986 (relating to current year business credit) is amended by striking ‘‘plus’’ at the end of paragraph (34), by striking the period at the end of paragraph (35) and inserting ‘‘, plus’’, and by inserting after paragraph (35) the fol- lowing: ‘‘(36) the small employer health insurance credit deter- mined under section 45R.’’. (c) C REDIT A LLOWED A GAINST A LTERNATIVE M INIMUM T AX .— Section 38(c)(4)(B) of the Internal Revenue Code of 1986 (defining specified credits) is amended by redesignating clauses (vi), (vii), and (viii) as clauses (vii), (viii), and (ix), respectively, and by insert- ing after clause (v) the following new clause: ‘‘(vi) the credit determined under section 45R,’’. D EDUCTION FOR C E XPENSES FOR ISALLOWANCE OF ERTAIN (d) D HICH .— REDIT A LLOWED C W N GENERAL .—Section 280C of the Internal Revenue (1) I Code of 1986 (relating to disallowance of deduction for certain expenses for which credit allowed), as amended by section 1401(b), is amended by adding at the end the following new subsection: ‘‘(h) C REDIT FOR E MPLOYEE H EALTH I NSURANCE E XPENSES OF As revised by section 10105(e)(3) S MPLOYERS .— ø E ¿ No deduc- MALL tion shall be allowed for that portion of the premiums for qualified health plans (as defined in section 1301(a) of the Patient Protection and Affordable Care Act), or for health insurance coverage in the case of taxable years beginning in 2010, 2011, 2012, or 2013, paid by an employer which is equal to the amount of the credit deter- mined under section 45R(a) with respect to the premiums.’’. (2) D EDUCTION FOR EXPIRING CREDITS .—Section 196(c) of such Code is amended by striking ‘‘and’’ at the end of para- graph (12), by striking the period at the end of paragraph (13) June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00142 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

162 143 Sec. 1501 PPACA (Consolidated) and inserting ‘‘, and’’, and by adding at the end the following new paragraph: ‘‘(14) the small employer health insurance credit deter- mined under section 45R(a).’’. LERICAL A MENDMENT .—The table of sections for subpart D (e) C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following: ‘‘Sec. 45R. Employee health insurance expenses of small employers.’’. FFECTIVE D ATES .— ø As revised by section 10105(e)(4) ¿ (f) E N GENERAL (1) I .—The amendments made by this section shall apply to amounts paid or incurred in taxable years begin- ning after December 31, 2009. INIMUM TAX .—The amendments made by subsection (2) M (c) shall apply to credits determined under section 45R of the Internal Revenue Code of 1986 in taxable years beginning after December 31, 2009, and to carrybacks of such credits. Subtitle F—Shared Responsibility for Health Care PART I—INDIVIDUAL RESPONSIBILITY SEC. 1501 ø 42 U.S.C. 18091 ¿ . REQUIREMENT TO MAINTAIN MINIMUM ES- SENTIAL COVERAGE. (a) F INDINGS .—Congress makes the following findings: N GENERAL .—The individual responsibility require- (1) I ment provided for in this section (in this subsection referred to as the ‘‘requirement’’) is commercial and economic in nature, and substantially affects interstate commerce, as a result of the effects described in paragraph (2). FFECTS ON THE NATIONAL ECONOMY AND INTERSTATE (2) E COMMERCE .— ø Replaced by section 10106(a) ¿ The effects de- scribed in this paragraph are the following: (A) The requirement regulates activity that is commer- cial and economic in nature: economic and financial deci- sions about how and when health care is paid for, and when health insurance is purchased. In the absence of the requirement, some individuals would make an economic and financial decision to forego health insurance coverage and attempt to self-insure, which increases financial risks to households and medical providers. (B) Health insurance and health care services are a significant part of the national economy. National health spending is projected to increase from $2,500,000,000,000, or 17.6 percent of the economy, in 2009 to $4,700,000,000,000 in 2019. Private health insurance spending is projected to be $854,000,000,000 in 2009, and pays for medical supplies, drugs, and equipment that are shipped in interstate commerce. Since most health insur- ance is sold by national or regional health insurance com- panies, health insurance is sold in interstate commerce and claims payments flow through interstate commerce. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00143 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

163 144 Sec. 1501 PPACA (Consolidated) (C) The requirement, together with the other provi- sions of this Act, will add millions of new consumers to the health insurance market, increasing the supply of, and de- mand for, health care services, and will increase the num- ber and share of Americans who are insured. (D) The requirement achieves near-universal coverage by building upon and strengthening the private employer- based health insurance system, which covers 176,000,000 Americans nationwide. In Massachusetts, a similar re- quirement has strengthened private employer-based cov- erage: despite the economic downturn, the number of workers offered employer-based coverage has actually in- creased. (E) The economy loses up to $207,000,000,000 a year because of the poorer health and shorter lifespan of the uninsured. By significantly reducing the number of the un- insured, the requirement, together with the other provi- sions of this Act, will significantly reduce this economic cost. (F) The cost of providing uncompensated care to the uninsured was $43,000,000,000 in 2008. To pay for this cost, health care providers pass on the cost to private in- surers, which pass on the cost to families. This cost-shift- ing increases family premiums by on average over $1,000 a year. By significantly reducing the number of the unin- sured, the requirement, together with the other provisions of this Act, will lower health insurance premiums. (G) 62 percent of all personal bankruptcies are caused in part by medical expenses. By significantly increasing health insurance coverage, the requirement, together with the other provisions of this Act, will improve financial se- curity for families. (H) Under the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1001 et seq.), the Public Health Service Act (42 U.S.C. 201 et seq.), and this Act, the Fed- eral Government has a significant role in regulating health insurance. The requirement is an essential part of this larger regulation of economic activity, and the absence of the requirement would undercut Federal regulation of the health insurance market. (I) Under sections 2704 and 2705 of the Public Health Service Act (as added by section 1201 of this Act), if there were no requirement, many individuals would wait to pur- chase health insurance until they needed care. By signifi- cantly increasing health insurance coverage, the require- ment, together with the other provisions of this Act, will minimize this adverse selection and broaden the health in- surance risk pool to include healthy individuals, which will lower health insurance premiums. The requirement is es- sential to creating effective health insurance markets in which improved health insurance products that are guar- anteed issue and do not exclude coverage of pre-existing conditions can be sold. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00144 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

164 145 Sec. 1501 PPACA (Consolidated) (J) Administrative costs for private health insurance, which were $90,000,000,000 in 2006, are 26 to 30 percent of premiums in the current individual and small group markets. By significantly increasing health insurance cov- erage and the size of purchasing pools, which will increase economies of scale, the requirement, together with the other provisions of this Act, will significantly reduce ad- ministrative costs and lower health insurance premiums. The requirement is essential to creating effective health insurance markets that do not require underwriting and eliminate its associated administrative costs. .—In United States v. South- UPREME COURT RULING (3) S Eastern Underwriters Association (322 U.S. 533 (1944)), the Supreme Court of the United States ruled that insurance is interstate commerce subject to Federal regulation. (b) I N G ENERAL .—Subtitle D of the Internal Revenue Code of 1986 is amended by adding at the end the following new chapter: ‘‘CHAPTER 48—MAINTENANCE OF MINIMUM ESSENTIAL COVERAGE Sec. 1501 5000A IRC \ ‘‘Sec. 5000A. Requirement to maintain minimum essential coverage. ‘‘SEC. 5000A. REQUIREMENT TO MAINTAIN MINIMUM ESSENTIAL COV- ERAGE. EQUIREMENT T O M AINTAIN M ‘‘(a) R E SSENTIAL C OV - INIMUM ERAGE .—An applicable individual shall for each month beginning after 2013 ensure that the individual, and any dependent of the in- dividual who is an applicable individual, is covered under min- imum essential coverage for such month. ‘‘(b) S R P AYMENT .— HARED ESPONSIBILITY N GENERAL .— ø Replaced by section 10106(b) ¿ ‘‘(1) I If a tax- payer who is an applicable individual, or an applicable indi- vidual for whom the taxpayer is liable under paragraph (3), fails to meet the requirement of subsection (a) for 1 or more months, then, except as provided in subsection (e), there is hereby imposed on the taxpayer a penalty with respect to such failures in the amount determined under subsection (c). ‘‘(2) I NCLUSION WITH RETURN .—Any penalty imposed by this section with respect to any month shall be included with a taxpayer’s return under chapter 1 for the taxable year which includes such month. ‘‘(3) P AYMENT OF PENALTY .—If an individual with respect to whom a penalty is imposed by this section for any month— ‘‘(A) is a dependent (as defined in section 152) of an- other taxpayer for the other taxpayer’s taxable year in- cluding such month, such other taxpayer shall be liable for such penalty, or ‘‘(B) files a joint return for the taxable year including such month, such individual and the spouse of such indi- vidual shall be jointly liable for such penalty. ‘‘(c) A ø P ENALTY .— MOUNT OF Paragraphs (1) and (2) were re- vised in their entirety by section 10106(b)(2) ¿ June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00145 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

165 146 Sec. 1501 PPACA (Consolidated) N GENERAL .—The amount of the penalty imposed by ‘‘(1) I this section on any taxpayer for any taxable year with respect to failures described in subsection (b)(1) shall be equal to the lesser of— ‘‘(A) the sum of the monthly penalty amounts deter- mined under paragraph (2) for months in the taxable year during which 1 or more such failures occurred, or ‘‘(B) an amount equal to the national average premium for qualified health plans which have a bronze level of cov- erage, provide coverage for the applicable family size in- volved, and are offered through Exchanges for plan years beginning in the calendar year with or within which the taxable year ends. ‘‘(2) M ONTHLY PENALTY AMOUNTS .—For purposes of para- graph (1)(A), the monthly penalty amount with respect to any taxpayer for any month during which any failure described in 1 subsection (b)(1) occurred is an amount equal to 12 ⁄ of the greater of the following amounts: ‘‘(A) F LAT DOLLAR AMOUNT .—An amount equal to the lesser of— ‘‘(i) the sum of the applicable dollar amounts for all individuals with respect to whom such failure oc- curred during such month, or ‘‘(ii) 300 percent of the applicable dollar amount (determined without regard to paragraph (3)(C)) for the calendar year with or within which the taxable year ends. As revised by section ERCENTAGE OF INCOME .— ø ‘‘(B) P 1002(a)(1) of HCERA An amount equal to the following ¿ percentage of the excess of the taxpayer’s household in- come for the taxable year over the amount of gross income specified in section 6012(a)(1) with respect to the taxpayer for the taxable year: ‘‘(i) 1.0 percent for taxable years beginning in 2014. ‘‘(ii) 2.0 percent for taxable years beginning in 2015. ‘‘(iii) 2.5 percent for taxable years beginning after 2015. ‘‘(3) A PPLICABLE DOLLAR AMOUNT .— ø As revised by section 10106(b)(3) and by section 1002(a)(2) of HCERA ¿ For purposes of paragraph (1)— ‘‘(A) I N GENERAL .—Except as provided in subpara- graphs (B) and (C), the applicable dollar amount is $695. ‘‘(B) P HASE IN .—The applicable dollar amount is $95 for 2014 and $325 for 2015. PECIAL RULE FOR INDIVIDUALS UNDER AGE 18 .— ‘‘(C) S If an applicable individual has not attained the age of 18 as of the beginning of a month, the applicable dollar amount with respect to such individual for the month shall be equal to one-half of the applicable dollar amount for the calendar year in which the month occurs. ‘‘(D) I NDEXING OF AMOUNT .—In the case of any cal- endar year beginning after 2016, the applicable dollar June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00146 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

166 147 Sec. 1501 PPACA (Consolidated) amount shall be equal to $695, increased by an amount equal to— ‘‘(i) $695, multiplied by ‘‘(ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year, determined by substituting ‘calendar year 2015’ for ‘calendar year 1992’ in subparagraph (B) thereof. If the amount of any increase under clause (i) is not a mul- tiple of $50, such increase shall be rounded to the next lowest multiple of $50. .—For pur- ERMS RELATING TO INCOME AND FAMILIES ‘‘(4) T poses of this section— AMILY SIZE .—The family size involved with re- ‘‘(A) F spect to any taxpayer shall be equal to the number of indi- viduals for whom the taxpayer is allowed a deduction under section 151 (relating to allowance of deduction for personal exemptions) for the taxable year. ‘‘(B) H OUSEHOLD INCOME .—The term ‘household in- come’ means, with respect to any taxpayer for any taxable year, an amount equal to the sum of— shown to reflect ø probable amendment made by section 1004(a)(1)(C) of HCERA ¿ adjusted gross income of the tax- ‘‘(i) the modified payer, plus ‘‘(ii) the aggregate modified adjusted gross in- comes of all other individuals who— ‘‘(I) were taken into account in determining the taxpayer’s family size under paragraph (1), and ‘‘(II) were required to file a return of tax im- posed by section 1 for the taxable year. ‘‘(C) M .— Replaced ODIFIED ADJUSTED GROSS INCOME ø by section 1004(a)(2)(B) ¿ The term ‘modified adjusted gross income’ means adjusted gross income increased by— ‘‘(i) any amount excluded from gross income under section 911, and ‘‘(ii) any amount of interest received or accrued by the taxpayer during the taxable year which is exempt from tax. PPLICABLE I NDIVIDUAL .—For purposes of this section— ‘‘(d) A ‘‘(1) I N GENERAL .—The term ‘applicable individual’ means, with respect to any month, an individual other than an indi- vidual described in paragraph (2), (3), or (4). ‘‘(2) R ELIGIOUS EXEMPTIONS .— ELIGIOUS CONSCIENCE EXEMPTION .— ø Replaced ‘‘(A) R by section 10106(c) ¿ Such term shall not include any indi- vidual for any month if such individual has in effect an ex- emption under section 1311(d)(4)(H) of the Patient Protec- tion and Affordable Care Act which certifies that such in- dividual is— ‘‘(i) a member of a recognized religious sect or divi- sion thereof which is described in section 1402(g)(1), and June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00147 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

167 148 Sec. 1501 PPACA (Consolidated) ‘‘(ii) an adherent of established tenets or teachings of such sect or division as described in such section. .— ‘‘(B) H EALTH CARE SHARING MINISTRY ‘‘(i) I .—Such term shall not include any N GENERAL individual for any month if such individual is a mem- ber of a health care sharing ministry for the month. ‘‘(ii) H EALTH CARE SHARING MINISTRY .—The term ‘health care sharing ministry’ means an organiza- tion— ‘‘(I) which is described in section 501(c)(3) and is exempt from taxation under section 501(a), ‘‘(II) members of which share a common set of ethical or religious beliefs and share medical ex- penses among members in accordance with those beliefs and without regard to the State in which a member resides or is employed, ‘‘(III) members of which retain membership even after they develop a medical condition, ‘‘(IV) which (or a predecessor of which) has been in existence at all times since December 31, 1999, and medical expenses of its members have been shared continuously and without interrup- tion since at least December 31, 1999, and ‘‘(V) which conducts an annual audit which is performed by an independent certified public ac- counting firm in accordance with generally accept- ed accounting principles and which is made avail- able to the public upon request. .—Such term NDIVIDUALS NOT LAWFULLY PRESENT ‘‘(3) I shall not include an individual for any month if for the month the individual is not a citizen or national of the United States or an alien lawfully present in the United States. NCARCERATED INDIVIDUALS .—Such term shall not in- ‘‘(4) I clude an individual for any month if for the month the indi- vidual is incarcerated, other than incarceration pending the disposition of charges. ‘‘(e) E .—No penalty shall be imposed under sub- XEMPTIONS section (a) with respect to— NDIVIDUALS WHO CANNOT AFFORD COVERAGE .— ‘‘(1) I ‘‘(A) I N GENERAL .—Any applicable individual for any month if the applicable individual’s required contribution (determined on an annual basis) for coverage for the month exceeds 8 percent of such individual’s household in- come for the taxable year described in section 1412(b)(1)(B) of the Patient Protection and Affordable Care Act. For pur- poses of applying this subparagraph, the taxpayer’s house- hold income shall be increased by any exclusion from gross income for any portion of the required contribution made through a salary reduction arrangement. EQUIRED CONTRIBUTION .—For purposes of this ‘‘(B) R paragraph, the term ‘required contribution’ means— ‘‘(i) in the case of an individual eligible to pur- chase minimum essential coverage consisting of cov- erage through an eligible-employer-sponsored plan, the June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00148 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

168 149 Sec. 1501 PPACA (Consolidated) portion of the annual premium which would be paid by the individual (without regard to whether paid through salary reduction or otherwise) for self-only coverage, or ‘‘(ii) in the case of an individual eligible only to purchase minimum essential coverage described in subsection (f)(1)(C), the annual premium for the lowest cost bronze plan available in the individual market through the Exchange in the State in the rating area in which the individual resides (without regard to whether the individual purchased a qualified health plan through the Exchange), reduced by the amount of the credit allowable under section 36B for the taxable year (determined as if the individual was covered by a qualified health plan offered through the Exchange for the entire taxable year). ‘‘(C) S - PECIAL RULES FOR INDIVIDUALS RELATED TO EM .— PLOYEES Replaced by section 10106(d) ¿ For purposes of ø subparagraph (B)(i), if an applicable individual is eligible for minimum essential coverage through an employer by reason of a relationship to an employee, the determination under subparagraph (A) shall be made by reference to re- quired contribution of the employee. NDEXING .—In the case of plan years beginning in ‘‘(D) I any calendar year after 2014, subparagraph (A) shall be applied by substituting for ‘8 percent’ the percentage the Secretary of Health and Human Services determines re- flects the excess of the rate of premium growth between the preceding calendar year and 2013 over the rate of in- come growth for such period. ‘‘(2) T .— AXPAYERS WITH INCOME BELOW FILING THRESHOLD As revised by section 1002(b)(2) of HCERA Any applicable in- ø ¿ dividual for any month during a calendar year if the individ- ual’s household income for the taxable year described in section 1412(b)(1)(B) of the Patient Protection and Affordable Care Act is less than the amount of gross income specified in section 6012(a)(1) with respect to the taxpayer. ‘‘(3) M EMBERS OF INDIAN TRIBES .—Any applicable indi- vidual for any month during which the individual is a member of an Indian tribe (as defined in section 45A(c)(6)). ‘‘(4) M ONTHS DURING SHORT COVERAGE GAPS .— ‘‘(A) I .—Any month the last day of which N GENERAL occurred during a period in which the applicable individual was not covered by minimum essential coverage for a con- tinuous period of less than 3 months. ‘‘(B) S PECIAL RULES .—For purposes of applying this paragraph— ‘‘(i) the length of a continuous period shall be de- termined without regard to the calendar years in which months in such period occur, ‘‘(ii) if a continuous period is greater than the pe- riod allowed under subparagraph (A), no exception shall be provided under this paragraph for any month in the period, and June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00149 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

169 150 Sec. 1501 PPACA (Consolidated) ‘‘(iii) if there is more than 1 continuous period de- scribed in subparagraph (A) covering months in a cal- endar year, the exception provided by this paragraph shall only apply to months in the first of such periods. The Secretary shall prescribe rules for the collection of the penalty imposed by this section in cases where continuous periods include months in more than 1 taxable year. ‘‘(5) H ARDSHIPS .—Any applicable individual who for any month is determined by the Secretary of Health and Human Services under section 1311(d)(4)(H) to have suffered a hard- ship with respect to the capability to obtain coverage under a qualified health plan. ‘‘(f) M E SSENTIAL C OVERAGE .—For purposes of this sec- INIMUM tion— ‘‘(1) I .—The term ‘minimum essential coverage’ N GENERAL means any of the following: ‘‘(A) G OVERNMENT SPONSORED PROGRAMS .—Coverage under— ‘‘(i) the Medicare program under part A of title XVIII of the Social Security Act, ‘‘(ii) the Medicaid program under title XIX of the Social Security Act, ‘‘(iii) the CHIP program under title XXI of the So- cial Security Act, ‘‘(iv) the TRICARE for Life program, ‘‘(v) the veteran’s health care program under chap- ter 17 of title 38, United States Code, or ‘‘(vi) a health plan under section 2504(e) of title 22, United States Code (relating to Peace Corps volun- teers). MPLOYER SPONSORED PLAN .—Coverage under an - ‘‘(B) E eligible employer-sponsored plan. ‘‘(C) P .—Coverage LANS IN THE INDIVIDUAL MARKET under a health plan offered in the individual market with- in a State. ‘‘(D) G .—Coverage under RANDFATHERED HEALTH PLAN a grandfathered health plan. ‘‘(E) O THER COVERAGE .—Such other health benefits coverage, such as a State health benefits risk pool, as the Secretary of Health and Human Services, in coordination with the Secretary, recognizes for purposes of this sub- section. ‘‘(2) E - SPONSORED PLAN .—The term ‘eli- LIGIBLE EMPLOYER gible employer-sponsored plan’ means, with respect to any em- ployee, a group health plan or group health insurance coverage offered by an employer to the employee which is— ‘‘(A) a governmental plan (within the meaning of sec- tion 2791(d)(8) of the Public Health Service Act), or ‘‘(B) any other plan or coverage offered in the small or large group market within a State. Such term shall include a grandfathered health plan described in paragraph (1)(D) offered in a group market. XCEPTED BENEFITS NOT TREATED AS MINIMUM ESSEN - ‘‘(3) E TIAL COVERAGE .—The term ‘minimum essential coverage’ shall June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00150 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

170 151 Sec. 1502 PPACA (Consolidated) not include health insurance coverage which consists of cov- erage of excepted benefits— ‘‘(A) described in paragraph (1) of subsection (c) of sec- tion 2791 of the Public Health Service Act; or ‘‘(B) described in paragraph (2), (3), or (4) of such sub- section if the benefits are provided under a separate policy, certificate, or contract of insurance. ‘‘(4) I NDIVIDUALS RESIDING OUTSIDE UNITED STATES OR RESIDENTS OF TERRITORIES .—Any applicable individual shall be treated as having minimum essential coverage for any month— ‘‘(A) if such month occurs during any period described in subparagraph (A) or (B) of section 911(d)(1) which is ap- plicable to the individual, or ‘‘(B) if such individual is a bona fide resident of any possession of the United States (as determined under sec- tion 937(a)) for such month. ‘‘(5) I - NSURANCE .—Any term used in this RELATED TERMS section which is also used in title I of the Patient Protection and Affordable Care Act shall have the same meaning as when used in such title. ‘‘(g) A DMINISTRATION AND P ROCEDURE .— N GENERAL .—The penalty provided by this section ‘‘(1) I shall be paid upon notice and demand by the Secretary, and except as provided in paragraph (2), shall be assessed and col- lected in the same manner as an assessable penalty under sub- chapter B of chapter 68. ‘‘(2) S PECIAL RULES .—Notwithstanding any other provision of law— ‘‘(A) W AIVER OF CRIMINAL PENALTIES .—In the case of any failure by a taxpayer to timely pay any penalty im- posed by this section, such taxpayer shall not be subject to any criminal prosecution or penalty with respect to such failure. ‘‘(B) L IMITATIONS ON LIENS AND LEVIES .—The Sec- retary shall not— ‘‘(i) file notice of lien with respect to any property of a taxpayer by reason of any failure to pay the pen- alty imposed by this section, or ‘‘(ii) levy on any such property with respect to such failure.’’. (c) C LERICAL A MENDMENT .—The table of chapters for subtitle D of the Internal Revenue Code of 1986 is amended by inserting after the item relating to chapter 47 the following new item: ‘‘C HAPTER 48—M AINTENANCE OF M INIMUM E SSENTIAL C OVERAGE .’’. (d) E D ATE .—The amendments made by this section FFECTIVE shall apply to taxable years ending after December 31, 2013. SEC. 1502. REPORTING OF HEALTH INSURANCE COVERAGE. (a) I N G ENERAL .—Part III of subchapter A of chapter 61 of the Internal Revenue Code of 1986 is amended by inserting after sub- part C the following new subpart: June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00151 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

171 152 Sec. 1502 6055 IRC PPACA (Consolidated) \ ‘‘Subpart D—Information Regarding Health Insurance Coverage ‘‘Sec. 6055. Reporting of health insurance coverage. ‘‘SEC. 6055. REPORTING OF HEALTH INSURANCE COVERAGE. N G ENERAL ‘‘(a) I .—Every person who provides minimum essen- tial coverage to an individual during a calendar year shall, at such time as the Secretary may prescribe, make a return described in subsection (b). ORM AND M ANNER OF R ‘‘(b) F .— ETURN ‘‘(1) I .—A return is described in this subsection N GENERAL if such return— ‘‘(A) is in such form as the Secretary may prescribe, and ‘‘(B) contains— ‘‘(i) the name, address and TIN of the primary in- sured and the name and TIN of each other individual obtaining coverage under the policy, ‘‘(ii) the dates during which such individual was covered under minimum essential coverage during the calendar year, ‘‘(iii) in the case of minimum essential coverage which consists of health insurance coverage, informa- tion concerning— ‘‘(I) whether or not the coverage is a qualified health plan offered through an Exchange estab- lished under section 1311 of the Patient Protection and Affordable Care Act, and ‘‘(II) in the case of a qualified health plan, the amount (if any) of any advance payment under section 1412 of the Patient Protection and Afford- able Care Act of any cost-sharing reduction under section 1402 of such Act or of any premium tax credit under section 36B with respect to such cov- erage, and ‘‘(iv) such other information as the Secretary may require. ‘‘(2) I NFORMATION RELATING TO EMPLOYER - PROVIDED COV - ERAGE .—If minimum essential coverage provided to an indi- vidual under subsection (a) consists of health insurance cov- erage of a health insurance issuer provided through a group health plan of an employer, a return described in this sub- section shall include— ‘‘(A) the name, address, and employer identification number of the employer maintaining the plan, ‘‘(B) the portion of the premium (if any) required to be paid by the employer, and ‘‘(C) if the health insurance coverage is a qualified health plan in the small group market offered through an Exchange, such other information as the Secretary may re- quire for administration of the credit under section 45R (relating to credit for employee health insurance expenses of small employers). June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00152 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

172 153 Sec. 1502 PPACA (Consolidated) - TATEMENTS B E F URNISHED TO I NDIVIDUALS W ITH R E O ‘‘(c) S T W I NFORMATION I HOM R EPORTED .— SPECT TO S N GENERAL .—Every person required to make a return ‘‘(1) I under subsection (a) shall furnish to each individual whose name is required to be set forth in such return a written state- ment showing— ‘‘(A) the name and address of the person required to make such return and the phone number of the informa- tion contact for such person, and ‘‘(B) the information required to be shown on the re- turn with respect to such individual. IME FOR FURNISHING STATEMENTS .—The written ‘‘(2) T statement required under paragraph (1) shall be furnished on or before January 31 of the year following the calendar year for which the return under subsection (a) was required to be made. OVERAGE P ROVIDED BY ‘‘(d) C OVERNMENTAL U NITS .—In the G case of coverage provided by any governmental unit or any agency or instrumentality thereof, the officer or employee who enters into the agreement to provide such coverage (or the person appro- priately designated for purposes of this section) shall make the re- turns and statements required by this section. ‘‘(e) M SSENTIAL C OVERAGE INIMUM E .—For purposes of this sec- tion, the term ‘minimum essential coverage’ has the meaning given such term by section 5000A(f).’’. (b) A SSESSABLE ENALTIES .— P (1) Subparagraph (B) of section 6724(d)(1) of the Internal Revenue Code of 1986 (relating to definitions) is amended by striking ‘‘or’’ at the end of clause (xxii), by striking ‘‘and’’ at the end of clause (xxiii) and inserting ‘‘or’’, and by inserting after clause (xxiii) the following new clause: ‘‘(xxiv) section 6055 (relating to returns relating to information regarding health insurance coverage), and’’. (2) Paragraph (2) of section 6724(d) of such Code is amend- ed by striking ‘‘or’’ at the end of subparagraph (EE), by strik- ing the period at the end of subparagraph (FF) and inserting ‘‘, or’’ and by inserting after subparagraph (FF) the following new subparagraph: ‘‘(GG) section 6055(c) (relating to statements relating to information regarding health insurance coverage).’’. OTIFICATION OF N .—Not later than June ONENROLLMENT (c) N 30 of each year, the Secretary of the Treasury, acting through the Internal Revenue Service and in consultation with the Secretary of Health and Human Services, shall send a notification to each indi- vidual who files an individual income tax return and who is not en- rolled in minimum essential coverage (as defined in section 5000A of the Internal Revenue Code of 1986). Such notification shall con- tain information on the services available through the Exchange operating in the State in which such individual resides. (d) C ONFORMING A MENDMENT .—The table of subparts for part III of subchapter A of chapter 61 of such Code is amended by in- serting after the item relating to subpart C the following new item: June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00153 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

173 154 Sec. 1511 PPACA (Consolidated) SUBPART D — ’’. ‘‘ INFORMATION REGARDING HEALTH INSURANCE COVERAGE D .—The amendments made by this section FFECTIVE (e) E ATE shall apply to calendar years beginning after 2013. PART II—EMPLOYER RESPONSIBILITIES SEC. 1511. AUTOMATIC ENROLLMENT FOR EMPLOYEES OF LARGE EM- PLOYERS. The Fair Labor Standards Act of 1938 is amended by inserting after section 18 (29 U.S.C. 218) the following: ø 29 U.S.C. 218a ‘‘SEC. 18A . AUTOMATIC ENROLLMENT FOR EMPLOYEES ¿ OF LARGE EMPLOYERS. ‘‘In accordance with regulations promulgated by the Secretary, an employer to which this Act applies that has more than 200 full- time employees and that offers employees enrollment in 1 or more health benefits plans shall automatically enroll new full-time em- ployees in one of the plans offered (subject to any waiting period authorized by law) and to continue the enrollment of current em- ployees in a health benefits plan offered through the employer. Any automatic enrollment program shall include adequate notice and the opportunity for an employee to opt out of any coverage the indi- vidual or employee were automatically enrolled in. Nothing in this section shall be construed to supersede any State law which estab- lishes, implements, or continues in effect any standard or require- ment relating to employers in connection with payroll except to the extent that such standard or requirement prevents an employer from instituting the automatic enrollment program under this sec- tion.’’. SEC. 1512. EMPLOYER REQUIREMENT TO INFORM EMPLOYEES OF COVERAGE OPTIONS. The Fair Labor Standards Act of 1938 is amended by inserting after section 18A (as added by section 1513) the following: ø 29 U.S.C. 218b ¿ . NOTICE TO EMPLOYEES. ‘‘SEC. 18B N ‘‘(a) I ENERAL .—In accordance with regulations promulgated G by the Secretary, an employer to which this Act applies, shall pro- vide to each employee at the time of hiring (or with respect to cur- rent employees, not later than March 1, 2013), written notice— ‘‘(1) informing the employee of the existence of an Ex- change, including a description of the services provided by such Exchange, and the manner in which the employee may contact the Exchange to request assistance; ‘‘(2) if the employer plan’s share of the total allowed costs of benefits provided under the plan is less than 60 percent of such costs, that the employee may be eligible for a premium tax credit under section 36B of the Internal Revenue Code of 1986 and a cost sharing reduction under section 1402 of the Patient Protection and Affordable Care Act if the employee purchases a qualified health plan through the Exchange; and ‘‘(3) ø As revised by section 10108(i)(2) ¿ if the employee pur- chases a qualified health plan through the Exchange and the employer does not offer a free choice voucher, the employee may lose the employer contribution (if any) to any health bene- fits plan offered by the employer and that all or a portion of June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00154 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

174 155 Sec. 1513 4980H IRC PPACA (Consolidated) \ such contribution may be excludable from income for Federal income tax purposes. D ATE .—Subsection (a) shall take effect with re- ‘‘(b) E FFECTIVE spect to employers in a State beginning on March 1, 2013.’’. SEC. 1513. SHARED RESPONSIBILITY FOR EMPLOYERS. (a) I G ENERAL .—Chapter 43 of the Internal Revenue Code of N 1986 is amended by adding at the end the following: ‘‘SEC. 4980H. SHARED RESPONSIBILITY FOR EMPLOYERS REGARDING HEALTH COVERAGE. ARGE E MPLOYERS N OT O FFERING H EALTH C OVERAGE .— ‘‘(a) L If— ‘‘(1) any applicable large employer fails to offer to its full- time employees (and their dependents) the opportunity to en- roll in minimum essential coverage under an eligible employer- sponsored plan (as defined in section 5000A(f)(2)) for any month, and ‘‘(2) at least one full-time employee of the applicable large employer has been certified to the employer under section 1411 of the Patient Protection and Affordable Care Act as having en- rolled for such month in a qualified health plan with respect to which an applicable premium tax credit or cost-sharing re- duction is allowed or paid with respect to the employee, then there is hereby imposed on the employer an assessable pay- ment equal to the product of the applicable payment amount and the number of individuals employed by the employer as full-time employees during such month. 60 E MPLOYERS W ITH W AITING P ERIODS E XCEEDING ARGE ø ‘‘(b) L D AYS .— ø Replaced first by section 10106(e) and stricken by section 1003(d) of HCERA and succeeding subsections were redesignated accordingly ¿¿ W ARGE O FFERING C OVERAGE MPLOYERS ITH E MPLOYEES ‘‘(b) L E HO Q W P REMIUM T AX C REDITS OR C OST - SHARING R E - UALIFY FOR DUCTIONS .— ‘‘(1) I N GENERAL .—If— ‘‘(A) an applicable large employer offers to its full-time employees (and their dependents) the opportunity to enroll in minimum essential coverage under an eligible employer- sponsored plan (as defined in section 5000A(f)(2)) for any month, and ‘‘(B) 1 or more full-time employees of the applicable large employer has been certified to the employer under section 1411 of the Patient Protection and Affordable Care Act as having enrolled for such month in a qualified health plan with respect to which an applicable premium tax credit or cost-sharing reduction is allowed or paid with re- spect to the employee, then there is hereby imposed on the employer an assessable payment equal to the product of the number of full-time em- ployees of the applicable large employer described in subpara- 1 ⁄ 12 of graph (B) for such month and an amount equal to $3,000. ø As revised by section 1003(b)(1) of HCERA ¿ ‘‘(2) O VERALL LIMITATION .—The aggregate amount of tax determined under paragraph (1) with respect to all employees June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00155 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

175 156 Sec. 1513 4980H IRC PPACA (Consolidated) \ of an applicable large employer for any month shall not exceed the product of the applicable payment amount and the number of individuals employed by the employer as full-time employees during such month. PECIAL FOR EMPLOYERS PROVIDING FREE RULES ‘‘(3) S CHOICE VOUCHERS As added by section 10108(i)(1) ¿ No as- .— ø sessable payment shall be imposed under paragraph (1) for any month with respect to any employee to whom the employer provides a free choice voucher under section 10108 of the Pa- tient Protection and Affordable Care Act for such month. ‘‘(c) D S PECIAL R ULES .—For purposes of this EFINITIONS AND section— ‘‘(1) A .—The term ‘applicable PPLICABLE PAYMENT AMOUNT 1 payment amount’ means, with respect to any month, 12 of ⁄ $2,000. As revised by section 1003(b)(2) of HCERA ¿ ø ‘‘(2) A PPLICABLE LARGE EMPLOYER .— N GENERAL .—The term ‘applicable large em- ‘‘(A) I ployer’ means, with respect to a calendar year, an em- ployer who employed an average of at least 50 full-time employees on business days during the preceding calendar year. ‘‘(B) E XEMPTION FOR CERTAIN EMPLOYERS .— .—An employer shall not be consid- N GENERAL ‘‘(i) I ered to employ more than 50 full-time employees if— ‘‘(I) the employer’s workforce exceeds 50 full- time employees for 120 days or fewer during the calendar year, and ‘‘(II) the employees in excess of 50 employed during such 120-day period were seasonal work- ers. ‘‘(ii) D OF SEASONAL WORKERS EFINITION .—The term ‘seasonal worker’ means a worker who performs labor or services on a seasonal basis as defined by the Secretary of Labor, including workers covered by sec- tion 500.20(s)(1) of title 29, Code of Federal Regula- tions and retail workers employed exclusively during holiday seasons. ‘‘(C) R .—For ULES FOR DETERMINING EMPLOYER SIZE purposes of this paragraph— PPLICATION OF AGGREGATION RULE FOR EM - ‘‘(i) A .—All persons treated as a single employer PLOYERS under subsection (b), (c), (m), or (o) of section 414 of the Internal Revenue Code of 1986 shall be treated as 1 employer. MPLOYERS NOT IN EXISTENCE IN PRECEDING ‘‘(ii) E YEAR .—In the case of an employer which was not in existence throughout the preceding calendar year, the determination of whether such employer is an applica- ble large employer shall be based on the average num- ber of employees that it is reasonably expected such employer will employ on business days in the current calendar year. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00156 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

176 157 Sec. 1513 4980H IRC PPACA (Consolidated) \ REDECESSORS .—Any reference in this sub- ‘‘(iii) P section to an employer shall include a reference to any predecessor of such employer. ø Previous subparagraph (D), relating to application to construc- tion industry employers, added by section 10106 but replaced, as shown below, by section 1003(a) of HCERA ¿ PPLICATION OF EMPLOYER SIZE TO ASSESSABLE ‘‘(D) A .— PENALTIES ‘‘(i) I N GENERAL .—The number of individuals em- ployed by an applicable large employer as full-time employees during any month shall be reduced by 30 solely for purposes of calculating— ‘‘(I) the assessable payment under subsection (a), or ‘‘(II) the overall limitation under subsection (b)(2). GGREGATION .—In the case of persons treated ‘‘(ii) A as 1 employer under subparagraph (C)(i), only 1 reduc- tion under subclause (I) or (II) shall be allowed with respect to such persons and such reduction shall be al- located among such persons ratably on the basis of the number of full-time employees employed by each such person. ‘‘(E) F ULL - TIME EQUIVALENTS TREATED AS FULL - TIME EMPLOYEES .— ø As added by section 1003(c) of HCERA ¿ Solely for purposes of determining whether an employer is an applicable large employer under this paragraph, an em- ployer shall, in addition to the number of full-time employ- ees for any month otherwise determined, include for such month a number of full-time employees determined by di- viding the aggregate number of hours of service of employ- ees who are not full-time employees for the month by 120. PPLICABLE PREMIUM TAX CREDIT AND COST - SHARING ‘‘(3) A .—The term ‘applicable premium tax credit and REDUCTION cost-sharing reduction’ means— ‘‘(A) any premium tax credit allowed under section 36B, ‘‘(B) any cost-sharing reduction under section 1402 of the Patient Protection and Affordable Care Act, and ‘‘(C) any advance payment of such credit or reduction under section 1412 of such Act. .— ULL - TIME EMPLOYEE ‘‘(4) F ‘‘(A) I .— ø As revised by section 10106(f)(1) ¿ N GENERAL The term ‘full-time employee’ means, with respect to any month, an employee who is employed on average at least 30 hours of service per week. ‘‘(B) H OURS OF SERVICE .—The Secretary, in consulta- tion with the Secretary of Labor, shall prescribe such regu- lations, rules, and guidance as may be necessary to deter- mine the hours of service of an employee, including rules for the application of this paragraph to employees who are not compensated on an hourly basis. ‘‘(5) I NFLATION ADJUSTMENT .— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00157 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

177 158 Sec. 1513 PPACA (Consolidated) N GENERAL .—In the case of any calendar year ‘‘(A) I after 2014, each of the dollar amounts in subsection (b) and paragraph (1) shall be increased by an amount equal to the product of— As revised by section 1003(a)(3) of ø HCERA ¿ ‘‘(i) such dollar amount, and ‘‘(ii) the premium adjustment percentage (as de- fined in section 1302(c)(4) of the Patient Protection and Affordable Care Act) for the calendar year. ‘‘(B) R .—If the amount of any increase under OUNDING subparagraph (A) is not a multiple of $10, such increase shall be rounded to the next lowest multiple of $10. ‘‘(6) O THER DEFINITIONS .—Any term used in this section which is also used in the Patient Protection and Affordable Care Act shall have the same meaning as when used in such Act. .—For denial of deduction for the AX NONDEDUCTIBLE ‘‘(7) T tax imposed by this section, see section 275(a)(6). P ROCEDURE .— DMINISTRATION AND ‘‘(d) A ‘‘(1) I .—Any assessable payment provided by N GENERAL this section shall be paid upon notice and demand by the Sec- retary, and shall be assessed and collected in the same manner as an assessable penalty under subchapter B of chapter 68. ‘‘(2) T IME FOR PAYMENT .—The Secretary may provide for the payment of any assessable payment provided by this sec- tion on an annual, monthly, or other periodic basis as the Sec- retary may prescribe. ‘‘(3) C OORDINATION WITH CREDITS , ETC ..—The Secretary shall prescribe rules, regulations, or guidance for the repay- ment of any assessable payment (including interest) if such payment is based on the allowance or payment of an applicable premium tax credit or cost-sharing reduction with respect to an employee, such allowance or payment is subsequently dis- allowed, and the assessable payment would not have been re- quired to be made but for such allowance or payment.’’. (b) C A LERICAL .—The table of sections for chapter MENDMENT 43 of such Code is amended by adding at the end the following new item: ‘‘Sec. 4980H. Shared responsibility for employers regarding health coverage.’’. (c) S TUDY AND R EPORT OF E FFECT OF T AX ON W ORKERS ’ .— AGES W (1) I N GENERAL .—The Secretary of Labor shall conduct a study to determine whether employees’ wages are reduced by reason of the application of the assessable payments under sec- tion 4980H of the Internal Revenue Code of 1986 (as added by the amendments made by this section). The Secretary shall make such determination on the basis of the National Com- pensation Survey published by the Bureau of Labor Statistics. (2) R EPORT .—The Secretary shall report the results of the study under paragraph (1) to the Committee on Ways and Means of the House of Representatives and to the Committee on Finance of the Senate. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00158 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

178 159 Sec. 1514 6056 IRC PPACA (Consolidated) \ FFECTIVE D .—The amendments made by this section (d) E ATE shall apply to months beginning after December 31, 2013. SEC. 1514. REPORTING OF EMPLOYER HEALTH INSURANCE COV- ERAGE. (a) I G ENERAL .—Subpart D of part III of subchapter A of N chapter 61 of the Internal Revenue Code of 1986, as added by sec- tion 1502, is amended by inserting after section 6055 the following new section: ‘‘SEC. 6056. CERTAIN EMPLOYERS REQUIRED TO REPORT ON HEALTH INSURANCE COVERAGE. Heading revised by section 10108(j)(3)(A) ¿ ø ¿ N ENERAL .— ‘‘(a) I As revised by section 10108(j)(1) G Every ap- ø plicable large employer required to meet the requirements of sec- tion 4980H with respect to its full-time employees during a cal- endar year and every offering employer shall, at such time as the Secretary may prescribe, make a return described in subsection (b). .—A return is described in ORM AND M ANNER OF R ETURN ‘‘(b) F this subsection if such return— ‘‘(1) is in such form as the Secretary may prescribe, and ‘‘(2) contains— ‘‘(A) the name, date, and employer identification num- ber of the employer, ‘‘(B) a certification as to whether the employer offers to its full-time employees (and their dependents) the op- portunity to enroll in minimum essential coverage under an eligible employer-sponsored plan (as defined in section 5000A(f)(2)), ‘‘(C) As revised by section 10108(j)(3)(B), including ø addition of clause (v) ¿ if the employer certifies that the employer did offer to its full-time employees (and their de- pendents) the opportunity to so enroll— ‘‘(i) in the case of an applicable large employer, the length of any waiting period (as defined in section 2701(b)(4) of the Public Health Service Act) with re- spect to such coverage, ‘‘(ii) the months during the calendar year for which coverage under the plan was available, ‘‘(iii) the monthly premium for the lowest cost op- tion in each of the enrollment categories under the plan, ‘‘(iv) the employer’s share of the total allowed costs of benefits provided under the plan, and ‘‘(v) in the case of an offering employer, the option for which the employer pays the largest portion of the cost of the plan and the portion of the cost paid by the employer in each of the enrollment categories under such option, ‘‘(D) the number of full-time employees for each month during the calendar year, ‘‘(E) the name, address, and TIN of each full-time em- ployee during the calendar year and the months (if any) during which such employee (and any dependents) were covered under any such health benefits plans, and June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00159 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

179 160 Sec. 1514 6056 IRC PPACA (Consolidated) \ ‘‘(F) such other information as the Secretary may re- quire. ¿ The Secretary shall have ø Sentence added by section 10106(g) the authority to review the accuracy of the information pro- vided under this subsection, including the applicable large em- ployer’s share under paragraph (2)(C)(iv). ‘‘(c) S O B E F URNISHED TO TATEMENTS NDIVIDUALS W ITH R E - T I W HOM SPECT TO NFORMATION I S R EPORTED .— I ‘‘(1) I .—Every person required to make a return N GENERAL under subsection (a) shall furnish to each full-time employee whose name is required to be set forth in such return under subsection (b)(2)(E) a written statement showing— ‘‘(A) the name and address of the person required to make such return and the phone number of the informa- tion contact for such person, and ‘‘(B) the information required to be shown on the re- turn with respect to such individual. ‘‘(2) T IME FOR FURNISHING STATEMENTS .—The written statement required under paragraph (1) shall be furnished on or before January 31 of the year following the calendar year for which the return under subsection (a) was required to be made. ‘‘(d) C OORDINATION W ITH O THER R EQUIREMENTS .—To the max- imum extent feasible, the Secretary may provide that— ‘‘(1) any return or statement required to be provided under this section may be provided as part of any return or state- ment required under section 6051 or 6055, and As revised by section 10108(j)(3)(C) ¿ in the case of an ‘‘(2) ø applicable large employer or offering employer offering health insurance coverage of a health insurance issuer, the employer may enter into an agreement with the issuer to include infor- mation required under this section with the return and state- ment required to be provided by the issuer under section 6055. OVERAGE ‘‘(e) C P G OVERNMENTAL U NITS .— ø As re- ROVIDED BY vised by section 10108(j)(3)(D) ¿ In the case of any applicable large employer or offering employer which is a governmental unit or any agency or instrumentality thereof, the person appropriately des- ignated for purposes of this section shall make the returns and statements required by this section. ‘‘(f) D .— ø Replaced by section 10108(j)(2) ¿ For pur- EFINITIONS poses of this section— ‘‘(1) O FFERING EMPLOYER .— ‘‘(A) I N GENERAL .—The term ‘offering employer’ means any offering employer (as defined in section 10108(b) of the Patient Protection and Affordable Care Act) if the required contribution (within the meaning of section 5000A(e)(1)(B)(i)) of any employee exceeds 8 percent of the wages (as defined in section 3121(a)) paid to such em- ployee by such employer. .—In the case of any calendar year be- NDEXING ‘‘(B) I ginning after 2014, the 8 percent under subparagraph (A) shall be adjusted for the calendar year to reflect the rate of premium growth between the preceding calendar year and 2013 over the rate of income growth for such period. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00160 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

180 161 Sec. 1515 PPACA (Consolidated) THER DEFINITIONS .—Any term used in this section ‘‘(2) O which is also used in section 4980H shall have the meaning given such term by section 4980H.’’. (b) A P ENALTIES .— SSESSABLE (1) Subparagraph (B) of section 6724(d)(1) of the Internal Revenue Code of 1986 (relating to definitions), as amended by section 1502, is amended by striking ‘‘or’’ at the end of clause (xxiii), by striking ‘‘and’’ at the end of clause (xxiv) and insert- ing ‘‘or’’, and by inserting after clause (xxiv) the following new ø Clause revised by section 10108(j)(3)(E) ¿ clause: ‘‘(xxv) section 6056 (relating to returns relating to certain employers required to report on health insur- ance coverage), and’’. (2) Paragraph (2) of section 6724(d) of such Code, as so amended, is amended by striking ‘‘or’’ at the end of subpara- graph (FF), by striking the period at the end of subparagraph (GG) and inserting ‘‘, or’’ and by inserting after subparagraph (GG) the following new subparagraph: As revised by section ø 10108(j)(3)(F) ¿ ‘‘(HH) section 6056(c) (relating to statements relating to certain employers required to report on health insur- ance coverage).’’. ONFORMING (c) C MENDMENT .—The table of sections for sub- A part D of part III of subchapter A of chapter 61 of such Code, as added by section 1502, is amended by adding at the end the fol- lowing new item: ø As revised by section 10108(j)(3)(G) ¿ ‘‘Sec. 6056. Certain employers required to report on health insurance coverage.’’. (d) E FFECTIVE D ATE .—The amendments made by this section shall apply to periods beginning after December 31, 2013. SEC. 1515. OFFERING OF EXCHANGE-PARTICIPATING QUALIFIED HEALTH PLANS THROUGH CAFETERIA PLANS. (a) I G ENERAL .—Subsection (f) of section 125 of the Internal N Revenue Code of 1986 is amended by adding at the end the fol- lowing new paragraph: ERTAIN EXCHANGE - PARTICIPATING QUALIFIED HEALTH ‘‘(3) C PLANS NOT QUALIFIED .— ‘‘(A) I N GENERAL .—The term ‘qualified benefit’ shall not include any qualified health plan (as defined in section 1301(a) of the Patient Protection and Affordable Care Act) offered through an Exchange established under section 1311 of such Act. .— XCEPTION FOR EXCHANGE - ELIGIBLE EMPLOYERS ‘‘(B) E Subparagraph (A) shall not apply with respect to any em- ployee if such employee’s employer is a qualified employer (as defined in section 1312(f)(2) of the Patient Protection and Affordable Care Act) offering the employee the oppor- tunity to enroll through such an Exchange in a qualified health plan in a group market.’’. (b) C ONFORMING A MENDMENTS .—Subsection (f) of section 125 of such Code is amended— (1) by striking ‘‘For purposes of this section, the term’’ and inserting ‘‘For purposes of this section— N G ENERAL .—The term’’, and ‘‘(1) I June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00161 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

181 162 Sec. 10108 PPACA (Consolidated) (2) by striking ‘‘Such term shall not include’’ and inserting the following: - TERM CARE INSURANCE NOT QUALIFIED .—The ‘‘(2) L ONG term ‘qualified benefit’ shall not include’’. FFECTIVE ATE .—The amendments made by this section D (c) E shall apply to taxable years beginning after December 31, 2013. Note: Section 10108 provides for Free Choice Vouchers as fol- ø lows: ¿ ƒ 42 U.S.C. 18101 ≈ . FREE CHOICE VOUCHERS SEC. 10108 copied from title Xx and shown here for information purposes ƒ ≈ only . (a) I N G ENERAL .—An offering employer shall provide free choice vouchers to each qualified employee of such employer. FFERING E MPLOYER .—For purposes of this section, the term (b) O ‘‘offering employer’’ means any employer who— (1) offers minimum essential coverage to its employees con- sisting of coverage through an eligible employer-sponsored plan; and (2) pays any portion of the costs of such plan. .—For purposes of this section— UALIFIED E MPLOYEE (c) Q (1) I .—The term ‘‘qualified employee’’ means, N GENERAL with respect to any plan year of an offering employer, any em- ployee— (A) whose required contribution (as determined under section 5000A(e)(1)(B)) for minimum essential coverage through an eligible employer-sponsored plan— (i) exceeds 8 percent of such employee’s household income for the taxable year described in section 1412(b)(1)(B) which ends with or within in the plan year; and (ii) does not exceed 9.8 percent of such employee’s household income for such taxable year; (B) whose household income for such taxable year is not greater than 400 percent of the poverty line for a family of the size involved; and (C) who does not participate in a health plan offered by the offering employer. NDEXING .—In the case of any calendar year beginning (2) I after 2014, the Secretary shall adjust the 8 percent under para- graph (1)(A)(i) and 9.8 percent under paragraph (1)(A)(ii) for the calendar year to reflect the rate of premium growth between the preceding calendar year and 2013 over the rate of income growth for such period. REE C HOICE V (d) F .— OUCHER (1) A MOUNT .— (A) I N GENERAL .—The amount of any free choice vouch- er provided under subsection (a) shall be equal to the monthly portion of the cost of the eligible employer-spon- sored plan which would have been paid by the employer if the employee were covered under the plan with respect to which the employer pays the largest portion of the cost of the plan. Such amount shall be equal to the amount the employer would pay for an employee with self-only coverage June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00162 Fmt 9001 Sfmt 6603 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

182 163 Sec. 10108 PPACA (Consolidated) unless such employee elects family coverage (in which case such amount shall be the amount the employer would pay for family coverage). (B) D .—The cost of any health ETERMINATION OF COST plan shall be determined under the rules similar to the rules of section 2204 of the Public Health Service Act, ex- cept that such amount shall be adjusted for age and cat- egory of enrollment in accordance with regulations estab- lished by the Secretary. (2) U SE OF VOUCHERS .—An Exchange shall credit the amount of any free choice voucher provided under subsection (a) to the monthly premium of any qualified health plan in the Ex- change in which the qualified employee is enrolled and the of- fering employer shall pay any amounts so credited to the Ex- change. (3) P AYMENT OF EXCESS AMOUNTS .—If the amount of the free choice voucher exceeds the amount of the premium of the qualified health plan in which the qualified employee is en- rolled for such month, such excess shall be paid to the employee. (e) O THER EFINITIONS .—Any term used in this section which D is also used in section 5000A of the Internal Revenue Code of 1986 shall have the meaning given such term under such section 5000A. XCLUSION F ROM I NCOME FOR E MPLOYEE .— (f) E N GENERAL .—Part III of subchapter B of chapter 1 of (1) I the Internal Revenue Code of 1986 is amended by inserting after section 139C the following new section: ‘‘SEC. 139D. FREE CHOICE VOUCHERS. ‘‘Gross income shall not include the amount of any free choice voucher provided by an employer under section 10108 of the Patient Protection and Affordable Care Act to the extent that the amount of such voucher does not exceed the amount paid for a qualified health plan (as defined in section 1301 of such Act) by the taxpayer.’’. (2) C LERICAL AMENDMENT .—The table of sections for part III of subchapter B of chapter 1 of such Code is amended by inserting after the item relating to section 139C the following new item: ‘‘Sec. 139D. Free choice vouchers.’’. (3) E FFECTIVE DATE .—The amendments made by this sub- section shall apply to vouchers provided after December 31, 2013. (g) D EDUCTION LLOWED TO E MPLOYER .— A (1) I N GENERAL .—Section 162(a) of the Internal Revenue Code of 1986 is amended by adding at the end the following new sentence: ‘‘For purposes of paragraph (1), the amount of a free choice voucher provided under section 10108 of the Patient Protection and Affordable Care Act shall be treated as an amount for compensation for personal services actually ren- dered.’’. FFECTIVE DATE .—The amendments made by this sub- (2) E section shall apply to vouchers provided after December 31, 2013. (h) V OUCHER T AKEN I NTO A CCOUNT IN D ETERMINING P REMIUM C REDIT .— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00163 Fmt 9001 Sfmt 6603 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

183 164 Sec. 1551 PPACA (Consolidated) ƒ Added a subparagraph (D) to section 36(c)(2) of the (1) IRC, added by section 1401 ≈ (2) E .—The amendment made by this sub- FFECTIVE DATE section shall apply to taxable years beginning after December 31, 2013. (i) C ITH E MPLOYER OORDINATION ESPONSIBILITIES .— W R HARED RESPONSIBILITY PENALTY .— (1) S (A) ƒ Added a paragraph (3) to section 4980H(c) of the ≈ IRC, added by section 1513 (B) E FFECTIVE DATE .—The amendment made by this paragraph shall apply to months beginning after December 31, 2013. ƒ Amended section 18B(a)(3) of FLSA, added by section (2) 1512 ≈ (j) E R EPORTING .— MPLOYER ƒ Amended section 6056(a) of the IRC, added by section (1) 1514 ≈ (2) ƒ Replaced subsection (f) of section 6056 of the IRC, added by section 1514 ≈ (3) ƒ Made miscellaneous conforming amendments to sec- tions 6056 and 6724(d) of the IRC, added by section 1514, as well as a table of sections amendment ≈ (4) E FFECTIVE DATE .—The amendments made by this sub- section shall apply to periods beginning after December 31, 2013. Subtitle G—Miscellaneous Provisions SEC. 1551 42 U.S.C. 18111 ¿ . DEFINITIONS. ø Unless specifically provided for otherwise, the definitions con- tained in section 2791 of the Public Health Service Act (42 U.S.C. 300gg–91) shall apply with respect to this title. ø 42 U.S.C. 18112 ¿ . TRANSPARENCY IN GOVERNMENT. SEC. 1552 Not later than 30 days after the date of enactment of this Act, the Secretary of Health and Human Services shall publish on the Internet website of the Department of Health and Human Services, a list of all of the authorities provided to the Secretary under this Act (and the amendments made by this Act). SEC. 1553 ø 42 U.S.C. 18113 ¿ . PROHIBITION AGAINST DISCRIMINATION ON ASSISTED SUICIDE. (a) I G ENERAL .—The Federal Government, and any State or N local government or health care provider that receives Federal fi- nancial assistance under this Act (or under an amendment made by this Act) or any health plan created under this Act (or under an amendment made by this Act), may not subject an individual or institutional health care entity to discrimination on the basis that the entity does not provide any health care item or service fur- nished for the purpose of causing, or for the purpose of assisting in causing, the death of any individual, such as by assisted suicide, euthanasia, or mercy killing. EFINITION .—In this section, the term ‘‘health care entity’’ (b) D includes an individual physician or other health care professional, a hospital, a provider-sponsored organization, a health mainte- June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00164 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

184 165 Sec. 1556 PPACA (Consolidated) nance organization, a health insurance plan, or any other kind of health care facility, organization, or plan. T REATMENT OF C ERTAIN S ERVICES .— ONSTRUCTION AND (c) C Nothing in subsection (a) shall be construed to apply to, or to af- fect, any limitation relating to— (1) the withholding or withdrawing of medical treatment or medical care; (2) the withholding or withdrawing of nutrition or hydra- tion; (3) abortion; or (4) the use of an item, good, benefit, or service furnished for the purpose of alleviating pain or discomfort, even if such use may increase the risk of death, so long as such item, good, benefit, or service is not also furnished for the purpose of caus- ing, or the purpose of assisting in causing, death, for any rea- son. (d) A DMINISTRATION .—The Office for Civil Rights of the Depart- ment of Health and Human Services is designated to receive com- plaints of discrimination based on this section. ø SEC. 1554 ¿ . ACCESS TO THERAPIES. 42 U.S.C. 18114 Notwithstanding any other provision of this Act, the Secretary of Health and Human Services shall not promulgate any regulation that— (1) creates any unreasonable barriers to the ability of indi- viduals to obtain appropriate medical care; (2) impedes timely access to health care services; (3) interferes with communications regarding a full range of treatment options between the patient and the provider; (4) restricts the ability of health care providers to provide full disclosure of all relevant information to patients making health care decisions; (5) violates the principles of informed consent and the eth- ical standards of health care professionals; or (6) limits the availability of health care treatment for the full duration of a patient’s medical needs. ø 42 U.S.C. 18115 SEC. 1555 . FREEDOM NOT TO PARTICIPATE IN FED- ¿ ERAL HEALTH INSURANCE PROGRAMS. No individual, company, business, nonprofit entity, or health insurance issuer offering group or individual health insurance cov- erage shall be required to participate in any Federal health insur- ance program created under this Act (or any amendments made by this Act), or in any Federal health insurance program expanded by this Act (or any such amendments), and there shall be no penalty or fine imposed upon any such issuer for choosing not to participate in such programs. SEC. 1556. EQUITY FOR CERTAIN ELIGIBLE SURVIVORS. (a) R EBUTTABLE P RESUMPTION .—Section 411(c)(4) of the Black Lung Benefits Act (30 U.S.C. 921(c)(4)) is amended by striking the last sentence. (b) C ONTINUATION OF B ENEFITS .—Section 422(l) of the Black Lung Benefits Act (30 U.S.C. 932(l)) is amended by striking ‘‘, ex- cept with respect to a claim filed under this part on or after the effective date of the Black Lung Benefits Amendments of 1981’’. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00165 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

185 166 Sec. 1557 PPACA (Consolidated) FFECTIVE D .—The amendments made by this section (c) E ATE shall apply with respect to claims filed under part B or part C of the Black Lung Benefits Act (30 U.S.C. 921 et seq., 931 et seq.) after January 1, 2005, that are pending on or after the date of en- actment of this Act. ø 42 U.S.C. 18116 ¿ . NONDISCRIMINATION. SEC. 1557 N G (a) I .—Except as otherwise provided for in this title ENERAL (or an amendment made by this title), an individual shall not, on the ground prohibited under title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.), title IX of the Education Amendments of 1972 (20 U.S.C. 1681 et seq.), the Age Discrimination Act of 1975 (42 U.S.C. 6101 et seq.), or section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), be excluded from participation in, be denied the benefits of, or be subjected to discrimination under, any health program or activity, any part of which is receiving Federal financial assistance, including credits, subsidies, or contracts of insurance, or under any program or activity that is administered by an Executive Agency or any entity established under this title (or amendments). The enforcement mechanisms provided for and available under such title VI, title IX, section 504, or such Age Discrimination Act shall apply for purposes of violations of this subsection. .—Nothing in this title (or ONTINUED A PPLICATION OF L AWS (b) C an amendment made by this title) shall be construed to invalidate or limit the rights, remedies, procedures, or legal standards avail- able to individuals aggrieved under title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.), title VII of the Civil Rights Act of 1964 (42 U.S.C. 2000e et seq.), title IX of the Education Amend- ments of 1972 (20 U.S.C. 1681 et seq.), section 504 of the Rehabili- tation Act of 1973 (29 U.S.C. 794), or the Age Discrimination Act of 1975 (42 U.S.C. 611 et seq.), or to supersede State laws that pro- vide additional protections against discrimination on any basis de- scribed in subsection (a). (c) R EGULATIONS .—The Secretary may promulgate regulations to implement this section. SEC. 1558. PROTECTIONS FOR EMPLOYEES. The Fair Labor Standards Act of 1938 is amended by inserting after section 18B (as added by section 1512) the following: ‘‘SEC. 18C ø 29 U.S.C. 218c ¿ . PROTECTIONS FOR EMPLOYEES. ‘‘(a) P .—No employer shall discharge or in any man- ROHIBITION ner discriminate against any employee with respect to his or her compensation, terms, conditions, or other privileges of employment because the employee (or an individual acting at the request of the employee) has— ‘‘(1) received a credit under section 36B of the Internal Revenue Code of 1986 or a subsidy under section 1402 of this Act; ‘‘(2) provided, caused to be provided, or is about to provide or cause to be provided to the employer, the Federal Govern- ment, or the attorney general of a State information relating to any violation of, or any act or omission the employee reason- ably believes to be a violation of, any provision of this title (or an amendment made by this title); June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00166 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

186 167 Sec. 1560 PPACA (Consolidated) ‘‘(3) testified or is about to testify in a proceeding con- cerning such violation; ‘‘(4) assisted or participated, or is about to assist or partici- pate, in such a proceeding; or ‘‘(5) objected to, or refused to participate in, any activity, policy, practice, or assigned task that the employee (or other such person) reasonably believed to be in violation of any pro- vision of this title (or amendment), or any order, rule, regula- tion, standard, or ban under this title (or amendment). OMPLAINT ROCEDURE .— P ‘‘(b) C ‘‘(1) I N GENERAL .—An employee who believes that he or she has been discharged or otherwise discriminated against by any employer in violation of this section may seek relief in ac- cordance with the procedures, notifications, burdens of proof, remedies, and statutes of limitation set forth in section 2087(b) of title 15, United States Code. ‘‘(2) N O LIMITATION ON RIGHTS .—Nothing in this section shall be deemed to diminish the rights, privileges, or remedies of any employee under any Federal or State law or under any collective bargaining agreement. The rights and remedies in this section may not be waived by any agreement, policy, form, or condition of employment.’’. SEC. 1559 42 U.S.C. 18117 ¿ . OVERSIGHT. ø The Inspector General of the Department of Health and Human Services shall have oversight authority with respect to the administration and implementation of this title as it relates to such Department. ø 42 U.S.C. 18118 SEC. 1560 . RULES OF CONSTRUCTION. ¿ (a) N E FFECT ON A O L AWS .—Nothing in this title (or NTITRUST an amendment made by this title) shall be construed to modify, im- pair, or supersede the operation of any of the antitrust laws. For the purposes of this section, the term ‘‘antitrust laws’’ has the meaning given such term in subsection (a) of the first section of the Clayton Act, except that such term includes section 5 of the Fed- eral Trade Commission Act to the extent that such section 5 ap- plies to unfair methods of competition. (b) R C ONSTRUCTION R EGARDING H AWAII ’ S P ULE OF REPAID H C ARE A EALTH .—Nothing in this title (or an amendment made CT by this title) shall be construed to modify or limit the application of the exemption for Hawaii’s Prepaid Health Care Act (Haw. Rev. Stat. §§ 393–1 et seq.) as provided for under section 514(b)(5) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1144(b)(5)). LANS H EALTH I NSURANCE P TUDENT .—Nothing in this title (c) S (or an amendment made by this title) shall be construed to prohibit an institution of higher education (as such term is defined for pur- poses of the Higher Education Act of 1965) from offering a student health insurance plan, to the extent that such requirement is oth- erwise permitted under applicable Federal, State or local law. (d) N R E FFECT ON E XISTING O EQUIREMENTS .—Nothing in this title (or an amendment made by this title, unless specified by di- rect statutory reference) shall be construed to modify any existing June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00167 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

187 168 Sec. 1561 PPACA (Consolidated) Federal requirement concerning the State agency responsible for determining eligibility for programs identified in section 1413. SEC. 1561. HEALTH INFORMATION TECHNOLOGY ENROLLMENT STANDARDS AND PROTOCOLS. Title XXX of the Public Health Service Act (42 U.S.C. 300jj et seq.) is amended by adding at the end the following: ‘‘Subtitle C—Other Provisions ‘‘SEC. 3021 42 U.S.C. 300jj–51 ¿ . HEALTH INFORMATION TECHNOLOGY ø ENROLLMENT STANDARDS AND PROTOCOLS. N G ENERAL .— ‘‘(a) I TANDARDS AND PROTOCOLS ‘‘(1) S .—Not later than 180 days after the date of enactment of this title, the Secretary, in con- sultation with the HIT Policy Committee and the HIT Stand- ards Committee, shall develop interoperable and secure stand- ards and protocols that facilitate enrollment of individuals in Federal and State health and human services programs, as de- termined by the Secretary. ‘‘(2) M .—The Secretary shall facilitate enrollment ETHODS in such programs through methods determined appropriate by the Secretary, which shall include providing individuals and third parties authorized by such individuals and their des- ignees notification of eligibility and verification of eligibility re- quired under such programs. ‘‘(b) C ONTENT .—The standards and protocols for electronic en- rollment in the Federal and State programs described in subsection (a) shall allow for the following: ‘‘(1) Electronic matching against existing Federal and State data, including vital records, employment history, enroll- ment systems, tax records, and other data determined appro- priate by the Secretary to serve as evidence of eligibility and in lieu of paper-based documentation. ‘‘(2) Simplification and submission of electronic documenta- tion, digitization of documents, and systems verification of eli- gibility. ‘‘(3) Reuse of stored eligibility information (including docu- mentation) to assist with retention of eligible individuals. ‘‘(4) Capability for individuals to apply, recertify and man- age their eligibility information online, including at home, at points of service, and other community-based locations. ‘‘(5) Ability to expand the enrollment system to integrate new programs, rules, and functionalities, to operate at in- creased volume, and to apply streamlined verification and eli- gibility processes to other Federal and State programs, as ap- propriate. ‘‘(6) Notification of eligibility, recertification, and other needed communication regarding eligibility, which may include communication via email and cellular phones. ‘‘(7) Other functionalities necessary to provide eligibles with streamlined enrollment process. PPROVAL AND N OTIFICATION .—With respect to any stand- ‘‘(c) A ard or protocol developed under subsection (a) that has been ap- June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00168 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

188 169 Sec. 1562 PPACA (Consolidated) proved by the HIT Policy Committee and the HIT Standards Com- mittee, the Secretary— ‘‘(1) shall notify States of such standards or protocols; and ‘‘(2) may require, as a condition of receiving Federal funds for the health information technology investments, that States or other entities incorporate such standards and protocols into such investments. ‘‘(d) G MPLEMENTATION OF A RANTS FOR E NROLL - I PPROPRIATE HIT.— MENT N GENERAL ‘‘(1) I .—The Secretary shall award grant to eli- gible entities to develop new, and adapt existing, technology systems to implement the HIT enrollment standards and pro- tocols developed under subsection (a) (referred to in this sub- section as ‘appropriate HIT technology’). ‘‘(2) E LIGIBLE ENTITIES .—To be eligible for a grant under this subsection, an entity shall— ‘‘(A) be a State, political subdivision of a State, or a local governmental entity; and ‘‘(B) submit to the Secretary an application at such time, in such manner, and containing— ‘‘(i) a plan to adopt and implement appropriate en- rollment technology that includes— ‘‘(I) proposed reduction in maintenance costs of technology systems; ‘‘(II) elimination or updating of legacy sys- tems; and ‘‘(III) demonstrated collaboration with other entities that may receive a grant under this sec- tion that are located in the same State, political subdivision, or locality; ‘‘(ii) an assurance that the entity will share such appropriate enrollment technology in accordance with paragraph (4); and ‘‘(iii) such other information as the Secretary may require. ‘‘(3) S .— HARING N GENERAL .—The Secretary shall ensure that ap- ‘‘(A) I propriate enrollment HIT adopted under grants under this subsection is made available to other qualified State, qualified political subdivisions of a State, or other appro- priate qualified entities (as described in subparagraph (B)) at no cost. ‘‘(B) Q UALIFIED ENTITIES .—The Secretary shall deter- mine what entities are qualified to receive enrollment HIT under subparagraph (A), taking into consideration the rec- ommendations of the HIT Policy Committee and the HIT Standards Committee.’’. SEC. 1562. GAO STUDY REGARDING THE RATE OF DENIAL OF COV- ERAGE AND ENROLLMENT BY HEALTH INSURANCE ISSUERS AND GROUP HEALTH PLANS. ø Section inserted by section 10107(b)(2) ¿ (a) I N G ENERAL .—The Comptroller General of the United States (referred to in this section as the ‘‘Comptroller General’’) shall conduct a study of the incidence of denials of coverage for June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00169 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

189 170 Sec. 1563 PPACA (Consolidated) medical services and denials of applications to enroll in health in- surance plans, as described in subsection (b), by group health plans and health insurance issuers. .— (b) D ATA N GENERAL .—In conducting the study described in sub- (1) I section (a), the Comptroller General shall consider samples of data concerning the following: (A)(i) denials of coverage for medical services to a plan enrollees, by the types of services for which such coverage was denied; and (ii) the reasons such coverage was denied; and (B)(i) incidents in which group health plans and health insurance issuers deny the application of an indi- vidual to enroll in a health insurance plan offered by such group health plan or issuer; and (ii) the reasons such applications are denied. (2) S .— COPE OF DATA AVORABLY RESOLVED DISPUTES .—The data that (A) F the Comptroller General considers under paragraph (1) shall include data concerning denials of coverage for med- ical services and denials of applications for enrollment in a plan by a group health plan or health insurance issuer, where such group health plan or health insurance issuer later approves such coverage or application. LL HEALTH PLANS .—The study under this section (B) A shall consider data from varied group health plans and health insurance plans offered by health insurance issuers, including qualified health plans and health plans that are not qualified health plans. (c) R .—Not later than one year after the date of enact- EPORT ment of this Act, the Comptroller General shall submit to the Sec- retaries of Health and Human Services and Labor a report describ- ing the results of the study conducted under this section. UBLICATION OF R EPORT .—The Secretaries of Health and (d) P Human Services and Labor shall make the report described in sub- section (c) available to the public on an Internet website. ø The following section 1563 (relating to small business procure- ment) inserted by section 10107(b)(2) ¿ SEC. 1563. SMALL BUSINESS PROCUREMENT. Part 19 of the Federal Acquisition Regulation, section 15 of the Small Business Act (15 U.S.C. 644), and any other applicable laws or regulations establishing procurement requirements relating to small business concerns (as defined in section 3 of the Small Busi- ness Act (15 U.S.C. 632)) may not be waived with respect to any contract awarded under any program or other authority under this Act or an amendment made by this Act. ø The following section 1563 (relating to conforming amend- ments) redesignated from section 1562 by section 10107(b)(1) ¿ SEC. 1563 [sic]. CONFORMING AMENDMENTS. (a) A PPLICABILITY .—Section 2735 of the Public Health Service Act (42 U.S.C. 300gg–21), as so redesignated by section 1001(4), is amended— (1) by striking subsection (a); June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00170 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

190 171 Sec. 1563 PPACA (Consolidated) (2) in subsection (b)— (A) in paragraph (1), by striking ‘‘1 through 3’’ and in- serting ‘‘1 and 2’’; and (B) in paragraph (2)— (i) in subparagraph (A), by striking ‘‘subparagraph (D)’’ and inserting ‘‘subparagraph (D) or (E)’’; (ii) by striking ‘‘1 through 3’’ and inserting ‘‘1 and 2’’; and Provision (iii) by adding at the end the following: ø ¿ likely amended by section 10107(a) LECTION NOT APPLICABLE .—The election de- ‘‘(E) E scribed in subparagraph (A) shall not be available with re- spect to the provisions of subparts I and II.’’; (3) in subsection (c), by striking ‘‘1 through 3 shall not apply to any group’’ and inserting ‘‘1 and 2 shall not apply to any individual coverage or any group’’; and (4) in subsection (d)— (A) in paragraph (1), by striking ‘‘1 through 3 shall not apply to any group’’ and inserting ‘‘1 and 2 shall not apply to any individual coverage or any group’’; (B) in paragraph (2)— (i) in the matter preceding subparagraph (A), by striking ‘‘1 through 3 shall not apply to any group’’ and inserting ‘‘1 and 2 shall not apply to any indi- vidual coverage or any group’’; and (ii) in subparagraph (C), by inserting ‘‘or, with re- spect to individual coverage, under any health insur- ance coverage maintained by the same health insur- ance issuer’’; and (C) in paragraph (3), by striking ‘‘any group’’ and in- serting ‘‘any individual coverage or any group’’. (b) D .—Section 2791(d) of the Public Health Service EFINITIONS Act (42 U.S.C. 300gg–91(d)) is amended by adding at the end the following: UALIFIED HEALTH PLAN .—The term ‘qualified health ‘‘(20) Q plan’ has the meaning given such term in section 1301(a) of the Patient Protection and Affordable Care Act. XCHANGE .—The term ‘Exchange’ means an Amer- ‘‘(21) E ican Health Benefit Exchange established under section 1311 of the Patient Protection and Affordable Care Act.’’. (c) T ECHNICAL AND C ONFORMING A MENDMENTS .—Title XXVII of the Public Health Service Act (42 U.S.C. 300gg et seq.) is amend- ed— (1) in section 2704 (42 U.S.C. 300gg), as so redesignated by section 1201(2)— (A) in subsection (c)— (i) in paragraph (2), by striking ‘‘group health plan’’ each place that such term appears and inserting ‘‘group or individual health plan’’; and (ii) in paragraph (3)— (I) by striking ‘‘group health insurance’’ each place that such term appears and inserting ‘‘group or individual health insurance’’; and June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00171 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

191 172 Sec. 1563 PPACA (Consolidated) (II) in subparagraph (D), by striking ‘‘small or large’’ and inserting ‘‘individual or group’’; (B) in subsection (d), by striking ‘‘group health insur- ance’’ each place that such term appears and inserting ‘‘group or individual health insurance’’; and (C) in subsection (e)(1)(A), by striking ‘‘group health insurance’’ and inserting ‘‘group or individual health insur- ance’’; (2) by striking the second heading for subpart 2 of part A (relating to other requirements); (3) in section 2725 (42 U.S.C. 300gg–4), as so redesignated by section 1001(2)— (A) in subsection (a), by striking ‘‘health insurance issuer offering group health insurance coverage’’ and in- serting ‘‘health insurance issuer offering group or indi- vidual health insurance coverage’’; (B) in subsection (b)— (i) by striking ‘‘health insurance issuer offering group health insurance coverage in connection with a group health plan’’ in the matter preceding paragraph (1) and inserting ‘‘health insurance issuer offering group or individual health insurance coverage’’; and (ii) in paragraph (1), by striking ‘‘plan’’ and insert- ing ‘‘plan or coverage’’; (C) in subsection (c)— (i) in paragraph (2), by striking ‘‘group health in- surance coverage offered by a health insurance issuer’’ and inserting ‘‘health insurance issuer offering group or individual health insurance coverage’’; and (ii) in paragraph (3), by striking ‘‘issuer’’ and in- serting ‘‘health insurance issuer’’; and (D) in subsection (e), by striking ‘‘health insurance issuer offering group health insurance coverage’’ and in- serting ‘‘health insurance issuer offering group or indi- vidual health insurance coverage’’; (4) in section 2726 (42 U.S.C. 300gg–5), as so redesignated by section 1001(2)— (A) in subsection (a), by striking ‘‘(or health insurance coverage offered in connection with such a plan)’’ each place that such term appears and inserting ‘‘or a health in- surance issuer offering group or individual health insur- ance coverage’’; (B) in subsection (b), by striking ‘‘(or health insurance coverage offered in connection with such a plan)’’ each place that such term appears and inserting ‘‘or a health in- surance issuer offering group or individual health insur- ance coverage’’; and (C) in subsection (c)— (i) in paragraph (1), by striking ‘‘(and group health insurance coverage offered in connection with a group health plan)’’ and inserting ‘‘and a health insurance issuer offering group or individual health insurance coverage’’; June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00172 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

192 173 Sec. 1563 PPACA (Consolidated) (ii) in paragraph (2), by striking ‘‘(or health insur- ance coverage offered in connection with such a plan)’’ each place that such term appears and inserting ‘‘or a health insurance issuer offering group or individual health insurance coverage’’; (5) in section 2727 (42 U.S.C. 300gg–6), as so redesignated by section 1001(2), by striking ‘‘health insurance issuers pro- viding health insurance coverage in connection with group health plans’’ and inserting ‘‘and health insurance issuers of- fering group or individual health insurance coverage’’; (6) in section 2728 (42 U.S.C. 300gg–7), as so redesignated by section 1001(2)— (A) in subsection (a), by striking ‘‘health insurance coverage offered in connection with such plan’’ and insert- ing ‘‘individual health insurance coverage’’; (B) in subsection (b)— (i) in paragraph (1), by striking ‘‘or a health insur- ance issuer that provides health insurance coverage in connection with a group health plan’’ and inserting ‘‘or a health insurance issuer that offers group or indi- vidual health insurance coverage’’; (ii) in paragraph (2), by striking ‘‘health insurance coverage offered in connection with the plan’’ and in- serting ‘‘individual health insurance coverage’’; and (iii) in paragraph (3), by striking ‘‘health insur- ance coverage offered by an issuer in connection with such plan’’ and inserting ‘‘individual health insurance coverage’’; (C) in subsection (c), by striking ‘‘health insurance issuer providing health insurance coverage in connection with a group health plan’’ and inserting ‘‘health insurance issuer that offers group or individual health insurance cov- erage’’; and (D) in subsection (e)(1), by striking ‘‘health insurance coverage offered in connection with such a plan’’ and in- serting ‘‘individual health insurance coverage’’; (7) by striking the heading for subpart 3; (8) in section 2731 (42 U.S.C. 300gg–11), as so redesig- nated by section 1001(3)— (A) by striking the section heading and all that follows through subsection (b); (B) in subsection (c)— (i) in paragraph (1)— (I) in the matter preceding subparagraph (A), by striking ‘‘small group’’ and inserting ‘‘group and individual’’; and (II) in subparagraph (B)— (aa) in the matter preceding clause (i), by inserting ‘‘and individuals’’ after ‘‘employers’’; (bb) in clause (i), by inserting ‘‘or any ad- ditional individuals’’ after ‘‘additional groups’’; and (cc) in clause (ii), by striking ‘‘without re- gard to the claims experience of those employ- June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00173 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

193 174 Sec. 1563 PPACA (Consolidated) ers and their employees (and their depend- ents) or any health status-related factor relat- ing to such’’ and inserting ‘‘and individuals without regard to the claims experience of those individuals, employers and their em- ployees (and their dependents) or any health status-related factor relating to such individ- uals’’; and (ii) in paragraph (2), by striking ‘‘small group’’ and inserting ‘‘group or individual’’; (C) in subsection (d)— (i) by striking ‘‘small group’’ each place that such appears and inserting ‘‘group or individual’’; and (ii) in paragraph (1)(B)— (I) by striking ‘‘all employers’’ and inserting ‘‘all employers and individuals’’; (II) by striking ‘‘those employers’’ and insert- ing ‘‘those individuals, employers’’; and (III) by striking ‘‘such employees’’ and insert- ing ‘‘such individuals, employees’’; (D) by striking subsection (e); (E) by striking subsection (f); and (F) by transferring such section (as amended by this paragraph) to appear at the end of section 2702 (as added by section 1001(4)); (9) in section 2732 (42 U.S.C. 300gg–12), as so redesig- nated by section 1001(3)— (A) by striking the section heading and all that follows through subsection (a); (B) in subsection (b)— (i) in the matter preceding paragraph (1), by strik- ing ‘‘group health plan in the small or large group market’’ and inserting ‘‘health insurance coverage of- fered in the group or individual market’’; (ii) in paragraph (1), by inserting ‘‘, or individual, as applicable,’’ after ‘‘plan sponsor’’; (iii) in paragraph (2), by inserting ‘‘, or individual, as applicable,’’ after ‘‘plan sponsor’’; and (iv) by striking paragraph (3) and inserting the following: ‘‘(3) V OF PARTICIPATION OR CONTRIBUTION IOLATION RATES .—In the case of a group health plan, the plan sponsor has failed to comply with a material plan provision relating to employer contribution or group participation rules, pursuant to applicable State law.’’; (C) in subsection (c)— (i) in paragraph (1)— (I) in the matter preceding subparagraph (A), by striking ‘‘group health insurance coverage of- fered in the small or large group market’’ and in- serting ‘‘group or individual health insurance cov- erage’’; (II) in subparagraph (A), by inserting ‘‘or indi- vidual, as applicable,’’ after ‘‘plan sponsor’’; June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00174 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

194 175 Sec. 1563 PPACA (Consolidated) (III) in subparagraph (B)— (aa) by inserting ‘‘or individual, as appli- cable,’’ after ‘‘plan sponsor’’; and (bb) by inserting ‘‘or individual health in- surance coverage’’; and (IV) in subparagraph (C), by inserting ‘‘or in- dividuals, as applicable,’’ after ‘‘those sponsors’’; and (ii) in paragraph (2)(A)— (I) in the matter preceding clause (i), by strik- ing ‘‘small group market or the large group mar- ket, or both markets,’’ and inserting ‘‘individual or group market, or all markets,’’; and (II) in clause (i), by inserting ‘‘or individual, as applicable,’’ after ‘‘plan sponsor’’; and (D) by transferring such section (as amended by this paragraph) to appear at the end of section 2703 (as added by section 1001(4)); (10) in section 2733 (42 U.S.C. 300gg–13), as so redesig- nated by section 1001(4)— (A) in subsection (a)— (i) in the matter preceding paragraph (1), by strik- ing ‘‘small employer’’ and inserting ‘‘small employer or an individual’’; (ii) in paragraph (1), by inserting ‘‘, or individual, as applicable,’’ after ‘‘employer’’ each place that such appears; and (iii) in paragraph (2), by striking ‘‘small employer’’ and inserting ‘‘employer, or individual, as applicable,’’; (B) in subsection (b)— (i) in paragraph (1)— (I) in the matter preceding subparagraph (A), by striking ‘‘small employer’’ and inserting ‘‘em- ployer, or individual, as applicable,’’; (II) in subparagraph (A), by adding ‘‘and’’ at the end; (III) by striking subparagraphs (B) and (C); and (IV) in subparagraph (D)— (aa) by inserting ‘‘, or individual, as appli- cable,’’ after ‘‘employer’’; and (bb) by redesignating such subparagraph as subparagraph (B); (ii) in paragraph (2)— (I) by striking ‘‘small employers’’ each place that such term appears and inserting ‘‘employers, or individuals, as applicable,’’; and (II) by striking ‘‘small employer’’ and inserting ‘‘employer, or individual, as applicable,’’; and (C) by redesignating such section (as amended by this paragraph) as section 2709 and transferring such section to appear after section 2708 (as added by section 1001(5)); (11) by redesignating subpart 4 as subpart 2; June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00175 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

195 176 Sec. 1563 PPACA (Consolidated) (12) in section 2735 (42 U.S.C. 300gg–21), as so redesig- nated by section 1001(4)— (A) by striking subsection (a); (B) by striking ‘‘subparts 1 through 3’’ each place that such appears and inserting ‘‘subpart 1’’; (C) by redesignating subsections (b) through (e) as subsections (a) through (d), respectively; and (D) by redesignating such section (as amended by this paragraph) as section 2722; (13) in section 2736 (42 U.S.C. 300gg–22), as so redesig- nated by section 1001(4)— (A) in subsection (a)— (i) in paragraph (1), by striking ‘‘small or large group markets’’ and inserting ‘‘individual or group market’’; and (ii) in paragraph (2), by inserting ‘‘or individual health insurance coverage’’ after ‘‘group health plans’’; (B) in subsection (b)(1)(B), by inserting ‘‘individual health insurance coverage or’’ after ‘‘respect to’’; and (C) by redesignating such section (as amended by this paragraph) as section 2723; (14) in section 2737(a)(1) (42 U.S.C. 300gg–23), as so re- designated by section 1001(4)— (A) by inserting ‘‘individual or’’ before ‘‘group health insurance’’; and (B) by redesignating such section(as amended by this paragraph) as section 2724; (15) in section 2762 (42 U.S.C. 300gg–62)— (A) in the section heading by inserting ‘‘ AND APPLI- CATION ’’ before the period; and (B) by adding at the end the following: .— PPLICATION OF P ART A P ROVISIONS ‘‘(c) A ‘‘(1) I .—The provisions of part A shall apply to N GENERAL health insurance issuers providing health insurance coverage in the individual market in a State as provided for in such part. ‘‘(2) C .—To the extent that any provision of LARIFICATION this part conflicts with a provision of part A with respect to health insurance issuers providing health insurance coverage in the individual market in a State, the provisions of such part A shall apply.’’; and (16) in section 2791(e) (42 U.S.C. 300gg–91(e))— (A) in paragraph (2), by striking ‘‘51’’ and inserting ‘‘101’’; and (B) in paragraph (4)— (i) by striking ‘‘at least 2’’ each place that such ap- pears and inserting ‘‘at least 1’’; and (ii) by striking ‘‘50’’ and inserting ‘‘100’’. (d) A PPLICATION .— ø 42 U.S.C. 18120 ¿ Notwithstanding any other provision of the Patient Protection and Affordable Care Act, nothing in such Act (or an amendment made by such Act) shall be construed to— (1) prohibit (or authorize the Secretary of Health and Human Services to promulgate regulations that prohibit) a June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00176 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

196 177 Sec. 1563 PPACA (Consolidated) \ 9815 IRC group health plan or health insurance issuer from carrying out utilization management techniques that are commonly used as of the date of enactment of this Act; or (2) restrict the application of the amendments made by this subtitle. A MENDMENT TO THE E MPLOYEE R ETIREMENT (e) T N - ECHNICAL I S ECURITY A CT OF 1974.—Subpart B of part 7 of subtitle A COME of title I of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1181 et. seq.) is amended, by adding at the end the fol- lowing: 29 U.S.C. 1185d . ADDITIONAL MARKET REFORMS. ø ¿ ‘‘SEC. 715 ‘‘(a) G ULE .—Except as provided in subsection (b)— ENERAL R ‘‘(1) the provisions of part A of title XXVII of the Public Health Service Act (as amended by the Patient Protection and Affordable Care Act) shall apply to group health plans, and health insurance issuers providing health insurance coverage in connection with group health plans, as if included in this subpart; and ‘‘(2) to the extent that any provision of this part conflicts with a provision of such part A with respect to group health plans, or health insurance issuers providing health insurance coverage in connection with group health plans, the provisions of such part A shall apply. XCEPTION .—Notwithstanding subsection (a), the provi- ‘‘(b) E sions of sections 2716 and 2718 of title XXVII of the Public Health Service Act (as amended by the Patient Protection and Affordable Care Act) shall not apply with respect to self-insured group health plans, and the provisions of this part shall continue to apply to such plans as if such sections of the Public Health Service Act (as so amended) had not been enacted.’’. ECHNICAL A MENDMENT TO THE I NTERNAL (f) T EVENUE C ODE R OF 1986.—Subchapter B of chapter 100 of the Internal Revenue Code of 1986 is amended by adding at the end the following: ‘‘SEC. 9815. ADDITIONAL MARKET REFORMS. ‘‘(a) G ENERAL R ULE .—Except as provided in subsection (b)— ‘‘(1) the provisions of part A of title XXVII of the Public Health Service Act (as amended by the Patient Protection and Affordable Care Act) shall apply to group health plans, and health insurance issuers providing health insurance coverage in connection with group health plans, as if included in this subchapter; and ‘‘(2) to the extent that any provision of this subchapter con- flicts with a provision of such part A with respect to group health plans, or health insurance issuers providing health in- surance coverage in connection with group health plans, the provisions of such part A shall apply. ‘‘(b) E XCEPTION .—Notwithstanding subsection (a), the provi- sions of sections 2716 and 2718 of title XXVII of the Public Health Service Act (as amended by the Patient Protection and Affordable Care Act) shall not apply with respect to self-insured group health plans, and the provisions of this subchapter shall continue to apply to such plans as if such sections of the Public Health Service Act (as so amended) had not been enacted.’’. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00177 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

197 178 Sec. 1563 PPACA (Consolidated) The following section 1563 (relating to Sense of the Senate ø ¿ promoting fiscal responsibility) was the original section 1563 SEC. 1563 [sic]. SENSE OF THE SENATE PROMOTING FISCAL RESPONSI- BILITY. INDINGS .—The Senate makes the following findings: (a) F (1) Based on Congressional Budget Office (CBO) estimates, this Act will reduce the Federal deficit between 2010 and 2019. (2) CBO projects this Act will continue to reduce budget deficits after 2019. (3) Based on CBO estimates, this Act will extend the sol- vency of the Medicare HI Trust Fund. (4) This Act will increase the surplus in the Social Security Trust Fund, which should be reserved to strengthen the fi- nances of Social Security. (5) The initial net savings generated by the Community Living Assistance Services and Supports (CLASS) program are necessary to ensure the long-term solvency of that program. (b) S ENSE OF THE S ENATE .—It is the sense of the Senate that— (1) the additional surplus in the Social Security Trust Fund generated by this Act should be reserved for Social Secu- rity and not spent in this Act for other purposes; and (2) the net savings generated by the CLASS program should be reserved for the CLASS program and not spent in this Act for other purposes. ø Note section 10108, p. 835, provides for free choice vouchers ¿ June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00178 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

198 179 Sec. 2001 PPACA (Consolidated) TITLE II—ROLE OF PUBLIC PROGRAMS Subtitle A—Improved Access to Medicaid SEC. 2001. MEDICAID COVERAGE FOR THE LOWEST INCOME POPU- LATIONS. NCOME AT OR NDIVIDUALS W OVERAGE FOR I I B ELOW (a) C ITH ERCENT OF THE P OVERTY 133 P INE .— L (1) B .—Section 1902(a)(10)(A)(i) of the Social EGINNING 2014 Security Act (42 U.S.C. 1396a) is amended— (A) by striking ‘‘or’’ at the end of subclause (VI); (B) by adding ‘‘or’’ at the end of subclause (VII); and (C) by inserting after subclause (VII) the following: ‘‘(VIII) beginning January 1, 2014, who are under 65 years of age, not pregnant, not entitled to, or enrolled for, benefits under part A of title XVIII, or enrolled for benefits under part B of title XVIII, and are not described in a previous sub- clause of this clause, and whose income (as deter- mined under subsection (e)(14)) does not exceed 133 percent of the poverty line (as defined in sec- tion 2110(c)(5)) applicable to a family of the size involved, subject to subsection (k);’’. - ROVISION OF AT LEAST MINIMUM ESSENTIAL COV (2) P .— ERAGE (A) I N GENERAL .—Section 1902 of such Act (42 U.S.C. 1396a) is amended by inserting after subsection (j) the fol- lowing: ‘‘(k)(1) The medical assistance provided to an individual de- scribed in subclause (VIII) of subsection (a)(10)(A)(i) shall consist of benchmark coverage described in section 1937(b)(1) or benchmark equivalent coverage described in section 1937(b)(2). Such medical assistance shall be provided subject to the requirements of section 1937, without regard to whether a State otherwise has elected the option to provide medical assistance through coverage under that section, unless an individual described in subclause (VIII) of sub- section (a)(10)(A)(i) is also an individual for whom, under subpara- graph (B) of section 1937(a)(2), the State may not require enroll- ment in benchmark coverage described in subsection (b)(1) of sec- tion 1937 or benchmark equivalent coverage described in sub- section (b)(2) of that section.’’. (B) C ONFORMING AMENDMENT .—Section 1903(i) of the Social Security Act, as amended by section 6402(c), is amended— (i) in paragraph (24), by striking ‘‘or’’ at the end; (ii) in paragraph (25), by striking the period and inserting ‘‘; or’’; and (iii) by adding at the end the following: ‘‘(26) with respect to any amounts expended for medical as- sistance for individuals described in subclause (VIII) of sub- section (a)(10)(A)(i) other than medical assistance provided through benchmark coverage described in section 1937(b)(1) or June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00179 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

199 180 Sec. 2001 PPACA (Consolidated) benchmark equivalent coverage described in section 1937(b)(2).’’. - EDERAL FUNDING FOR COST OF COVERING NEWLY ELIGI (3) F BLE INDIVIDUALS .—Section 1905 of the Social Security Act (42 U.S.C. 1396d), is amended— (A) in subsection (b), in the first sentence, by inserting ‘‘subsection (y) and’’ before ‘‘section 1933(d)’’; and (B) by adding at the end the following new subsection: FMAP FOR NCREASED EDICAL A SSISTANCE FOR N EWLY M ‘‘(y) I LIGIBLE M ANDATORY I NDIVIDUALS .— E ‘‘(1) A OF INCREASE .— ø Replaced by section MOUNT 1201(1)(B) of HCERA Notwithstanding subsection (b), the ¿ Federal medical assistance percentage for a State that is one of the 50 States or the District of Columbia, with respect to amounts expended by such State for medical assistance for newly eligible individuals described in subclause (VIII) of sec- tion 1902(a)(10)(A)(i), shall be equal to— ‘‘(A) 100 percent for calendar quarters in 2014, 2015, and 2016; ‘‘(B) 95 percent for calendar quarters in 2017; ‘‘(C) 94 percent for calendar quarters in 2018; ‘‘(D) 93 percent for calendar quarters in 2019; and ‘‘(E) 90 percent for calendar quarters in 2020 and each year thereafter. ‘‘(2) D .—In this subsection: EFINITIONS ‘‘(A) N ELIGIBLE .—The term ‘newly eligible’ EWLY means, with respect to an individual described in sub- clause (VIII) of section 1902(a)(10)(A)(i), an individual who is not under 19 years of age (or such higher age as the State may have elected) and who, as of December 1, 2009, is not eligible under the State plan or under a waiver of the plan for full benefits or for benchmark coverage de- scribed in subparagraph (A), (B), or (C) of section 1937(b)(1) or benchmark equivalent coverage described in section 1937(b)(2) that has an aggregate actuarial value that is at least actuarially equivalent to benchmark cov- erage described in subparagraph (A), (B), or (C) of section 1937(b)(1), or is eligible but not enrolled (or is on a waiting list) for such benefits or coverage through a waiver under the plan that has a capped or limited enrollment that is full. As revised by section 10201(c)(3)(B) ¿ ø .—The term ‘full benefits’ means, ULL BENEFITS ‘‘(B) F with respect to an individual, medical assistance for all services covered under the State plan under this title that is not less in amount, duration, or scope, or is determined by the Secretary to be substantially equivalent, to the medical assistance available for an individual described in section 1902(a)(10)(A)(i). ø Drafting note: subclause (II) of paragraph (1)(B)(ii), as origi- nally added by section 2001(a)(3) and as amended by section 10201(c)(3)(A), was redesignated as paragraph (5) of subsection (z) and is shown in subsection (z), p. 841, as added by section 10201(c)(4) ¿ June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00180 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

200 181 Sec. 2001 PPACA (Consolidated) TATE OPTIONS TO OFFER COVERAGE EARLIER AND PRE - (4) S CHILDREN REQUIRED TO HAVE COVERAGE SUMPTIVE ELIGIBILITY ; FOR PARENTS TO BE ELIGIBLE .— .—Subsection (k) of section 1902 of the (A) I N GENERAL Social Security Act (as added by paragraph (2)), is amend- ed by inserting after paragraph (1) the following: ø As revised by section 10201(b) ¿ ‘‘(2) Beginning with the first day of any fiscal year quarter that begins on or after April 1, 2010, and before January 1, 2014, a State may elect through a State plan amendment to provide medical assistance to individuals who would be described in subclause (VIII) of subsection (a)(10)(A)(i) if that subclause were effective before January 1, 2014. A State may elect to phase-in the extension of eligibility for medical assistance to such individuals based on income, so long as the State does not ex- tend such eligibility to individuals described in such subclause with higher income before making individuals described in such sub- clause with lower income eligible for medical assistance. ‘‘(3) If an individual described in subclause (VIII) of subsection (a)(10)(A)(i) is the parent of a child who is under 19 years of age (or such higher age as the State may have elected) who is eligible for medical assistance under the State plan or under a waiver of such plan (under that subclause or under a State plan amendment under paragraph (2), the individual may not be enrolled under the State plan unless the individual’s child is enrolled under the State plan or under a waiver of the plan or is enrolled in other health insurance coverage. For purposes of the preceding sentence, the term ‘parent’ includes an individual treated as a caretaker relative for purposes of carrying out section 1931.’’. RESUMPTIVE ELIGIBILITY .—Section 1920 of the So- (B) P cial Security Act (42 U.S.C. 1396r–1) is amended by add- ing at the end the following: ‘‘(e) If the State has elected the option to provide a presump- tive eligibility period under this section or section 1920A, the State may elect to provide a presumptive eligibility period (as defined in subsection (b)(1)) for individuals who are eligible for medical assist- ance under clause (i)(VIII) of subsection (a)(10)(A) or section 1931 in the same manner as the State provides for such a period under this section or section 1920A, subject to such guidance as the Sec- retary shall establish.’’. .— ONFORMING AMENDMENTS (5) C (A) Section 1902(a)(10) of such Act (42 U.S.C. 1396a(a)(10)) is amended in the matter following subpara- graph (G), by striking ‘‘and (XIV)’’ and inserting ‘‘(XIV)’’ and by inserting ‘‘and (XV) the medical assistance made available to an individual described in subparagraph (A)(i)(VIII) shall be limited to medical assistance described in subsection (k)(1)’’ before the semicolon. ø Note that sec- tion 10201(a)(2) made an additional conforming amend- ment to reflect overlap with subparagraph (A)(i)(IX), added by section 2004(a) ¿ (B) Section 1902(l)(2)(C) of such Act (42 U.S.C. 1396a(l)(2)(C)) is amended by striking ‘‘100’’ and inserting ‘‘133’’. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00181 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

201 182 Sec. 2001 PPACA (Consolidated) (C) Section 1905(a) of such Act (42 U.S.C. 1396d(a)) is amended in the matter preceding paragraph (1)— (i) by striking ‘‘or’’ at the end of clause (xii); (ii) by inserting ‘‘or’’ at the end of clause (xiii); and (iii) by inserting after clause (xiii) the following: ‘‘(xiv) individuals described in section 1902(a)(10)(A)(i)(VIII),’’. (D) Section 1903(f)(4) of such Act (42 U.S.C. 1396b(f)(4)) is amended by inserting ‘‘1902(a)(10)(A)(i)(VIII),’’ after ‘‘1902(a)(10)(A)(i)(VII),’’. (E) Section 1937(a)(1)(B) of such Act (42 U.S.C. 1396u–7(a)(1)(B)) is amended by inserting ‘‘subclause (VIII) of section 1902(a)(10)(A)(i) or under’’ after ‘‘eligible under’’. AINTENANCE OF M EDICAID .—Section NCOME E LIGIBILITY I (b) M 1902 of the Social Security Act (42 U.S.C. 1396a) is amended— (1) in subsection (a)— (A) by striking ‘‘and’’ at the end of paragraph (72); (B) by striking the period at the end of paragraph (73) and inserting ‘‘; and’’; and (C) by inserting after paragraph (73) the following new paragraph: ‘‘(74) provide for maintenance of effort under the State plan or under any waiver of the plan in accordance with sub- section (gg).’’; and (2) by adding at the end the following new subsection: ‘‘(gg) M AINTENANCE OF E FFORT .— ‘‘(1) G ENERAL TO MAINTAIN ELIGIBILITY REQUIREMENT .— STANDARDS UNTIL STATE EXCHANGE IS FULLY OPERATIONAL Subject to the succeeding paragraphs of this subsection, during the period that begins on the date of enactment of the Patient Protection and Affordable Care Act and ends on the date on which the Secretary determines that an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act is fully operational, as a condition for re- ceiving any Federal payments under section 1903(a) for cal- endar quarters occurring during such period, a State shall not have in effect eligibility standards, methodologies, or proce- dures under the State plan under this title or under any waiv- er of such plan that is in effect during that period, that are more restrictive than the eligibility standards, methodologies, or procedures, respectively, under the plan or waiver that are in effect on the date of enactment of the Patient Protection and Affordable Care Act. ONTINUATION OF ELIGIBILITY STANDARDS FOR CHIL - ‘‘(2) C DREN UNTIL OCTOBER 1 , 2019 .—The requirement under para- graph (1) shall continue to apply to a State through September 30, 2019, with respect to the eligibility standards, methodolo- gies, and procedures under the State plan under this title or under any waiver of such plan that are applicable to deter- mining the eligibility for medical assistance of any child who is under 19 years of age (or such higher age as the State may have elected). June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00182 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

202 183 Sec. 2001 PPACA (Consolidated) ONAPPLICATION .—During the period that begins on ‘‘(3) N January 1, 2011, and ends on December 31, 2013, the require- ment under paragraph (1) shall not apply to a State with re- spect to nonpregnant, nondisabled adults who are eligible for medical assistance under the State plan or under a waiver of the plan at the option of the State and whose income exceeds 133 percent of the poverty line (as defined in section 2110(c)(5)) applicable to a family of the size involved if, on or after Decem- ber 31, 2010, the State certifies to the Secretary that, with re- spect to the State fiscal year during which the certification is made, the State has a budget deficit, or with respect to the succeeding State fiscal year, the State is projected to have a budget deficit. Upon submission of such a certification to the Secretary, the requirement under paragraph (1) shall not apply to the State with respect to any remaining portion of the pe- riod described in the preceding sentence. ‘‘(4) D ETERMINATION OF COMPLIANCE .— ‘‘(A) S TATES SHALL APPLY MODIFIED ADJUSTED GROSS INCOME .—A State’s determination of income in accordance with subsection (e)(14) shall not be considered to be eligi- bility standards, methodologies, or procedures that are more restrictive than the standards, methodologies, or pro- cedures in effect under the State plan or under a waiver of the plan on the date of enactment of the Patient Protec- tion and Affordable Care Act for purposes of determining compliance with the requirements of paragraph (1), (2), or ø As revised by section 1004(b)(1)(B) of HCERA (3). ¿ TATES MAY EXPAND ELIGIBILITY OR MOVE ‘‘(B) S WAIVERED POPULATIONS INTO COVERAGE UNDER THE STATE PLAN .—With respect to any period applicable under para- graph (1), (2), or (3), a State that applies eligibility stand- ards, methodologies, or procedures under the State plan under this title or under any waiver of the plan that are less restrictive than the eligibility standards, methodolo- gies, or procedures, applied under the State plan or under a waiver of the plan on the date of enactment of the Pa- tient Protection and Affordable Care Act, or that makes in- dividuals who, on such date of enactment, are eligible for medical assistance under a waiver of the State plan, after such date of enactment eligible for medical assistance through a State plan amendment with an income eligi- bility level that is not less than the income eligibility level that applied under the waiver, or as a result of the appli- cation of subclause (VIII) of section 1902(a)(10)(A)(i), shall not be considered to have in effect eligibility standards, methodologies, or procedures that are more restrictive than the standards, methodologies, or procedures in effect under the State plan or under a waiver of the plan on the date of enactment of the Patient Protection and Affordable Care Act for purposes of determining compliance with the requirements of paragraph (1), (2), or (3).’’. (c) M EDICAID ENCHMARK B ENEFITS M UST C ONSIST OF AT B .—Section 1937(b) of such EAST M INIMUM E SSENTIAL C OVERAGE L Act (42 U.S.C. 1396u–7(b)) is amended— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00183 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

203 184 Sec. 2001 PPACA (Consolidated) (1) in paragraph (1), in the matter preceding subparagraph (A), by inserting ‘‘subject to paragraphs (5) and (6),’’ before ‘‘each’’; (2) in paragraph (2)— (A) in the matter preceding subparagraph (A), by in- serting ‘‘subject to paragraphs (5) and (6)’’ after ‘‘sub- section (a)(1),’’; (B) in subparagraph (A)— (i) by redesignating clauses (iv) and (v) as clauses (vi) and (vii), respectively; and (ii) by inserting after clause (iii), the following: ‘‘(iv) Coverage of prescription drugs. ‘‘(v) Mental health services.’’; and (C) in subparagraph (C)— (i) by striking clauses (i) and (ii); and (ii) by redesignating clauses (iii) and (iv) as clauses (i) and (ii), respectively; and (3) by adding at the end the following new paragraphs: INIMUM STANDARDS .—Effective January 1, 2014, any ‘‘(5) M benchmark benefit package under paragraph (1) or benchmark equivalent coverage under paragraph (2) must provide at least essential health benefits as described in section 1302(b) of the Patient Protection and Affordable Care Act. ‘‘(6) M .— ENTAL HEALTH SERVICES PARITY ‘‘(A) I .—In the case of any benchmark ben- N GENERAL efit package under paragraph (1) or benchmark equivalent coverage under paragraph (2) that is offered by an entity that is not a medicaid managed care organization and that provides both medical and surgical benefits and mental health or substance use disorder benefits, the entity shall ensure that the financial requirements and treatment limi- tations applicable to such mental health or substance use disorder benefits comply with the requirements of section 2705(a) of the Public Health Service Act in the same man- ner as such requirements apply to a group health plan. EEMED COMPLIANCE .—Coverage provided with ‘‘(B) D respect to an individual described in section 1905(a)(4)(B) and covered under the State plan under section 1902(a)(10)(A) of the services described in section 1905(a)(4)(B) (relating to early and periodic screening, di- agnostic, and treatment services defined in section 1905(r)) and provided in accordance with section 1902(a)(43), shall be deemed to satisfy the requirements of subparagraph (A).’’. .— NNUAL R EPORTS ON M EDICAID E NROLLMENT (d) A (1) S TATE REPORTS .—Section 1902(a) of the Social Security Act (42 U.S.C. 1396a(a)), as amended by subsection (b), is amended— (A) by striking ‘‘and’’ at the end of paragraph (73); (B) by striking the period at the end of paragraph (74) and inserting ‘‘; and’’; and (C) by inserting after paragraph (74) the following new paragraph: June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00184 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

204 185 Sec. 2001 PPACA (Consolidated) ‘‘(75) provide that, beginning January 2015, and annually thereafter, the State shall submit a report to the Secretary that contains— ‘‘(A) the total number of enrolled and newly enrolled individuals in the State plan or under a waiver of the plan for the fiscal year ending on September 30 of the preceding calendar year, disaggregated by population, including chil- dren, parents, nonpregnant childless adults, disabled indi- viduals, elderly individuals, and such other categories or sub-categories of individuals eligible for medical assistance under the State plan or under a waiver of the plan as the Secretary may require; ‘‘(B) a description, which may be specified by popu- lation, of the outreach and enrollment processes used by the State during such fiscal year; and ‘‘(C) any other data reporting determined necessary by the Secretary to monitor enrollment and retention of indi- viduals eligible for medical assistance under the State plan or under a waiver of the plan.’’. (2) R EPORTS TO CONGRESS .—Beginning April 2015, and an- nually thereafter, the Secretary of Health and Human Services shall submit a report to the appropriate committees of Con- gress on the total enrollment and new enrollment in Medicaid for the fiscal year ending on September 30 of the preceding cal- endar year on a national and State-by-State basis, and shall include in each such report such recommendations for adminis- trative or legislative changes to improve enrollment in the Medicaid program as the Secretary determines appropriate. - TATE O PTION FOR C OVERAGE FOR I NDIVIDUALS W ITH I N (e) S COME HAT E XCEEDS 133 P ERCENT OF THE P OVERTY L INE T .— (1) C AS OPTIONAL CATEGORICALLY OVERAGE NEEDY GROUP .—Section 1902 of the Social Security Act (42 U.S.C. 1396a) is amended— (A) in subsection (a)(10)(A)(ii)— (i) in subclause (XVIII), by striking ‘‘or’’ at the end; (ii) in subclause (XIX), by adding ‘‘or’’ at the end; and (iii) by adding at the end the following new sub- clause: ‘‘(XX) beginning January 1, 2014, who are under 65 years of age and are not described in or enrolled under a previous subclause of this clause, and whose income (as determined under sub- section (e)(14)) exceeds 133 percent of the poverty line (as defined in section 2110(c)(5)) applicable to a family of the size involved but does not exceed the highest income eligibility level established under the State plan or under a waiver of the plan, subject to subsection (hh);’’ and (B) by adding at the end the following new subsection: ‘‘(hh)(1) A State may elect to phase-in the extension of eligi- bility for medical assistance to individuals described in subclause (XX) of subsection (a)(10)(A)(ii) based on the categorical group (in- June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00185 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

205 186 Sec. 2002 PPACA (Consolidated) cluding nonpregnant childless adults) or income, so long as the State does not extend such eligibility to individuals described in such subclause with higher income before making individuals de- scribed in such subclause with lower income eligible for medical as- sistance. ‘‘(2) If an individual described in subclause (XX) of subsection (a)(10)(A)(ii) is the parent of a child who is under 19 years of age (or such higher age as the State may have elected) who is eligible for medical assistance under the State plan or under a waiver of such plan, the individual may not be enrolled under the State plan unless the individual’s child is enrolled under the State plan or under a waiver of the plan or is enrolled in other health insurance coverage. For purposes of the preceding sentence, the term ‘parent’ includes an individual treated as a caretaker relative for purposes of carrying out section 1931.’’. (2) C .— ONFORMING AMENDMENTS (A) Section 1905(a) of such Act (42 U.S.C. 1396d(a)), as amended by subsection (a)(5)(C), is amended in the matter preceding paragraph (1)— (i) by striking ‘‘or’’ at the end of clause (xiii); (ii) by inserting ‘‘or’’ at the end of clause (xiv); and (iii) by inserting after clause (xiv) the following: ‘‘(xv) individuals described in section 1902(a)(10)(A)(ii)(XX),’’. (B) Section 1903(f)(4) of such Act (42 U.S.C. 1396b(f)(4)) is amended by inserting ‘‘1902(a)(10)(A)(ii)(XX),’’ after ‘‘1902(a)(10)(A)(ii)(XIX),’’. (C) Section 1920(e) of such Act (42 U.S.C. 1396r–1(e)), as added by subsection (a)(4)(B), is amended by inserting ‘‘or clause (ii)(XX)’’ after ‘‘clause (i)(VIII)’’. SEC. 2002. INCOME ELIGIBILITY FOR NONELDERLY DETERMINED USING MODIFIED GROSS INCOME. (a) I N G ENERAL .—Section 1902(e) of the Social Security Act (42 U.S.C. 1396a(e)) is amended by adding at the end the following: ‘‘(14) I DETERMINED MODIFIED ADJUSTED NCOME USING .— GROSS INCOME As revised by section 1004(b)(1)(A) & 1004(e) ø of HCERA ¿ ‘‘(A) I N GENERAL .—Notwithstanding subsection (r) or any other provision of this title, except as provided in sub- paragraph (D), for purposes of determining income eligi- bility for medical assistance under the State plan or under any waiver of such plan and for any other purpose applica- ble under the plan or waiver for which a determination of income is required, including with respect to the imposi- tion of premiums and cost-sharing, a State shall use the modified adjusted gross income of an individual and, in the case of an individual in a family greater than 1, the house- hold income of such family. A State shall establish income eligibility thresholds for populations to be eligible for med- ical assistance under the State plan or a waiver of the plan using modified adjusted gross income and household in- come that are not less than the effective income eligibility levels that applied under the State plan or waiver on the date of enactment of the Patient Protection and Affordable June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00186 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

206 187 Sec. 2002 PPACA (Consolidated) Care Act. For purposes of complying with the maintenance of effort requirements under subsection (gg) during the transition to modified adjusted gross income and house- hold income, a State shall, working with the Secretary, es- tablish an equivalent income test that ensures individuals eligible for medical assistance under the State plan or under a waiver of the plan on the date of enactment of the Patient Protection and Affordable Care Act, do not lose coverage under the State plan or under a waiver of the plan. The Secretary may waive such provisions of this title and title XXI as are necessary to ensure that States estab- lish income and eligibility determination systems that pro- tect beneficiaries. ‘‘(B) N O INCOME OR EXPENSE DISREGARDS .—Subject to subparagraph (I), no type of expense, block, or other in- come disregard shall be applied by a State to determine in- come eligibility for medical assistance under the State plan or under any waiver of such plan or for any other purpose applicable under the plan or waiver for which a determina- tion of income is required. ‘‘(C) N O ASSETS TEST .—A State shall not apply any as- sets or resources test for purposes of determining eligi- bility for medical assistance under the State plan or under a waiver of the plan. XCEPTIONS .— ‘‘(D) E ‘‘(i) I NDIVIDUALS ELIGIBLE BECAUSE OF OTHER AID OR ASSISTANCE , ELDERLY INDIVIDUALS , MEDICALLY NEEDY INDIVIDUALS , AND INDIVIDUALS ELIGIBLE FOR COST SHARING .—Subparagraphs (A), (B), MEDICARE - and (C) shall not apply to the determination of eligi- bility under the State plan or under a waiver for med- ical assistance for the following: ‘‘(I) Individuals who are eligible for medical assistance under the State plan or under a waiver of the plan on a basis that does not require a de- termination of income by the State agency admin- istering the State plan or waiver, including as a result of eligibility for, or receipt of, other Federal or State aid or assistance, individuals who are eli- gible on the basis of receiving (or being treated as if receiving) supplemental security income benefits under title XVI, and individuals who are eligible as a result of being or being deemed to be a child in foster care under the responsibility of the State. ‘‘(II) Individuals who have attained age 65. ‘‘(III) Individuals who qualify for medical as- sistance under the State plan or under any waiver of such plan on the basis of being blind or disabled (or being treated as being blind or disabled) with- out regard to whether the individual is eligible for supplemental security income benefits under title XVI on the basis of being blind or disabled and in- cluding an individual who is eligible for medical assistance on the basis of section 1902(e)(3). June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00187 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

207 188 Sec. 2002 PPACA (Consolidated) ‘‘(IV) Individuals described in subsection (a)(10)(C). ‘‘(V) Individuals described in any clause of subsection (a)(10)(E). ‘‘(ii) E XPRESS LANE AGENCY FINDINGS .—In the case of a State that elects the Express Lane option under paragraph (13), notwithstanding subparagraphs (A), (B), and (C), the State may rely on a finding made by an Express Lane agency in accordance with that para- graph relating to the income of an individual for pur- poses of determining the individual’s eligibility for medical assistance under the State plan or under a waiver of the plan. ‘‘(iii) M EDICARE PRESCRIPTION DRUG SUBSIDIES DE - TERMINATIONS .—Subparagraphs (A), (B), and (C) shall not apply to any determinations of eligibility for pre- mium and cost-sharing subsidies under and in accord- ance with section 1860D–14 made by the State pursu- ant to section 1935(a)(2). ‘‘(iv) L - ONG .—Subparagraphs (A), (B), TERM CARE and (C) shall not apply to any determinations of eligi- bility of individuals for purposes of medical assistance for nursing facility services, a level of care in any in- stitution equivalent to that of nursing facility services, home or community-based services furnished under a waiver or State plan amendment under section 1915 or a waiver under section 1115, and services described in section 1917(c)(1)(C)(ii). RANDFATHER OF CURRENT ENROLLEES UNTIL ‘‘(v) G DATE OF NEXT REGULAR REDETERMINATION .—An indi- vidual who, on January 1, 2014, is enrolled in the State plan or under a waiver of the plan and who would be determined ineligible for medical assistance solely because of the application of the modified ad- justed gross income or household income standard de- scribed in subparagraph (A), shall remain eligible for medical assistance under the State plan or waiver (and subject to the same premiums and cost-sharing as applied to the individual on that date) through March 31, 2014, or the date on which the individual’s next regularly scheduled redetermination of eligibility is to occur, whichever is later. ‘‘(E) T RANSITION PLANNING AND OVERSIGHT .—Each State shall submit to the Secretary for the Secretary’s ap- proval the income eligibility thresholds proposed to be es- tablished using modified adjusted gross income and house- hold income, the methodologies and procedures to be used to determine income eligibility using modified adjusted gross income and household income and, if applicable, a State plan amendment establishing an optional eligibility category under subsection (a)(10)(A)(ii)(XX). To the extent practicable, the State shall use the same methodologies and procedures for purposes of making such determina- tions as the State used on the date of enactment of the Pa- June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00188 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

208 189 Sec. 2002 PPACA (Consolidated) tient Protection and Affordable Care Act. The Secretary shall ensure that the income eligibility thresholds pro- posed to be established using modified adjusted gross in- come and household income, including under the eligibility category established under subsection (a)(10)(A)(ii)(XX), and the methodologies and procedures proposed to be used to determine income eligibility, will not result in children who would have been eligible for medical assistance under the State plan or under a waiver of the plan on the date of enactment of the Patient Protection and Affordable Care Act no longer being eligible for such assistance. ‘‘(F) L .—The IMITATION ON SECRETARIAL AUTHORITY Secretary shall not waive compliance with the require- ments of this paragraph except to the extent necessary to permit a State to coordinate eligibility requirements for dual eligible individuals (as defined in section 1915(h)(2)(B)) under the State plan or under a waiver of the plan and under title XVIII and individuals who require the level of care provided in a hospital, a nursing facility, or an intermediate care facility for the mentally retarded. ‘‘(G) D EFINITIONS OF MODIFIED ADJUSTED GROSS IN - .—In this paragraph, the COME AND HOUSEHOLD INCOME terms ‘modified adjusted gross income’ and ‘household in- come’ have the meanings given such terms in section 36B(d)(2) of the Internal Revenue Code of 1986. ONTINUED APPLICATION OF MEDICAID RULES RE - ‘‘(H) C GARDING POINT - IN - TIME INCOME AND SOURCES OF IN - COME .—The requirement under this paragraph for States to use modified adjusted gross income and household in- come to determine income eligibility for medical assistance under the State plan or under any waiver of such plan and for any other purpose applicable under the plan or waiver for which a determination of income is required shall not be construed as affecting or limiting the application of— ‘‘(i) the requirement under this title and under the State plan or a waiver of the plan to determine an in- dividual’s income as of the point in time at which an application for medical assistance under the State plan or a waiver of the plan is processed; or ‘‘(ii) any rules established under this title or under the State plan or a waiver of the plan regarding sources of countable income. ‘‘(I) T REATMENT OF PORTION OF MODIFIED ADJUSTED GROSS INCOME .— ø As added by section 1004(e)(2) of HCERA For purposes of determining the income eligi- ¿ bility of an individual for medical assistance whose eligi- bility is determined based on the application of modified adjusted gross income under subparagraph (A), the State shall— ‘‘(i) determine the dollar equivalent of the dif- ference between the upper income limit on eligibility for such an individual (expressed as a percentage of the poverty line) and such upper income limit in- creased by 5 percentage points; and June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00189 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

209 190 Sec. 2003 PPACA (Consolidated) ‘‘(ii) notwithstanding the requirement in subpara- graph (A) with respect to use of modified adjusted gross income, utilize as the applicable income of such individual, in determining such income eligibility, an amount equal to the modified adjusted gross income applicable to such individual reduced by such dollar equivalent amount.’’. A MENDMENT ONFORMING .—Section 1902(a)(17) of such Act (b) C (42 U.S.C. 1396a(a)(17)) is amended by inserting ‘‘(e)(14),’’ before ‘‘(l)(3)’’. (c) E D ATE FFECTIVE .—The amendments made by subsections (a) and (b) take effect on January 1, 2014. SEC. 2003. REQUIREMENT TO OFFER PREMIUM ASSISTANCE FOR EM- PLOYER-SPONSORED INSURANCE. N G ENERAL .—Section 1906A of such Act (42 U.S.C. 1396e– (a) I 1) is amended— (1) in subsection (a)— (A) by striking ‘‘may elect to’’ and inserting ‘‘shall’’; ø Subparagraph (B) of section 10203(b)(2), p. 849, provides: ‘‘This Act shall be applied without regard to subparagraph (A) of section 2003(a)(1) of this Act and that subparagraph and the amendment made by that subparagraph are hereby deemed null, void, and of no effect.’’ ¿ (B) by striking ‘‘under age 19’’; and (C) by inserting ‘‘, in the case of an individual under age 19,’’ after ‘‘(and’’; (2) in subsection (c), in the first sentence, by striking ‘‘under age 19’’; and (3) in subsection (d)— (A) in paragraph (2)— (i) in the first sentence, by striking ‘‘under age 19’’; and (ii) by striking the third sentence and inserting ‘‘A State may not require, as a condition of an individual (or the individual’s parent) being or remaining eligible for medical assistance under this title, that the indi- vidual (or the individual’s parent) apply for enrollment in qualified employer-sponsored coverage under this section.’’; and (B) in paragraph (3), by striking ‘‘the parent of an in- dividual under age 19’’ and inserting ‘‘an individual (or the parent of an individual)’’; and (4) in subsection (e), by striking ‘‘under age 19’’ each place it appears. (b) C ONFORMING A MENDMENT .—The heading for section 1906A of such Act (42 U.S.C. 1396e–1) is amended by striking ‘‘ OPTION FOR CHILDREN ’’. (c) E FFECTIVE D ATE .—The amendments made by this section take effect on January 1, 2014. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00190 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

210 191 Sec. 2005 PPACA (Consolidated) SEC. 2004. MEDICAID COVERAGE FOR FORMER FOSTER CARE CHIL- DREN. G ENERAL .—Section 1902(a)(10)(A)(i) of the Social Secu- (a) I N rity Act (42 U.S.C. 1396a), as amended by section 2001(a)(1), is amended— (1) by striking ‘‘or’’ at the end of subclause (VII); (2) by adding ‘‘or’’ at the end of subclause (VIII); and (3) by inserting after subclause (VIII) the following: Replaced by section 10201(a)(1) ¿ who— ‘‘(IX) ø ‘‘(aa) are under 26 years of age; ‘‘(bb) are not described in or enrolled under any of subclauses (I) through (VII) of this clause or are described in any of such subclauses but have income that exceeds the level of income applicable under the State plan for eligibility to enroll for medical assist- ance under such subclause; ‘‘(cc) were in foster care under the respon- sibility of the State on the date of attaining 18 years of age or such higher age as the State has elected under section 475(8)(B)(iii); and ‘‘(dd) were enrolled in the State plan under this title or under a waiver of the plan while in such foster care;’’. ø Section 10201(a)(2), p. 839, provides a related amendment to section 1902(a)(10) of the SSA ¿ (b) O PTION O P ROVIDE P RESUMPTIVE E LIGIBILITY .—Section T 1920(e) of such Act (42 U.S.C. 1396r–1(e)), as added by section 2001(a)(4)(B) and amended by section 2001(e)(2)(C), is amended by inserting ‘‘, clause (i)(IX),’’ after ‘‘clause (i)(VIII)’’. (c) C A MENDMENTS ONFORMING .— (1) Section 1903(f)(4) of such Act (42 U.S.C. 1396b(f)(4)), as amended by section 2001(a)(5)(D), is amended by inserting ‘‘1902(a)(10)(A)(i)(IX),’’ after ‘‘1902(a)(10)(A)(i)(VIII),’’. (2) Section 1937(a)(2)(B)(viii) of such Act (42 U.S.C. 1396u–7(a)(2)(B)(viii)) is amended by inserting ‘‘, or the indi- vidual qualifies for medical assistance on the basis of section 1902(a)(10)(A)(i)(IX)’’ before the period. Additional conforming amendments relating to section ø ¿ 1902(a)(10)(A)(i)(IX) are in section 10201(c)(1), p. 840 (d) E FFECTIVE D ATE .—The amendments made by this section take effect on January 1, 2014. ø As revised by section 10201(a)(3) ¿ SEC. 2005. PAYMENTS TO TERRITORIES. (a) I NCREASE IN IMIT ON P AYMENTS .—Section 1108(g) of the L Social Security Act (42 U.S.C. 1308(g)) is amended— (1) in paragraph (2), in the matter preceding subparagraph (A), by striking ‘‘paragraph (3)’’ and inserting ‘‘paragraphs (3) and (5)’’; (2) in paragraph (4), by striking ‘‘and (3)’’ and inserting ‘‘(3), and (4)’’; and (3) by adding at the end the following paragraph: ‘‘(5) A DDITIONAL INCREASE .— ø Replaced by section 1204(b)(1)(B) of HCERA ¿ The Secretary shall increase the June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00191 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

211 192 Sec. 2006 PPACA (Consolidated) amounts otherwise determined under this subsection for Puer- to Rico, the Virgin Islands, Guam, the Northern Mariana Is- lands, and American Samoa (after the application of subsection (f) and the preceding paragraphs of this subsection) for the pe- riod beginning July 1, 2011, and ending on September 30, 2019, by such amounts that the total additional payments under title XIX to such territories equals $6,300,000,000 for such period. The Secretary shall increase such amounts in pro- portion to the amounts applicable to such territories under this subsection and subsection (f) on the date of enactment of this paragraph.’’. Subsection (b) repealed by section 1204(b)(2)(A) of HCERA ¿ ø (c) I FMAP.— NCREASED (1) I N GENERAL .—The first sentence of section 1905(b) of the Social Security Act (42 U.S.C. 1396d(b)) is amended by striking ‘‘shall be 50 per centum’’ and inserting ‘‘shall be 55 percent’’. (2) E .—The amendment made by paragraph FFECTIVE DATE (1) takes effect on July 1, 2011. As revised by section ø 1204(b)(2)(B)of HCERA ¿ SEC. 2006. SPECIAL ADJUSTMENT TO FMAP DETERMINATION FOR CERTAIN STATES RECOVERING FROM A MAJOR DIS- ASTER. Section 1905 of the Social Security Act (42 U.S.C. 1396d), as amended by sections 2001(a)(3) and 2001(b)(2), is amended— (1) in subsection (b), in the first sentence, by striking ‘‘sub- section (y)’’ and inserting ‘‘subsections (y) and (aa)’’; and (2) by adding at the end the following new subsection: ‘‘(aa)(1) Notwithstanding subsection (b), beginning January 1, 2011, the Federal medical assistance percentage for a fiscal year for a disaster-recovery FMAP adjustment State shall be equal to the following: ‘‘(A) In the case of the first fiscal year (or part of a fiscal year) for which this subsection applies to the State, the Fed- eral medical assistance percentage determined for the fiscal year without regard to this subsection, subsection (y), sub- section (z), and section 10202 of the Patient Protection and Af- fordable Care Act, increased by 50 percent of the number of percentage points by which the Federal medical assistance per- centage determined for the State for the fiscal year without re- gard to this subsection and subsection (y), is less than the Fed- eral medical assistance percentage determined for the State for the preceding fiscal year after the application of only sub- section (a) of section 5001 of Public Law 111–5 (if applicable to the preceding fiscal year) and without regard to this sub- section, subsection (y), and subsections (b) and (c) of section 5001 of Public Law 111–5. ‘‘(B) In the case of the second or any succeeding fiscal year for which this subsection applies to the State, the Federal med- ical assistance percentage determined for the preceding fiscal year under this subsection for the State, increased by 25 per- cent of the number of percentage points by which the Federal medical assistance percentage determined for the State for the fiscal year without regard to this subsection, subsection (y), June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00192 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

212 193 Sec. 2007 PPACA (Consolidated) subsection (z), and section 10202 of the Patient Protection and Affordable Care Act, is less than the Federal medical assist- ance percentage determined for the State for the preceding fis- cal year under this subsection. ‘‘(2) In this subsection, the term ‘disaster-recovery FMAP ad- justment State’ means a State that is one of the 50 States or the District of Columbia, for which, at any time during the preceding 7 fiscal years, the President has declared a major disaster under section 401 of the Robert T. Stafford Disaster Relief and Emer- gency Assistance Act and determined as a result of such disaster that every county or parish in the State warrant individual and public assistance or public assistance from the Federal Government under such Act and for which— ‘‘(A) in the case of the first fiscal year (or part of a fiscal year) for which this subsection applies to the State, the Fed- eral medical assistance percentage determined for the State for the fiscal year without regard to this subsection, subsection (y), subsection (z), and section 10202 of the Patient Protection and Affordable Care Act, is less than the Federal medical assist- ance percentage determined for the State for the preceding fis- cal year after the application of only subsection (a) of section 5001 of Public Law 111–5 (if applicable to the preceding fiscal year) and without regard to this subsection, subsection (y), and subsections (b) and (c) of section 5001 of Public Law 111–5, by at least 3 percentage points; and ‘‘(B) in the case of the second or any succeeding fiscal year for which this subsection applies to the State, the Federal med- ical assistance percentage determined for the State for the fis- cal year without regard to this subsection, subsection (y), sub- section (z), and section 10202 of the Patient Protection and Af- fordable Care Act, is less than the Federal medical assistance percentage determined for the State for the preceding fiscal year under this subsection by at least 3 percentage points. ‘‘(3) The Federal medical assistance percentage determined for a disaster-recovery FMAP adjustment State under paragraph (1) shall apply for purposes of this title (other than with respect to dis- proportionate share hospital payments described in section 1923 and payments under this title that are based on the enhanced FMAP described in 2105(b)) and shall not apply with respect to payments under title IV (other than under part E of title IV) or payments under title XXI.’’. SEC. 2007. MEDICAID IMPROVEMENT FUND RESCISSION. (a) R ESCISSION .—Any amounts available to the Medicaid Im- provement Fund established under section 1941 of the Social Secu- rity Act (42 U.S.C. 1396w–1) for any of fiscal years 2014 through 2018 that are available for expenditure from the Fund and that are not so obligated as of the date of the enactment of this Act are re- scinded. (b) C ONFORMING A MENDMENTS .—Section 1941(b)(1) of the So- cial Security Act (42 U.S.C. 1396w–1(b)(1)) is amended— (1) in subparagraph (A), by striking ‘‘$100,000,000’’ and in- serting ‘‘$0’’; and June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00193 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

213 194 Sec. 2101 PPACA (Consolidated) (2) in subparagraph (B), by striking ‘‘$150,000,000’’ and in- serting ‘‘$0’’. Subtitle B—Enhanced Support for the Children’s Health Insurance Program SEC. 2101. ADDITIONAL FEDERAL FINANCIAL PARTICIPATION FOR CHIP. N G ENERAL .—Section 2105(b) of the Social Security Act (42 (a) I U.S.C. 1397ee(b)) is amended by adding at the end the following: ¿ ‘‘Notwithstanding the preceding As revised by section 10203(c)(1) ø sentence, during the period that begins on October 1, 2015, and ends on September 30, 2019, the enhanced FMAP determined for a State for a fiscal year (or for any portion of a fiscal year occurring during such period) shall be increased by 23 percentage points, but in no case shall exceed 100 percent. The increase in the enhanced FMAP under the preceding sentence shall not apply with respect to determining the payment to a State under subsection (a)(1) for expenditures described in subparagraph (D)(iv), paragraphs (8), (9), (11) of subsection (c), or clause (4) of the first sentence of section 1905(b).’’. AINTENANCE OF E FFORT .— (b) M (1) I N GENERAL .—Section 2105(d) of the Social Security Act (42 U.S.C. 1397ee(d)) is amended by adding at the end the fol- lowing: ‘‘(3) C ONTINUATION OF ELIGIBILITY STANDARDS FOR CHIL - DREN UNTIL OCTOBER 1 , .— 2019 N .— ø As revised by section ‘‘(A) I GENERAL ¿ During the period that begins on the 10203(c)(2)(A)(i) date of enactment of the Patient Protection and Affordable Care Act and ends on September 30, 2019, as a condition of receiving payments under section 1903(a), a State shall not have in effect eligibility standards, methodologies, or procedures under its State child health plan (including any waiver under such plan) for children (including children provided medical assistance for which payment is made under section 2105(a)(1)(A)) that are more restrictive than the eligibility standards, methodologies, or procedures, re- spectively, under such plan (or waiver) as in effect on the date of enactment of that Act. The preceding sentence shall not be construed as preventing a State during such period from— ‘‘(i) applying eligibility standards, methodologies, or procedures for children under the State child health plan or under any waiver of the plan that are less re- strictive than the eligibility standards, methodologies, or procedures, respectively, for children under the plan or waiver that are in effect on the date of enactment of such Act; ø As revised by section 10203(c)(2)(A)(ii) ¿ ‘‘(ii) after September 30, 2015, enrolling children eligible to be targeted low-income children under the State child health plan in a qualified health plan that June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00194 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

214 195 Sec. 2101 PPACA (Consolidated) has been certified by the Secretary under subpara- graph (C); or ¿ ø As added by section 10203(c)(2)(A)(iv) ‘‘(iii) imposing a limitation described in section 2112(b)(7) for a fiscal year in order to limit expendi- tures under the State child health plan to those for which Federal financial participation is available under this section for the fiscal year. ‘‘(B) A SSURANCE OF EXCHANGE COVERAGE FOR TAR - INCOME CHILDREN UNABLE TO BE PROVIDED GETED LOW - - CHILD HEALTH ASSISTANCE AS A RESULT OF FUNDING SHORT FALLS .—In the event that allotments provided under sec- tion 2104 are insufficient to provide coverage to all chil- dren who are eligible to be targeted low-income children under the State child health plan under this title, a State shall establish procedures to ensure that such children are screened for eligibility for medical assistance under the State plan under title XIX or a waiver of that plan and, if found eligible, enrolled in such plan or a waiver. In the case of such children who, as a result of such screening, are determined to not be eligible for medical assistance under the State plan or a waiver under title XIX, the State shall establish procedures to ensure that the children are enrolled in a qualified health plan that has been certified by the Secretary under subparagraph (C) and is offered through an Exchange established by the State under sec- tion 1311 of the Patient Protection and Affordable Care Act. For purposes of eligibility for premium assistance for the purchase of a qualified health plan under section 36B of the Internal Revenue Code of 1986 and reduced cost- sharing under section 1402 of the Patient Protection and Affordable Care Act, children described in the preceding sentence shall be deemed to be ineligible for coverage under the State child health plan. ø As revised by sections 10201(g) and 10203(c)(2)(B) ¿ ‘‘(C) C ERTIFICATION OF COMPARABILITY OF PEDIATRIC .—With COVERAGE OFFERED BY QUALIFIED HEALTH PLANS respect to each State, the Secretary, not later than April 1, 2015, shall review the benefits offered for children and the cost-sharing imposed with respect to such benefits by qualified health plans offered through an Exchange estab- lished by the State under section 1311 of the Patient Pro- tection and Affordable Care Act and shall certify those plans that offer benefits for children and impose cost-shar- ing with respect to such benefits that the Secretary deter- mines are at least comparable to the benefits offered and cost-sharing protections provided under the State child ø health plan. ¿ ’’. As added by section 10203(c)(2)(C) (2) C - ONFORMING AMENDMENT TO TITLE XXI MEDICAID MAIN TENANCE OF EFFORT .—Section 2105(d)(1) of the Social Security Act (42 U.S.C. 1397ee(d)(1)) is amended by adding before the period ‘‘, except as required under section 1902(e)(14)’’. - (c) N E NROLLMENT B ONUS P AYMENTS FOR C HILDREN E N O Y ROLLED FTER F ISCAL A EAR 2013.—Section 2105(a)(3)(F)(iii) of the Social Security Act (42 U.S.C. 1397ee(a)(3)(F)(iii)) is amended by June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00195 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

215 196 Sec. 2101 PPACA (Consolidated) inserting ‘‘or any children enrolled on or after October 1, 2013’’ be- fore the period. E LIGIBILITY D ETERMINED U SING M ODIFIED G ROSS NCOME (d) I I NCOME .— TATE PLAN REQUIREMENT .—Section 2102(b)(1)(B) of (1) S the Social Security Act (42 U.S.C. 1397bb(b)(1)(B)) is amend- ed— (A) in clause (iii), by striking ‘‘and’’ after the semi- colon; (B) in clause (iv), by striking the period and inserting ‘‘; and’’; and ø As revised by (C) by adding at the end the following: section 1004(b)(2)(A) of HCERA ¿ ‘‘(v) shall, beginning January 1, 2014, use modi- fied adjusted gross income and household income (as defined in section 36B(d)(2) of the Internal Revenue Code of 1986) to determine eligibility for child health assistance under the State child health plan or under any waiver of such plan and for any other purpose ap- plicable under the plan or waiver for which a deter- mination of income is required, including with respect to the imposition of premiums and cost-sharing, con- sistent with section 1902(e)(14).’’. ONFORMING AMENDMENT .—Section 2107(e)(1) of the (2) C Social Security Act (42 U.S.C. 1397gg(e)(1)) is amended— (A) by redesignating subparagraphs (E) through (L) as subparagraphs (F) through (M), respectively; and (B) by inserting after subparagraph (D), the following: ‘‘(E) Section 1902(e)(14) (relating to income determined using modified adjusted gross income and household in- come). ø ¿ ’’. As revised by section 1004(b)(2)(B) of HCERA (e) A .—Sec- TREAMLINED E NROLLMENT PPLICATION OF YSTEM S S tion 2107(e)(1) of the Social Security Act (42 U.S.C. 1397gg(e)(1)), as amended by subsection (d)(2), is amended by adding at the end the following: ‘‘(N) Section 1943(b) (relating to coordination with State Exchanges and the State Medicaid agency).’’. (f) CHIP E LIGIBILITY FOR C HILDREN I NELIGIBLE FOR M EDICAID .—Notwithstanding AS A E LIMINATION OF D ISREGARDS ESULT OF R any other provision of law, a State shall treat any child who is de- termined to be ineligible for medical assistance under the State Medicaid plan or under a waiver of the plan as a result of the elimination of the application of an income disregard based on ex- pense or type of income, as required under section 1902(e)(14) of the Social Security Act (as added by this Act), as a targeted low- income child under section 2110(b) (unless the child is excluded under paragraph (2) of that section) and shall provide child health assistance to the child under the State child health plan (whether implemented under title XIX or XXI, or both, of the Social Security Act). ø Additional CHIP amendments made by section 10203, p. 848 ¿ June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00196 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

216 197 Sec. 2102 PPACA (Consolidated) SEC. 2102. TECHNICAL CORRECTIONS. (a) CHIPRA.—Effective as if included in the enactment of the Children’s Health Insurance Program Reauthorization Act of 2009 (Public Law 111–3) (in this section referred to as ‘‘CHIPRA’’): (1) Section 2104(m) of the Social Security Act, as added by section 102 of CHIPRA, is amended— (A) by redesignating paragraph (7) as paragraph (8); and (B) by inserting after paragraph (6), the following: DJUSTMENT OF FISCAL YEAR 2010 ALLOTMENTS TO AC - ‘‘(7) A - COUNT FOR CHANGES IN PROJECTED SPENDING FOR CERTAIN PRE .—For purposes of re- VIOUSLY APPROVED EXPANSION PROGRAMS calculating the fiscal year 2010 allotment, in the case of one of the 50 States or the District of Columbia that has an approved State plan amendment effective January 1, 2006, to provide child health assistance through the provision of benefits under the State plan under title XIX for children from birth through age 5 whose family income does not exceed 200 percent of the poverty line, the Secretary shall increase the allotment by an amount that would be equal to the Federal share of expendi- tures that would have been claimed at the enhanced FMAP rate rather than the Federal medical assistance percentage matching rate for such population.’’. ø Additional amendments to section 2104(m) of the SSA made by section 10203(d)(2), p. 849 ¿ (2) Section 605 of CHIPRA is amended by striking ‘‘legal residents’’ and insert ‘‘lawfully residing in the United States’’. (3) Subclauses (I) and (II) of paragraph (3)(C)(i) of section 2105(a) of the Social Security Act (42 U.S.C. 1397ee(a)(3)(ii)), as added by section 104 of CHIPRA, are each amended by striking ‘‘, respectively’’. (4) Section 2105(a)(3)(E)(ii) of the Social Security Act (42 U.S.C. 1397ee(a)(3)(E)(ii)), as added by section 104 of CHIPRA, is amended by striking subclause (IV). (5) Section 2105(c)(9)(B) of the Social Security Act (42 U.S.C. 1397e(c)(9)(B)), as added by section 211(c)(1) of CHIPRA, is amended by striking ‘‘section 1903(a)(3)(F)’’ and in- serting ‘‘section 1903(a)(3)(G)’’. (6) Section 2109(b)(2)(B) of the Social Security Act (42 U.S.C. 1397ii(b)(2)(B)), as added by section 602 of CHIPRA, is amended by striking ‘‘the child population growth factor under section 2104(m)(5)(B)’’ and inserting ‘‘a high-performing State under section 2111(b)(3)(B)’’. (7) Section 2110(c)(9)(B)(v) of the Social Security Act (42 U.S.C. 1397jj(c)(9)(B)(v)), as added by section 505(b) of CHIPRA, is amended by striking ‘‘school or school system’’ and inserting ‘‘local educational agency (as defined under section 9101 of the Elementary and Secondary Education Act of 1965’’. (8) Section 211(a)(1)(B) of CHIPRA is amended— (A) by striking ‘‘is amended’’ and all that follows through ‘‘adding’’ and inserting ‘‘is amended by adding’’; and June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00197 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

217 198 Sec. 2201 PPACA (Consolidated) (B) by redesignating the new subparagraph to be added by such section to section 1903(a)(3) of the Social Security Act as a new subparagraph (H). (b) ARRA.—Effective as if included in the enactment of section 5006(a) of division B of the American Recovery and Reinvestment Act of 2009 (Public Law 111–5), the second sentence of section 1916A(a)(1) of the Social Security Act (42 U.S.C. 1396o–1(a)(1)) is amended by striking ‘‘or (i)’’ and inserting ‘‘, (i), or (j)’’. Subtitle C—Medicaid and CHIP Enrollment Simplification SEC. 2201. ENROLLMENT SIMPLIFICATION AND COORDINATION WITH STATE HEALTH INSURANCE EXCHANGES. Title XIX of the Social Security Act (42 U.S.C. 1397aa et seq.) is amended by adding at the end the following: ø 42 U.S.C. 1396w–3 ‘‘SEC. 1943 . ENROLLMENT SIMPLIFICATION AND CO- ¿ ORDINATION WITH STATE HEALTH INSURANCE EX- CHANGES. .—As a condi- P ARTICIPATION IN M ‘‘(a) C ONDITION FOR EDICAID tion of the State plan under this title and receipt of any Federal financial assistance under section 1903(a) for calendar quarters be- ginning after January 1, 2014, a State shall ensure that the re- quirements of subsection (b) is met. NROLLMENT S IMPLIFICATION AND C OORDINATION W ITH ‘‘(b) E S H EALTH I NSURANCE E XCHANGES AND C HIP TATE .— ‘‘(1) I N GENERAL .—A State shall establish procedures for— ‘‘(A) enabling individuals, through an Internet website that meets the requirements of paragraph (4), to apply for medical assistance under the State plan or under a waiver of the plan, to be enrolled in the State plan or waiver, to renew their enrollment in the plan or waiver, and to con- sent to enrollment or reenrollment in the State plan through electronic signature; ‘‘(B) enrolling, without any further determination by the State and through such website, individuals who are identified by an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act as being eligible for— ‘‘(i) medical assistance under the State plan or under a waiver of the plan; or ‘‘(ii) child health assistance under the State child health plan under title XXI; ‘‘(C) ensuring that individuals who apply for but are determined to be ineligible for medical assistance under the State plan or a waiver or ineligible for child health as- sistance under the State child health plan under title XXI, are screened for eligibility for enrollment in qualified health plans offered through such an Exchange and, if ap- plicable, premium assistance for the purchase of a quali- fied health plan under section 36B of the Internal Revenue Code of 1986 (and, if applicable, advance payment of such assistance under section 1412 of the Patient Protection June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00198 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

218 199 Sec. 2201 1943 SSA PPACA (Consolidated) \ and Affordable Care Act), and, if eligible, enrolled in such a plan without having to submit an additional or separate application, and that such individuals receive information regarding reduced cost-sharing for eligible individuals under section 1402 of the Patient Protection and Afford- able Care Act, and any other assistance or subsidies avail- able for coverage obtained through the Exchange; ‘‘(D) ensuring that the State agency responsible for ad- ministering the State plan under this title (in this section referred to as the ‘State Medicaid agency’), the State agen- cy responsible for administering the State child health plan under title XXI (in this section referred to as the ‘State CHIP agency’) and an Exchange established by the State under section 1311 of the Patient Protection and Af- fordable Care Act utilize a secure electronic interface suffi- cient to allow for a determination of an individual’s eligi- bility for such medical assistance, child health assistance, or premium assistance, and enrollment in the State plan under this title, title XXI, or a qualified health plan, as ap- propriate; ‘‘(E) coordinating, for individuals who are enrolled in the State plan or under a waiver of the plan and who are also enrolled in a qualified health plan offered through such an Exchange, and for individuals who are enrolled in the State child health plan under title XXI and who are also enrolled in a qualified health plan, the provision of medical assistance or child health assistance to such indi- viduals with the coverage provided under the qualified health plan in which they are enrolled, including services described in section 1905(a)(4)(B) (relating to early and periodic screening, diagnostic, and treatment services de- fined in section 1905(r)) and provided in accordance with the requirements of section 1902(a)(43); and ‘‘(F) conducting outreach to and enrolling vulnerable and underserved populations eligible for medical assist- ance under this title XIX or for child health assistance under title XXI, including children, unaccompanied home- less youth, children and youth with special health care needs, pregnant women, racial and ethnic minorities, rural populations, victims of abuse or trauma, individuals with mental health or substance-related disorders, and individ- uals with HIV/AIDS. ‘‘(2) A GREEMENTS WITH STATE HEALTH INSURANCE EX - CHANGES .—The State Medicaid agency and the State CHIP agency may enter into an agreement with an Exchange estab- lished by the State under section 1311 of the Patient Protec- tion and Affordable Care Act under which the State Medicaid agency or State CHIP agency may determine whether a State resident is eligible for premium assistance for the purchase of a qualified health plan under section 36B of the Internal Rev- enue Code of 1986 (and, if applicable, advance payment of such assistance under section 1412 of the Patient Protection and Af- fordable Care Act), so long as the agreement meets such condi- tions and requirements as the Secretary of the Treasury may June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00199 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

219 200 Sec. 2202 PPACA (Consolidated) prescribe to reduce administrative costs and the likelihood of eligibility errors and disruptions in coverage. ‘‘(3) S .—The State Med- TREAMLINED ENROLLMENT SYSTEM icaid agency and State CHIP agency shall participate in and comply with the requirements for the system established under section 1413 of the Patient Protection and Affordable Care Act (relating to streamlined procedures for enrollment through an Exchange, Medicaid, and CHIP). ‘‘(4) E .—The proce- NROLLMENT WEBSITE REQUIREMENTS dures established by State under paragraph (1) shall include establishing and having in operation, not later than January 1, 2014, an Internet website that is linked to any website of an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act and to the State CHIP agency (if different from the State Medicaid agency) and allows an individual who is eligible for medical assistance under the State plan or under a waiver of the plan and who is eligible to receive premium credit assistance for the pur- chase of a qualified health plan under section 36B of the Inter- nal Revenue Code of 1986 to compare the benefits, premiums, and cost-sharing applicable to the individual under the State plan or waiver with the benefits, premiums, and cost-sharing available to the individual under a qualified health plan of- fered through such an Exchange, including, in the case of a child, the coverage that would be provided for the child through the State plan or waiver with the coverage that would be provided to the child through enrollment in family coverage under that plan and as supplemental coverage by the State under the State plan or waiver. ONTINUED NEED FOR ASSESSMENT FOR HOME AND ‘‘(5) C COMMUNITY - .—Nothing in paragraph (1) shall BASED SERVICES limit or modify the requirement that the State assess an indi- vidual for purposes of providing home and community-based services under the State plan or under any waiver of such plan for individuals described in subsection (a)(10)(A)(ii)(VI).’’. SEC. 2202. PERMITTING HOSPITALS TO MAKE PRESUMPTIVE ELIGI- BILITY DETERMINATIONS FOR ALL MEDICAID ELIGIBLE POPULATIONS. N G ENERAL .—Section 1902(a)(47) of the Social Security Act (a) I (42 U.S.C. 1396a(a)(47)) is amended— (1) by striking ‘‘at the option of the State, provide’’ and in- serting ‘‘provide— ‘‘(A) at the option of the State,’’; (2) by inserting ‘‘and’’ after the semicolon; and (3) by adding at the end the following: ‘‘(B) that any hospital that is a participating provider under the State plan may elect to be a qualified entity for purposes of determining, on the basis of preliminary infor- mation, whether any individual is eligible for medical as- sistance under the State plan or under a waiver of the plan for purposes of providing the individual with medical assistance during a presumptive eligibility period, in the same manner, and subject to the same requirements, as apply to the State options with respect to populations de- June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00200 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

220 201 Sec. 2301 PPACA (Consolidated) scribed in section 1920, 1920A, or 1920B (but without re- gard to whether the State has elected to provide for a pre- sumptive eligibility period under any such sections), sub- ject to such guidance as the Secretary shall establish;’’. (b) C ONFORMING A MENDMENT .—Section 1903(u)(1)(D)(v) of such Act (42 U.S.C. 1396b(u)(1)(D)v)) is amended— (1) by striking ‘‘or for’’ and inserting ‘‘for’’; and (2) by inserting before the period at the end the following: ‘‘, or for medical assistance provided to an individual during a presumptive eligibility period resulting from a determination of presumptive eligibility made by a hospital that elects under section 1902(a)(47)(B) to be a qualified entity for such pur- pose’’. (c) E D ATE .—The amendments made by this section FFECTIVE take effect on January 1, 2014, and apply to services furnished on or after that date. Subtitle D—Improvements to Medicaid Services SEC. 2301. COVERAGE FOR FREESTANDING BIRTH CENTER SERVICES. (a) I N G ENERAL .—Section 1905 of the Social Security Act (42 U.S.C. 1396d), is amended— (1) in subsection (a)— (A) in paragraph (27), by striking ‘‘and’’ at the end; (B) by redesignating paragraph (28) as paragraph (29); and (C) by inserting after paragraph (27) the following new paragraph: ‘‘(28) freestanding birth center services (as defined in sub- section (l)(3)(A)) and other ambulatory services that are offered by a freestanding birth center (as defined in subsection (l)(3)(B)) and that are otherwise included in the plan; and’’; and (2) in subsection (l), by adding at the end the following new paragraph: ‘‘(3)(A) The term ‘freestanding birth center services’ means services furnished to an individual at a freestanding birth center (as defined in subparagraph (B)) at such center. ‘‘(B) The term ‘freestanding birth center’ means a health facil- ity— ‘‘(i) that is not a hospital; ‘‘(ii) where childbirth is planned to occur away from the pregnant woman’s residence; ‘‘(iii) that is licensed or otherwise approved by the State to provide prenatal labor and delivery or postpartum care and other ambulatory services that are included in the plan; and ‘‘(iv) that complies with such other requirements relating to the health and safety of individuals furnished services by the facility as the State shall establish. ‘‘(C) A State shall provide separate payments to providers ad- ministering prenatal labor and delivery or postpartum care in a freestanding birth center (as defined in subparagraph (B)), such as nurse midwives and other providers of services such as birth at- June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00201 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

221 202 Sec. 2302 PPACA (Consolidated) tendants recognized under State law, as determined appropriate by the Secretary. For purposes of the preceding sentence, the term ‘birth attendant’ means an individual who is recognized or reg- istered by the State involved to provide health care at childbirth and who provides such care within the scope of practice under which the individual is legally authorized to perform such care under State law (or the State regulatory mechanism provided by State law), regardless of whether the individual is under the super- vision of, or associated with, a physician or other health care pro- vider. Nothing in this subparagraph shall be construed as changing State law requirements applicable to a birth attendant.’’. (b) C A MENDMENT .—Section 1902(a)(10)(A) of the ONFORMING Social Security Act (42 U.S.C. 1396a(a)(10)(A)), is amended in the matter preceding clause (i) by striking ‘‘and (21)’’ and inserting ‘‘, (21), and (28)’’. FFECTIVE ATE .— (c) E D N GENERAL .—Except as provided in paragraph (2), the (1) I amendments made by this section shall take effect on the date of the enactment of this Act and shall apply to services fur- nished on or after such date. XCEPTION IF STATE LEGISLATION REQUIRED .—In the (2) E case of a State plan for medical assistance under title XIX of the Social Security Act which the Secretary of Health and Human Services determines requires State legislation (other than legislation appropriating funds) in order for the plan to meet the additional requirement imposed by the amendments made by this section, the State plan shall not be regarded as failing to comply with the requirements of such title solely on the basis of its failure to meet this additional requirement be- fore the first day of the first calendar quarter beginning after the close of the first regular session of the State legislature that begins after the date of the enactment of this Act. For purposes of the previous sentence, in the case of a State that has a 2-year legislative session, each year of such session shall be deemed to be a separate regular session of the State legisla- ture. SEC. 2302. CONCURRENT CARE FOR CHILDREN. (a) I N G ENERAL .—Section 1905(o)(1) of the Social Security Act (42 U.S.C. 1396d(o)(1)) is amended— (1) in subparagraph (A), by striking ‘‘subparagraph (B)’’ and inserting ‘‘subparagraphs (B) and (C)’’; and (2) by adding at the end the following new subparagraph: ‘‘(C) A voluntary election to have payment made for hospice care for a child (as defined by the State) shall not constitute a waiver of any rights of the child to be provided with, or to have payment made under this title for, services that are related to the treatment of the child’s condition for which a diagnosis of terminal illness has been made.’’. PPLICATION TO CHIP.—Section 2110(a)(23) of the Social (b) A Security Act (42 U.S.C. 1397jj(a)(23)) is amended by inserting ‘‘(concurrent, in the case of an individual who is a child, with care related to the treatment of the child’s condition with respect to June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00202 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

222 203 Sec. 2303 PPACA (Consolidated) which a diagnosis of terminal illness has been made’’ after ‘‘hospice care’’. SEC. 2303. STATE ELIGIBILITY OPTION FOR FAMILY PLANNING SERV- ICES. EEDY PTIONAL C OVERAGE AS N O G ROUP .— (a) C ATEGORICALLY N GENERAL .—Section 1902(a)(10)(A)(ii) of the Social (1) I Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)), as amended by sec- tion 2001(e), is amended— (A) in subclause (XIX), by striking ‘‘or’’ at the end; (B) in subclause (XX), by adding ‘‘or’’ at the end; and (C) by adding at the end the following new subclause: ‘‘(XXI) who are described in subsection (ii) (re- lating to individuals who meet certain income standards);’’. (2) G ROUP DESCRIBED .—Section 1902 of such Act (42 U.S.C. 1396a), as amended by section 2001(d), is amended by adding at the end the following new subsection: ‘‘(ii)(1) Individuals described in this subsection are individ- uals— ‘‘(A) whose income does not exceed an income eligi- bility level established by the State that does not exceed the highest income eligibility level established under the State plan under this title (or under its State child health plan under title XXI) for pregnant women; and ‘‘(B) who are not pregnant. ‘‘(2) At the option of a State, individuals described in this subsection may include individuals who, had individuals ap- plied on or before January 1, 2007, would have been made eli- gible pursuant to the standards and processes imposed by that State for benefits described in clause (XV) of the matter fol- lowing subparagraph (G) of section subsection (a)(10) pursuant to a waiver granted under section 1115. ‘‘(3) At the option of a State, for purposes of subsection (a)(17)(B), in determining eligibility for services under this sub- section, the State may consider only the income of the appli- cant or recipient.’’. (3) L IMITATION ON BENEFITS .—Section 1902(a)(10) of the Social Security Act (42 U.S.C. 1396a(a)(10)), as amended by section 2001(a)(5)(A), is amended in the matter following sub- paragraph (G)— (A) by striking ‘‘and (XV)’’ and inserting ‘‘(XV)’’; and (B) by inserting ‘‘, and (XVI) the medical assistance made available to an individual described in subsection (ii) shall be limited to family planning services and supplies described in section 1905(a)(4)(C) including medical diag- nosis and treatment services that are provided pursuant to a family planning service in a family planning setting’’ be- fore the semicolon. (4) C ONFORMING AMENDMENTS .— (A) Section 1905(a) of the Social Security Act (42 U.S.C. 1396d(a)), as amended by section 2001(e)(2)(A), is amended in the matter preceding paragraph (1)— (i) in clause (xiv), by striking ‘‘or’’ at the end; (ii) in clause (xv), by adding ‘‘or’’ at the end; and June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00203 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

223 204 Sec. 2303 1920C SSA PPACA (Consolidated) \ (iii) by inserting after clause (xv) the following: ‘‘(xvi) individuals described in section 1902(ii),’’. (B) Section 1903(f)(4) of such Act (42 U.S.C. 1396b(f)(4)), as amended by section 2001(e)(2)(B), is amended by inserting ‘‘1902(a)(10)(A)(ii)(XXI),’’ after ‘‘1902(a)(10)(A)(ii)(XX),’’. E LIGIBILITY .— RESUMPTIVE (b) P N GENERAL .—Title XIX of the Social Security Act (42 (1) I U.S.C. 1396 et seq.) is amended by inserting after section 1920B the following: PRESUMPTIVE ELIGIBILITY FOR FAMILY PLANNING SERVICES ‘‘ .—State . 1920C ø 42 U.S.C. 1396r–1c ¿ . (a) S TATE O PTION ‘‘S EC plan approved under section 1902 may provide for making medical assistance available to an individual described in section 1902(ii) (relating to individuals who meet certain income eligibility stand- ard) during a presumptive eligibility period. In the case of an indi- vidual described in section 1902(ii), such medical assistance shall be limited to family planning services and supplies described in 1905(a)(4)(C) and, at the State’s option, medical diagnosis and treatment services that are provided in conjunction with a family planning service in a family planning setting. .—For purposes of this section: EFINITIONS ‘‘(b) D .—The term ‘pre- RESUMPTIVE ELIGIBILITY PERIOD ‘‘(1) P sumptive eligibility period’ means, with respect to an indi- vidual described in subsection (a), the period that— ‘‘(A) begins with the date on which a qualified entity determines, on the basis of preliminary information, that the individual is described in section 1902(ii); and ‘‘(B) ends with (and includes) the earlier of— ‘‘(i) the day on which a determination is made with respect to the eligibility of such individual for services under the State plan; or ‘‘(ii) in the case of such an individual who does not file an application by the last day of the month fol- lowing the month during which the entity makes the determination referred to in subparagraph (A), such last day. ‘‘(2) Q UALIFIED ENTITY .— ‘‘(A) I N GENERAL .—Subject to subparagraph (B), the term ‘qualified entity’ means any entity that— ‘‘(i) is eligible for payments under a State plan ap- proved under this title; and ‘‘(ii) is determined by the State agency to be capa- ble of making determinations of the type described in paragraph (1)(A). ‘‘(B) R ULE OF CONSTRUCTION .—Nothing in this para- graph shall be construed as preventing a State from lim- iting the classes of entities that may become qualified enti- ties in order to prevent fraud and abuse. ‘‘(c) A DMINISTRATION .— ‘‘(1) I N GENERAL .—The State agency shall provide qualified entities with— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00204 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

224 205 Sec. 2303 PPACA (Consolidated) ‘‘(A) such forms as are necessary for an application to be made by an individual described in subsection (a) for medical assistance under the State plan; and ‘‘(B) information on how to assist such individuals in completing and filing such forms. .—A qualified entity that OTIFICATION REQUIREMENTS ‘‘(2) N determines under subsection (b)(1)(A) that an individual de- scribed in subsection (a) is presumptively eligible for medical assistance under a State plan shall— ‘‘(A) notify the State agency of the determination with- in 5 working days after the date on which determination is made; and ‘‘(B) inform such individual at the time the determina- tion is made that an application for medical assistance is required to be made by not later than the last day of the month following the month during which the determina- tion is made. PPLICATION FOR MEDICAL ASSISTANCE .—In the case of ‘‘(3) A an individual described in subsection (a) who is determined by a qualified entity to be presumptively eligible for medical as- sistance under a State plan, the individual shall apply for med- ical assistance by not later than the last day of the month fol- lowing the month during which the determination is made. ‘‘(d) P AYMENT .—Notwithstanding any other provision of law, medical assistance that— ‘‘(1) is furnished to an individual described in subsection (a)— ‘‘(A) during a presumptive eligibility period; and ‘‘(B) by a entity that is eligible for payments under the State plan; and ‘‘(2) is included in the care and services covered by the State plan, shall be treated as medical assistance provided by such plan for purposes of clause (4) of the first sentence of section 1905(b).’’. ONFORMING AMENDMENTS .— (2) C (A) Section 1902(a)(47) of the Social Security Act (42 U.S.C. 1396a(a)(47)), as amended by section 2202(a), is amended— (i) in subparagraph (A), by inserting before the semicolon at the end the following: ‘‘and provide for making medical assistance available to individuals de- scribed in subsection (a) of section 1920C during a pre- sumptive eligibility period in accordance with such section’’; and (ii) in subparagraph (B), by striking ‘‘or 1920B’’ and inserting ‘‘1920B, or 1920C’’. (B) Section 1903(u)(1)(D)(v) of such Act (42 U.S.C. 1396b(u)(1)(D)(v)), as amended by section 2202(b), is amended by inserting ‘‘or for medical assistance provided to an individual described in subsection (a) of section 1920C during a presumptive eligibility period under such section,’’ after ‘‘1920B during a presumptive eligibility pe- riod under such section,’’. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00205 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

225 206 Sec. 2304 PPACA (Consolidated) LARIFICATION OF C F AMILY P LANNING S ERV - (c) C OVERAGE OF UPPLIES .—Section 1937(b) of the Social Security Act (42 ICES AND S U.S.C. 1396u–7(b)), as amended by section 2001(c), is amended by adding at the end the following: OVERAGE OF FAMILY PLANNING SERVICES AND SUP - ‘‘(7) C .—Notwithstanding the previous provisions of this sec- PLIES tion, a State may not provide for medical assistance through enrollment of an individual with benchmark coverage or bench- mark-equivalent coverage under this section unless such cov- erage includes for any individual described in section 1905(a)(4)(C), medical assistance for family planning services and supplies in accordance with such section.’’. FFECTIVE D ATE .—The amendments made by this section (d) E take effect on the date of the enactment of this Act and shall apply to items and services furnished on or after such date. SEC. 2304. CLARIFICATION OF DEFINITION OF MEDICAL ASSISTANCE. Section 1905(a) of the Social Security Act (42 U.S.C. 1396d(a)) is amended by inserting ‘‘or the care and services themselves, or both’’ before ‘‘(if provided in or after’’. Subtitle E—New Options for States to Provide Long-Term Services and Supports SEC. 2401. COMMUNITY FIRST CHOICE OPTION. Section 1915 of the Social Security Act (42 U.S.C. 1396n) is amended by adding at the end the following: ‘‘(k) S TATE P LAN O PTION T O P ROVIDE H OME AND C OMMUNITY - BASED A S ERVICES AND S UPPORTS .— TTENDANT N GENERAL ø ‘‘(1) I As revised by section 1205 of HCERA ¿ .— Subject to the succeeding provisions of this subsection, begin- ning October 1, 2011, a State may provide through a State plan amendment for the provision of medical assistance for home and community-based attendant services and supports for individuals who are eligible for medical assistance under the State plan whose income does not exceed 150 percent of the poverty line (as defined in section 2110(c)(5)) or, if greater, the income level applicable for an individual who has been de- termined to require an institutional level of care to be eligible for nursing facility services under the State plan and with re- spect to whom there has been a determination that, but for the provision of such services, the individuals would require the level of care provided in a hospital, a nursing facility, an inter- mediate care facility for the mentally retarded, or an institu- tion for mental diseases, the cost of which could be reimbursed under the State plan, but only if the individual chooses to re- ceive such home and community-based attendant services and supports, and only if the State meets the following require- ments: VAILABILITY .—The State shall make available ‘‘(A) A home and community-based attendant services and sup- ports to eligible individuals, as needed, to assist in accom- plishing activities of daily living, instrumental activities of June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00206 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

226 207 Sec. 2401 PPACA (Consolidated) daily living, and health-related tasks through hands-on as- sistance, supervision, or cueing— ‘‘(i) under a person-centered plan of services and supports that is based on an assessment of functional need and that is agreed to in writing by the individual or, as appropriate, the individual’s representative; ‘‘(ii) in a home or community setting, which does not include a nursing facility, institution for mental diseases, or an intermediate care facility for the men- tally retarded; ‘‘(iii) under an agency-provider model or other model (as defined in paragraph (6)(C )); and ‘‘(iv) the furnishing of which— ‘‘(I) is selected, managed, and dismissed by the individual, or, as appropriate, with assistance from the individual’s representative; ‘‘(II) is controlled, to the maximum extent pos- sible, by the individual or where appropriate, the individual’s representative, regardless of who may act as the employer of record; and ‘‘(III) provided by an individual who is quali- fied to provide such services, including family members (as defined by the Secretary). NCLUDED SERVICES AND SUPPORTS .—In addition ‘‘(B) I to assistance in accomplishing activities of daily living, in- strumental activities of daily living, and health related tasks, the home and community-based attendant services and supports made available include— ‘‘(i) the acquisition, maintenance, and enhance- ment of skills necessary for the individual to accom- plish activities of daily living, instrumental activities of daily living, and health related tasks; ‘‘(ii) back-up systems or mechanisms (such as the use of beepers or other electronic devices) to ensure continuity of services and supports; and ‘‘(iii) voluntary training on how to select, manage, and dismiss attendants. ‘‘(C) E .—Subject to XCLUDED SERVICES AND SUPPORTS subparagraph (D), the home and community-based attend- ant services and supports made available do not include— ‘‘(i) room and board costs for the individual; ‘‘(ii) special education and related services pro- vided under the Individuals with Disabilities Edu- cation Act and vocational rehabilitation services pro- vided under the Rehabilitation Act of 1973; ‘‘(iii) assistive technology devices and assistive technology services other than those under (1)(B)(ii); ‘‘(iv) medical supplies and equipment; or ‘‘(v) home modifications. .—The home ERMISSIBLE SERVICES AND SUPPORTS ‘‘(D) P and community-based attendant services and supports may include— ‘‘(i) expenditures for transition costs such as rent and utility deposits, first month’s rent and utilities, June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00207 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

227 208 Sec. 2401 PPACA (Consolidated) bedding, basic kitchen supplies, and other necessities required for an individual to make the transition from a nursing facility, institution for mental diseases, or intermediate care facility for the mentally retarded to a community-based home setting where the individual resides; and ‘‘(ii) expenditures relating to a need identified in an individual’s person-centered plan of services that increase independence or substitute for human assist- ance, to the extent that expenditures would otherwise be made for the human assistance. ‘‘(2) I .—For NCREASED FEDERAL FINANCIAL PARTICIPATION purposes of payments to a State under section 1903(a)(1), with respect to amounts expended by the State to provide medical assistance under the State plan for home and community- based attendant services and supports to eligible individuals in accordance with this subsection during a fiscal year quarter oc- curring during the period described in paragraph (1), the Fed- eral medical assistance percentage applicable to the State (as determined under section 1905(b)) shall be increased by 6 per- centage points. ‘‘(3) S TATE REQUIREMENTS .—In order for a State plan amendment to be approved under this subsection, the State shall— ‘‘(A) develop and implement such amendment in col- laboration with a Development and Implementation Coun- cil established by the State that includes a majority of members with disabilities, elderly individuals, and their representatives and consults and collaborates with such in- dividuals; ‘‘(B) provide consumer controlled home and commu- nity-based attendant services and supports to individuals on a statewide basis, in a manner that provides such serv- ices and supports in the most integrated setting appro- priate to the individual’s needs, and without regard to the individual’s age, type or nature of disability, severity of disability, or the form of home and community-based at- tendant services and supports that the individual requires in order to lead an independent life; ‘‘(C) with respect to expenditures during the first full fiscal year in which the State plan amendment is imple- mented, maintain or exceed the level of State expenditures for medical assistance that is provided under section 1905(a), section 1915, section 1115, or otherwise to individ- uals with disabilities or elderly individuals attributable to the preceding fiscal year; ‘‘(D) establish and maintain a comprehensive, contin- uous quality assurance system with respect to community- based attendant services and supports that— ‘‘(i) includes standards for agency-based and other delivery models with respect to training, appeals for denials and reconsideration procedures of an indi- vidual plan, and other factors as determined by the Secretary; June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00208 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

228 209 Sec. 2401 PPACA (Consolidated) ‘‘(ii) incorporates feedback from consumers and their representatives, disability organizations, pro- viders, families of disabled or elderly individuals, members of the community, and others and maximizes consumer independence and consumer control; ‘‘(iii) monitors the health and well-being of each individual who receives home and community-based attendant services and supports, including a process for the mandatory reporting, investigation, and resolu- tion of allegations of neglect, abuse, or exploitation in connection with the provision of such services and sup- ports; and ‘‘(iv) provides information about the provisions of the quality assurance required under clauses (i) through (iii) to each individual receiving such services; and ‘‘(E) collect and report information, as determined nec- essary by the Secretary, for the purposes of approving the State plan amendment, providing Federal oversight, and conducting an evaluation under paragraph (5)(A), includ- ing data regarding how the State provides home and com- munity-based attendant services and supports and other home and community-based services, the cost of such serv- ices and supports, and how the State provides individuals with disabilities who otherwise qualify for institutional care under the State plan or under a waiver the choice to instead receive home and community-based services in lieu of institutional care. OMPLIANCE WITH CERTAIN LAWS .—A State shall en- ‘‘(4) C sure that, regardless of whether the State uses an agency-pro- vider model or other models to provide home and community- based attendant services and supports under a State plan amendment under this subsection, such services and supports are provided in accordance with the requirements of the Fair Labor Standards Act of 1938 and applicable Federal and State laws regarding— ‘‘(A) withholding and payment of Federal and State in- come and payroll taxes; ‘‘(B) the provision of unemployment and workers com- pensation insurance; ‘‘(C) maintenance of general liability insurance; and ‘‘(D) occupational health and safety. ‘‘(5) E VALUATION , DATA COLLECTION , AND REPORT TO CON - GRESS .— ‘‘(A) E VALUATION .—The Secretary shall conduct an evaluation of the provision of home and community-based attendant services and supports under this subsection in order to determine the effectiveness of the provision of such services and supports in allowing the individuals re- ceiving such services and supports to lead an independent life to the maximum extent possible; the impact on the physical and emotional health of the individuals who re- ceive such services; and an comparative analysis of the costs of services provided under the State plan amendment June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00209 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

229 210 Sec. 2401 PPACA (Consolidated) under this subsection and those provided under institu- tional care in a nursing facility, institution for mental dis- eases, or an intermediate care facility for the mentally re- tarded. ‘‘(B) D ATA COLLECTION .—The State shall provide the Secretary with the following information regarding the provision of home and community-based attendant services and supports under this subsection for each fiscal year for which such services and supports are provided: ‘‘(i) The number of individuals who are estimated to receive home and community-based attendant serv- ices and supports under this subsection during the fis- cal year. ‘‘(ii) The number of individuals that received such services and supports during the preceding fiscal year. ‘‘(iii) The specific number of individuals served by type of disability, age, gender, education level, and employment status. ‘‘(iv) Whether the specific individuals have been previously served under any other home and commu- nity based services program under the State plan or under a waiver. ‘‘(C) R EPORTS .—Not later than— ‘‘(i) December 31, 2013, the Secretary shall submit to Congress and make available to the public an in- terim report on the findings of the evaluation under subparagraph (A); and ‘‘(ii) December 31, 2015, the Secretary shall sub- mit to Congress and make available to the public a final report on the findings of the evaluation under subparagraph (A). EFINITIONS .—In this subsection: ‘‘(6) D ‘‘(A) A CTIVITIES OF DAILY LIVING .—The term ‘activities of daily living’ includes tasks such as eating, toileting, grooming, dressing, bathing, and transferring. ‘‘(B) C ONSUMER CONTROLLED .—The term ‘consumer controlled’ means a method of selecting and providing serv- ices and supports that allow the individual, or where ap- propriate, the individual’s representative, maximum con- trol of the home and community-based attendant services and supports, regardless of who acts as the employer of record. ‘‘(C) D ELIVERY MODELS .— ‘‘(i) A GENCY - PROVIDER MODEL .—The term ‘agency- provider model’ means, with respect to the provision of home and community-based attendant services and supports for an individual, subject to paragraph (4), a method of providing consumer controlled services and supports under which entities contract for the provi- sion of such services and supports. ‘‘(ii) O THER MODELS .—The term ‘other models’ means, subject to paragraph (4), methods, other than an agency-provider model, for the provision of con- sumer controlled services and supports. Such models June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00210 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

230 211 Sec. 2402 PPACA (Consolidated) may include the provision of vouchers, direct cash pay- ments, or use of a fiscal agent to assist in obtaining services. ‘‘(D) H - .—The term ‘health-re- EALTH RELATED TASKS lated tasks’ means specific tasks related to the needs of an individual, which can be delegated or assigned by licensed health-care professionals under State law to be performed by an attendant. ‘‘(E) I NDIVIDUAL ’ S REPRESENTATIVE .—The term ‘indi- vidual’s representative’ means a parent, family member, guardian, advocate, or other authorized representative of an individual NSTRUMENTAL ACTIVITIES OF DAILY LIVING ‘‘(F) I .—The term ‘instrumental activities of daily living’ includes (but is not limited to) meal planning and preparation, man- aging finances, shopping for food, clothing, and other es- sential items, performing essential household chores, com- municating by phone or other media, and traveling around and participating in the community.’’. Note that section 10202, on p. 845, provides incentives for ø States to offer home and community-based services as long-term care alternative to nursing homes ¿ SEC. 2402. REMOVAL OF BARRIERS TO PROVIDING HOME AND COM- MUNITY-BASED SERVICES. (a) O VERSIGHT AND A SSESSMENT OF THE A DMINISTRATION OF H OME AND OMMUNITY - BASED S ERVICES .—The Secretary of Health C and Human Services shall promulgate regulations to ensure that all States develop service systems that are designed to— (1) allocate resources for services in a manner that is re- sponsive to the changing needs and choices of beneficiaries re- ceiving non-institutionally-based long-term services and sup- ports (including such services and supports that are provided under programs other the State Medicaid program), and that provides strategies for beneficiaries receiving such services to maximize their independence, including through the use of cli- ent-employed providers; (2) provide the support and coordination needed for a bene- ficiary in need of such services (and their family caregivers or representative, if applicable) to design an individualized, self- directed, community-supported life; and (3) improve coordination among, and the regulation of, all providers of such services under federally and State-funded programs in order to— (A) achieve a more consistent administration of poli- cies and procedures across programs in relation to the pro- vision of such services; and (B) oversee and monitor all service system functions to assure— (i) coordination of, and effectiveness of, eligibility determinations and individual assessments; (ii) development and service monitoring of a com- plaint system, a management system, a system to qualify and monitor providers, and systems for role- setting and individual budget determinations; and June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00211 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

231 212 Sec. 2402 PPACA (Consolidated) (iii) an adequate number of qualified direct care workers to provide self-directed personal assistance services. (b) A S O PTIONS .—Section 1915(i) of the Social TATE DDITIONAL Security Act (42 U.S.C. 1396n(i)) is amended by adding at the end the following new paragraphs: ‘‘(6) S TATE OPTION TO PROVIDE HOME AND COMMUNITY - BASED SERVICES TO INDIVIDUALS ELIGIBLE FOR SERVICES UNDER A WAIVER .— ‘‘(A) I N GENERAL .—A State that provides home and community-based services in accordance with this sub- section to individuals who satisfy the needs-based criteria for the receipt of such services established under para- graph (1)(A) may, in addition to continuing to provide such services to such individuals, elect to provide home and community-based services in accordance with the require- ments of this paragraph to individuals who are eligible for home and community-based services under a waiver ap- proved for the State under subsection (c), (d), or (e) or under section 1115 to provide such services, but only for those individuals whose income does not exceed 300 per- cent of the supplemental security income benefit rate es- tablished by section 1611(b)(1). PPLICATION OF SAME REQUIREMENTS FOR INDIVID - ‘‘(B) A UALS SATISFYING NEEDS - BASED CRITERIA .—Subject to sub- paragraph (C), a State shall provide home and community- based services to individuals under this paragraph in the same manner and subject to the same requirements as apply under the other paragraphs of this subsection to the provision of home and community-based services to indi- viduals who satisfy the needs-based criteria established under paragraph (1)(A). UTHORITY TO OFFER DIFFERENT TYPE AMOUNT , ‘‘(C) A , DURATION OR SCOPE OF HOME AND COMMUNITY - BASED , .—A State may offer home and community-based SERVICES services to individuals under this paragraph that differ in type, amount, duration, or scope from the home and com- munity-based services offered for individuals who satisfy the needs-based criteria established under paragraph (1)(A), so long as such services are within the scope of services described in paragraph (4)(B) of subsection (c) for which the Secretary has the authority to approve a waiver and do not include room or board. ‘‘(7) S TATE OPTION TO OFFER HOME AND COMMUNITY - BASED SERVICES TO SPECIFIC TARGETED POPULATIONS .— , ‘‘(A) I N GENERAL .—A State may elect in a State plan amendment under this subsection to target the provision of home and community-based services under this sub- section to specific populations and to differ the type, amount, duration, or scope of such services to such specific populations. ‘‘(B) 5- YEAR TERM .— N GENERAL .—An election by a State under ‘‘(i) I this paragraph shall be for a period of 5 years. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00212 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

232 213 Sec. 2402 PPACA (Consolidated) HASE - - ‘‘(ii) P IN OF SERVICES AND ELIGIBILITY PER YEAR PERIOD - MITTED DURING INITIAL 5 .—A State mak- ing an election under this paragraph may, during the first 5-year period for which the election is made, phase-in the enrollment of eligible individuals, or the provision of services to such individuals, or both, so long as all eligible individuals in the State for such services are enrolled, and all such services are pro- vided, before the end of the initial 5-year period. ‘‘(C) R ENEWAL .—An election by a State under this paragraph may be renewed for additional 5-year terms if the Secretary determines, prior to beginning of each such renewal period, that the State has— ‘‘(i) adhered to the requirements of this subsection and paragraph in providing services under such an election; and ‘‘(ii) met the State’s objectives with respect to quality improvement and beneficiary outcomes.’’. (c) R L EMOVAL OF S COPE OF S ERVICES .—Para- IMITATION ON graph (1) of section 1915(i) of the Social Security Act (42 U.S.C. 1396n(i)), as amended by subsection (a), is amended by striking ‘‘or such other services requested by the State as the Secretary may approve’’. PTIONAL E LIGIBILITY C ATEGORY - O P ROVIDE F ULL M ED T (d) O ICAID B ENEFITS TO I NDIVIDUALS R ECEIVING H OME AND C OMMUNITY - BASED S U NDER A S TATE P LAN A MENDMENT .— ERVICES N GENERAL (1) I .—Section 1902(a)(10)(A)(ii) of the Social Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)), as amended by sec- tion 2304(a)(1), is amended— (A) in subclause (XX), by striking ‘‘or’’ at the end; (B) in subclause (XXI), by adding ‘‘or’’ at the end; and (C) by inserting after subclause (XXI), the following new subclause: ‘‘(XXII) who are eligible for home and commu- nity-based services under needs-based criteria es- tablished under paragraph (1)(A) of section 1915(i), or who are eligible for home and commu- nity-based services under paragraph (6) of such section, and who will receive home and commu- nity-based services pursuant to a State plan amendment under such subsection;’’. (2) C .— ONFORMING AMENDMENTS (A) Section 1903(f)(4) of the Social Security Act (42 U.S.C. 1396b(f)(4)), as amended by section 2304(a)(4)(B), is amended in the matter preceding subparagraph (A), by in- serting ‘‘1902(a)(10)(A)(ii)(XXII),’’ after ‘‘1902(a)(10)(A)(ii)(XXI),’’. (B) Section 1905(a) of the Social Security Act (42 U.S.C. 1396d(a)), as so amended, is amended in the matter preceding paragraph (1)— (i) in clause (xv), by striking ‘‘or’’ at the end; (ii) in clause (xvi), by adding ‘‘or’’ at the end; and (iii) by inserting after clause (xvi) the following new clause: June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00213 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

233 214 Sec. 2403 PPACA (Consolidated) ‘‘(xvii) individuals who are eligible for home and commu- nity-based services under needs-based criteria established under paragraph (1)(A) of section 1915(i), or who are eligible for home and community-based services under paragraph (6) of such section, and who will receive home and community-based services pursuant to a State plan amendment under such sub- section,’’. O PTION T O L LIMINATION OF N UMBER OF E LIGIBLE I N - IMIT (e) E L ENGTH OF P ERIOD FOR G RANDFATHERED I NDIVID - DIVIDUALS OR UALS IF E C RITERIA I S M ODIFIED .—Paragraph (1) of sec- LIGIBILITY tion 1915(i) of such Act (42 U.S.C. 1396n(i)) is amended— (1) by striking subparagraph (C) and inserting the fol- lowing: ROJECTION OF NUMBER OF INDIVIDUALS TO BE ‘‘(C) P - BASED SERVICES .—The PROVIDED HOME AND COMMUNITY State submits to the Secretary, in such form and manner, and upon such frequency as the Secretary shall specify, the projected number of individuals to be provided home and community-based services.’’; and (2) in subclause (II) of subparagraph (D)(ii), by striking ‘‘to be eligible for such services for a period of at least 12 months beginning on the date the individual first received medical as- sistance for such services’’ and inserting ‘‘to continue to be eli- gible for such services after the effective date of the modifica- tion and until such time as the individual no longer meets the standard for receipt of such services under such pre-modified criteria’’. - LIMINATION OF O PTION T O W AIVE S TATEWIDENESS ; A DDI (f) E TION OF PTION T O W AIVE C OMPARABILITY .—Paragraph (3) of sec- O tion 1915(i) of such Act (42 U.S.C. 1396n(3)) is amended by striking ‘‘1902(a)(1) (relating to statewideness)’’ and inserting ‘‘1902(a)(10)(B) (relating to comparability)’’. (g) E D ATE .—The amendments made by subsections FFECTIVE (b) through (f) take effect on the first day of the first fiscal year quarter that begins after the date of enactment of this Act. SEC. 2403. MONEY FOLLOWS THE PERSON REBALANCING DEM- ONSTRATION. (a) E XTENSION OF D EMONSTRATION .— (1) I N GENERAL .—Section 6071(h) of the Deficit Reduction Act of 2005 (42 U.S.C. 1396a note) is amended— (A) in paragraph (1)(E), by striking ‘‘fiscal year 2011’’ and inserting ‘‘each of fiscal years 2011 through 2016’’; and (B) in paragraph (2), by striking ‘‘2011’’ and inserting ‘‘2016’’. VALUATION .—Paragraphs (2) and (3) of section 6071(g) (2) E of such Act is amended are each amended by striking ‘‘2011’’ and inserting ‘‘2016’’. (b) R EDUCTION OF I NSTITUTIONAL R ESIDENCY P ERIOD .— (1) I N GENERAL .—Section 6071(b)(2) of the Deficit Reduc- tion Act of 2005 (42 U.S.C. 1396a note) is amended— (A) in subparagraph (A)(i), by striking ‘‘, for a period of not less than 6 months or for such longer minimum pe- riod, not to exceed 2 years, as may be specified by the June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00214 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

234 215 Sec. 2406 PPACA (Consolidated) State’’ and inserting ‘‘for a period of not less than 90 con- secutive days’’; and (B) by adding at the end the following: ‘‘Any days that an individual resides in an institution on the basis of having been admitted solely for purposes of receiving short-term rehabilitative services for a period for which pay- ment for such services is limited under title XVIII shall not be taken into account for purposes of determining the 90-day pe- riod required under subparagraph (A)(i).’’. (2) E FFECTIVE DATE .—The amendments made by this sub- section take effect 30 days after the date of enactment of this Act. SEC. 2404. PROTECTION FOR RECIPIENTS OF HOME AND COMMUNITY- BASED SERVICES AGAINST SPOUSAL IMPOVERISHMENT. During the 5-year period that begins on January 1, 2014, sec- tion 1924(h)(1)(A) of the Social Security Act (42 U.S.C. 1396r– 5(h)(1)(A)) shall be applied as though ‘‘is eligible for medical assist- ance for home and community-based services provided under sub- section (c), (d), or (i) of section 1915, under a waiver approved under section 1115, or who is eligible for such medical assistance by reason of being determined eligible under section 1902(a)(10)(C) or by reason of section 1902(f) or otherwise on the basis of a reduc- tion of income based on costs incurred for medical or other reme- dial care, or who is eligible for medical assistance for home and community-based attendant services and supports under section 1915(k)’’ were substituted in such section for ‘‘(at the option of the State) is described in section 1902(a)(10)(A)(ii)(VI)’’. SEC. 2405. FUNDING TO EXPAND STATE AGING AND DISABILITY RE- SOURCE CENTERS. Out of any funds in the Treasury not otherwise appropriated, there is appropriated to the Secretary of Health and Human Serv- ices, acting through the Assistant Secretary for Aging, $10,000,000 for each of fiscal years 2010 through 2014, to carry out subsections (a)(20)(B)(iii) and (b)(8) of section 202 of the Older Americans Act of 1965 (42 U.S.C. 3012). SEC. 2406. SENSE OF THE SENATE REGARDING LONG-TERM CARE. INDINGS .—The Senate makes the following findings: (a) F (1) Nearly 2 decades have passed since Congress seriously considered long-term care reform. The United States Bipar- tisan Commission on Comprehensive Health Care, also know as the ‘‘Pepper Commission’’, released its ‘‘Call for Action’’ blueprint for health reform in September 1990. In the 20 years since those recommendations were made, Congress has never acted on the report. (2) In 1999, under the United States Supreme Court’s deci- sion in Olmstead v. L.C., 527 U.S. 581 (1999), individuals with disabilities have the right to choose to receive their long-term services and supports in the community, rather than in an in- stitutional setting. (3) Despite the Pepper Commission and Olmstead decision, the long-term care provided to our Nation’s elderly and dis- abled has not improved. In fact, for many, it has gotten far worse. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00215 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

235 216 Sec. 2501 PPACA (Consolidated) (4) In 2007, 69 percent of Medicaid long-term care spend- ing for elderly individuals and adults with physical disabilities paid for institutional services. Only 6 states spent 50 percent or more of their Medicaid long-term care dollars on home and community-based services for elderly individuals and adults 1 with physical disabilities while ⁄ 2 of the States spent less than 25 percent. This disparity continues even though, on average, it is estimated that Medicaid dollars can support nearly 3 el- derly individuals and adults with physical disabilities in home and community-based services for every individual in a nurs- ing home. Although every State has chosen to provide certain services under home and community-based waivers, these serv- ices are unevenly available within and across States, and reach a small percentage of eligible individuals. (b) S S ENATE .—It is the sense of the Senate that— ENSE OF THE (1) during the 111th session of Congress, Congress should address long-term services and supports in a comprehensive way that guarantees elderly and disabled individuals the care they need; and (2) long term services and supports should be made avail- able in the community in addition to in institutions. Subtitle F—Medicaid Prescription Drug Coverage SEC. 2501. PRESCRIPTION DRUG REBATES. NCREASE IN M (a) I R EBATE P ERCENTAGE FOR S INGLE INIMUM S OURCE D RUGS AND I NNOVATOR M ULTIPLE S OURCE D RUGS .— (1) I N GENERAL .—Section 1927(c)(1)(B) of the Social Secu- rity Act (42 U.S.C. 1396r–8(c)(1)(B)) is amended— (A) in clause (i)— (i) in subclause (IV), by striking ‘‘and’’ at the end; (ii) in subclause (V)— (I) by inserting ‘‘and before January 1, 2010’’ after ‘‘December 31, 1995,’’; and (II) by striking the period at the end and in- serting ‘‘; and’’; and (iii) by adding at the end the following new sub- clause: ‘‘(VI) except as provided in clause (iii), after December 31, 2009, 23.1 percent.’’; and (B) by adding at the end the following new clause: ‘‘(iii) M INIMUM REBATE PERCENTAGE FOR CERTAIN DRUGS .— ‘‘(I) I N GENERAL .—In the case of a single source drug or an innovator multiple source drug described in subclause (II), the minimum rebate percentage for rebate periods specified in clause (i)(VI) is 17.1 percent. ‘‘(II) D RUG DESCRIBED .—For purposes of sub- clause (I), a single source drug or an innovator multiple source drug described in this subclause is any of the following drugs: June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00216 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

236 217 Sec. 2501 PPACA (Consolidated) ‘‘(aa) A clotting factor for which a sepa- rate furnishing payment is made under sec- tion 1842(o)(5) and which is included on a list of such factors specified and updated regu- larly by the Secretary. ‘‘(bb) A drug approved by the Food and Drug Administration exclusively for pediatric indications.’’. (2) R ECAPTURE OF TOTAL SAVINGS DUE TO INCREASE .—Sec- tion 1927(b)(1) of such Act (42 U.S.C. 1396r–8(b)(1)) is amend- ed by adding at the end the following new subparagraph: PECIAL RULE FOR INCREASED MINIMUM REBATE ‘‘(C) S PERCENTAGE .— ‘‘(i) I .—In addition to the amounts ap- N GENERAL plied as a reduction under subparagraph (B), for re- bate periods beginning on or after January 1, 2010, during a fiscal year, the Secretary shall reduce pay- ments to a State under section 1903(a) in the manner specified in clause (ii), in an amount equal to the prod- uct of— ‘‘(I) 100 percent minus the Federal medical assistance percentage applicable to the rebate pe- riod for the State; and ‘‘(II) the amounts received by the State under such subparagraph that are attributable (as esti- mated by the Secretary based on utilization and other data) to the increase in the minimum rebate percentage effected by the amendments made by subsections (a)(1), (b), and (d) of section 2501 of the Patient Protection and Affordable Care Act, taking into account the additional drugs included under the amendments made by subsection (c) of section 2501 of such Act. The Secretary shall adjust such payment reduction for a calendar quarter to the extent the Secretary deter- mines, based upon subsequent utilization and other data, that the reduction for such quarter was greater or less than the amount of payment reduction that should have been made. ‘‘(ii) M OF PAYMENT ANNER .—The REDUCTION amount of the payment reduction under clause (i) for a State for a quarter shall be deemed an overpayment to the State under this title to be disallowed against the State’s regular quarterly draw for all Medicaid spending under section 1903(d)(2). Such a disallow- ance is not subject to a reconsideration under section 1116(d).’’. RUGS (b) I IN R EBATE FOR O THER D NCREASE .—Section 1927(c)(3)(B) of such Act (42 U.S.C. 1396r–8(c)(3)(B)) is amended— (1) in clause (i), by striking ‘‘and’’ at the end; (2) in clause (ii)— (A) by inserting ‘‘and before January 1, 2010,’’ after ‘‘December 31, 1993,’’; and (B) by striking the period and inserting ‘‘; and’’; and June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00217 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

237 218 Sec. 2501 PPACA (Consolidated) (3) by adding at the end the following new clause: ‘‘(iii) after December 31, 2009, is 13 percent.’’. P RESCRIPTION D RUG XTENSION OF ISCOUNTS TO E NROLL - (c) E D M EDICAID M ANAGED C ARE EES OF RGANIZATIONS .— O (1) I .—Section 1903(m)(2)(A) of such Act (42 N GENERAL U.S.C. 1396b(m)(2)(A)) is amended— (A) in clause (xi), by striking ‘‘and’’ at the end; (B) in clause (xii), by striking the period at the end and inserting ‘‘; and’’; and (C) by adding at the end the following: ‘‘(xiii) such contract provides that (I) covered out- patient drugs dispensed to individuals eligible for medical assistance who are enrolled with the entity shall be subject to the same rebate required by the agreement entered into under section 1927 as the State is subject to and that the State shall collect such rebates from manufacturers, (II) capitation rates paid to the entity shall be based on actual cost experience related to rebates and subject to the Federal regula- tions requiring actuarially sound rates, and (III) the entity shall report to the State, on such timely and periodic basis as specified by the Secretary in order to include in the information submitted by the State to a manufacturer and the Secretary under section 1927(b)(2)(A), information on the total number of units of each dosage form and strength and package size by National Drug Code of each covered outpatient drug dispensed to individuals eligible for medical assistance who are enrolled with the entity and for which the en- tity is responsible for coverage of such drug under this subsection (other than covered outpatient drugs that under subsection (j)(1) of section 1927 are not subject to the requirements of that section) and such other data as the Secretary determines necessary to carry out this subsection.’’. (2) C ONFORMING AMENDMENTS .—Section 1927 (42 U.S.C. 1396r–8) is amended— (A) in subsection (b)— (i) in paragraph (1)(A), in the first sentence, by in- serting ‘‘, including such drugs dispensed to individ- uals enrolled with a medicaid managed care organiza- tion if the organization is responsible for coverage of such drugs’’ before the period; and (ii) in paragraph (2)(A), by inserting ‘‘including such information reported by each medicaid managed care organization,’’ after ‘‘for which payment was made under the plan during the period,’’; and (B) in subsection (j), by striking paragraph (1) and in- serting the following: ‘‘(1) Covered outpatient drugs are not subject to the re- quirements of this section if such drugs are— ‘‘(A) dispensed by health maintenance organizations, including Medicaid managed care organizations that con- tract under section 1903(m); and June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00218 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

238 219 Sec. 2502 PPACA (Consolidated) ‘‘(B) subject to discounts under section 340B of the Public Health Service Act.’’. R EBATE FOR N EW F ORMULATIONS OF E XISTING DDITIONAL (d) A D RUGS .— (1) I N GENERAL .—Section 1927(c)(2) of the Social Security Act (42 U.S.C. 1396r–8(c)(2)) is amended by adding at the end the following new subparagraph: REATMENT OF NEW FORMULATIONS .— ‘‘(C) T Replaced ø by section 1206(a) of HCERA In the case of a drug that ¿ is a line extension of a single source drug or an innovator multiple source drug that is an oral solid dosage form, the rebate obligation with respect to such drug under this sec- tion shall be the amount computed under this section for such new drug or, if greater, the product of— ‘‘(i) the average manufacturer price of the line ex- tension of a single source drug or an innovator mul- tiple source drug that is an oral solid dosage form; ‘‘(ii) the highest additional rebate (calculated as a percentage of average manufacturer price) under this section for any strength of the original single source drug or innovator multiple source drug; and ‘‘(iii) the total number of units of each dosage form and strength of the line extension product paid for under the State plan in the rebate period (as reported by the State). In this subparagraph, the term ‘line extension’ means, with respect to a drug, a new formulation of the drug, such as an extended release formulation.’’. (2) E FFECTIVE DATE .—The amendment made by paragraph (1) shall apply to drugs that are paid for by a State after De- cember 31, 2009. (e) M AXIMUM R EBATE A MOUNT .—Section 1927(c)(2) of such Act (42 U.S.C. 1396r–8(c)(2)), as amended by subsection (d), is amend- ed by adding at the end the following new subparagraph: ‘‘(D) M AXIMUM REBATE AMOUNT .—In no case shall the sum of the amounts applied under paragraph (1)(A)(ii) and this paragraph with respect to each dosage form and strength of a single source drug or an innovator multiple source drug for a rebate period beginning after December 31, 2009, exceed 100 percent of the average manufacturer price of the drug.’’. (f) C ONFORMING A MENDMENTS .— (1) I N GENERAL .—Section 340B of the Public Health Serv- ice Act (42 U.S.C. 256b) is amended— (A) in subsection (a)(2)(B)(i), by striking ‘‘1927(c)(4)’’ and inserting ‘‘1927(c)(3)’’; and (B) by striking subsection (c); and (C) redesignating subsection (d) as subsection (c). FFECTIVE DATE .—The amendments made by this sub- (2) E section take effect on January 1, 2010. SEC. 2502. ELIMINATION OF EXCLUSION OF COVERAGE OF CERTAIN DRUGS. (a) I N G ENERAL .—Section 1927(d) of the Social Security Act (42 U.S.C. 1397r–8(d)) is amended— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00219 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

239 220 Sec. 2503 PPACA (Consolidated) (1) in paragraph (2)— (A) by striking subparagraphs (E), (I), and (J), respec- tively; and (B) by redesignating subparagraphs (F), (G), (H), and (K) as subparagraphs (E), (F), (G), and (H), respectively; and (2) by adding at the end the following new paragraph: - EXCLUDABLE DRUGS .—The following drugs or ON ‘‘(7) N classes of drugs, or their medical uses, shall not be excluded from coverage: ‘‘(A) Agents when used to promote smoking cessation, including agents approved by the Food and Drug Adminis- tration under the over-the-counter monograph process for purposes of promoting, and when used to promote, tobacco cessation. ‘‘(B) Barbiturates. ‘‘(C) Benzodiazepines.’’. FFECTIVE ATE .—The amendments made by this section D (b) E shall apply to services furnished on or after January 1, 2014. SEC. 2503. PROVIDING ADEQUATE PHARMACY REIMBURSEMENT. HARMACY (a) P EIMBURSEMENT L IMITS .— R (1) I N GENERAL .—Section 1927(e) of the Social Security Act (42 U.S.C. 1396r–8(e)) is amended— (A) in paragraph (4), by striking ‘‘(or, effective January 1, 2007, two or more)’’; and (B) by striking paragraph (5) and inserting the fol- lowing: SE OF AMP IN UPPER PAYMENT LIMITS .—The Secretary ‘‘(5) U shall calculate the Federal upper reimbursement limit estab- lished under paragraph (4) as no less than 175 percent of the weighted average (determined on the basis of utilization) of the most recently reported monthly average manufacturer prices for pharmaceutically and therapeutically equivalent multiple source drug products that are available for purchase by retail community pharmacies on a nationwide basis. The Secretary shall implement a smoothing process for average manufacturer prices. Such process shall be similar to the smoothing process used in determining the average sales price of a drug or bio- logical under section 1847A.’’. .—Section 1927(k)(1) of such Act (42 EFINITION OF AMP (2) D U.S.C. 1396r–8(k)(1)) is amended— (A) in subparagraph (A), by striking ‘‘by’’ and all that follows through the period and inserting ‘‘by— ‘‘(i) wholesalers for drugs distributed to retail com- munity pharmacies; and ‘‘(ii) retail community pharmacies that purchase drugs directly from the manufacturer.’’; and (B) by striking subparagraph (B) and inserting the fol- lowing: ‘‘(B) E XCLUSION OF CUSTOMARY PROMPT PAY DISCOUNTS AND OTHER PAYMENTS .— ‘‘(i) I N GENERAL .—The average manufacturer price for a covered outpatient drug shall exclude— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00220 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

240 221 Sec. 2503 PPACA (Consolidated) ‘‘(I) customary prompt pay discounts extended to wholesalers; ‘‘(II) bona fide service fees paid by manufac- turers to wholesalers or retail community phar- macies, including (but not limited to) distribution service fees, inventory management fees, product stocking allowances, and fees associated with ad- ministrative services agreements and patient care programs (such as medication compliance pro- grams and patient education programs); ‘‘(III) reimbursement by manufacturers for re- called, damaged, expired, or otherwise unsalable returned goods, including (but not limited to) re- imbursement for the cost of the goods and any re- imbursement of costs associated with return goods handling and processing, reverse logistics, and drug destruction; ‘‘(IV) payments received from, and rebates or discounts provided to, pharmacy benefit man- agers, managed care organizations, health mainte- nance organizations, insurers, hospitals, clinics, mail order pharmacies, long term care providers, manufacturers, or any other entity that does not conduct business as a wholesaler or a retail com- munity pharmacy ø error in final punctuation— amendment made by section 1101(c)(2) of HCERA ¿ only struck period and did not insert ‘; and’ ‘‘(V) discounts provided by manufacturers under section 1860D–14A. ø As added by section 1101(c)(3) of HCERA ¿ NCLUSION OF OTHER DISCOUNTS AND PAY - ‘‘(ii) I MENTS .—Notwithstanding clause (i), any other dis- counts, rebates, payments, or other financial trans- actions that are received by, paid by, or passed through to, retail community pharmacies shall be in- cluded in the average manufacturer price for a covered outpatient drug.’’; and (C) in subparagraph (C), by striking ‘‘the retail phar- macy class of trade’’ and inserting ‘‘retail community phar- macies’’. EFINITION OF MULTIPLE SOURCE DRUG .—Section (3) D 1927(k)(7) of such Act (42 U.S.C. 1396r–8(k)(7)) is amended— (A) in subparagraph (A)(i)(III), by striking ‘‘the State’’ and inserting ‘‘the United States’’; and (B) in subparagraph (C)— (i) in clause (i), by inserting ‘‘and’’ after the semi- colon; (ii) in clause (ii), by striking ‘‘; and’’ and inserting a period; and (iii) by striking clause (iii). (4) D EFINITIONS OF RETAIL COMMUNITY PHARMACY ; WHOLE - SALER .—Section 1927(k) of such Act (42 U.S.C. 1396r–8(k)) is amended by adding at the end the following new paragraphs: June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00221 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

241 222 Sec. 2503 PPACA (Consolidated) ETAIL COMMUNITY PHARMACY .—The term ‘retail ‘‘(10) R community pharmacy’ means an independent pharmacy, a chain pharmacy, a supermarket pharmacy, or a mass merchan- diser pharmacy that is licensed as a pharmacy by the State and that dispenses medications to the general public at retail prices. Such term does not include a pharmacy that dispenses prescription medications to patients primarily through the mail, nursing home pharmacies, long-term care facility phar- macies, hospital pharmacies, clinics, charitable or not-for-profit pharmacies, government pharmacies, or pharmacy benefit managers. HOLESALER .—The term ‘wholesaler’ means a drug ‘‘(11) W wholesaler that is engaged in wholesale distribution of pre- scription drugs to retail community pharmacies, including (but not limited to) manufacturers, repackers, distributors, own- label distributors, private-label distributors, jobbers, brokers, warehouses (including manufacturer’s and distributor’s ware- houses, chain drug warehouses, and wholesale drug ware- houses) independent wholesale drug traders, and retail com- munity pharmacies that conduct wholesale distributions.’’. (b) D P RICE I NFORMATION TO THE ISCLOSURE OF UBLIC .—Sec- P tion 1927(b)(3) of such Act (42 U.S.C. 1396r–8(b)(3)) is amended— (1) in subparagraph (A)— (A) in the first sentence, by inserting after clause (iii) the following: ‘‘(iv) not later than 30 days after the last day of each month of a rebate period under the agreement, on the manufacturer’s total number of units that are used to calculate the monthly average manufacturer price for each covered outpatient drug;’’; and (B) in the second sentence, by inserting ‘‘(relating to the weighted average of the most recently reported month- ly average manufacturer prices)’’ after ‘‘(D)(v)’’; and (2) in subparagraph (D)(v), by striking ‘‘average manufac- turer prices’’ and inserting ‘‘the weighted average of the most recently reported monthly average manufacturer prices and the average retail survey price determined for each multiple source drug in accordance with subsection (f)’’. (c) C LARIFICATION OF A PPLICATION OF S URVEY OF R ETAIL .—Section 1927(f)(1) of such Act (42 U.S.C. 1396r–8(b)(1)) is RICES P amended— (1) in subparagraph (A)(i), by inserting ‘‘with respect to a retail community pharmacy,’’ before ‘‘the determination’’; and (2) in subparagraph (C)(ii), by striking ‘‘retail pharmacies’’ and inserting ‘‘retail community pharmacies’’. .—The amendments made by this section FFECTIVE D ATE (d) E shall take effect on the first day of the first calendar year quarter that begins at least 180 days after the date of enactment of this Act, without regard to whether or not final regulations to carry out such amendments have been promulgated by such date. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00222 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

242 223 Sec. 2551 PPACA (Consolidated) Subtitle G—Medicaid Disproportionate Share Hospital (DSH) Payments SEC. 2551. DISPROPORTIONATE SHARE HOSPITAL PAYMENTS. G .—Section 1923(f) of the Social Security Act (42 (a) I N ENERAL U.S.C. 1396r–4(f)) is amended— (1) in paragraph (1), by striking ‘‘and (3)’’ and inserting ‘‘, (3), and (7)’’; (2) in paragraph (3)(A), by striking ‘‘paragraph (6)’’ and in- serting ‘‘paragraphs (6) and (7)’’; Note: clause (v) added to paragraph (6)(A) of section 1923(f) ø by section 1203(b) of HCERA ¿ ø Note: a clause (iii) is added to paragraph (6)(B) of section ¿ 1923(f) by section 10201(e)(1)(A) (3) by redesignating paragraph (7) as paragraph (8); and (4) by inserting after paragraph (6) the following new paragraph: ‘‘(7) M .— ø Replaced by section EDICAID DSH REDUCTIONS 1203(2) of HCERA; previously revised by section 10201(e)(1)(B) ¿ ‘‘(A) R .— EDUCTIONS ‘‘(i) I N GENERAL .—For each of fiscal years 2014 through 2020 the Secretary shall effect the following reductions: ‘‘(I) R EDUCTION IN DSH ALLOTMENTS .—The Secretary shall reduce DSH allotments to States in the amount specified under the DSH health re- form methodology under subparagraph (B) for the State for the fiscal year. ‘‘(II) R EDUCTIONS IN PAYMENTS .—The Sec- retary shall reduce payments to States under sec- tion 1903(a) for each calendar quarter in the fiscal year, in the manner specified in clause (iii), in an 1 amount equal to ⁄ of the DSH allotment reduc- 4 tion under subclause (I) for the State for the fiscal year. ‘‘(ii) A GGREGATE REDUCTIONS .—The aggregate re- ductions in DSH allotments for all States under clause (i)(I) shall be equal to— ‘‘(I) $500,000,000 for fiscal year 2014; ‘‘(II) $600,000,000 for fiscal year 2015; ‘‘(III) $600,000,000 for fiscal year 2016; ‘‘(IV) $1,800,000,000 for fiscal year 2017; ‘‘(V) $5,000,000,000 for fiscal year 2018; ‘‘(VI) $5,600,000,000 for fiscal year 2019; and ‘‘(VII) $4,000,000,000 for fiscal year 2020. The Secretary shall distribute such aggregate reduc- tions among States in accordance with subparagraph (B). .—The ANNER OF PAYMENT REDUCTION ‘‘(iii) M amount of the payment reduction under clause (i)(II) for a State for a quarter shall be deemed an overpay- ment to the State under this title to be disallowed against the State’s regular quarterly draw for all June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00223 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

243 224 Sec. 2601 PPACA (Consolidated) spending under section 1903(d)(2). Such a disallow- ance is not subject to a reconsideration under sub- sections (d) and (e) of section 1116. ‘‘(iv) D .—In this paragraph, the term EFINITION ‘State’ means the 50 States and the District of Colum- bia. ‘‘(B) DSH HEALTH REFORM METHODOLOGY .—The Sec- retary shall carry out subparagraph (A) through use of a DSH Health Reform methodology that meets the following requirements: ‘‘(i) The methodology imposes the largest percent- age reductions on the States that— ‘‘(I) have the lowest percentages of uninsured individuals (determined on the basis of data from the Bureau of the Census, audited hospital cost reports, and other information likely to yield accu- rate data) during the most recent year for which such data are available; or ‘‘(II) do not target their DSH payments on— ‘‘(aa) hospitals with high volumes of Med- icaid inpatients (as defined in subsection (b)(1)(A)); and ‘‘(bb) hospitals that have high levels of uncompensated care (excluding bad debt). ‘‘(ii) The methodology imposes a smaller percent- age reduction on low DSH States described in para- graph (5)(B). ‘‘(iii) The methodology takes into account the ex- tent to which the DSH allotment for a State was in- cluded in the budget neutrality calculation for a cov- erage expansion approved under section 1115 as of July 31, 2009.’’. ø Subsection (b) stricken by section 10201(f) ¿ Subtitle H—Improved Coordination for Dual Eligible Beneficiaries SEC. 2601. 5-YEAR PERIOD FOR DEMONSTRATION PROJECTS. (a) I N G ENERAL .—Section 1915(h) of the Social Security Act (42 U.S.C. 1396n(h)) is amended— (1) by inserting ‘‘(1)’’ after ‘‘(h)’’; (2) by inserting ‘‘, or a waiver described in paragraph (2)’’ after ‘‘(e)’’; and (3) by adding at the end the following new paragraph: ‘‘(2)(A) Notwithstanding subsections (c)(3) and (d) (3), any waiver under subsection (b), (c), or (d), or a waiver under section 1115, that provides medical assistance for dual eligible individuals (including any such waivers under which non dual eligible individ- uals may be enrolled in addition to dual eligible individuals) may be conducted for a period of 5 years and, upon the request of the State, may be extended for additional 5-year periods unless the Secretary determines that for the previous waiver period the condi- tions for the waiver have not been met or it would no longer be June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00224 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

244 225 Sec. 2602 PPACA (Consolidated) cost-effective and efficient, or consistent with the purposes of this title, to extend the waiver. ‘‘(B) In this paragraph, the term ‘dual eligible individual’ means an individual who is entitled to, or enrolled for, benefits under part A of title XVIII, or enrolled for benefits under part B of title XVIII, and is eligible for medical assistance under the State plan under this title or under a waiver of such plan.’’. A MENDMENTS .— ONFORMING (b) C (1) Section 1915 of such Act (42 U.S.C. 1396n) is amend- ed— (A) in subsection (b), by adding at the end the fol- lowing new sentence: ‘‘Subsection (h)(2) shall apply to a waiver under this subsection.’’; (B) in subsection (c)(3), in the second sentence, by in- serting ‘‘(other than a waiver described in subsection (h)(2))’’ after ‘‘A waiver under this subsection’’; (C) in subsection (d)(3), in the second sentence, by in- serting ‘‘(other than a waiver described in subsection (h)(2))’’ after ‘‘A waiver under this subsection’’. (2) Section 1115 of such Act (42 U.S.C. 1315) is amended— (A) in subsection (e)(2), by inserting ‘‘(5 years, in the case of a waiver described in section 1915(h)(2))’’ after ‘‘3 years’’; and (B) in subsection (f)(6), by inserting ‘‘(5 years, in the case of a waiver described in section 1915(h)(2))’’ after ‘‘3 years’’. ø 42 U.S.C. 1315b ¿ . PROVIDING FEDERAL COVERAGE AND PAY- SEC. 2602 MENT COORDINATION FOR DUAL ELIGIBLE BENE- FICIARIES. (a) E STABLISHMENT OF F EDERAL C OORDINATED H EALTH C ARE O FFICE .— N GENERAL .—Not later than March 1, 2010, the Sec- (1) I retary of Health and Human Services (in this section referred to as the ‘‘Secretary’’) shall establish a Federal Coordinated Health Care Office. STABLISHMENT AND REPORTING TO CMS ADMINIS - (2) E TRATOR .—The Federal Coordinated Health Care Office— (A) shall be established within the Centers for Medi- care & Medicaid Services; and (B) have as the Office a Director who shall be ap- pointed by, and be in direct line of authority to, the Ad- ministrator of the Centers for Medicare & Medicaid Serv- ices. (b) P URPOSE .—The purpose of the Federal Coordinated Health Care Office is to bring together officers and employees of the Medi- care and Medicaid programs at the Centers for Medicare & Med- icaid Services in order to— (1) more effectively integrate benefits under the Medicare program under title XVIII of the Social Security Act and the Medicaid program under title XIX of such Act; and (2) improve the coordination between the Federal Govern- ment and States for individuals eligible for benefits under both such programs in order to ensure that such individuals get full June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00225 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

245 226 Sec. 2602 PPACA (Consolidated) access to the items and services to which they are entitled under titles XVIII and XIX of the Social Security Act. .—The goals of the Federal Coordinated Health Care (c) G OALS Office are as follows: (1) Providing dual eligible individuals full access to the benefits to which such individuals are entitled under the Medi- care and Medicaid programs. (2) Simplifying the processes for dual eligible individuals to access the items and services they are entitled to under the Medicare and Medicaid programs. (3) Improving the quality of health care and long-term services for dual eligible individuals. (4) Increasing dual eligible individuals’ understanding of and satisfaction with coverage under the Medicare and Med- icaid programs. (5) Eliminating regulatory conflicts between rules under the Medicare and Medicaid programs. (6) Improving care continuity and ensuring safe and effec- tive care transitions for dual eligible individuals. (7) Eliminating cost-shifting between the Medicare and Medicaid program and among related health care providers. (8) Improving the quality of performance of providers of services and suppliers under the Medicare and Medicaid pro- grams. .—The specific responsibilities of PECIFIC R ESPONSIBILITIES (d) S the Federal Coordinated Health Care Office are as follows: (1) Providing States, specialized MA plans for special needs individuals (as defined in section 1859(b)(6) of the Social Security Act (42 U.S.C. 1395w–28(b)(6))), physicians and other relevant entities or individuals with the education and tools necessary for developing programs that align benefits under the Medicare and Medicaid programs for dual eligible individ- uals. (2) Supporting State efforts to coordinate and align acute care and long-term care services for dual eligible individuals with other items and services furnished under the Medicare program. (3) Providing support for coordination of contracting and oversight by States and the Centers for Medicare & Medicaid Services with respect to the integration of the Medicare and Medicaid programs in a manner that is supportive of the goals described in paragraph (3). (4) To consult and coordinate with the Medicare Payment Advisory Commission established under section 1805 of the So- cial Security Act (42 U.S.C. 1395b–6) and the Medicaid and CHIP Payment and Access Commission established under sec- tion 1900 of such Act (42 U.S.C. 1396) with respect to policies relating to the enrollment in, and provision of, benefits to dual eligible individuals under the Medicare program under title XVIII of the Social Security Act and the Medicaid program under title XIX of such Act. (5) To study the provision of drug coverage for new full- benefit dual eligible individuals (as defined in section 1935(c)(6) of the Social Security Act (42 U.S.C. 1396u–5(c)(6)), June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00226 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

246 227 Sec. 2701 1139B SSA PPACA (Consolidated) \ as well as to monitor and report annual total expenditures, health outcomes, and access to benefits for all dual eligible in- dividuals. (e) R .—The Secretary shall, as part of the budget trans- EPORT mitted under section 1105(a) of title 31, United States Code, sub- mit to Congress an annual report containing recommendations for legislation that would improve care coordination and benefits for dual eligible individuals. (f) D E LIGIBLE D EFINED .—In this section, the term ‘‘dual el- UAL igible individual’’ means an individual who is entitled to, or en- rolled for, benefits under part A of title XVIII of the Social Security Act, or enrolled for benefits under part B of title XVIII of such Act, and is eligible for medical assistance under a State plan under title XIX of such Act or under a waiver of such plan. Subtitle I—Improving the Quality of Medicaid for Patients and Providers SEC. 2701. ADULT HEALTH QUALITY MEASURES. Title XI of the Social Security Act (42 U.S.C. 1301 et seq.), as amended by section 401 of the Children’s Health Insurance Pro- gram Reauthorization Act of 2009 (Public Law 111–3), is amended by inserting after section 1139A the following new section: ‘‘SEC. 1139B ø 42 U.S.C. 1320b–9b ¿ . ADULT HEALTH QUALITY MEASURES. ‘‘(a) D EVELOPMENT OF C ORE S ET OF H EALTH C ARE Q UALITY U M E LIGIBLE FOR B ENEFITS DULTS NDER M ED - A EASURES FOR .—The Secretary shall identify and publish a recommended ICAID core set of adult health quality measures for Medicaid eligible adults in the same manner as the Secretary identifies and pub- lishes a core set of child health quality measures under section 1139A, including with respect to identifying and publishing exist- ing adult health quality measures that are in use under public and privately sponsored health care coverage arrangements, or that are part of reporting systems that measure both the presence and du- ration of health insurance coverage over time, that may be applica- ble to Medicaid eligible adults. EADLINES .— ‘‘(b) D ‘‘(1) R ECOMMENDED MEASURES .—Not later than January 1, 2011, the Secretary shall identify and publish for comment a recommended core set of adult health quality measures for Medicaid eligible adults. ‘‘(2) D ISSEMINATION .—Not later than January 1, 2012, the Secretary shall publish an initial core set of adult health qual- ity measures that are applicable to Medicaid eligible adults. ‘‘(3) S TANDARDIZED REPORTING .—Not later than January 1, 2013, the Secretary, in consultation with States, shall develop a standardized format for reporting information based on the initial core set of adult health quality measures and create pro- cedures to encourage States to use such measures to volun- tarily report information regarding the quality of health care for Medicaid eligible adults. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00227 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

247 228 Sec. 2701 1139B SSA PPACA (Consolidated) \ EPORTS TO CONGRESS .—Not later than January 1, ‘‘(4) R 2014, and every 3 years thereafter, the Secretary shall include in the report to Congress required under section 1139A(a)(6) information similar to the information required under that sec- tion with respect to the measures established under this sec- tion. ‘‘(5) E STABLISHMENT OF MEDICAID QUALITY MEASUREMENT PROGRAM .— ‘‘(A) I N GENERAL .—Not later than 12 months after the release of the recommended core set of adult health quality measures under paragraph (1)), the Secretary shall estab- lish a Medicaid Quality Measurement Program in the same manner as the Secretary establishes the pediatric quality measures program under section 1139A(b). The ag- gregate amount awarded by the Secretary for grants and contracts for the development, testing, and validation of emerging and innovative evidence-based measures under such program shall equal the aggregate amount awarded by the Secretary for grants under section 1139A(b)(4)(A) ‘‘(B) R EVISING , AND IMPROVING INI - STRENGTHENING , MEASURES .—Beginning not later than 24 CORE TIAL months after the establishment of the Medicaid Quality Measurement Program, and annually thereafter, the Sec- retary shall publish recommended changes to the initial core set of adult health quality measures that shall reflect the results of the testing, validation, and consensus proc- ess for the development of adult health quality measures. .—Nothing in this section shall be construed ONSTRUCTION ‘‘(c) C as supporting the restriction of coverage, under title XIX or XXI or otherwise, to only those services that are evidence-based, or in any- way limiting available services. ‘‘(d) A NNUAL S TATE R EPORTS R EGARDING S TATE -S PECIFIC Q UAL - .— ITY OF M EASURES A PPLIED U NDER M EDICAID ARE C ‘‘(1) A NNUAL STATE REPORTS .—Each State with a State plan or waiver approved under title XIX shall annually report (separately or as part of the annual report required under sec- tion 1139A(c)), to the Secretary on the— ‘‘(A) State-specific adult health quality measures ap- plied by the State under the such plan, including measures described in subsection (a)(5); and ‘‘(B) State-specific information on the quality of health care furnished to Medicaid eligible adults under such plan, including information collected through external quality reviews of managed care organizations under section 1932 and benchmark plans under section 1937. ‘‘(2) P UBLICATION .—Not later than September 30, 2014, and annually thereafter, the Secretary shall collect, analyze, and make publicly available the information reported by States under paragraph (1). PPROPRIATION .—Out of any funds in the Treasury not ‘‘(e) A otherwise appropriated, there is appropriated for each of fiscal years 2010 through 2014, $60,000,000 for the purpose of carrying out this section. Funds appropriated under this subsection shall re- main available until expended.’’. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00228 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

248 229 Sec. 2703 1945 SSA PPACA (Consolidated) \ ø 42 U.S.C. 1396b–1 . PAYMENT ADJUSTMENT FOR HEALTH SEC. 2702 ¿ CARE-ACQUIRED CONDITIONS. N ENERAL .—The Secretary of Health and Human Serv- (a) I G ices (in this subsection referred to as the ‘‘Secretary’’) shall identify current State practices that prohibit payment for health care-ac- quired conditions and shall incorporate the practices identified, or elements of such practices, which the Secretary determines appro- priate for application to the Medicaid program in regulations. Such regulations shall be effective as of July 1, 2011, and shall prohibit payments to States under section 1903 of the Social Security Act for any amounts expended for providing medical assistance for health care-acquired conditions specified in the regulations. The regulations shall ensure that the prohibition on payment for health care-acquired conditions shall not result in a loss of access to care or services for Medicaid beneficiaries. EALTH ARE -A CQUIRED C ONDITION .—In this section. the C (b) H term ‘‘health care-acquired condition’’ means a medical condition for which an individual was diagnosed that could be identified by a secondary diagnostic code described in section 1886(d)(4)(D)(iv) of the Social Security Act (42 U.S.C. 1395ww(d)(4)(D)(iv)). (c) M P ROVISIONS EDICARE .—In carrying out this section, the Secretary shall apply to State plans (or waivers) under title XIX of the Social Security Act the regulations promulgated pursuant to section 1886(d)(4)(D) of such Act (42 U.S.C. 1395ww(d)(4)(D)) relat- ing to the prohibition of payments based on the presence of a sec- ondary diagnosis code specified by the Secretary in such regula- tions, as appropriate for the Medicaid program. The Secretary may exclude certain conditions identified under title XVIII of the Social Security Act for non-payment under title XIX of such Act when the Secretary finds the inclusion of such conditions to be inapplicable to beneficiaries under title XIX. SEC. 2703. STATE OPTION TO PROVIDE HEALTH HOMES FOR ENROLL- EES WITH CHRONIC CONDITIONS. P LAN (a) S MENDMENT .—Title XIX of the Social Security TATE A Act (42 U.S.C. 1396a et seq.), as amended by sections 2201 and 2305, is amended by adding at the end the following new section: EC . 1945 ø 42 U.S.C. 1396w–4 ¿ . State Option To Provide Co- ‘‘S ordinated Care Through a Health Home for Individuals With Chronic Conditions.— ‘‘(a) I N G ENERAL .—Notwithstanding section 1902(a)(1) (relating to statewideness), section 1902(a)(10)(B) (relating to comparability), and any other provision of this title for which the Secretary deter- mines it is necessary to waive in order to implement this section, beginning January 1, 2011, a State, at its option as a State plan amendment, may provide for medical assistance under this title to eligible individuals with chronic conditions who select a designated provider (as described under subsection (h)(5)), a team of health care professionals (as described under subsection (h)(6)) operating with such a provider, or a health team (as described under sub- section (h)(7)) as the individual’s health home for purposes of pro- viding the individual with health home services. ‘‘(b) H S EALTH OME Q UALIFICATION H TANDARDS .—The Secretary shall establish standards for qualification as a designated provider June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00229 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

249 230 Sec. 2703 1945 SSA PPACA (Consolidated) \ for the purpose of being eligible to be a health home for purposes of this section. .— ‘‘(c) P AYMENTS ‘‘(1) I .—A State shall provide a designated pro- N GENERAL vider, a team of health care professionals operating with such a provider, or a health team with payments for the provision of health home services to each eligible individual with chronic conditions that selects such provider, team of health care pro- fessionals, or health team as the individual’s health home. Pay- ments made to a designated provider, a team of health care professionals operating with such a provider, or a health team for such services shall be treated as medical assistance for pur- poses of section 1903(a), except that, during the first 8 fiscal year quarters that the State plan amendment is in effect, the Federal medical assistance percentage applicable to such pay- ments shall be equal to 90 percent. ‘‘(2) M ETHODOLOGY .— ‘‘(A) I N GENERAL .—The State shall specify in the State plan amendment the methodology the State will use for determining payment for the provision of health home services. Such methodology for determining payment— ‘‘(i) may be tiered to reflect, with respect to each eligible individual with chronic conditions provided such services by a designated provider, a team of health care professionals operating with such a pro- vider, or a health team, as well as the severity or number of each such individual’s chronic conditions or the specific capabilities of the provider, team of health care professionals, or health team; and ‘‘(ii) shall be established consistent with section 1902(a)(30)(A). LTERNATE MODELS OF PAYMENT .—The method- ‘‘(B) A ology for determining payment for provision of health home services under this section shall not be limited to a per-member per-month basis and may provide (as proposed by the State and subject to approval by the Secretary) for alternate models of payment. ‘‘(3) P LANNING GRANTS .— N GENERAL .—Beginning January 1, 2011, the ‘‘(A) I Secretary may award planning grants to States for pur- poses of developing a State plan amendment under this section. A planning grant awarded to a State under this paragraph shall remain available until expended. ‘‘(B) S TATE CONTRIBUTION .—A State awarded a plan- ning grant shall contribute an amount equal to the State percentage determined under section 1905(b) (without re- gard to section 5001 of Public Law 111–5) for each fiscal year for which the grant is awarded. ‘‘(C) L IMITATION .—The total amount of payments made to States under this paragraph shall not exceed $25,000,000. ‘‘(d) H OSPITAL R EFERRALS .—A State shall include in the State plan amendment a requirement for hospitals that are participating providers under the State plan or a waiver of such plan to establish June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00230 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

250 231 Sec. 2703 1945 SSA PPACA (Consolidated) \ procedures for referring any eligible individuals with chronic condi- tions who seek or need treatment in a hospital emergency depart- ment to designated providers. .—A State shall consult and coordinate, as OORDINATION ‘‘(e) C appropriate, with the Substance Abuse and Mental Health Services Administration in addressing issues regarding the prevention and treatment of mental illness and substance abuse among eligible in- dividuals with chronic conditions. .—A State shall include in the State plan ONITORING ‘‘(f) M amendment— ‘‘(1) a methodology for tracking avoidable hospital readmis- sions and calculating savings that result from improved chron- ic care coordination and management under this section; and ‘‘(2) a proposal for use of health information technology in providing health home services under this section and improv- ing service delivery and coordination across the care con- tinuum (including the use of wireless patient technology to im- prove coordination and management of care and patient adher- ence to recommendations made by their provider). EPORT ON Q UALITY M .—As a condition for receiv- EASURES ‘‘(g) R ing payment for health home services provided to an eligible indi- vidual with chronic conditions, a designated provider shall report to the State, in accordance with such requirements as the Sec- retary shall specify, on all applicable measures for determining the quality of such services. When appropriate and feasible, a des- ignated provider shall use health information technology in pro- viding the State with such information. ‘‘(h) D .—In this section: EFINITIONS ‘‘(1) E LIGIBLE INDIVIDUAL WITH CHRONIC CONDITIONS .— N GENERAL .—Subject to subparagraph (B), the ‘‘(A) I term ‘eligible individual with chronic conditions’ means an individual who— ‘‘(i) is eligible for medical assistance under the State plan or under a waiver of such plan; and ‘‘(ii) has at least— ‘‘(I) 2 chronic conditions; ‘‘(II) 1 chronic condition and is at risk of hav- ing a second chronic condition; or ‘‘(III) 1 serious and persistent mental health condition. .—Nothing in this para- ULE OF CONSTRUCTION ‘‘(B) R graph shall prevent the Secretary from establishing higher levels as to the number or severity of chronic or mental health conditions for purposes of determining eligibility for receipt of health home services under this section. ‘‘(2) C HRONIC CONDITION .—The term ‘chronic condition’ has the meaning given that term by the Secretary and shall in- clude, but is not limited to, the following: ‘‘(A) A mental health condition. ‘‘(B) Substance use disorder. ‘‘(C) Asthma. ‘‘(D) Diabetes. ‘‘(E) Heart disease. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00231 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

251 232 Sec. 2703 1945 SSA PPACA (Consolidated) \ ‘‘(F) Being overweight, as evidenced by having a Body Mass Index (BMI) over 25. .—The term ‘health home’ means a des- ‘‘(3) H EALTH HOME ignated provider (including a provider that operates in coordi- nation with a team of health care professionals) or a health team selected by an eligible individual with chronic conditions to provide health home services. ‘‘(4) H EALTH HOME SERVICES .— ‘‘(A) I .—The term ‘health home services’ N GENERAL means comprehensive and timely high-quality services de- scribed in subparagraph (B) that are provided by a des- ignated provider, a team of health care professionals oper- ating with such a provider, or a health team. ‘‘(B) S .—The services described in ERVICES DESCRIBED this subparagraph are— ‘‘(i) comprehensive care management; ‘‘(ii) care coordination and health promotion; ‘‘(iii) comprehensive transitional care, including appropriate follow-up, from inpatient to other settings; ‘‘(iv) patient and family support (including author- ized representatives); ‘‘(v) referral to community and social support serv- ices, if relevant; and ‘‘(vi) use of health information technology to link services, as feasible and appropriate. ESIGNATED PROVIDER .—The term ‘designated pro- ‘‘(5) D vider’ means a physician, clinical practice or clinical group practice, rural clinic, community health center, community mental health center, home health agency, or any other entity or provider (including pediatricians, gynecologists, and obste- tricians) that is determined by the State and approved by the Secretary to be qualified to be a health home for eligible indi- viduals with chronic conditions on the basis of documentation evidencing that the physician, practice, or clinic— ‘‘(A) has the systems and infrastructure in place to provide health home services; and ‘‘(B) satisfies the qualification standards established by the Secretary under subsection (b). ‘‘(6) T EAM OF HEALTH CARE PROFESSIONALS .—The term ‘team of health care professionals’ means a team of health pro- fessionals (as described in the State plan amendment) that may— ‘‘(A) include physicians and other professionals, such as a nurse care coordinator, nutritionist, social worker, be- havioral health professional, or any professionals deemed appropriate by the State; and ‘‘(B) be free standing, virtual, or based at a hospital, community health center, community mental health cen- ter, rural clinic, clinical practice or clinical group practice, academic health center, or any entity deemed appropriate by the State and approved by the Secretary. ‘‘(7) H EALTH TEAM .—The term ‘health team’ has the mean- ing given such term for purposes of section 3502 of the Patient Protection and Affordable Care Act.’’. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00232 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

252 233 Sec. 2704 PPACA (Consolidated) VALUATION (b) E .— .— (1) I NDEPENDENT EVALUATION N GENERAL .—The Secretary shall enter into a con- (A) I tract with an independent entity or organization to con- duct an evaluation and assessment of the States that have elected the option to provide coordinated care through a health home for Medicaid beneficiaries with chronic condi- tions under section 1945 of the Social Security Act (as added by subsection (a)) for the purpose of determining the effect of such option on reducing hospital admissions, emergency room visits, and admissions to skilled nursing facilities. VALUATION REPORT .—Not later than January 1, (B) E 2017, the Secretary shall report to Congress on the evalua- tion and assessment conducted under subparagraph (A). .— URVEY AND INTERIM REPORT (2) S N GENERAL .—Not later than January 1, 2014, the (A) I Secretary of Health and Human Services shall survey States that have elected the option under section 1945 of the Social Security Act (as added by subsection (a)) and re- port to Congress on the nature, extent, and use of such op- tion, particularly as it pertains to— (i) hospital admission rates; (ii) chronic disease management; (iii) coordination of care for individuals with chronic conditions; (iv) assessment of program implementation; (v) processes and lessons learned (as described in subparagraph (B)); (vi) assessment of quality improvements and clin- ical outcomes under such option; and (vii) estimates of cost savings. MPLEMENTATION REPORTING .—A State that has (B) I elected the option under section 1945 of the Social Security Act (as added by subsection (a)) shall report to the Sec- retary, as necessary, on processes that have been devel- oped and lessons learned regarding provision of coordi- nated care through a health home for Medicaid bene- ficiaries with chronic conditions under such option. SEC. 2704 ø 42 U.S.C. 1396a note ¿ . DEMONSTRATION PROJECT TO EVALU- ATE INTEGRATED CARE AROUND A HOSPITALIZATION. (a) A UTHORITY T O C ONDUCT P ROJECT .— (1) I .—The Secretary of Health and Human N GENERAL Services (in this section referred to as the ‘‘Secretary’’) shall es- tablish a demonstration project under title XIX of the Social Security Act to evaluate the use of bundled payments for the provision of integrated care for a Medicaid beneficiary— (A) with respect to an episode of care that includes a hospitalization; and (B) for concurrent physicians services provided during a hospitalization. (2) D URATION .—The demonstration project shall begin on January 1, 2012, and shall end on December 31, 2016. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00233 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

253 234 Sec. 2704 PPACA (Consolidated) EQUIREMENTS .—The demonstration project shall be con- (b) R ducted in accordance with the following: (1) The demonstration project shall be conducted in up to 8 States, determined by the Secretary based on consideration of the potential to lower costs under the Medicaid program while improving care for Medicaid beneficiaries. A State se- lected to participate in the demonstration project may target the demonstration project to particular categories of bene- ficiaries, beneficiaries with particular diagnoses, or particular geographic regions of the State, but the Secretary shall insure that, as a whole, the demonstration project is, to the greatest extent possible, representative of the demographic and geo- graphic composition of Medicaid beneficiaries nationally. (2) The demonstration project shall focus on conditions where there is evidence of an opportunity for providers of serv- ices and suppliers to improve the quality of care furnished to Medicaid beneficiaries while reducing total expenditures under the State Medicaid programs selected to participate, as deter- mined by the Secretary. (3) A State selected to participate in the demonstration project shall specify the 1 or more episodes of care the State proposes to address in the project, the services to be included in the bundled payments, and the rationale for the selection of such episodes of care and services. The Secretary may modify the episodes of care as well as the services to be included in the bundled payments prior to or after approving the project. The Secretary may also vary such factors among the different States participating in the demonstration project. (4) The Secretary shall ensure that payments made under the demonstration project are adjusted for severity of illness and other characteristics of Medicaid beneficiaries within a cat- egory or having a diagnosis targeted as part of the demonstra- tion project. States shall ensure that Medicaid beneficiaries are not liable for any additional cost sharing than if their care had not been subject to payment under the demonstration project. (5) Hospitals participating in the demonstration project shall have or establish robust discharge planning programs to ensure that Medicaid beneficiaries requiring post-acute care are appropriately placed in, or have ready access to, post-acute care settings. (6) The Secretary and each State selected to participate in the demonstration project shall ensure that the demonstration project does not result in the Medicaid beneficiaries whose care is subject to payment under the demonstration project being provided with less items and services for which medical assist- ance is provided under the State Medicaid program than the items and services for which medical assistance would have been provided to such beneficiaries under the State Medicaid program in the absence of the demonstration project. .—Notwithstanding section 1115(a) AIVER OF P ROVISIONS (c) W of the Social Security Act (42 U.S.C. 1315(a)), the Secretary may waive such provisions of titles XIX, XVIII, and XI of that Act as may be necessary to accomplish the goals of the demonstration, en- June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00234 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

254 235 Sec. 2705 PPACA (Consolidated) sure beneficiary access to acute and post-acute care, and maintain quality of care. R EPORT .— VALUATION AND (d) E (1) D .—Each State selected to participate in the dem- ATA onstration project under this section shall provide to the Sec- retary, in such form and manner as the Secretary shall specify, relevant data necessary to monitor outcomes, costs, and qual- ity, and evaluate the rationales for selection of the episodes of care and services specified by States under subsection (b)(3). EPORT .—Not later than 1 year after the conclusion of (2) R the demonstration project, the Secretary shall submit a report to Congress on the results of the demonstration project. ø 42 U.S.C. 1315a note ¿ SEC. 2705 . MEDICAID GLOBAL PAYMENT SYSTEM DEMONSTRATION PROJECT. N ENERAL .—The Secretary of Health and Human Serv- (a) I G ices (referred to in this section as the ‘‘Secretary’’) shall, in coordi- nation with the Center for Medicare and Medicaid Innovation (as established under section 1115A of the Social Security Act, as added by section 3021 of this Act), establish the Medicaid Global Payment System Demonstration Project under which a partici- pating State shall adjust the payments made to an eligible safety net hospital system or network from a fee-for-service payment structure to a global capitated payment model. URATION AND S COPE .—The demonstration project con- (b) D ducted under this section shall operate during a period of fiscal years 2010 through 2012. The Secretary shall select not more than 5 States to participate in the demonstration project. S LIGIBLE N ET H OSPITAL AFETY YSTEM OR N ETWORK .—For S (c) E purposes of this section, the term ‘‘eligible safety net hospital sys- tem or network’’ means a large, safety net hospital system or net- work (as defined by the Secretary) that operates within a State se- lected by the Secretary under subsection (b). VALUATION .— (d) E (1) T ESTING .—The Innovation Center shall test and evalu- ate the demonstration project conducted under this section to examine any changes in health care quality outcomes and spending by the eligible safety net hospital systems or net- works. UDGET NEUTRALITY .—During the testing period under (2) B paragraph (1), any budget neutrality requirements under sec- tion 1115A(b)(3) of the Social Security Act (as so added) shall not be applicable. ODIFICATION .—During the testing period under para- (3) M graph (1), the Secretary may, in the Secretary’s discretion, modify or terminate the demonstration project conducted under this section. EPORT .—Not later than 12 months after the date of com- (e) R pletion of the demonstration project under this section, the Sec- retary shall submit to Congress a report containing the results of the evaluation and testing conducted under subsection (d), together with recommendations for such legislation and administrative ac- tion as the Secretary determines appropriate. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00235 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

255 236 Sec. 2706 PPACA (Consolidated) UTHORIZATION OF A .—There are authorized (f) A PPROPRIATIONS to be appropriated such sums as are necessary to carry out this section. SEC. 2706 42 U.S.C. 1396a note ¿ . PEDIATRIC ACCOUNTABLE CARE OR- ø GANIZATION DEMONSTRATION PROJECT. UTHORITY T O C ONDUCT D EMONSTRATION .— (a) A N GENERAL (1) I .—The Secretary of Health and Human Services (referred to in this section as the ‘‘Secretary’’) shall es- tablish the Pediatric Accountable Care Organization Dem- onstration Project to authorize a participating State to allow pediatric medical providers that meet specified requirements to be recognized as an accountable care organization for purposes of receiving incentive payments (as described under subsection (d)), in the same manner as an accountable care organization is recognized and provided with incentive payments under sec- tion 1899 of the Social Security Act (as added by section 3022). (2) D URATION .—The demonstration project shall begin on January 1, 2012, and shall end on December 31, 2016. PPLICATION .—A State that desires to participate in the (b) A demonstration project under this section shall submit to the Sec- retary an application at such time, in such manner, and containing such information as the Secretary may require. .— EQUIREMENTS (c) R ERFORMANCE GUIDELINES (1) P .—The Secretary, in con- sultation with the States and pediatric providers, shall estab- lish guidelines to ensure that the quality of care delivered to individuals by a provider recognized as an accountable care or- ganization under this section is not less than the quality of care that would have otherwise been provided to such individ- uals. .—A participating State, in con- AVINGS REQUIREMENT (2) S sultation with the Secretary, shall establish an annual mini- mal level of savings in expenditures for items and services cov- ered under the Medicaid program under title XIX of the Social Security Act and the CHIP program under title XXI of such Act that must be reached by an accountable care organization in order for such organization to receive an incentive payment under subsection (d). .—A provider desiring INIMUM PARTICIPATION PERIOD (3) M to be recognized as an accountable care organization under the demonstration project shall enter into an agreement with the State to participate in the project for not less than a 3-year pe- riod. .—An accountable care organization NCENTIVE P AYMENT (d) I that meets the performance guidelines established by the Secretary under subsection (c)(1) and achieves savings greater than the an- nual minimal savings level established by the State under sub- section (c)(2) shall receive an incentive payment for such year equal to a portion (as determined appropriate by the Secretary) of the amount of such excess savings. The Secretary may establish an an- nual cap on incentive payments for an accountable care organiza- tion. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00236 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

256 237 Sec. 2707 PPACA (Consolidated) UTHORIZATION OF A .—There are authorized (e) A PPROPRIATIONS to be appropriated such sums as are necessary to carry out this section. SEC. 2707 42 U.S.C. 1396a note ¿ . MEDICAID EMERGENCY PSYCHIATRIC ø DEMONSTRATION PROJECT. T O (a) A ONDUCT D EMONSTRATION P ROJECT .—The UTHORITY C Secretary of Health and Human Services (in this section referred to as the ‘‘Secretary’’) shall establish a demonstration project under which an eligible State (as described in subsection (c)) shall provide payment under the State Medicaid plan under title XIX of the So- cial Security Act to an institution for mental diseases that is not publicly owned or operated and that is subject to the requirements of section 1867 of the Social Security Act (42 U.S.C. 1395dd) for the provision of medical assistance available under such plan to indi- viduals who— (1) have attained age 21, but have not attained age 65; (2) are eligible for medical assistance under such plan; and (3) require such medical assistance to stabilize an emer- gency medical condition. (b) S R TABILIZATION .—A State shall specify in its applica- EVIEW tion described in subsection (c)(1) establish a mechanism for how it will ensure that institutions participating in the demonstration will determine whether or not such individuals have been sta- bilized (as defined in subsection (h)(5)). This mechanism shall com- mence before the third day of the inpatient stay. States partici- pating in the demonstration project may manage the provision of services for the stabilization of medical emergency conditions through utilization review, authorization, or management practices, or the application of medical necessity and appropriateness criteria applicable to behavioral health. (c) E LIGIBLE TATE D EFINED .— S N GENERAL (1) I .—An eligible State is a State that has made an application and has been selected pursuant to para- graphs (2) and (3). (2) A .—A State seeking to participate in the PPLICATION demonstration project under this section shall submit to the Secretary, at such time and in such format as the Secretary re- quires, an application that includes such information, provi- sions, and assurances, as the Secretary may require. (3) S ELECTION .—A State shall be determined eligible for the demonstration by the Secretary on a competitive basis among States with applications meeting the requirements of paragraph (1). In selecting State applications for the dem- onstration project, the Secretary shall seek to achieve an ap- propriate national balance in the geographic distribution of such projects. D EMONSTRATION P ROJECT .—The demonstration ENGTH OF (d) L project established under this section shall be conducted for a pe- riod of 3 consecutive years. (e) L IMITATIONS ON F EDERAL F UNDING .— (1) A PPROPRIATION .— (A) I N GENERAL .—Out of any funds in the Treasury not otherwise appropriated, there is appropriated to carry out this section, $75,000,000 for fiscal year 2011. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00237 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

257 238 Sec. 2707 PPACA (Consolidated) UDGET AUTHORITY (B) B .—Subparagraph (A) con- stitutes budget authority in advance of appropriations Act and represents the obligation of the Federal Government to provide for the payment of the amounts appropriated under that subparagraph. (2) 5- YEAR AVAILABILITY .—Funds appropriated under para- graph (1) shall remain available for obligation through Decem- ber 31, 2015. (3) L IMITATION ON PAYMENTS .—In no case may— (A) the aggregate amount of payments made by the Secretary to eligible States under this section exceed $75,000,000; or (B) payments be provided by the Secretary under this section after December 31, 2015. (4) F UNDS ALLOCATED TO STATES .—Funds shall be allo- cated to eligible States on the basis of criteria, including a State’s application and the availability of funds, as determined by the Secretary. (5) P .—The Secretary shall pay to each AYMENTS TO STATES eligible State, from its allocation under paragraph (4), an amount each quarter equal to the Federal medical assistance percentage of expenditures in the quarter for medical assist- ance described in subsection (a). As a condition of receiving payment, a State shall collect and report information, as deter- mined necessary by the Secretary, for the purposes of pro- viding Federal oversight and conducting an evaluation under subsection (f)(1). .— VALUATION AND R EPORT TO C ONGRESS (f) E (1) E .—The Secretary shall conduct an evalua- VALUATION tion of the demonstration project in order to determine the im- pact on the functioning of the health and mental health service system and on individuals enrolled in the Medicaid program and shall include the following: (A) An assessment of access to inpatient mental health services under the Medicaid program; average lengths of inpatient stays; and emergency room visits. (B) An assessment of discharge planning by partici- pating hospitals. (C) An assessment of the impact of the demonstration project on the costs of the full range of mental health serv- ices (including inpatient, emergency and ambulatory care). (D) An analysis of the percentage of consumers with Medicaid coverage who are admitted to inpatient facilities as a result of the demonstration project as compared to those admitted to these same facilities through other means. (E) A recommendation regarding whether the dem- onstration project should be continued after December 31, 2013, and expanded on a national basis. EPORT .—Not later than December 31, 2013, the Sec- (2) R retary shall submit to Congress and make available to the pub- lic a report on the findings of the evaluation under paragraph (1). (g) W AIVER A UTHORITY .— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00238 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

258 239 PPACA (Consolidated) Sec. 2801 .—The Secretary shall waive the limitation (1) I N GENERAL of subdivision (B) following paragraph (28) of section 1905(a) of the Social Security Act (42 U.S.C. 1396d(a)) (relating to limita- tions on payments for care or services for individuals under 65 years of age who are patients in an institution for mental dis- eases) for purposes of carrying out the demonstration project under this section. .—The Secretary IMITED OTHER WAIVER AUTHORITY (2) L may waive other requirements of titles XI and XIX of the So- cial Security Act (including the requirements of sections 1902(a)(1) (relating to statewideness) and 1902(1)(10)(B) (relat- ing to comparability)) only to extent necessary to carry out the demonstration project under this section. EFINITIONS .—In this section: (h) D (1) E MERGENCY MEDICAL CONDITION .—The term ‘‘emer- gency medical condition’’ means, with respect to an individual, an individual who expresses suicidal or homicidal thoughts or gestures, if determined dangerous to self or others. EDERAL MEDICAL ASSISTANCE PERCENTAGE .—The term (2) F ‘‘Federal medical assistance percentage’’ has the meaning given that term with respect to a State under section 1905(b) of the Social Security Act (42 U.S.C. 1396d(b)). NSTITUTION FOR MENTAL DISEASES .—The term ‘‘institu- (3) I tion for mental diseases’’ has the meaning given to that term in section 1905(i) of the Social Security Act (42 U.S.C. 1396d(i)). EDICAL ASSISTANCE .—The term ‘‘medical assistance’’ (4) M has the meaning given that term in section 1905(a) of the So- cial Security Act (42 U.S.C. 1396d(a)). TABILIZED .—The term ‘‘stabilized’’ means, with respect (5) S to an individual, that the emergency medical condition no longer exists with respect to the individual and the individual is no longer dangerous to self or others. (6) S .—The term ‘‘State’’ has the meaning given that TATE term for purposes of title XIX of the Social Security Act (42 U.S.C. 1396 et seq.). Subtitle J—Improvements to the Medicaid and CHIP Payment and Access Commis- sion (MACPAC) SEC. 2801. MACPAC ASSESSMENT OF POLICIES AFFECTING ALL MED- ICAID BENEFICIARIES. (a) I N G ENERAL .—Section 1900 of the Social Security Act (42 U.S.C. 1396) is amended— (1) in subsection (b)— (A) in paragraph (1)— (i) in the paragraph heading, by inserting ‘‘ FOR ALL STATES ’’ before ‘‘ AND ANNUAL ’’; and (ii) in subparagraph (A), by striking ‘‘children’s’’; (iii) in subparagraph (B), by inserting ‘‘, the Sec- retary, and States’’ after ‘‘Congress’’; June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00239 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

259 240 Sec. 2801 PPACA (Consolidated) (iv) in subparagraph (C), by striking ‘‘March 1’’ and inserting ‘‘March 15’’; and (v) in subparagraph (D), by striking ‘‘June 1’’ and inserting ‘‘June 15’’; (B) in paragraph (2)— (i) in subparagraph (A)— (I) in clause (i)— (aa) by inserting ‘‘the efficient provision of’’ after ‘‘expenditures for’’; and (bb) by striking ‘‘hospital, skilled nursing facility, physician, Federally-qualified health center, rural health center, and other fees’’ and inserting ‘‘payments to medical, dental, and health professionals, hospitals, residen- tial and long-term care providers, providers of home and community based services, Feder- ally-qualified health centers and rural health clinics, managed care entities, and providers of other covered items and services’’; and (II) in clause (iii), by inserting ‘‘(including how such factors and methodologies enable such bene- ficiaries to obtain the services for which they are eligible, affect provider supply, and affect pro- viders that serve a disproportionate share of low- income and other vulnerable populations)’’ after ‘‘beneficiaries’’; (ii) by redesignating subparagraphs (B) and (C) as subparagraphs (F) and (H), respectively; (iii) by inserting after subparagraph (A), the fol- lowing: LIGIBILITY POLICIES .—Medicaid and CHIP eligi- ‘‘(B) E bility policies, including a determination of the degree to which Federal and State policies provide health care cov- erage to needy populations. ‘‘(C) E NROLLMENT AND RETENTION PROCESSES .—Med- icaid and CHIP enrollment and retention processes, includ- ing a determination of the degree to which Federal and State policies encourage the enrollment of individuals who are eligible for such programs and screen out individuals who are ineligible, while minimizing the share of program expenses devoted to such processes. ‘‘(D) C OVERAGE POLICIES .—Medicaid and CHIP benefit and coverage policies, including a determination of the de- gree to which Federal and State policies provide access to the services enrollees require to improve and maintain their health and functional status. UALITY OF CARE .—Medicaid and CHIP policies ‘‘(E) Q as they relate to the quality of care provided under those programs, including a determination of the degree to which Federal and State policies achieve their stated goals and interact with similar goals established by other pur- chasers of health care services.’’; June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00240 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

260 241 Sec. 2801 PPACA (Consolidated) (iv) by inserting after subparagraph (F) (as redes- ignated by clause (ii) of this subparagraph), the fol- lowing: ‘‘(G) I .— NTERACTIONS WITH MEDICARE AND MEDICAID Consistent with paragraph (11), the interaction of policies under Medicaid and the Medicare program under title XVIII, including with respect to how such interactions af- fect access to services, payments, and dual eligible individ- uals.’’ and (v) in subparagraph (H) (as so redesignated), by inserting ‘‘and preventive, acute, and long-term serv- ices and supports’’ after ‘‘barriers’’; (C) by redesignating paragraphs (3) through (9) as paragraphs (4) through (10), respectively; (D) by inserting after paragraph (2), the following new paragraph: ‘‘(3) R ECOMMENDATIONS AND REPORTS OF STATE SPECIFIC - .—MACPAC shall— DATA ‘‘(A) review national and State-specific Medicaid and CHIP data; and ‘‘(B) submit reports and recommendations to Congress, the Secretary, and States based on such reviews.’’; (E) in paragraph (4), as redesignated by subparagraph (C), by striking ‘‘or any other problems’’ and all that fol- lows through the period and inserting ‘‘, as well as other factors that adversely affect, or have the potential to ad- versely affect, access to care by, or the health care status of, Medicaid and CHIP beneficiaries. MACPAC shall in- clude in the annual report required under paragraph (1)(D) a description of all such areas or problems identified with respect to the period addressed in the report.’’; (F) in paragraph (5), as so redesignated,— AND (i) in the paragraph heading, by inserting ‘‘ REGULATIONS ’’ after ‘‘ REPORTS ’’; and (ii) by striking ‘‘If’’ and inserting the following: ERTAIN SECRETARIAL REPORTS .—If’’; and ‘‘(A) C (iii) in the second sentence, by inserting ‘‘and the Secretary’’ after ‘‘appropriate committees of Congress’’; and (iv) by adding at the end the following: ‘‘(B) R EGULATIONS .—MACPAC shall review Medicaid and CHIP regulations and may comment through submis- sion of a report to the appropriate committees of Congress and the Secretary, on any such regulations that affect ac- cess, quality, or efficiency of health care.’’; (G) in paragraph (10), as so redesignated, by inserting ‘‘, and shall submit with any recommendations, a report on the Federal and State-specific budget consequences of the recommendations’’ before the period; and (H) by adding at the end the following: ‘‘(11) C ONSULTATION AND COORDINATION WITH MEDPAC .— ‘‘(A) I N GENERAL .—MACPAC shall consult with the Medicare Payment Advisory Commission (in this para- graph referred to as ‘MedPAC’) established under section June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00241 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

261 242 Sec. 2801 PPACA (Consolidated) 1805 in carrying out its duties under this section, as ap- propriate and particularly with respect to the issues speci- fied in paragraph (2) as they relate to those Medicaid beneficiaries who are dually eligible for Medicaid and the Medicare program under title XVIII, adult Medicaid bene- ficiaries (who are not dually eligible for Medicare), and beneficiaries under Medicare. Responsibility for analysis of and recommendations to change Medicare policy regarding Medicare beneficiaries, including Medicare beneficiaries who are dually eligible for Medicare and Medicaid, shall rest with MedPAC. ‘‘(B) I .—MACPAC and MedPAC NFORMATION SHARING shall have access to deliberations and records of the other such entity, respectively, upon the request of the other such entity. ‘‘(12) C ONSULTATION WITH STATES .—MACPAC shall regu- larly consult with States in carrying out its duties under this section, including with respect to developing processes for car- rying out such duties, and shall ensure that input from States is taken into account and represented in MACPAC’s rec- ommendations and reports. ‘‘(13) C OORDINATE AND CONSULT WITH THE FEDERAL CO - ORDINATED HEALTH CARE OFFICE .—MACPAC shall coordinate and consult with the Federal Coordinated Health Care Office established under section 2081 of the Patient Protection and Affordable Care Act before making any recommendations re- garding dual eligible individuals. ROGRAMMATIC OVERSIGHT VESTED IN THE SEC - ‘‘(14) P .—MACPAC’s authority to make recommendations in RETARY accordance with this section shall not affect, or be considered to duplicate, the Secretary’s authority to carry out Federal re- sponsibilities with respect to Medicaid and CHIP.’’; (2) in subsection (c)(2)— (A) by striking subparagraphs (A) and (B) and insert- ing the following: ‘‘(A) I N GENERAL .—The membership of MACPAC shall include individuals who have had direct experience as en- rollees or parents or caregivers of enrollees in Medicaid or CHIP and individuals with national recognition for their expertise in Federal safety net health programs, health fi- nance and economics, actuarial science, health plans and integrated delivery systems, reimbursement for health care, health information technology, and other providers of health services, public health, and other related fields, who provide a mix of different professions, broad geographic representation, and a balance between urban and rural representation. ‘‘(B) I NCLUSION .—The membership of MACPAC shall include (but not be limited to) physicians, dentists, and other health professionals, employers, third-party payers, and individuals with expertise in the delivery of health services. Such membership shall also include representa- tives of children, pregnant women, the elderly, individuals with disabilities, caregivers, and dual eligible individuals, June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00242 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

262 243 Sec. 2801 PPACA (Consolidated) current or former representatives of State agencies respon- sible for administering Medicaid, and current or former representatives of State agencies responsible for admin- istering CHIP.’’. (3) in subsection (d)(2), by inserting ‘‘and State’’ after ‘‘Fed- eral’’; (4) in subsection (e)(1), in the first sentence, by inserting ‘‘and, as a condition for receiving payments under sections 1903(a) and 2105(a), from any State agency responsible for ad- ministering Medicaid or CHIP,’’ after ‘‘United States’’; and (5) in subsection (f)— (A) in the subsection heading, by striking ‘‘A UTHORIZA - A PPROPRIATIONS ’’ and inserting ‘‘F UNDING ’’; TION OF (B) in paragraph (1), by inserting ‘‘(other than for fis- cal year 2010)’’ before ‘‘in the same manner’’; and (C) by adding at the end the following: ‘‘(3) F .— UNDING FOR FISCAL YEAR 2010 ‘‘(A) I N GENERAL .—Out of any funds in the Treasury not otherwise appropriated, there is appropriated to MACPAC to carry out the provisions of this section for fis- cal year 2010, $9,000,000. ‘‘(B) T RANSFER OF FUNDS .—Notwithstanding section 2104(a)(13), from the amounts appropriated in such section for fiscal year 2010, $2,000,000 is hereby transferred and made available in such fiscal year to MACPAC to carry out the provisions of this section. .—Amounts made available under para- VAILABILITY ‘‘(4) A graphs (2) and (3) to MACPAC to carry out the provisions of this section shall remain available until expended.’’. (b) C M ED PAC A MENDMENTS .—Section 1805(b) of ONFORMING the Social Security Act (42 U.S.C. 1395b–6(b)), is amended— (1) in paragraph (1)(C), by striking ‘‘March 1 of each year (beginning with 1998)’’ and inserting ‘‘March 15’’; (2) in paragraph (1)(D), by inserting ‘‘, and (beginning with 2012) containing an examination of the topics described in paragraph (9), to the extent feasible’’ before the period; and (3) by adding at the end the following: ‘‘(9) R EVIEW AND ANNUAL REPORT ON MEDICAID AND COM - MERCIAL TRENDS .—The Commission shall review and report on aggregate trends in spending, utilization, and financial per- formance under the Medicaid program under title XIX and the private market for health care services with respect to pro- viders for which, on an aggregate national basis, a significant portion of revenue or services is associated with the Medicaid program. Where appropriate, the Commission shall conduct such review in consultation with the Medicaid and CHIP Pay- ment and Access Commission established under section 1900 (in this section referred to as ‘MACPAC’). ‘‘(10) C OORDINATE AND CONSULT WITH THE FEDERAL CO - ORDINATED HEALTH CARE OFFICE .—The Commission shall co- ordinate and consult with the Federal Coordinated Health Care Office established under section 2081 of the Patient Pro- tection and Affordable Care Act before making any rec- ommendations regarding dual eligible individuals. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00243 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

263 244 Sec. 2901 PPACA (Consolidated) NTERACTION OF MEDICAID AND MEDICARE .—The Com- ‘‘(11) I mission shall consult with MACPAC in carrying out its duties under this section, as appropriate. Responsibility for analysis of and recommendations to change Medicare policy regarding Medicare beneficiaries, including Medicare beneficiaries who are dually eligible for Medicare and Medicaid, shall rest with the Commission. Responsibility for analysis of and rec- ommendations to change Medicaid policy regarding Medicaid beneficiaries, including Medicaid beneficiaries who are dually eligible for Medicare and Medicaid, shall rest with MACPAC.’’. Subtitle K—Protections for American Indians and Alaska Natives SEC. 2901 ø 25 U.S.C. 1623 ¿ . SPECIAL RULES RELATING TO INDIANS. O C OST - SHARING FOR I NDIANS W ITH I NCOME AT OR B ELOW (a) N 300 P ERCENT OF OVERTY E NROLLED IN C OVERAGE T HROUGH A P TATE XCHANGE .—For provisions prohibiting cost sharing for Indi- S E ans enrolled in any qualified health plan in the individual market through an Exchange, see section 1402(d) of the Patient Protection and Affordable Care Act. (b) P AYER OF AST R ESORT .—Health programs operated by the L Indian Health Service, Indian tribes, tribal organizations, and Urban Indian organizations (as those terms are defined in section 4 of the Indian Health Care Improvement Act (25 U.S.C. 1603)) shall be the payer of last resort for services provided by such Serv- ice, tribes, or organizations to individuals eligible for services through such programs, notwithstanding any Federal, State, or local law to the contrary. (c) F ACILITATING E NROLLMENT OF I NDIANS U NDER THE E XPRESS L ANE PTION .—Section 1902(e)(13)(F)(ii) of the Social Security Act O (42 U.S.C. 1396a(e)(13)(F)(ii)) is amended— (1) in the clause heading, by inserting ‘‘ AND INDIAN TRIBES AND TRIBAL ORGANIZATIONS ’’ after ‘‘ AGENCIES ’’; and (2) by adding at the end the following: ‘‘(IV) The Indian Health Service, an Indian Tribe, Tribal Organization, or Urban Indian Orga- nization (as defined in section 1139(c)).’’. (d) T C ORRECTIONS .—Section 1139(c) of the Social Se- ECHNICAL curity Act (42 U.S.C. 1320b–9(c)) is amended by striking ‘‘In this section’’ and inserting ‘‘For purposes of this section, title XIX, and title XXI’’. SEC. 2902. ELIMINATION OF SUNSET FOR REIMBURSEMENT FOR ALL MEDICARE PART B SERVICES FURNISHED BY CERTAIN IN- DIAN HOSPITALS AND CLINICS. (a) R EIMBURSEMENT FOR A LL M EDICARE P ART B S ERVICES F UR - OSPITALS AND NISHED BY I NDIAN H ERTAIN C LINICS .—Section C 1880(e)(1)(A) of the Social Security Act (42 U.S.C. 1395qq(e)(1)(A)) is amended by striking ‘‘during the 5-year period beginning on’’ and inserting ‘‘on or after’’. (b) E FFECTIVE D ATE .—The amendments made by this section shall apply to items or services furnished on or after January 1, 2010. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00244 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

264 245 Sec. 2951 511 SSA PPACA (Consolidated) \ Subtitle L—Maternal and Child Health Services SEC. 2951. MATERNAL, INFANT, AND EARLY CHILDHOOD HOME VIS- ITING PROGRAMS. Title V of the Social Security Act (42 U.S.C. 701 et seq.) is amended by adding at the end the following new section: 42 U.S.C. 711 ¿ . MATERNAL, INFANT, AND EARLY CHILDHOOD ‘‘SEC. 511 ø HOME VISITING PROGRAMS. URPOSES .—The purposes of this section are— ‘‘(a) P ‘‘(1) to strengthen and improve the programs and activities carried out under this title; ‘‘(2) to improve coordination of services for at risk commu- nities; and ‘‘(3) to identify and provide comprehensive services to im- prove outcomes for families who reside in at risk communities. ‘‘(b) R A LL S TATES EQUIREMENT FOR O A SSESS S TATEWIDE T N EEDS AND I DENTIFY AT R ISK C OMMUNITIES .— ‘‘(1) I N GENERAL .—Not later than 6 months after the date of enactment of this section, each State shall, as a condition of receiving payments from an allotment for the State under sec- tion 502 for fiscal year 2011, conduct a statewide needs assess- ment (which shall be separate from the statewide needs assess- ment required under section 505(a)) that identifies— ‘‘(A) communities with concentrations of— ‘‘(i) premature birth, low-birth weight infants, and infant mortality, including infant death due to neglect, or other indicators of at-risk prenatal, maternal, new- born, or child health; ‘‘(ii) poverty; ‘‘(iii) crime; ‘‘(iv) domestic violence; ‘‘(v) high rates of high-school drop-outs; ‘‘(vi) substance abuse; ‘‘(vii) unemployment; or ‘‘(viii) child maltreatment; ‘‘(B) the quality and capacity of existing programs or initiatives for early childhood home visitation in the State including— ‘‘(i) the number and types of individuals and fami- lies who are receiving services under such programs or initiatives; ‘‘(ii) the gaps in early childhood home visitation in the State; and ‘‘(iii) the extent to which such programs or initia- tives are meeting the needs of eligible families de- scribed in subsection (k)(2); and ‘‘(C) the State’s capacity for providing substance abuse treatment and counseling services to individuals and fami- lies in need of such treatment or services. ‘‘(2) C OORDINATION WITH OTHER ASSESSMENTS .—In con- ducting the statewide needs assessment required under para- graph (1), the State shall coordinate with, and take into ac- June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00245 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

265 246 Sec. 2951 511 SSA PPACA (Consolidated) \ count, other appropriate needs assessments conducted by the State, as determined by the Secretary, including the needs as- sessment required under section 505(a) (both the most recently completed assessment and any such assessment in progress), the communitywide strategic planning and needs assessments conducted in accordance with section 640(g)(1)(C) of the Head Start Act, and the inventory of current unmet needs and cur- rent community-based and prevention-focused programs and activities to prevent child abuse and neglect, and other family resource services operating in the State required under section 205(3) of the Child Abuse Prevention and Treatment Act. ‘‘(3) S .—Each State shall sub- UBMISSION TO THE SECRETARY mit to the Secretary, in such form and manner as the Sec- retary shall require— ‘‘(A) the results of the statewide needs assessment re- quired under paragraph (1); and ‘‘(B) a description of how the State intends to address needs identified by the assessment, particularly with re- spect to communities identified under paragraph (1)(A), which may include applying for a grant to conduct an early childhood home visitation program in accordance with the requirements of this section. ‘‘(c) G E ARLY C HILDHOOD H RANTS FOR V ISITATION P RO - OME GRAMS .— ‘‘(1) A UTHORITY TO MAKE GRANTS .—In addition to any other payments made under this title to a State, the Secretary shall make grants to eligible entities to enable the entities to deliver services under early childhood home visitation programs that satisfy the requirements of subsection (d) to eligible families in order to promote improvements in maternal and prenatal health, infant health, child health and development, parenting related to child development outcomes, school readiness, and the socioeconomic status of such families, and reductions in child abuse, neglect, and injuries. ‘‘(2) A - UTHORITY TO USE INITIAL GRANT FUNDS FOR PLAN .—An eligible entity that receives a NING OR IMPLEMENTATION grant under paragraph (1) may use a portion of the funds made available to the entity during the first 6 months of the period for which the grant is made for planning or implementa- tion activities to assist with the establishment of early child- hood home visitation programs that satisfy the requirements of subsection (d). ‘‘(3) G RANT DURATION .—The Secretary shall determine the period of years for which a grant is made to an eligible entity under paragraph (1). ECHNICAL ASSISTANCE .—The Secretary shall provide ‘‘(4) T an eligible entity that receives a grant under paragraph (1) with technical assistance in administering programs or activi- ties conducted in whole or in part with grant funds. EQUIREMENTS .—The requirements of this subsection for ‘‘(d) R an early childhood home visitation program conducted with a grant made under this section are as follows: ‘‘(1) Q UANTIFIABLE , MEASURABLE IMPROVEMENT IN BENCH - MARK AREAS .— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00246 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

266 247 Sec. 2951 511 SSA PPACA (Consolidated) \ N GENERAL .—The eligible entity establishes, sub- ‘‘(A) I ject to the approval of the Secretary, quantifiable, measur- able 3- and 5-year benchmarks for demonstrating that the program results in improvements for the eligible families participating in the program in each of the following areas: ‘‘(i) Improved maternal and newborn health. ‘‘(ii) Prevention of child injuries, child abuse, ne- glect, or maltreatment, and reduction of emergency de- partment visits. ‘‘(iii) Improvement in school readiness and achievement. ‘‘(iv) Reduction in crime or domestic violence. ‘‘(v) Improvements in family economic self-suffi- ciency. ‘‘(vi) Improvements in the coordination and refer- rals for other community resources and supports. ‘‘(B) D OF AFTER 3 EMONSTRATION IMPROVEMENTS .— YEARS EPORT TO THE SECRETARY .—Not later than 30 ‘‘(i) R days after the end of the 3rd year in which the eligible entity conducts the program, the entity submits to the Secretary a report demonstrating improvement in at least 4 of the areas specified in subparagraph (A). .—If the report sub- ORRECTIVE ACTION PLAN ‘‘(ii) C mitted by the eligible entity under clause (i) fails to demonstrate improvement in at least 4 of the areas specified in subparagraph (A), the entity shall develop and implement a plan to improve outcomes in each of the areas specified in subparagraph (A), subject to ap- proval by the Secretary. The plan shall include provi- sions for the Secretary to monitor implementation of the plan and conduct continued oversight of the pro- gram, including through submission by the entity of regular reports to the Secretary. ‘‘(iii) T .— ECHNICAL ASSISTANCE ‘‘(I) I N GENERAL .—The Secretary shall provide an eligible entity required to develop and imple- ment an improvement plan under clause (ii) with technical assistance to develop and implement the plan. The Secretary may provide the technical as- sistance directly or through grants, contracts, or cooperative agreements. DVISORY PANEL .—The Secretary shall ‘‘(II) A establish an advisory panel for purposes of obtain- ing recommendations regarding the technical as- sistance provided to entities in accordance with subclause (I). ‘‘(iv) N O IMPROVEMENT OR FAILURE TO SUBMIT RE - PORT .—If the Secretary determines after a period of time specified by the Secretary that an eligible entity implementing an improvement plan under clause (ii) has failed to demonstrate any improvement in the areas specified in subparagraph (A), or if the Secretary determines that an eligible entity has failed to submit June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00247 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

267 248 Sec. 2951 511 SSA PPACA (Consolidated) \ the report required under clause (i), the Secretary shall terminate the entity’s grant and may include any unexpended grant funds in grants made to nonprofit organizations under subsection (h)(2)(B). ‘‘(C) F INAL REPORT .—Not later than December 31, 2015, the eligible entity shall submit a report to the Sec- retary demonstrating improvements (if any) in each of the areas specified in subparagraph (A). ‘‘(2) I - MPROVEMENTS IN OUTCOMES FOR INDIVIDUAL FAMI LIES .— N GENERAL ‘‘(A) I .—The program is designed, with re- spect to an eligible family participating in the program, to result in the participant outcomes described in subpara- graph (B) that the eligible entity identifies on the basis of an individualized assessment of the family, are relevant for that family. ‘‘(B) P ARTICIPANT OUTCOMES .—The participant out- comes described in this subparagraph are the following: ‘‘(i) Improvements in prenatal, maternal, and new- born health, including improved pregnancy outcomes ‘‘(ii) Improvements in child health and develop- ment, including the prevention of child injuries and maltreatment and improvements in cognitive, lan- guage, social-emotional, and physical developmental indicators. ‘‘(iii) Improvements in parenting skills. ‘‘(iv) Improvements in school readiness and child academic achievement. ‘‘(v) Reductions in crime or domestic violence. ‘‘(vi) Improvements in family economic self-suffi- ciency. ‘‘(vii) Improvements in the coordination of refer- rals for, and the provision of, other community re- sources and supports for eligible families, consistent with State child welfare agency training. ‘‘(3) C ORE COMPONENTS .—The program includes the fol- lowing core components: ‘‘(A) S ERVICE DELIVERY MODEL OR MODELS .— .—Subject to clause (ii), the pro- N GENERAL ‘‘(i) I gram is conducted using 1 or more of the service deliv- ery models described in item (aa) or (bb) of subclause (I) or in subclause (II) selected by the eligible entity: ‘‘(I) The model conforms to a clear consistent home visitation model that has been in existence for at least 3 years and is research-based, ground- ed in relevant empirically-based knowledge, linked to program determined outcomes, associated with a national organization or institution of higher education that has comprehensive home visitation program standards that ensure high quality serv- ice delivery and continuous program quality im- provement, and has demonstrated significant, (and in the case of the service delivery model de- scribed in item (aa), sustained) positive outcomes, June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00248 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

268 249 Sec. 2951 511 SSA PPACA (Consolidated) \ as described in the benchmark areas specified in paragraph (1)(A) and the participant outcomes de- scribed in paragraph (2)(B), when evaluated using well-designed and rigorous— ‘‘(aa) randomized controlled research de- signs, and the evaluation results have been published in a peer-reviewed journal; or ‘‘(bb) quasi-experimental research de- signs. ‘‘(II) The model conforms to a promising and new approach to achieving the benchmark areas specified in paragraph (1)(A) and the participant outcomes described in paragraph (2)(B), has been developed or identified by a national organization or institution of higher education, and will be evaluated through well-designed and rigorous process. - AJORITY OF GRANT FUNDS USED FOR EVI ‘‘(ii) M - BASED MODELS DENCE .—An eligible entity shall use not more than 25 percent of the amount of the grant paid to the entity for a fiscal year for purposes of con- ducting a program using the service delivery model de- scribed in clause (i)(II). ‘‘(iii) C RITERIA FOR EVIDENCE OF EFFECTIVENESS OF MODELS .—The Secretary shall establish criteria for evidence of effectiveness of the service delivery models and shall ensure that the process for establishing the criteria is transparent and provides the opportunity for public comment. ‘‘(B) A DDITIONAL REQUIREMENTS .— ‘‘(i) The program adheres to a clear, consistent model that satisfies the requirements of being ground- ed in empirically-based knowledge related to home vis- iting and linked to the benchmark areas specified in paragraph (1)(A) and the participant outcomes de- scribed in paragraph (2)(B) related to the purposes of the program. ‘‘(ii) The program employs well-trained and com- petent staff, as demonstrated by education or training, such as nurses, social workers, educators, child devel- opment specialists, or other well-trained and com- petent staff, and provides ongoing and specific training on the model being delivered. ‘‘(iii) The program maintains high quality super- vision to establish home visitor competencies. ‘‘(iv) The program demonstrates strong organiza- tional capacity to implement the activities involved. ‘‘(v) The program establishes appropriate linkages and referral networks to other community resources and supports for eligible families. ‘‘(vi) The program monitors the fidelity of program implementation to ensure that services are delivered pursuant to the specified model. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00249 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

269 250 Sec. 2951 PPACA (Consolidated) \ 511 SSA - .—The RIORITY FOR SERVING HIGH ‘‘(4) P RISK POPULATIONS eligible entity gives priority to providing services under the program to the following: ‘‘(A) Eligible families who reside in communities in need of such services, as identified in the statewide needs assessment required under subsection (b)(1)(A). ‘‘(B) Low-income eligible families. ‘‘(C) Eligible families who are pregnant women who have not attained age 21. ‘‘(D) Eligible families that have a history of child abuse or neglect or have had interactions with child wel- fare services. ‘‘(E) Eligible families that have a history of substance abuse or need substance abuse treatment. ‘‘(F) Eligible families that have users of tobacco prod- ucts in the home. ‘‘(G) Eligible families that are or have children with low student achievement. ‘‘(H) Eligible families with children with develop- mental delays or disabilities. ‘‘(I) Eligible families who, or that include individuals who, are serving or formerly served in the Armed Forces, including such families that have members of the Armed Forces who have had multiple deployments outside of the United States. PPLICATION R EQUIREMENTS .—An eligible entity desiring a ‘‘(e) A grant under this section shall submit an application to the Sec- retary for approval, in such manner as the Secretary may require, that includes the following: ‘‘(1) A description of the populations to be served by the entity, including specific information regarding how the entity will serve high risk populations described in subsection (d)(4). ‘‘(2) An assurance that the entity will give priority to serv- ing low-income eligible families and eligible families who reside in at risk communities identified in the statewide needs assess- ment required under subsection (b)(1)(A). ‘‘(3) The service delivery model or models described in sub- section (d)(3)(A) that the entity will use under the program and the basis for the selection of the model or models. ‘‘(4) A statement identifying how the selection of the popu- lations to be served and the service delivery model or models that the entity will use under the program for such populations is consistent with the results of the statewide needs assess- ment conducted under subsection (b). ‘‘(5) The quantifiable, measurable benchmarks established by the State to demonstrate that the program contributes to improvements in the areas specified in subsection (d)(1)(A). ‘‘(6) An assurance that the entity will obtain and submit documentation or other appropriate evidence from the organi- zation or entity that developed the service delivery model or models used under the program to verify that the program is implemented and services are delivered according to the model specifications. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00250 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

270 251 Sec. 2951 511 SSA PPACA (Consolidated) \ ‘‘(7) Assurances that the entity will establish procedures to ensure that— ‘‘(A) the participation of each eligible family in the pro- gram is voluntary; and ‘‘(B) services are provided to an eligible family in ac- cordance with the individual assessment for that family. ‘‘(8) Assurances that the entity will— ‘‘(A) submit annual reports to the Secretary regarding the program and activities carried out under the program that include such information and data as the Secretary shall require; and ‘‘(B) participate in, and cooperate with, data and infor- mation collection necessary for the evaluation required under subsection (g)(2) and other research and evaluation activities carried out under subsection (h)(3). ‘‘(9) A description of other State programs that include home visitation services, including, if applicable to the State, other programs carried out under this title with funds made available from allotments under section 502(c), programs fund- ed under title IV, title II of the Child Abuse Prevention and Treatment Act (relating to community-based grants for the prevention of child abuse and neglect), and section 645A of the Head Start Act (relating to Early Head Start programs). ‘‘(10) Other information as required by the Secretary. AINTENANCE OF E FFORT .—Funds provided to an eligible ‘‘(f) M entity receiving a grant under this section shall supplement, and not supplant, funds from other sources for early childhood home visitation programs or initiatives. ‘‘(g) E VALUATION .— NDEPENDENT EXPERT ADVISORY PANEL .—The Sec- ‘‘(1) I , retary, in accordance with subsection (h)(1)(A), shall appoint an independent advisory panel consisting of experts in pro- gram evaluation and research, education, and early childhood development— ‘‘(A) to review, and make recommendations on, the de- sign and plan for the evaluation required under paragraph (2) within 1 year after the date of enactment of this sec- tion; ‘‘(B) to maintain and advise the Secretary regarding the progress of the evaluation; and ‘‘(C) to comment, if the panel so desires, on the report submitted under paragraph (3). ‘‘(2) A UTHORITY TO CONDUCT EVALUATION .—On the basis of the recommendations of the advisory panel under paragraph (1), the Secretary shall, by grant, contract, or interagency agreement, conduct an evaluation of the statewide needs as- sessments submitted under subsection (b) and the grants made under subsections (c) and (h)(3)(B). The evaluation shall in- clude— ‘‘(A) an analysis, on a State-by-State basis, of the re- sults of such assessments, including indicators of maternal and prenatal health and infant health and mortality, and State actions in response to the assessments; and ‘‘(B) an assessment of— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00251 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

271 252 Sec. 2951 511 SSA PPACA (Consolidated) \ ‘‘(i) the effect of early childhood home visitation programs on child and parent outcomes, including with respect to each of the benchmark areas specified in subsection (d)(1)(A) and the participant outcomes described in subsection (d)(2)(B); ‘‘(ii) the effectiveness of such programs on dif- ferent populations, including the extent to which the ability of programs to improve participant outcomes varies across programs and populations; and ‘‘(iii) the potential for the activities conducted under such programs, if scaled broadly, to improve health care practices, eliminate health disparities, and improve health care system quality, efficiencies, and reduce costs. EPORT .—Not later than March 31, 2015, the Sec- ‘‘(3) R retary shall submit a report to Congress on the results of the evaluation conducted under paragraph (2) and shall make the report publicly available. ‘‘(h) O P ROVISIONS .— THER NTRA ‘‘(1) I AGENCY COLLABORATION .—The Secretary shall - ensure that the Maternal and Child Health Bureau and the Administration for Children and Families collaborate with re- spect to carrying out this section, including with respect to— ‘‘(A) reviewing and analyzing the statewide needs as- sessments required under subsection (b), the awarding and oversight of grants awarded under this section, the estab- lishment of the advisory panels required under subsections (d)(1)(B)(iii)(II) and (g)(1), and the evaluation and report required under subsection (g); and ‘‘(B) consulting with other Federal agencies with re- sponsibility for administering or evaluating programs that serve eligible families to coordinate and collaborate with respect to research related to such programs and families, including the Office of the Assistant Secretary for Plan- ning and Evaluation of the Department of Health and Human Services, the Centers for Disease Control and Pre- vention, the National Institute of Child Health and Human Development of the National Institutes of Health, the Office of Juvenile Justice and Delinquency Prevention of the Department of Justice, and the Institute of Edu- cation Sciences of the Department of Education. RANTS TO ELIGIBLE ENTITIES THAT ARE NOT STATES .— ‘‘(2) G ‘‘(A) I NDIAN TRIBES , TRIBAL ORGANIZATIONS , OR URBAN INDIAN ORGANIZATIONS .—The Secretary shall specify re- quirements for eligible entities that are Indian Tribes (or a consortium of Indian Tribes), Tribal Organizations, or Urban Indian Organizations to apply for and conduct an early childhood home visitation program with a grant under this section. Such requirements shall, to the great- est extent practicable, be consistent with the requirements applicable to eligible entities that are States and shall re- quire an Indian Tribe (or consortium), Tribal Organization, or Urban Indian Organization to— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00252 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

272 253 Sec. 2951 511 SSA PPACA (Consolidated) \ ‘‘(i) conduct a needs assessment similar to the as- sessment required for all States under subsection (b); and ‘‘(ii) establish quantifiable, measurable 3- and 5- year benchmarks consistent with subsection (d)(1)(A). ‘‘(B) N ONPROFIT ORGANIZATIONS .—If, as of the begin- ning of fiscal year 2012, a State has not applied or been approved for a grant under this section, the Secretary may use amounts appropriated under paragraph (1) of sub- section (j) that are available for expenditure under para- graph (3) of that subsection to make a grant to an eligible entity that is a nonprofit organization described in sub- section (k)(1)(B) to conduct an early childhood home visita- tion program in the State. The Secretary shall specify the requirements for such an organization to apply for and conduct the program which shall, to the greatest extent practicable, be consistent with the requirements applicable to eligible entities that are States and shall require the or- ganization to— ‘‘(i) carry out the program based on the needs as- sessment conducted by the State under subsection (b); and ‘‘(ii) establish quantifiable, measurable 3- and 5- year benchmarks consistent with subsection (d)(1)(A). ESEARCH AND OTHER EVALUATION ACTIVITIES .— ‘‘(3) R ‘‘(A) I N GENERAL .—The Secretary shall carry out a con- tinuous program of research and evaluation activities in order to increase knowledge about the implementation and effectiveness of home visiting programs, using random as- signment designs to the maximum extent feasible. The Secretary may carry out such activities directly, or through grants, cooperative agreements, or contracts. ‘‘(B) R EQUIREMENTS .—The Secretary shall ensure that— ‘‘(i) evaluation of a specific program or project is conducted by persons or individuals not directly in- volved in the operation of such program or project; and ‘‘(ii) the conduct of research and evaluation activi- ties includes consultation with independent research- ers, State officials, and developers and providers of home visiting programs on topics including research design and administrative data matching. ‘‘(4) R .—Not later than De- EPORT AND RECOMMENDATION cember 31, 2015, the Secretary shall submit a report to Con- gress regarding the programs conducted with grants under this section. The report required under this paragraph shall in- clude— ‘‘(A) information regarding the extent to which eligible entities receiving grants under this section demonstrated improvements in each of the areas specified in subsection (d)(1)(A); ‘‘(B) information regarding any technical assistance provided under subsection (d)(1)(B)(iii)(I), including the type of any such assistance provided; and June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00253 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

273 254 Sec. 2951 511 SSA PPACA (Consolidated) \ ‘‘(C) recommendations for such legislative or adminis- trative action as the Secretary determines appropriate. O THER P ROVISIONS OF T ITLE .— PPLICATION OF ‘‘(i) A .—Except as provided in paragraph (2), the N GENERAL ‘‘(1) I other provisions of this title shall not apply to a grant made under this section. XCEPTIONS .—The following provisions of this title ‘‘(2) E shall apply to a grant made under this section to the same ex- tent and in the same manner as such provisions apply to allot- ments made under section 502(c): ‘‘(A) Section 504(b)(6) (relating to prohibition on pay- ments to excluded individuals and entities). ‘‘(B) Section 504(c) (relating to the use of funds for the purchase of technical assistance). ‘‘(C) Section 504(d) (relating to a limitation on admin- istrative expenditures). ‘‘(D) Section 506 (relating to reports and audits), but only to the extent determined by the Secretary to be ap- propriate for grants made under this section. ‘‘(E) Section 507 (relating to penalties for false state- ments). ‘‘(F) Section 508 (relating to nondiscrimination). ‘‘(G) Section 509(a) (relating to the administration of the grant program). .— PPROPRIATIONS ‘‘(j) A N GENERAL ‘‘(1) I .—Out of any funds in the Treasury not otherwise appropriated, there are appropriated to the Sec- retary to carry out this section— ‘‘(A) $100,000,000 for fiscal year 2010; ‘‘(B) $250,000,000 for fiscal year 2011; ‘‘(C) $350,000,000 for fiscal year 2012; ‘‘(D) $400,000,000 for fiscal year 2013; and ‘‘(E) $400,000,000 for fiscal year 2014. ESERVATIONS .—Of the amount appropriated under ‘‘(2) R this subsection for a fiscal year, the Secretary shall reserve— ‘‘(A) 3 percent of such amount for purposes of making grants to eligible entities that are Indian Tribes (or a con- sortium of Indian Tribes), Tribal Organizations, or Urban Indian Organizations; and ‘‘(B) 3 percent of such amount for purposes of carrying out subsections (d)(1)(B)(iii), (g), and (h)(3). VAILABILITY .—Funds made available to an eligible ‘‘(3) A entity under this section for a fiscal year shall remain avail- able for expenditure by the eligible entity through the end of the second succeeding fiscal year after award. Any funds that are not expended by the eligible entity during the period in which the funds are available under the preceding sentence may be used for grants to nonprofit organizations under sub- section (h)(2)(B). ‘‘(k) D EFINITIONS .—In this section: ‘‘(1) E LIGIBLE ENTITY .— ‘‘(A) I N GENERAL .—The term ‘eligible entity’ means a State, an Indian Tribe, Tribal Organization, or Urban In- June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00254 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

274 255 Sec. 2952 PPACA (Consolidated) dian Organization, Puerto Rico, Guam, the Virgin Islands, the Northern Mariana Islands, and American Samoa. .—Only for purposes of ‘‘(B) N ONPROFIT ORGANIZATIONS awarding grants under subsection (h)(2)(B), such term shall include a nonprofit organization with an established record of providing early childhood home visitation pro- grams or initiatives in a State or several States. ‘‘(2) E LIGIBLE FAMILY .—The term ‘eligible family’ means— ‘‘(A) a woman who is pregnant, and the father of the child if the father is available; or ‘‘(B) a parent or primary caregiver of a child, including grandparents or other relatives of the child, and foster par- ents, who are serving as the child’s primary caregiver from birth to kindergarten entry, and including a noncustodial parent who has an ongoing relationship with, and at times provides physical care for, the child. ‘‘(3) I ; TRIBAL ORGANIZATION .—The terms ‘In- NDIAN TRIBE dian Tribe’ and ‘Tribal Organization’, and ‘Urban Indian Orga- nization’ have the meanings given such terms in section 4 of the Indian Health Care Improvement Act.’’. SEC. 2952 ø 42 U.S.C. 712 note ¿ . SUPPORT, EDUCATION, AND RESEARCH FOR POSTPARTUM DEPRESSION. (a) R ESEARCH ON P OSTPARTUM C ONDITIONS .— (1) E XPANSION AND INTENSIFICATION OF ACTIVITIES .—The Secretary of Health and Human Services (in this subsection and subsection (c) referred to as the ‘‘Secretary’’) is encouraged to continue activities on postpartum depression or postpartum psychosis (in this subsection and subsection (c) referred to as ‘‘postpartum conditions’’), including research to expand the un- derstanding of the causes of, and treatments for, postpartum conditions. Activities under this paragraph shall include con- ducting and supporting the following: (A) Basic research concerning the etiology and causes of the conditions. (B) Epidemiological studies to address the frequency and natural history of the conditions and the differences among racial and ethnic groups with respect to the condi- tions. (C) The development of improved screening and diag- nostic techniques. (D) Clinical research for the development and evalua- tion of new treatments. (E) Information and education programs for health care professionals and the public, which may include a co- ordinated national campaign to increase the awareness and knowledge of postpartum conditions. Activities under such a national campaign may— (i) include public service announcements through television, radio, and other means; and (ii) focus on— (I) raising awareness about screening; (II) educating new mothers and their families about postpartum conditions to promote earlier di- agnosis and treatment; and June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00255 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

275 256 Sec. 2952 512 SSA PPACA (Consolidated) \ (III) ensuring that such education includes complete information concerning postpartum con- ditions, including its symptoms, methods of coping with the illness, and treatment resources. ENSE OF CONGRESS REGARDING LONGITUDINAL STUDY (2) S OF RELATIVE MENTAL HEALTH CONSEQUENCES FOR WOMEN OF RESOLVING A PREGNANCY .— .—It is the sense of Congress ENSE OF CONGRESS (A) S that the Director of the National Institute of Mental Health may conduct a nationally representative longitu- dinal study (during the period of fiscal years 2010 through 2019) of the relative mental health consequences for women of resolving a pregnancy (intended and unintended) in various ways, including carrying the pregnancy to term and parenting the child, carrying the pregnancy to term and placing the child for adoption, miscarriage, and having an abortion. This study may assess the incidence, timing, magnitude, and duration of the immediate and long-term mental health consequences (positive or negative) of these pregnancy outcomes. EPORT .—Subject to the completion of the study (B) R under subsection (a), beginning not later than 5 years after the date of the enactment of this Act, and periodi- cally thereafter for the duration of the study, such Director may prepare and submit to the Congress reports on the findings of the study. RANTS T O P ROVIDE S ERVICES TO I NDIVIDUALS W ITH A (b) G P C ONDITION AND T HEIR F AMILIES .—Title V of the So- OSTPARTUM cial Security Act (42 U.S.C. 701 et seq.), as amended by section 2951, is amended by adding at the end the following new section: ø 42 U.S.C. 712 ¿ . SERVICES TO INDIVIDUALS WITH A ‘‘SEC. 512 POSTPARTUM CONDITION AND THEIR FAMILIES. N G ENERAL .—In addition to any other payments made ‘‘(a) I under this title to a State, the Secretary may make grants to eligi- ble entities for projects for the establishment, operation, and co- ordination of effective and cost-efficient systems for the delivery of essential services to individuals with or at risk for postpartum con- ditions and their families. ‘‘(b) C ERTAIN A CTIVITIES .—To the extent practicable and appro- priate, the Secretary shall ensure that projects funded under sub- section (a) provide education and services with respect to the diag- nosis and management of postpartum conditions for individuals with or at risk for postpartum conditions and their families. The Secretary may allow such projects to include the following: ‘‘(1) Delivering or enhancing outpatient and home-based health and support services, including case management and comprehensive treatment services. ‘‘(2) Delivering or enhancing inpatient care management services that ensure the well-being of the mother and family and the future development of the infant. ‘‘(3) Improving the quality, availability, and organization of health care and support services (including transportation services, attendant care, homemaker services, day or respite June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00256 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

276 257 Sec. 2952 PPACA (Consolidated) \ 512 SSA care, and providing counseling on financial assistance and in- surance). ‘‘(4) Providing education about postpartum conditions to promote earlier diagnosis and treatment. Such education may include— ‘‘(A) providing complete information on postpartum conditions, symptoms, methods of coping with the illness, and treatment resources; and ‘‘(B) in the case of a grantee that is a State, hospital, or birthing facility— ‘‘(i) providing education to new mothers and fa- thers, and other family members as appropriate, con- cerning postpartum conditions before new mothers leave the health facility; and ‘‘(ii) ensuring that training programs regarding such education are carried out at the health facility. ‘‘(c) I W ITH O THER P ROGRAMS .—To the extent prac- NTEGRATION ticable and appropriate, the Secretary may integrate the grant pro- gram under this section with other grant programs carried out by the Secretary, including the program under section 330 of the Pub- lic Health Service Act. ‘‘(d) R EQUIREMENTS .—The Secretary shall establish require- ments for grants made under this section that include a limit on the amount of grants funds that may be used for administration, accounting, reporting, or program oversight functions and a re- quirement for each eligible entity that receives a grant to submit, for each grant period, a report to the Secretary that describes how grant funds were used during such period. ECHNICAL A SSISTANCE .—The Secretary may provide tech- ‘‘(e) T nical assistance to entities seeking a grant under this section in order to assist such entities in complying with the requirements of this section. ITLE O THER P ROVISIONS OF ‘‘(f) A PPLICATION OF .— T ‘‘(1) I N GENERAL .—Except as provided in paragraph (2), the other provisions of this title shall not apply to a grant made under this section. ‘‘(2) E XCEPTIONS .—The following provisions of this title shall apply to a grant made under this section to the same ex- tent and in the same manner as such provisions apply to allot- ments made under section 502(c): ‘‘(A) Section 504(b)(6) (relating to prohibition on pay- ments to excluded individuals and entities). ‘‘(B) Section 504(c) (relating to the use of funds for the purchase of technical assistance). ‘‘(C) Section 504(d) (relating to a limitation on admin- istrative expenditures). ‘‘(D) Section 506 (relating to reports and audits), but only to the extent determined by the Secretary to be ap- propriate for grants made under this section. ‘‘(E) Section 507 (relating to penalties for false state- ments). ‘‘(F) Section 508 (relating to nondiscrimination). ‘‘(G) Section 509(a) (relating to the administration of the grant program). June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00257 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

277 258 Sec. 2952 PPACA (Consolidated) EFINITIONS .—In this section: ‘‘(g) D ‘‘(1) The term ‘eligible entity’— ‘‘(A) means a public or nonprofit private entity; and ‘‘(B) includes a State or local government, public-pri- vate partnership, recipient of a grant under section 330H of the Public Health Service Act (relating to the Healthy Start Initiative), public or nonprofit private hospital, com- munity-based organization, hospice, ambulatory care facil- ity, community health center, migrant health center, pub- lic housing primary care center, or homeless health center. ‘‘(2) The term ‘postpartum condition’ means postpartum depression or postpartum psychosis.’’. ENERAL P ROVISIONS .— (c) G (1) A .—To carry out this UTHORIZATION OF APPROPRIATIONS section and the amendment made by subsection (b), there are authorized to be appropriated, in addition to such other sums as may be available for such purpose— (A) $3,000,000 for fiscal year 2010; and (B) such sums as may be necessary for fiscal years 2011 and 2012. (2) R EPORT BY THE SECRETARY .— TUDY .—The Secretary shall conduct a study on (A) S the benefits of screening for postpartum conditions. (B) R EPORT .—Not later than 2 years after the date of the enactment of this Act, the Secretary shall complete the study required by subparagraph (A) and submit a report to the Congress on the results of such study. SEC. 2953. PERSONAL RESPONSIBILITY EDUCATION. Title V of the Social Security Act (42 U.S.C. 701 et seq.), as amended by sections 2951 and 2952(c), is amended by adding at the end the following: ø ¿ . PERSONAL RESPONSIBILITY EDUCATION. ‘‘SEC. 513 42 U.S.C. 713 ‘‘(a) A LLOTMENTS TO S TATES .— ‘‘(1) A .— MOUNT ‘‘(A) I N GENERAL .—For the purpose described in sub- section (b), subject to the succeeding provisions of this sec- tion, for each of fiscal years 2010 through 2014, the Sec- retary shall allot to each State an amount equal to the product of— ‘‘(i) the amount appropriated under subsection (f) for the fiscal year and available for allotments to States after the application of subsection (c); and ‘‘(ii) the State youth population percentage deter- mined under paragraph (2). INIMUM ALLOTMENT .— ‘‘(B) M ‘‘(i) I N GENERAL .—Each State allotment under this paragraph for a fiscal year shall be at least $250,000. ‘‘(ii) P RO RATA ADJUSTMENTS .—The Secretary shall adjust on a pro rata basis the amount of the State al- lotments determined under this paragraph for a fiscal year to the extent necessary to comply with clause (i). ‘‘(C) A PPLICATION REQUIRED TO ACCESS ALLOTMENTS .— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00258 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

278 259 Sec. 2953 513 SSA PPACA (Consolidated) \ N GENERAL .—A State shall not be paid from ‘‘(i) I its allotment for a fiscal year unless the State submits an application to the Secretary for the fiscal year and the Secretary approves the application (or requires changes to the application that the State satisfies) and meets such additional requirements as the Secretary may specify. .—The State application shall EQUIREMENTS ‘‘(ii) R contain an assurance that the State has complied with the requirements of this section in preparing and sub- mitting the application and shall include the following as well as such additional information as the Sec- retary may require: ‘‘(I) Based on data from the Centers for Dis- ease Control and Prevention National Center for Health Statistics, the most recent pregnancy rates for the State for youth ages 10 to 14 and youth ages 15 to 19 for which data are available, the most recent birth rates for such youth populations in the State for which data are available, and trends in those rates for the most recently pre- ceding 5-year period for which such data are avail- able. ‘‘(II) State-established goals for reducing the pregnancy rates and birth rates for such youth populations. ‘‘(III) A description of the State’s plan for using the State allotments provided under this section to achieve such goals, especially among youth populations that are the most high-risk or vulnerable for pregnancies or otherwise have spe- cial circumstances, including youth in foster care, homeless youth, youth with HIV/AIDS, pregnant youth who are under 21 years of age, mothers who are under 21 years of age, and youth residing in areas with high birth rates for youth. TATE YOUTH POPULATION PERCENTAGE .— ‘‘(2) S N GENERAL .—For purposes of paragraph ‘‘(A) I (1)(A)(ii), the State youth population percentage is, with respect to a State, the proportion (expressed as a percent- age) of— ‘‘(i) the number of individuals who have attained age 10 but not attained age 20 in the State; to ‘‘(ii) the number of such individuals in all States. ‘‘(B) D ETERMINATION OF NUMBER OF YOUTH .—The number of individuals described in clauses (i) and (ii) of subparagraph (A) in a State shall be determined on the basis of the most recent Bureau of the Census data. ‘‘(3) A VAILABILITY OF STATE ALLOTMENTS .—Subject to para- graph (4)(A), amounts allotted to a State pursuant to this sub- section for a fiscal year shall remain available for expenditure by the State through the end of the second succeeding fiscal year. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00259 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

279 260 Sec. 2953 513 SSA PPACA (Consolidated) \ UTHORITY TO AWARD GRANTS FROM STATE ALLOT - ‘‘(4) A MENTS TO LOCAL ORGANIZATIONS AND ENTITIES IN NONPARTICI - PATING STATES .— ‘‘(A) G RANTS FROM UNEXPENDED ALLOTMENTS .—If a State does not submit an application under this section for fiscal year 2010 or 2011, the State shall no longer be eligi- ble to submit an application to receive funds from the amounts allotted for the State for each of fiscal years 2010 through 2014 and such amounts shall be used by the Sec- retary to award grants under this paragraph for each of fiscal years 2012 through 2014. The Secretary also shall use any amounts from the allotments of States that submit applications under this section for a fiscal year that re- main unexpended as of the end of the period in which the allotments are available for expenditure under paragraph (3) for awarding grants under this paragraph. YEAR GRANTS .— ‘‘(B) 3- ‘‘(i) I N GENERAL .—The Secretary shall solicit appli- cations to award 3-year grants in each of fiscal years 2012, 2013, and 2014 to local organizations and enti- ties to conduct, consistent with subsection (b), pro- grams and activities in States that do not submit an application for an allotment under this section for fis- cal year 2010 or 2011. .— AITH - BASED ORGANIZATIONS OR CONSORTIA ‘‘(ii) F The Secretary may solicit and award grants under this paragraph to faith-based organizations or consortia. ‘‘(C) E .—An organization or entity awarded VALUATION a grant under this paragraph shall agree to participate in a rigorous Federal evaluation. AINTENANCE OF EFFORT .—No payment shall be made ‘‘(5) M to a State from the allotment determined for the State under this subsection or to a local organization or entity awarded a grant under paragraph (4), if the expenditure of non-federal funds by the State, organization, or entity for activities, pro- grams, or initiatives for which amounts from allotments and grants under this subsection may be expended is less than the amount expended by the State, organization, or entity for such programs or initiatives for fiscal year 2009. ‘‘(6) D ATA COLLECTION AND REPORTING .—A State or local organization or entity receiving funds under this section shall cooperate with such requirements relating to the collection of data and information and reporting on outcomes regarding the programs and activities carried out with such funds, as the Secretary shall specify. URPOSE .— ‘‘(b) P .—The purpose of an allotment under sub- N GENERAL ‘‘(1) I section (a)(1) to a State is to enable the State (or, in the case of grants made under subsection (a)(4)(B), to enable a local or- ganization or entity) to carry out personal responsibility edu- cation programs consistent with this subsection. ERSONAL RESPONSIBILITY EDUCATION PROGRAMS .— ‘‘(2) P June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00260 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

280 261 Sec. 2953 513 SSA PPACA (Consolidated) \ N GENERAL .—In this section, the term ‘personal ‘‘(A) I responsibility education program’ means a program that is designed to educate adolescents on— ‘‘(i) both abstinence and contraception for the pre- vention of pregnancy and sexually transmitted infec- tions, including HIV/AIDS, consistent with the re- quirements of subparagraph (B); and ‘‘(ii) at least 3 of the adulthood preparation sub- jects described in subparagraph (C). EQUIREMENTS .—The requirements of this sub- ‘‘(B) R paragraph are the following: ‘‘(i) The program replicates evidence-based effec- tive programs or substantially incorporates elements of effective programs that have been proven on the basis of rigorous scientific research to change behav- ior, which means delaying sexual activity, increasing condom or contraceptive use for sexually active youth, or reducing pregnancy among youth. ‘‘(ii) The program is medically-accurate and com- plete. ‘‘(iii) The program includes activities to educate youth who are sexually active regarding responsible sexual behavior with respect to both abstinence and the use of contraception. ‘‘(iv) The program places substantial emphasis on both abstinence and contraception for the prevention of pregnancy among youth and sexually transmitted infections. ‘‘(v) The program provides age-appropriate infor- mation and activities. ‘‘(vi) The information and activities carried out under the program are provided in the cultural con- text that is most appropriate for individuals in the particular population group to which they are directed. ‘‘(C) A DULTHOOD PREPARATION SUBJECTS .—The adult- hood preparation subjects described in this subparagraph are the following: ‘‘(i) Healthy relationships, including marriage and family interactions. ø Replaced by section 10201(h) ¿ ‘‘(ii) Adolescent development, such as the develop- ment of healthy attitudes and values about adolescent growth and development, body image, racial and eth- nic diversity, and other related subjects. ‘‘(iii) Financial literacy. ‘‘(iv) Parent-child communication. ‘‘(v) Educational and career success, such as devel- oping skills for employment preparation, job seeking, independent living, financial self-sufficiency, and workplace productivity. ‘‘(vi) Healthy life skills, such as goal-setting, deci- sion making, negotiation, communication and inter- personal skills, and stress management. ‘‘(c) R ESERVATIONS OF F UNDS .— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00261 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

281 262 Sec. 2953 513 SSA PPACA (Consolidated) \ RANTS TO IMPLEMENT INNOVATIVE STRATEGIES .— ‘‘(1) G From the amount appropriated under subsection (f) for the fis- cal year, the Secretary shall reserve $10,000,000 of such amount for purposes of awarding grants to entities to imple- ment innovative youth pregnancy prevention strategies and target services to high-risk, vulnerable, and culturally under- represented youth populations, including youth in foster care, homeless youth, youth with HIV/AIDS, pregnant women who are under 21 years of age and their partners, mothers who are under 21 years of age and their partners, and youth residing in areas with high birth rates for youth. An entity awarded a grant under this paragraph shall agree to participate in a rig- orous Federal evaluation of the activities carried out with grant funds. ‘‘(2) O THER .—From the amount appro- RESERVATIONS priated under subsection (f) for the fiscal year that remains after the application of paragraph (1), the Secretary shall re- serve the following amounts: ‘‘(A) G - RANTS FOR INDIAN TRIBES OR TRIBAL ORGANIZA TIONS .—The Secretary shall reserve 5 percent of such re- mainder for purposes of awarding grants to Indian tribes and tribal organizations in such manner, and subject to such requirements, as the Secretary, in consultation with Indian tribes and tribal organizations, determines appro- priate. .— ECRETARIAL RESPONSIBILITIES ‘‘(B) S ‘‘(i) R .—The Secretary shall ESERVATION OF FUNDS reserve 10 percent of such remainder for expenditures by the Secretary for the activities described in clauses (ii) and (iii). ‘‘(ii) P ROGRAM SUPPORT .—The Secretary shall pro- vide, directly or through a competitive grant process, research, training and technical assistance, including dissemination of research and information regarding effective and promising practices, providing consulta- tion and resources on a broad array of teen pregnancy prevention strategies, including abstinence and contra- ception, and developing resources and materials to support the activities of recipients of grants and other State, tribal, and community organizations working to reduce teen pregnancy. In carrying out such functions, the Secretary shall collaborate with a variety of enti- ties that have expertise in the prevention of teen preg- nancy, HIV and sexually transmitted infections, healthy relationships, financial literacy, and other top- ics addressed through the personal responsibility edu- cation programs. ‘‘(iii) E VALUATION .—The Secretary shall evaluate the programs and activities carried out with funds made available through allotments or grants under this section. ‘‘(d) A DMINISTRATION .— N GENERAL .—The Secretary shall administer this sec- ‘‘(1) I tion through the Assistant Secretary for the Administration for June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00262 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

282 263 Sec. 2954 PPACA (Consolidated) Children and Families within the Department of Health and Human Services. .— ‘‘(2) A PPLICATION OF OTHER PROVISIONS OF TITLE .—Except as provided in subpara- N GENERAL ‘‘(A) I graph (B), the other provisions of this title shall not apply to allotments or grants made under this section. .—The following provisions of this ‘‘(B) E XCEPTIONS title shall apply to allotments and grants made under this section to the same extent and in the same manner as such provisions apply to allotments made under section 502(c): ‘‘(i) Section 504(b)(6) (relating to prohibition on payments to excluded individuals and entities). ‘‘(ii) Section 504(c) (relating to the use of funds for the purchase of technical assistance). ‘‘(iii) Section 504(d) (relating to a limitation on ad- ministrative expenditures). ‘‘(iv) Section 506 (relating to reports and audits), but only to the extent determined by the Secretary to be appropriate for grants made under this section. ‘‘(v) Section 507 (relating to penalties for false statements). ‘‘(vi) Section 508 (relating to nondiscrimination). EFINITIONS .—In this section: ‘‘(e) D ‘‘(1) A GE - APPROPRIATE .—The term ‘age-appropriate’, with respect to the information in pregnancy prevention, means top- ics, messages, and teaching methods suitable to particular ages or age groups of children and adolescents, based on developing cognitive, emotional, and behavioral capacity typical for the age or age group. ‘‘(2) M EDICALLY ACCURATE AND COMPLETE .—The term ‘medically accurate and complete’ means verified or supported by the weight of research conducted in compliance with accept- ed scientific methods and— ‘‘(A) published in peer-reviewed journals, where appli- cable; or ‘‘(B) comprising information that leading professional organizations and agencies with relevant expertise in the field recognize as accurate, objective, and complete. .—The terms ‘In- NDIAN TRIBES ; TRIBAL ORGANIZATIONS ‘‘(3) I dian tribe’ and ‘Tribal organization’ have the meanings given such terms in section 4 of the Indian Health Care Improve- ment Act (25 U.S.C. 1603)). ‘‘(4) Y OUTH .—The term ‘youth’ means an individual who has attained age 10 but has not attained age 20. ‘‘(f) A PPROPRIATION .—For the purpose of carrying out this sec- tion, there is appropriated, out of any money in the Treasury not otherwise appropriated, $75,000,000 for each of fiscal years 2010 through 2014. Amounts appropriated under this subsection shall remain available until expended.’’. SEC. 2954. RESTORATION OF FUNDING FOR ABSTINENCE EDUCATION. Section 510 of the Social Security Act (42 U.S.C. 710) is amended— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00263 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

283 264 Sec. 2955 PPACA (Consolidated) (1) in subsection (a), by striking ‘‘fiscal year 1998 and each subsequent fiscal year’’ and inserting ‘‘each of fiscal years 2010 through 2014’’; and (2) in subsection (d)— (A) in the first sentence, by striking ‘‘1998 through 2003’’ and inserting ‘‘2010 through 2014’’; and (B) in the second sentence, by inserting ‘‘(except that such appropriation shall be made on the date of enactment of the Patient Protection and Affordable Care Act in the case of fiscal year 2010)’’ before the period. SEC. 2955. INCLUSION OF INFORMATION ABOUT THE IMPORTANCE OF HAVING A HEALTH CARE POWER OF ATTORNEY IN TRAN- SITION PLANNING FOR CHILDREN AGING OUT OF FOSTER CARE AND INDEPENDENT LIVING PROGRAMS. RANSITION P LANNING (a) T .—Section 475(5)(H) of the Social Se- curity Act (42 U.S.C. 675(5)(H)) is amended by inserting ‘‘includes information about the importance of designating another individual to make health care treatment decisions on behalf of the child if the child becomes unable to participate in such decisions and the child does not have, or does not want, a relative who would other- wise be authorized under State law to make such decisions, and provides the child with the option to execute a health care power of attorney, health care proxy, or other similar document recog- nized under State law,’’ after ‘‘employment services,’’. (b) I NDEPENDENT L IVING E DUCATION .—Section 477(b)(3) of such Act (42 U.S.C. 677(b)(3)) is amended by adding at the end the following: ‘‘(K) A certification by the chief executive officer of the State that the State will ensure that an adolescent partici- pating in the program under this section are provided with education about the importance of designating another in- dividual to make health care treatment decisions on behalf of the adolescent if the adolescent becomes unable to par- ticipate in such decisions and the adolescent does not have, or does not want, a relative who would otherwise be au- thorized under State law to make such decisions, whether a health care power of attorney, health care proxy, or other similar document is recognized under State law, and how to execute such a document if the adolescent wants to do so.’’. (c) H EALTH O VERSIGHT AND C OORDINATION P LAN .—Section 422(b)(15)(A) of such Act (42 U.S.C. 622(b)(15)(A)) is amended— (1) in clause (v), by striking ‘‘and’’ at the end; and (2) by adding at the end the following: ‘‘(vii) steps to ensure that the components of the transition plan development process required under section 475(5)(H) that relate to the health care needs of children aging out of foster care, including the re- quirements to include options for health insurance, in- formation about a health care power of attorney, health care proxy, or other similar document recog- nized under State law, and to provide the child with the option to execute such a document, are met; and’’. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00264 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

284 265 PPACA (Consolidated) Sec. 2955 (d) E FFECTIVE D ATE .—The amendments made by this section take effect on October 1, 2010. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00265 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

285 266 Sec. 3001 PPACA (Consolidated) TITLE III—IMPROVING THE QUALITY AND EFFICIENCY OF HEALTH CARE Subtitle A—Transforming the Health Care Delivery System PART 1—LINKING PAYMENT TO QUALITY OUTCOMES UNDER THE MEDICARE PROGRAM SEC. 3001. HOSPITAL VALUE-BASED PURCHASING PROGRAM. (a) P ROGRAM .— (1) I N GENERAL .—Section 1886 of the Social Security Act (42 U.S.C. 1395ww), as amended by section 4102(a) of the HITECH Act (Public Law 111–5), is amended by adding at the end the following new subsection: ‘‘(o) H V ALUE OSPITAL ASED P URCHASING P ROGRAM .— -B ‘‘(1) E .— STABLISHMENT ‘‘(A) I N GENERAL .—Subject to the succeeding provisions of this subsection, the Secretary shall establish a hospital value-based purchasing program (in this subsection re- ferred to as the ‘Program’) under which value-based incen- tive payments are made in a fiscal year to hospitals that meet the performance standards under paragraph (3) for the performance period for such fiscal year (as established under paragraph (4)). ‘‘(B) P .—The ROGRAM TO BEGIN IN FISCAL YEAR 2013 Program shall apply to payments for discharges occurring on or after October 1, 2012. ‘‘(C) A PPLICABILITY OF PROGRAM TO HOSPITALS .— N GENERAL .—For purposes of this subsection, ‘‘(i) I subject to clause (ii), the term ‘hospital’ means a sub- section (d) hospital (as defined in subsection (d)(1)(B)). ‘‘(ii) E XCLUSIONS .—The term ‘hospital’ shall not in- clude, with respect to a fiscal year, a hospital— ‘‘(I) that is subject to the payment reduction under subsection (b)(3)(B)(viii)(I) for such fiscal year; ‘‘(II) for which, during the performance period for such fiscal year, the Secretary has cited defi- ciencies that pose immediate jeopardy to the health or safety of patients; ‘‘(III) for which there are not a minimum number (as determined by the Secretary) of meas- ures that apply to the hospital for the perform- ance period for such fiscal year; or ‘‘(IV) for which there are not a minimum number (as determined by the Secretary) of cases for the measures that apply to the hospital for the performance period for such fiscal year. ‘‘(iii) I NDEPENDENT ANALYSIS .—For purposes of de- termining the minimum numbers under subclauses (III) and (IV) of clause (ii), the Secretary shall have June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00266 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

286 267 Sec. 3001 PPACA (Consolidated) conducted an independent analysis of what numbers are appropriate. .—In the case of a hospital that is ‘‘(iv) E XEMPTION paid under section 1814(b)(3), the Secretary may ex- empt such hospital from the application of this sub- section if the State which is paid under such section submits an annual report to the Secretary describing how a similar program in the State for a participating hospital or hospitals achieves or surpasses the meas- ured results in terms of patient health outcomes and cost savings established under this subsection. ‘‘(2) M EASURES .— N GENERAL .—The Secretary shall select meas- ‘‘(A) I ures, other than measures of readmissions, for purposes of the Program. Such measures shall be selected from the ø measures specified under subsection (b)(3)(B)(viii). As re- vised by section 10335 ¿ ‘‘(B) R .— EQUIREMENTS OR FISCAL YEAR 2013 .—For value-based incen- ‘‘(i) F tive payments made with respect to discharges occur- ring during fiscal year 2013, the Secretary shall en- sure the following: ‘‘(I) C ONDITIONS OR PROCEDURES .—Measures are selected under subparagraph (A) that cover at least the following 5 specific conditions or proce- dures: ‘‘(aa) Acute myocardial infarction (AMI). ‘‘(bb) Heart failure. ‘‘(cc) Pneumonia. ‘‘(dd) Surgeries, as measured by the Sur- gical Care Improvement Project (formerly re- ferred to as ‘Surgical Infection Prevention’ for discharges occurring before July 2006). ‘‘(ee) Healthcare-associated infections, as measured by the prevention metrics and tar- gets established in the HHS Action Plan to Prevent Healthcare-Associated Infections (or any successor plan) of the Department of Health and Human Services. ‘‘(II) HCAHPS.—Measures selected under sub- paragraph (A) shall be related to the Hospital Consumer Assessment of Healthcare Providers and Systems survey (HCAHPS). NCLUSION OF EFFICIENCY MEASURES .—For ‘‘(ii) I value-based incentive payments made with respect to discharges occurring during fiscal year 2014 or a sub- sequent fiscal year, the Secretary shall ensure that measures selected under subparagraph (A) include ef- ficiency measures, including measures of ‘Medicare spending per beneficiary’. Such measures shall be ad- justed for factors such as age, sex, race, severity of ill- ness, and other factors that the Secretary determines appropriate. ‘‘(C) L IMITATIONS .— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00267 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

287 268 Sec. 3001 PPACA (Consolidated) IME REQUIREMENT FOR PRIOR REPORTING AND ‘‘(i) T NOTICE .—The Secretary may not select a measure under subparagraph (A) for use under the Program with respect to a performance period for a fiscal year (as established under paragraph (4)) unless such measure has been specified under subsection (b)(3)(B)(viii) and included on the Hospital Compare Internet website for at least 1 year prior to the begin- ning of such performance period. EASURE NOT APPLICABLE UNLESS HOSPITAL ‘‘(ii) M FURNISHES SERVICES APPROPRIATE TO THE MEASURE .— A measure selected under subparagraph (A) shall not apply to a hospital if such hospital does not furnish services appropriate to such measure. ‘‘(D) R .—Subclause (VI) of sub- EPLACING MEASURES section (b)(3)(B)(viii) shall apply to measures selected under subparagraph (A) in the same manner as such sub- clause applies to measures selected under such subsection. ‘‘(3) P ERFORMANCE STANDARDS .— STABLISHMENT ‘‘(A) E .—The Secretary shall establish performance standards with respect to measures selected under paragraph (2) for a performance period for a fiscal year (as established under paragraph (4)). ‘‘(B) A CHIEVEMENT AND IMPROVEMENT .—The perform- ance standards established under subparagraph (A) shall include levels of achievement and improvement. ‘‘(C) T IMING .—The Secretary shall establish and an- nounce the performance standards under subparagraph (A) not later than 60 days prior to the beginning of the per- formance period for the fiscal year involved. ‘‘(D) C .— ONSIDERATIONS IN ESTABLISHING STANDARDS In establishing performance standards with respect to measures under this paragraph, the Secretary shall take into account appropriate factors, such as— ‘‘(i) practical experience with the measures in- volved, including whether a significant proportion of hospitals failed to meet the performance standard dur- ing previous performance periods; ‘‘(ii) historical performance standards; ‘‘(iii) improvement rates; and ‘‘(iv) the opportunity for continued improvement. ERFORMANCE PERIOD .—For purposes of the Program, ‘‘(4) P the Secretary shall establish the performance period for a fiscal year. Such performance period shall begin and end prior to the beginning of such fiscal year. ‘‘(5) H OSPITAL PERFORMANCE SCORE .— ‘‘(A) I N GENERAL .—Subject to subparagraph (B), the Secretary shall develop a methodology for assessing the total performance of each hospital based on performance standards with respect to the measures selected under paragraph (2) for a performance period (as established under paragraph (4)). Using such methodology, the Sec- retary shall provide for an assessment (in this subsection June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00268 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

288 269 Sec. 3001 PPACA (Consolidated) referred to as the ‘hospital performance score’) for each hospital for each performance period. .— PPLICATION ‘‘(B) A .—The Secretary PPROPRIATE DISTRIBUTION ‘‘(i) A shall ensure that the application of the methodology developed under subparagraph (A) results in an appro- priate distribution of value-based incentive payments under paragraph (6) among hospitals achieving dif- ferent levels of hospital performance scores, with hos- pitals achieving the highest hospital performance scores receiving the largest value-based incentive pay- ments. IGHER OF ACHIEVEMENT OR IMPROVEMENT .— ‘‘(ii) H The methodology developed under subparagraph (A) shall provide that the hospital performance score is determined using the higher of its achievement or im- provement score for each measure. ‘‘(iii) W .—The methodology developed under EIGHTS subparagraph (A) shall provide for the assignment of weights for categories of measures as the Secretary de- termines appropriate. ‘‘(iv) N .—The O MINIMUM PERFORMANCE STANDARD Secretary shall not set a minimum performance stand- ard in determining the hospital performance score for any hospital. ‘‘(v) R EFLECTION OF MEASURES APPLICABLE TO THE HOSPITAL .—The hospital performance score for a hos- pital shall reflect the measures that apply to the hos- pital. ‘‘(6) C - BASED INCENTIVE PAYMENTS .— ALCULATION OF VALUE N GENERAL ‘‘(A) I .—In the case of a hospital that the Secretary determines meets (or exceeds) the performance standards under paragraph (3) for the performance period for a fiscal year (as established under paragraph (4)), the Secretary shall increase the base operating DRG payment amount (as defined in paragraph (7)(D)), as determined after application of paragraph (7)(B)(i), for a hospital for each discharge occurring in such fiscal year by the value- based incentive payment amount. .—The ALUE - BASED INCENTIVE PAYMENT AMOUNT ‘‘(B) V value-based incentive payment amount for each discharge of a hospital in a fiscal year shall be equal to the product of— ‘‘(i) the base operating DRG payment amount (as defined in paragraph (7)(D)) for the discharge for the hospital for such fiscal year; and ‘‘(ii) the value-based incentive payment percentage specified under subparagraph (C) for the hospital for such fiscal year. ‘‘(C) V ALUE - BASED INCENTIVE PAYMENT PERCENTAGE .— ‘‘(i) I N GENERAL .—The Secretary shall specify a value-based incentive payment percentage for a hos- pital for a fiscal year. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00269 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

289 270 Sec. 3001 PPACA (Consolidated) EQUIREMENTS ‘‘(ii) R .—In specifying the value- based incentive payment percentage for each hospital for a fiscal year under clause (i), the Secretary shall ensure that— ‘‘(I) such percentage is based on the hospital performance score of the hospital under paragraph (5); and ‘‘(II) the total amount of value-based incentive payments under this paragraph to all hospitals in such fiscal year is equal to the total amount avail- able for value-based incentive payments for such fiscal year under paragraph (7)(A), as estimated by the Secretary. UNDING FOR VALUE - BASED INCENTIVE PAYMENTS .— ‘‘(7) F MOUNT ‘‘(A) A .—The total amount available for value- based incentive payments under paragraph (6) for all hos- pitals for a fiscal year shall be equal to the total amount of reduced payments for all hospitals under subparagraph (B) for such fiscal year, as estimated by the Secretary. ‘‘(B) A DJUSTMENT TO PAYMENTS .— ‘‘(i) I N GENERAL .—The Secretary shall reduce the base operating DRG payment amount (as defined in subparagraph (D)) for a hospital for each discharge in a fiscal year (beginning with fiscal year 2013) by an amount equal to the applicable percent (as defined in subparagraph (C)) of the base operating DRG payment amount for the discharge for the hospital for such fis- cal year. The Secretary shall make such reductions for all hospitals in the fiscal year involved, regardless of whether or not the hospital has been determined by the Secretary to have earned a value-based incentive payment under paragraph (6) for such fiscal year. ‘‘(ii) N O EFFECT ON OTHER PAYMENTS .—Payments described in items (aa) and (bb) of subparagraph (D)(i)(II) for a hospital shall be determined as if this subsection had not been enacted. PPLICABLE PERCENT DEFINED .—For purposes of ‘‘(C) A subparagraph (B), the term ‘applicable percent’ means— ‘‘(i) with respect to fiscal year 2013, 1.0 percent; ‘‘(ii) with respect to fiscal year 2014, 1.25 percent; ‘‘(iii) with respect to fiscal year 2015, 1.5 percent; ‘‘(iv) with respect to fiscal year 2016, 1.75 percent; and ‘‘(v) with respect to fiscal year 2017 and suc- ceeding fiscal years, 2 percent. ‘‘(D) B - ASE OPERATING DRG PAYMENT AMOUNT DE .— FINED N GENERAL .—Except as provided in clause (ii), ‘‘(i) I in this subsection, the term ‘base operating DRG pay- ment amount’ means, with respect to a hospital for a fiscal year— ‘‘(I) the payment amount that would otherwise be made under subsection (d) (determined without June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00270 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

290 271 Sec. 3001 PPACA (Consolidated) regard to subsection (q)) for a discharge if this subsection did not apply; reduced by ‘‘(II) any portion of such payment amount that is attributable to— ‘‘(aa) payments under paragraphs (5)(A), (5)(B), (5)(F), and (12) of subsection (d); and ‘‘(bb) such other payments under sub- section (d) determined appropriate by the Sec- retary. ‘‘(ii) S PECIAL RULES FOR CERTAIN HOSPITALS .— ‘‘(I) S OLE COMMUNITY HOSPITALS AND MEDI - - DEPENDENT , CARE .—In SMALL RURAL HOSPITALS the case of a medicare-dependent, small rural hos- pital (with respect to discharges occurring during fiscal year 2012 and 2013) or a sole community hospital, in applying subparagraph (A)(i), the pay- ment amount that would otherwise be made under subsection (d) shall be determined without regard to subparagraphs (I) and (L) of subsection (b)(3) and subparagraphs (D) and (G) of subsection (d)(5). ‘‘(II) H OSPITALS PAID UNDER SECTION 1814 .—In the case of a hospital that is paid under section 1814(b)(3), the term ‘base operating DRG payment amount’ means the payment amount under such section. .— NNOUNCEMENT OF NET RESULT OF ADJUSTMENTS ‘‘(8) A Under the Program, the Secretary shall, not later than 60 days prior to the fiscal year involved, inform each hospital of the ad- justments to payments to the hospital for discharges occurring in such fiscal year under paragraphs (6) and (7)(B)(i). ‘‘(9) N O EFFECT IN SUBSEQUENT FISCAL YEARS .—The value- based incentive payment under paragraph (6) and the payment reduction under paragraph (7)(B)(i) shall each apply only with respect to the fiscal year involved, and the Secretary shall not take into account such value-based incentive payment or pay- ment reduction in making payments to a hospital under this section in a subsequent fiscal year. ‘‘(10) P UBLIC REPORTING .— ‘‘(A) H OSPITAL SPECIFIC INFORMATION .— ‘‘(i) I N GENERAL .—The Secretary shall make infor- mation available to the public regarding the perform- ance of individual hospitals under the Program, in- cluding— ‘‘(I) the performance of the hospital with re- spect to each measure that applies to the hospital; ‘‘(II) the performance of the hospital with re- spect to each condition or procedure; and ‘‘(III) the hospital performance score assessing the total performance of the hospital. ‘‘(ii) O PPORTUNITY TO REVIEW AND SUBMIT CORREC - TIONS .—The Secretary shall ensure that a hospital has the opportunity to review, and submit corrections for, the information to be made public with respect to the June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00271 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

291 272 Sec. 3001 PPACA (Consolidated) hospital under clause (i) prior to such information being made public. .—Such information shall be posted ‘‘(iii) W EBSITE on the Hospital Compare Internet website in an easily understandable format. ‘‘(B) A GGREGATE INFORMATION .—The Secretary shall periodically post on the Hospital Compare Internet website aggregate information on the Program, including— ‘‘(i) the number of hospitals receiving value-based incentive payments under paragraph (6) and the range and total amount of such value-based incentive pay- ments; and ‘‘(ii) the number of hospitals receiving less than the maximum value-based incentive payment avail- able to the hospital for the fiscal year involved and the range and amount of such payments. ‘‘(11) I MPLEMENTATION .— ‘‘(A) A .—The Secretary shall establish a process PPEALS by which hospitals may appeal the calculation of a hos- pital’s performance assessment with respect to the per- formance standards established under paragraph (3)(A) and the hospital performance score under paragraph (5). The Secretary shall ensure that such process provides for resolution of such appeals in a timely manner. .—Except as provided in IMITATION ON REVIEW ‘‘(B) L subparagraph (A), there shall be no administrative or judi- cial review under section 1869, section 1878, or otherwise of the following: ‘‘(i) The methodology used to determine the amount of the value-based incentive payment under paragraph (6) and the determination of such amount. ‘‘(ii) The determination of the amount of funding available for such value-based incentive payments under paragraph (7)(A) and the payment reduction under paragraph (7)(B)(i). ‘‘(iii) The establishment of the performance stand- ards under paragraph (3) and the performance period under paragraph (4). ‘‘(iv) The measures specified under subsection (b)(3)(B)(viii) and the measures selected under para- graph (2). ‘‘(v) The methodology developed under paragraph (5) that is used to calculate hospital performance scores and the calculation of such scores. ‘‘(vi) The validation methodology specified in sub- section (b)(3)(B)(viii)(XI). ONSULTATION WITH SMALL HOSPITALS .—The Sec- ‘‘(C) C retary shall consult with small rural and urban hospitals on the application of the Program to such hospitals. ‘‘(12) P ROMULGATION OF REGULATIONS .—The Secretary shall promulgate regulations to carry out the Program, includ- ing the selection of measures under paragraph (2), the method- ology developed under paragraph (5) that is used to calculate hospital performance scores, and the methodology used to de- June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00272 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

292 273 Sec. 3001 PPACA (Consolidated) termine the amount of value-based incentive payments under paragraph (6).’’. - (2) A MENDMENTS FOR REPORTING OF HOSPITAL QUALITY IN .—Section 1886(b)(3)(B)(viii) of the Social Security FORMATION Act (42 U.S.C. 1395ww(b)(3)(B)(viii)) is amended— (A) in subclause (II), by adding at the end the fol- lowing sentence: ‘‘The Secretary may require hospitals to submit data on measures that are not used for the deter- mination of value-based incentive payments under sub- section (o).’’; (B) in subclause (V), by striking ‘‘beginning with fiscal year 2008’’ and inserting ‘‘for fiscal years 2008 through 2012’’; (C) in subclause (VII), in the first sentence, by striking ‘‘data submitted’’ and inserting ‘‘information regarding measures submitted’’; and (D) by adding at the end the following new subclauses: ‘‘(VIII) Effective for payments beginning with fiscal year 2013, with respect to quality measures for outcomes of care, the Sec- retary shall provide for such risk adjustment as the Secretary de- termines to be appropriate to maintain incentives for hospitals to treat patients with severe illnesses or conditions. ‘‘(IX)(aa) Subject to item (bb), effective for payments beginning with fiscal year 2013, each measure specified by the Secretary under this clause shall be endorsed by the entity with a contract under section 1890(a). ‘‘(bb) In the case of a specified area or medical topic deter- mined appropriate by the Secretary for which a feasible and prac- tical measure has not been endorsed by the entity with a contract under section 1890(a), the Secretary may specify a measure that is not so endorsed as long as due consideration is given to measures that have been endorsed or adopted by a consensus organization identified by the Secretary. ‘‘(X) To the extent practicable, the Secretary shall, with input from consensus organizations and other stakeholders, take steps to ensure that the measures specified by the Secretary under this clause are coordinated and aligned with quality measures applica- ble to— ‘‘(aa) physicians under section 1848(k); and ‘‘(bb) other providers of services and suppliers under this title. ‘‘(XI) The Secretary shall establish a process to validate meas- ures specified under this clause as appropriate. Such process shall include the auditing of a number of randomly selected hospitals sufficient to ensure validity of the reporting program under this clause as a whole and shall provide a hospital with an opportunity to appeal the validation of measures reported by such hospital.’’. (3) W EBSITE IMPROVEMENTS .—Section 1886(b)(3)(B) of the Social Security Act (42 U.S.C. 1395ww(b)(3)(B)), as amended by section 4102(b) of the HITECH Act (Public Law 111–5), is amended by adding at the end the following new clause: ‘‘(x)(I) The Secretary shall develop standard Internet website reports tailored to meet the needs of various stakeholders such as hospitals, patients, researchers, and policymakers. The Secretary June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00273 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

293 274 Sec. 3001 PPACA (Consolidated) shall seek input from such stakeholders in determining the type of information that is useful and the formats that best facilitate the use of the information. ‘‘(II) The Secretary shall modify the Hospital Compare Internet website to make the use and navigation of that website readily available to individuals accessing it.’’. STUDY AND REPORT .— (4) GAO TUDY .—The Comptroller General of the United (A) S States shall conduct a study on the performance of the hospital value-based purchasing program established under section 1886(o) of the Social Security Act, as added by paragraph (1). Such study shall include an analysis of the impact of such program on— (i) the quality of care furnished to Medicare bene- ficiaries, including diverse Medicare beneficiary popu- lations (such as diverse in terms of race, ethnicity, and socioeconomic status); (ii) expenditures under the Medicare program, in- cluding any reduced expenditures under Part A of title XVIII of such Act that are attributable to the improve- ment in the delivery of inpatient hospital services by reason of such hospital value-based purchasing pro- gram; (iii) the quality performance among safety net hos- pitals and any barriers such hospitals face in meeting the performance standards applicable under such hos- pital value-based purchasing program; and (iv) the quality performance among small rural and small urban hospitals and any barriers such hos- pitals face in meeting the performance standards ap- plicable under such hospital value-based purchasing program. EPORTS .— (B) R (i) I NTERIM REPORT .—Not later than October 1, 2015, the Comptroller General of the United States shall submit to Congress an interim report containing the results of the study conducted under subparagraph (A), together with recommendations for such legisla- tion and administrative action as the Comptroller General determines appropriate. INAL REPORT .—Not later than July 1, 2017, (ii) F the Comptroller General of the United States shall submit to Congress a report containing the results of the study conducted under subparagraph (A), together with recommendations for such legislation and admin- istrative action as the Comptroller General determines appropriate. STUDY AND REPORT .— (5) HHS (A) S TUDY .—The Secretary of Health and Human Services shall conduct a study on the performance of the hospital value-based purchasing program established under section 1886(o) of the Social Security Act, as added by paragraph (1). Such study shall include an analysis— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00274 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

294 275 Sec. 3001 PPACA (Consolidated) (i) of ways to improve the hospital value-based purchasing program and ways to address any unin- tended consequences that may occur as a result of such program; (ii) of whether the hospital value-based pur- chasing program resulted in lower spending under the Medicare program under title XVIII of such Act or other financial savings to hospitals; (iii) the appropriateness of the Medicare program sharing in any savings generated through the hospital value-based purchasing program; and (iv) any other area determined appropriate by the Secretary. (B) R EPORT .—Not later than January 1, 2016, the Sec- retary of Health and Human Services shall submit to Con- gress a report containing the results of the study con- ducted under subparagraph (A), together with rec- ommendations for such legislation and administrative ac- tion as the Secretary determines appropriate. (b) V .— -B P URCHASING D EMONSTRATION P ALUE ASED ROGRAMS (1) V ALUE - BASED PURCHASING DEMONSTRATION PROGRAM FOR INPATIENT CRITICAL ACCESS HOSPITALS .— (A) E STABLISHMENT .— N GENERAL .—Not later than 2 years after the (i) I date of enactment of this Act, the Secretary of Health and Human Services (in this subsection referred to as the ‘‘Secretary’’) shall establish a demonstration pro- gram under which the Secretary establishes a value- based purchasing program under the Medicare pro- gram under title XVIII of the Social Security Act for critical access hospitals (as defined in paragraph (1) of section 1861(mm) of such Act (42 U.S.C. 1395x(mm))) with respect to inpatient critical access hospital serv- ices (as defined in paragraph (2) of such section) in order to test innovative methods of measuring and re- warding quality and efficient health care furnished by such hospitals. (ii) D URATION .—The demonstration program under this paragraph shall be conducted for a 3-year period. (iii) S ITES .—The Secretary shall conduct the dem- onstration program under this paragraph at an appro- priate number (as determined by the Secretary) of crit- ical access hospitals. The Secretary shall ensure that such hospitals are representative of the spectrum of such hospitals that participate in the Medicare pro- gram. (B) W AIVER AUTHORITY .—The Secretary may waive such requirements of titles XI and XVIII of the Social Se- curity Act as may be necessary to carry out the demonstra- tion program under this paragraph. (C) B UDGET NEUTRALITY REQUIREMENT .—In conducting the demonstration program under this section, the Sec- retary shall ensure that the aggregate payments made by June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00275 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

295 276 Sec. 3001 PPACA (Consolidated) the Secretary do not exceed the amount which the Sec- retary would have paid if the demonstration program under this section was not implemented. EPORT .—Not later than 18 months after the com- (D) R pletion of the demonstration program under this para- graph, the Secretary shall submit to Congress a report on the demonstration program together with— (i) recommendations on the establishment of a permanent value-based purchasing program under the Medicare program for critical access hospitals with re- spect to inpatient critical access hospital services; and (ii) recommendations for such other legislation and administrative action as the Secretary determines appropriate. ALUE - BASED PURCHASING DEMONSTRATION PROGRAM (2) V - - FOR HOSPITALS EXCLUDED FROM HOSPITAL VALUE BASED PUR CHASING PROGRAM AS A RESULT OF INSUFFICIENT NUMBERS OF MEASURES AND CASES .— (A) E .— STABLISHMENT (i) I N GENERAL .—Not later than 2 years after the date of enactment of this Act, the Secretary shall es- tablish a demonstration program under which the Sec- retary establishes a value-based purchasing program under the Medicare program under title XVIII of the Social Security Act for applicable hospitals (as defined in clause (ii)) with respect to inpatient hospital serv- ices (as defined in section 1861(b) of the Social Secu- rity Act (42 U.S.C. 1395x(b))) in order to test innova- tive methods of measuring and rewarding quality and efficient health care furnished by such hospitals. (ii) A PPLICABLE HOSPITAL DEFINED .—For purposes of this paragraph, the term ‘‘applicable hospital’’ means a hospital described in subclause (III) or (IV) of section 1886(o)(1)(C)(ii) of the Social Security Act, as added by subsection (a)(1). URATION .—The demonstration program (iii) D under this paragraph shall be conducted for a 3-year period. .—The Secretary shall conduct the dem- ITES (iv) S onstration program under this paragraph at an appro- priate number (as determined by the Secretary) of ap- plicable hospitals. The Secretary shall ensure that such hospitals are representative of the spectrum of such hospitals that participate in the Medicare pro- gram. (B) W AIVER AUTHORITY .—The Secretary may waive such requirements of titles XI and XVIII of the Social Se- curity Act as may be necessary to carry out the demonstra- tion program under this paragraph. (C) B UDGET NEUTRALITY REQUIREMENT .—In conducting the demonstration program under this section, the Sec- retary shall ensure that the aggregate payments made by the Secretary do not exceed the amount which the Sec- June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00276 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

296 277 Sec. 3002 PPACA (Consolidated) retary would have paid if the demonstration program under this section was not implemented. .—Not later than 18 months after the com- (D) R EPORT pletion of the demonstration program under this para- graph, the Secretary shall submit to Congress a report on the demonstration program together with— (i) recommendations on the establishment of a permanent value-based purchasing program under the Medicare program for applicable hospitals with respect to inpatient hospital services; and (ii) recommendations for such other legislation and administrative action as the Secretary determines appropriate. SEC. 3002. IMPROVEMENTS TO THE PHYSICIAN QUALITY REPORTING SYSTEM. XTENSION (a) E .—Section 1848(m) of the Social Security Act (42 U.S.C. 1395w–4(m)) is amended— (1) in paragraph (1)— (A) in subparagraph (A), in the matter preceding clause (i), by striking ‘‘2010’’ and inserting ‘‘2014’’; and (B) in subparagraph (B)— (i) in clause (i), by striking ‘‘and’’ at the end; (ii) in clause (ii), by striking the period at the end and inserting a semicolon; and (iii) by adding at the end the following new clauses: ‘‘(iii) for 2011, 1.0 percent; and ‘‘(iv) for 2012, 2013, and 2014, 0.5 percent.’’; (2) in paragraph (3)— (A) in subparagraph (A), in the matter preceding clause (i), by inserting ‘‘(or, for purposes of subsection (a)(8), for the quality reporting period for the year)’’ after ‘‘reporting period’’; and (B) in subparagraph (C)(i), by inserting ‘‘, or, for pur- poses of subsection (a)(8), for a quality reporting period for the year’’ after ‘‘(a)(5), for a reporting period for a year’’; (3) in paragraph (5)(E)(iv), by striking ‘‘subsection (a)(5)(A)’’ and inserting ‘‘paragraphs (5)(A) and (8)(A) of sub- section (a)’’; and (4) in paragraph (6)(C)— (A) in clause (i)(II), by striking ‘‘, 2009, 2010, and 2011’’ and inserting ‘‘and subsequent years’’; and (B) in clause (iii)— (i) by inserting ‘‘(a)(8)’’ after ‘‘(a)(5)’’; and (ii) by striking ‘‘under subparagraph (D)(iii) of such subsection’’ and inserting ‘‘under subsection (a)(5)(D)(iii) or the quality reporting period under sub- section (a)(8)(D)(iii), respectively’’. (b) I NCENTIVE P AYMENT A DJUSTMENT FOR Q UALITY R EPORT - ING .—Section 1848(a) of the Social Security Act (42 U.S.C. 1395w– 4(a)) is amended by adding at the end the following new para- graph: ‘‘(8) I NCENTIVES FOR QUALITY REPORTING .— ‘‘(A) A DJUSTMENT .— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00277 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

297 278 Sec. 3002 PPACA (Consolidated) N GENERAL .—With respect to covered profes- ‘‘(i) I sional services furnished by an eligible professional during 2015 or any subsequent year, if the eligible professional does not satisfactorily submit data on quality measures for covered professional services for the quality reporting period for the year (as deter- mined under subsection (m)(3)(A)), the fee schedule amount for such services furnished by such profes- sional during the year (including the fee schedule amount for purposes of determining a payment based on such amount) shall be equal to the applicable per- cent of the fee schedule amount that would otherwise apply to such services under this subsection (deter- mined after application of paragraphs (3), (5), and (7), but without regard to this paragraph). ‘‘(ii) A PPLICABLE PERCENT .—For purposes of clause (i), the term ‘applicable percent’ means— ‘‘(I) for 2015, 98.5 percent; and ‘‘(II) for 2016 and each subsequent year, 98 percent. ‘‘(B) A .— PPLICATION ‘‘(i) P HYSICIAN REPORTING SYSTEM RULES .—Para- graphs (5), (6), and (8) of subsection (k) shall apply for purposes of this paragraph in the same manner as they apply for purposes of such subsection. NCENTIVE PAYMENT VALIDATION RULES .— ‘‘(ii) I Clauses (ii) and (iii) of subsection (m)(5)(D) shall apply for purposes of this paragraph in a similar manner as they apply for purposes of such subsection. ‘‘(C) D EFINITIONS .—For purposes of this paragraph: ‘‘(i) E LIGIBLE PROFESSIONAL ; COVERED PROFES - SIONAL SERVICES .—The terms ‘eligible professional’ and ‘covered professional services’ have the meanings given such terms in subsection (k)(3). ‘‘(ii) P HYSICIAN REPORTING SYSTEM .—The term ‘physician reporting system’ means the system estab- lished under subsection (k). UALITY REPORTING PERIOD .—The term ‘qual- ‘‘(iii) Q ity reporting period’ means, with respect to a year, a period specified by the Secretary.’’. (c) M AINTENANCE OF C ERTIFICATION P ROGRAMS .— (1) I N GENERAL .—Section 1848(k)(4) of the Social Security Act (42 U.S.C. 1395w–4(k)(4)) is amended by inserting ‘‘or through a Maintenance of Certification program operated by a specialty body of the American Board of Medical Specialties that meets the criteria for such a registry’’ after ‘‘Database)’’. FFECTIVE DATE .—The amendment made by paragraph (2) E (1) shall apply for years after 2010. (3) A UTHORITY .—For years after 2014, if the Secretary of Health and Human Services determines it to be appropriate, the Secretary may incorporate participation in a Maintenance of Certification Program and successful completion of a quali- fied Maintenance of Certification Program practice assessment into the composite of measures of quality of care furnished pur- June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00278 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

298 279 Sec. 3003 PPACA (Consolidated) suant to the physician fee schedule payment modifier, as de- scribed in section 1848(p)(2) of the Social Security Act (42 As added by section 10327(b) U.S.C. 1395w–4(p)(2)). ø ¿ P HYSICIAN Q UALITY R NTEGRATION OF EHR EPORTING AND (d) I R EPORTING .—Section 1848(m) of the Social Security Act (42 U.S.C. 1395w–4(m)) is amended by adding at the end the following new paragraph: NTEGRATION OF PHYSICIAN QUALITY REPORTING AND ‘‘(7) I EHR REPORTING .—Not later than January 1, 2012, the Sec- retary shall develop a plan to integrate reporting on quality measures under this subsection with reporting requirements under subsection (o) relating to the meaningful use of elec- tronic health records. Such integration shall consist of the fol- lowing: ‘‘(A) The selection of measures, the reporting of which would both demonstrate— ‘‘(i) meaningful use of an electronic health record for purposes of subsection (o); and ‘‘(ii) quality of care furnished to an individual. ‘‘(B) Such other activities as specified by the Sec- retary.’’. ø Section 10327(a), p. 871, also added a paragraph (7) to section 1848(m) adding an additional incentive payment relating to physi- cian quality reporting ¿ EEDBACK .—Section 1848(m)(5) of the Social Security Act (e) F (42 U.S.C. 1395w–4(m)(5)) is amended by adding at the end the fol- lowing new subparagraph: ‘‘(H) F .—The Secretary shall provide timely EEDBACK feedback to eligible professionals on the performance of the eligible professional with respect to satisfactorily submit- ting data on quality measures under this subsection.’’. PPEALS .—Such section is further amended— (f) A (1) in subparagraph (E), by striking ‘‘There shall’’ and in- serting ‘‘Except as provided in subparagraph (I), there shall’’; and (2) by adding at the end the following new subparagraph: NFORMAL APPEALS PROCESS .—The Secretary shall, ‘‘(I) I by not later than January 1, 2011, establish and have in place an informal process for eligible professionals to seek a review of the determination that an eligible professional did not satisfactorily submit data on quality measures under this subsection.’’. ø Section 10331, p. 875, also provides for public reporting of per- formance information for eligible professionals who participate in the Physician Quality Reporting Initiative ¿ SEC. 3003. IMPROVEMENTS TO THE PHYSICIAN FEEDBACK PROGRAM. (a) I N ENERAL .—Section 1848(n) of the Social Security Act (42 G U.S.C. 1395w–4(n)) is amended— (1) in paragraph (1)— (A) in subparagraph (A)— (i) by striking ‘‘ .—The Secretary’’ and in- GENERAL serting ‘‘ GENERAL .— ‘‘(i) E STABLISHMENT .—The Secretary’’; June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00279 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

299 280 Sec. 3003 PPACA (Consolidated) (ii) in clause (i), as added by clause (i), by striking ‘‘the ‘Program’)’’ and all that follows through the pe- riod at the end of the second sentence and inserting ‘‘the ‘Program’).’’; and (iii) by adding at the end the following new clauses: ‘‘(ii) R EPORTS ON RESOURCES .—The Secretary shall use claims data under this title (and may use other data) to provide confidential reports to physicians (and, as determined appropriate by the Secretary, to groups of physicians) that measure the resources in- volved in furnishing care to individuals under this title. ‘‘(iii) I NCLUSION OF CERTAIN INFORMATION .—If de- termined appropriate by the Secretary, the Secretary may include information on the quality of care fur- nished to individuals under this title by the physician (or group of physicians) in such reports.’’; and (B) in subparagraph (B), by striking ‘‘subparagraph (A)’’ and inserting ‘‘subparagraph (A)(ii)’’; (2) in paragraph (4)— (A) in the heading, by inserting ‘‘ INITIAL ’’ after ‘‘ FOCUS ’’; and (B) in the matter preceding subparagraph (A), by in- serting ‘‘initial’’ after ‘‘focus the’’; (3) in paragraph (6), by adding at the end the following new sentence: ‘‘For adjustments for reports on utilization under paragraph (9), see subparagraph (D) of such para- graph.’’; and (4) by adding at the end the following new paragraphs: EPORTS ON UTILIZATION .— ‘‘(9) R ‘‘(A) D EVELOPMENT OF EPISODE GROUPER .— N GENERAL ‘‘(i) I .—The Secretary shall develop an episode grouper that combines separate but clinically related items and services into an episode of care for an individual, as appropriate. ‘‘(ii) T .—The episode IMELINE FOR DEVELOPMENT grouper described in subparagraph (A) shall be devel- oped by not later than January 1, 2012. ‘‘(iii) P UBLIC AVAILABILITY .—The Secretary shall make the details of the episode grouper described in subparagraph (A) available to the public. ‘‘(iv) E NDORSEMENT .—The Secretary shall seek en- dorsement of the episode grouper described in sub- paragraph (A) by the entity with a contract under sec- tion 1890(a). EPORTS ON UTILIZATION .—Effective beginning ‘‘(B) R with 2012, the Secretary shall provide reports to physi- cians that compare, as determined appropriate by the Sec- retary, patterns of resource use of the individual physician to such patterns of other physicians. ‘‘(C) A NALYSIS OF DATA .—The Secretary shall, for pur- poses of preparing reports under this paragraph, establish methodologies as appropriate, such as to— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00280 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

300 281 Sec. 3003 PPACA (Consolidated) ‘‘(i) attribute episodes of care, in whole or in part, to physicians; ‘‘(ii) identify appropriate physicians for purposes of comparison under subparagraph (B); and ‘‘(iii) aggregate episodes of care attributed to a physician under clause (i) into a composite measure per individual. ATA ADJUSTMENT .—In preparing reports under ‘‘(D) D this paragraph, the Secretary shall make appropriate ad- justments, including adjustments— ‘‘(i) to account for differences in socioeconomic and demographic characteristics, ethnicity, and health sta- tus of individuals (such as to recognize that less healthy individuals may require more intensive inter- ventions); and ‘‘(ii) to eliminate the effect of geographic adjust- ments in payment rates (as described in subsection (e)). ‘‘(E) P UBLIC AVAILABILITY OF METHODOLOGY .—The Sec- retary shall make available to the public— ‘‘(i) the methodologies established under subpara- graph (C); ‘‘(ii) information regarding any adjustments made to data under subparagraph (D); and ‘‘(iii) aggregate reports with respect to physicians. EFINITION OF PHYSICIAN .—In this paragraph: ‘‘(F) D ‘‘(i) I N GENERAL .—The term ‘physician’ has the meaning given that term in section 1861(r)(1). ‘‘(ii) T REATMENT OF GROUPS .—Such term includes, as the Secretary determines appropriate, a group of physicians. ‘‘(G) L IMITATIONS ON REVIEW .—There shall be no ad- ministrative or judicial review under section 1869, section 1878, or otherwise of the establishment of the methodology under subparagraph (C), including the determination of an episode of care under such methodology. ‘‘(10) C OORDINATION WITH OTHER VALUE BASED PURCHASING - REFORMS .—The Secretary shall coordinate the Program with the value-based payment modifier established under subsection (p) and, as the Secretary determines appropriate, other similar provisions of this title.’’. A MENDMENT .—Section 1890(b) of the Social ONFORMING (b) C Security Act (42 U.S.C. 1395aaa(b)) is amended by adding at the end the following new paragraph: EVIEW AND ENDORSEMENT OF EPISODE GROUPER ‘‘(6) R UNDER THE PHYSICIAN FEEDBACK PROGRAM .—The entity shall provide for the review and, as appropriate, the endorsement of the episode grouper developed by the Secretary under section 1848(n)(9)(A). Such review shall be conducted on an expedited basis.’’. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00281 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

301 282 Sec. 3004 PPACA (Consolidated) SEC. 3004. QUALITY REPORTING FOR LONG-TERM CARE HOSPITALS, INPATIENT REHABILITATION HOSPITALS, AND HOSPICE PROGRAMS. - TERM C ARE H OSPITALS .—Section 1886(m) of the So- (a) L ONG cial Security Act (42 U.S.C. 1395ww(m)), as amended by section 3401(c), is amended by adding at the end the following new para- graph: ‘‘(5) Q UALITY REPORTING .— ‘‘(A) R EDUCTION IN UPDATE FOR FAILURE TO REPORT .— ‘‘(i) I .—Under the system described in N GENERAL paragraph (1), for rate year 2014 and each subsequent rate year, in the case of a long-term care hospital that does not submit data to the Secretary in accordance with subparagraph (C) with respect to such a rate year, any annual update to a standard Federal rate for discharges for the hospital during the rate year, and after application of paragraph (3), shall be reduced by 2 percentage points. PECIAL RULE .—The application of this sub- ‘‘(ii) S paragraph may result in such annual update being less than 0.0 for a rate year, and may result in pay- ment rates under the system described in paragraph (1) for a rate year being less than such payment rates for the preceding rate year. ONCUMULATIVE APPLICATION .—Any reduction ‘‘(B) N under subparagraph (A) shall apply only with respect to the rate year involved and the Secretary shall not take into account such reduction in computing the payment amount under the system described in paragraph (1) for a subsequent rate year. ‘‘(C) S UBMISSION OF QUALITY DATA .—For rate year 2014 and each subsequent rate year, each long-term care hospital shall submit to the Secretary data on quality measures specified under subparagraph (D). Such data shall be submitted in a form and manner, and at a time, specified by the Secretary for purposes of this subpara- graph. UALITY MEASURES .— ‘‘(D) Q ‘‘(i) I N GENERAL .—Subject to clause (ii), any meas- ure specified by the Secretary under this subpara- graph must have been endorsed by the entity with a contract under section 1890(a). ‘‘(ii) E XCEPTION .—In the case of a specified area or medical topic determined appropriate by the Secretary for which a feasible and practical measure has not been endorsed by the entity with a contract under sec- tion 1890(a), the Secretary may specify a measure that is not so endorsed as long as due consideration is given to measures that have been endorsed or adopted by a consensus organization identified by the Sec- retary. ‘‘(iii) T IME FRAME .—Not later than October 1, 2012, the Secretary shall publish the measures se- June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00282 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

302 283 Sec. 3004 PPACA (Consolidated) lected under this subparagraph that will be applicable with respect to rate year 2014. .—The ‘‘(E) P UBLIC AVAILABILITY OF DATA SUBMITTED Secretary shall establish procedures for making data sub- mitted under subparagraph (C) available to the public. Such procedures shall ensure that a long-term care hos- pital has the opportunity to review the data that is to be made public with respect to the hospital prior to such data being made public. The Secretary shall report quality measures that relate to services furnished in inpatient set- tings in long-term care hospitals on the Internet website of the Centers for Medicare & Medicaid Services.’’. (b) I R EHABILITATION H OSPITALS .—Section 1886(j) of NPATIENT the Social Security Act (42 U.S.C. 1395ww(j)) is amended— (1) by redesignating paragraph (7) as paragraph (8); and (2) by inserting after paragraph (6) the following new paragraph: ‘‘(7) Q UALITY REPORTING .— ‘‘(A) R EDUCTION IN UPDATE FOR FAILURE TO REPORT .— ‘‘(i) I .—For purposes of fiscal year 2014 N GENERAL and each subsequent fiscal year, in the case of a reha- bilitation facility that does not submit data to the Sec- retary in accordance with subparagraph (C) with re- spect to such a fiscal year, after determining the in- crease factor described in paragraph (3)(C), and after application of paragraph (3)(D), the Secretary shall re- duce such increase factor for payments for discharges occurring during such fiscal year by 2 percentage points. PECIAL RULE .—The application of this sub- ‘‘(ii) S paragraph may result in the increase factor described in paragraph (3)(C) being less than 0.0 for a fiscal year, and may result in payment rates under this sub- section for a fiscal year being less than such payment rates for the preceding fiscal year. ‘‘(B) N ONCUMULATIVE .—Any reduction APPLICATION under subparagraph (A) shall apply only with respect to the fiscal year involved and the Secretary shall not take into account such reduction in computing the payment amount under this subsection for a subsequent fiscal year. ‘‘(C) S UBMISSION OF QUALITY DATA .—For fiscal year 2014 and each subsequent rate year, each rehabilitation facility shall submit to the Secretary data on quality meas- ures specified under subparagraph (D). Such data shall be submitted in a form and manner, and at a time, specified by the Secretary for purposes of this subparagraph. UALITY MEASURES .— ‘‘(D) Q ‘‘(i) I N GENERAL .—Subject to clause (ii), any meas- ure specified by the Secretary under this subpara- graph must have been endorsed by the entity with a contract under section 1890(a). ‘‘(ii) E XCEPTION .—In the case of a specified area or medical topic determined appropriate by the Secretary for which a feasible and practical measure has not June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00283 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

303 284 Sec. 3004 PPACA (Consolidated) been endorsed by the entity with a contract under sec- tion 1890(a), the Secretary may specify a measure that is not so endorsed as long as due consideration is given to measures that have been endorsed or adopted by a consensus organization identified by the Sec- retary. ‘‘(iii) T IME FRAME .—Not later than October 1, 2012, the Secretary shall publish the measures se- lected under this subparagraph that will be applicable with respect to fiscal year 2014. ‘‘(E) P UBLIC AVAILABILITY OF DATA SUBMITTED .—The Secretary shall establish procedures for making data sub- mitted under subparagraph (C) available to the public. Such procedures shall ensure that a rehabilitation facility has the opportunity to review the data that is to be made public with respect to the facility prior to such data being made public. The Secretary shall report quality measures that relate to services furnished in inpatient settings in re- habilitation facilities on the Internet website of the Cen- ters for Medicare & Medicaid Services.’’. (c) H P ROGRAMS .—Section 1814(i) of the Social Security OSPICE Act (42 U.S.C. 1395f(i)) is amended— (1) by redesignating paragraph (5) as paragraph (6); and (2) by inserting after paragraph (4) the following new paragraph: UALITY REPORTING .— ‘‘(5) Q ‘‘(A) R EDUCTION IN UPDATE FOR FAILURE TO REPORT .— ‘‘(i) I N GENERAL .—For purposes of fiscal year 2014 and each subsequent fiscal year, in the case of a hos- pice program that does not submit data to the Sec- retary in accordance with subparagraph (C) with re- spect to such a fiscal year, after determining the mar- ket basket percentage increase under paragraph (1)(C)(ii)(VII) or paragraph (1)(C)(iii), as applicable, and after application of paragraph (1)(C)(iv), with re- spect to the fiscal year, the Secretary shall reduce such market basket percentage increase by 2 percent- age points. ‘‘(ii) S PECIAL RULE .—The application of this sub- paragraph may result in the market basket percentage increase under paragraph (1)(C)(ii)(VII) or paragraph (1)(C)(iii), as applicable, being less than 0.0 for a fiscal year, and may result in payment rates under this sub- section for a fiscal year being less than such payment rates for the preceding fiscal year. ‘‘(B) N ONCUMULATIVE APPLICATION .—Any reduction under subparagraph (A) shall apply only with respect to the fiscal year involved and the Secretary shall not take into account such reduction in computing the payment amount under this subsection for a subsequent fiscal year. ‘‘(C) S UBMISSION OF QUALITY DATA .—For fiscal year 2014 and each subsequent fiscal year, each hospice pro- gram shall submit to the Secretary data on quality meas- ures specified under subparagraph (D). Such data shall be June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00284 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

304 285 Sec. 3005 PPACA (Consolidated) submitted in a form and manner, and at a time, specified by the Secretary for purposes of this subparagraph. .— UALITY MEASURES ‘‘(D) Q .—Subject to clause (ii), any meas- N GENERAL ‘‘(i) I ure specified by the Secretary under this subpara- graph must have been endorsed by the entity with a contract under section 1890(a). .—In the case of a specified area or XCEPTION ‘‘(ii) E medical topic determined appropriate by the Secretary for which a feasible and practical measure has not been endorsed by the entity with a contract under sec- tion 1890(a), the Secretary may specify a measure that is not so endorsed as long as due consideration is given to measures that have been endorsed or adopted by a consensus organization identified by the Sec- retary. .—Not later than October 1, IME FRAME ‘‘(iii) T 2012, the Secretary shall publish the measures se- lected under this subparagraph that will be applicable with respect to fiscal year 2014. UBLIC AVAILABILITY OF DATA SUBMITTED .—The ‘‘(E) P Secretary shall establish procedures for making data sub- mitted under subparagraph (C) available to the public. Such procedures shall ensure that a hospice program has the opportunity to review the data that is to be made pub- lic with respect to the hospice program prior to such data being made public. The Secretary shall report quality measures that relate to hospice care provided by hospice programs on the Internet website of the Centers for Medi- care & Medicaid Services.’’. SEC. 3005. QUALITY REPORTING FOR PPS-EXEMPT CANCER HOS- PITALS. Section 1866 of the Social Security Act (42 U.S.C. 1395cc) is amended— (1) in subsection (a)(1)— (A) in subparagraph (U), by striking ‘‘and’’ at the end; (B) in subparagraph (V), by striking the period at the end and inserting ‘‘, and’’; and (C) by adding at the end the following new subpara- graph: ‘‘(W) in the case of a hospital described in section 1886(d)(1)(B)(v), to report quality data to the Secretary in accordance with subsection (k).’’; and (2) by adding at the end the following new subsection: .— UALITY R EPORTING BY C ANCER H OSPITALS ‘‘(k) Q ‘‘(1) I N GENERAL .—For purposes of fiscal year 2014 and each subsequent fiscal year, a hospital described in section 1886(d)(1)(B)(v) shall submit data to the Secretary in accord- ance with paragraph (2) with respect to such a fiscal year. ‘‘(2) S UBMISSION OF QUALITY DATA .—For fiscal year 2014 and each subsequent fiscal year, each hospital described in such section shall submit to the Secretary data on quality measures specified under paragraph (3). Such data shall be June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00285 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

305 286 Sec. 3006 PPACA (Consolidated) submitted in a form and manner, and at a time, specified by the Secretary for purposes of this subparagraph. .— ‘‘(3) Q UALITY MEASURES ‘‘(A) I .—Subject to subparagraph (B), any N GENERAL measure specified by the Secretary under this paragraph must have been endorsed by the entity with a contract under section 1890(a). ‘‘(B) E XCEPTION .—In the case of a specified area or medical topic determined appropriate by the Secretary for which a feasible and practical measure has not been en- dorsed by the entity with a contract under section 1890(a), the Secretary may specify a measure that is not so en- dorsed as long as due consideration is given to measures that have been endorsed or adopted by a consensus organi- zation identified by the Secretary. ‘‘(C) T IME FRAME .—Not later than October 1, 2012, the Secretary shall publish the measures selected under this paragraph that will be applicable with respect to fiscal year 2014. ‘‘(4) P .—The Sec- UBLIC AVAILABILITY OF DATA SUBMITTED retary shall establish procedures for making data submitted under paragraph (4) available to the public. Such procedures shall ensure that a hospital described in section 1886(d)(1)(B)(v) has the opportunity to review the data that is to be made public with respect to the hospital prior to such data being made public. The Secretary shall report quality measures of process, structure, outcome, patients’ perspective on care, efficiency, and costs of care that relate to services fur- nished in such hospitals on the Internet website of the Centers for Medicare & Medicaid Services.’’. SEC. 3006. PLANS FOR A VALUE-BASED PURCHASING PROGRAM FOR SKILLED NURSING FACILITIES AND HOME HEALTH AGEN- CIES. KILLED N URSING F ACILITIES .— (a) S N GENERAL .—The Secretary of Health and Human (1) I Services (in this section referred to as the ‘‘Secretary’’) shall de- velop a plan to implement a value-based purchasing program for payments under the Medicare program under title XVIII of the Social Security Act for skilled nursing facilities (as defined in section 1819(a) of such Act (42 U.S.C. 1395i–3(a))). (2) D ETAILS .—In developing the plan under paragraph (1), the Secretary shall consider the following issues: (A) The ongoing development, selection, and modifica- tion process for measures (including under section 1890 of the Social Security Act (42 U.S.C. 1395aaa) and section 1890A such Act, as added by section 3014), to the extent feasible and practicable, of all dimensions of quality and efficiency in skilled nursing facilities. ø As revised by sec- tion 10301(b) ¿ (B) The reporting, collection, and validation of quality data. (C) The structure of value-based payment adjust- ments, including the determination of thresholds or im- provements in quality that would substantiate a payment June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00286 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

306 287 Sec. 3006 PPACA (Consolidated) adjustment, the size of such payments, and the sources of funding for the value-based bonus payments. (D) Methods for the public disclosure of information on the performance of skilled nursing facilities. (E) Any other issues determined appropriate by the Secretary. (3) C ONSULTATION .—In developing the plan under para- graph (1), the Secretary shall— (A) consult with relevant affected parties; and (B) consider experience with such demonstrations that the Secretary determines are relevant to the value-based purchasing program described in paragraph (1). (4) R EPORT TO CONGRESS .—Not later than October 1, 2011, the Secretary shall submit to Congress a report containing the plan developed under paragraph (1). (b) H OME EALTH A GENCIES .— H (1) I .—The Secretary of Health and Human N GENERAL Services (in this section referred to as the ‘‘Secretary’’) shall de- velop a plan to implement a value-based purchasing program for payments under the Medicare program under title XVIII of the Social Security Act for home health agencies (as defined in section 1861(o) of such Act (42 U.S.C. 1395x(o))). (2) D ETAILS .—In developing the plan under paragraph (1), the Secretary shall consider the following issues: (A) The ongoing development, selection, and modifica- tion process for measures (including under section 1890 of the Social Security Act (42 U.S.C. 1395aaa) and section 1890A such Act, as added by section 3014), to the extent feasible and practicable, of all dimensions of quality and efficiency in home health agencies. (B) The reporting, collection, and validation of quality data. (C) The structure of value-based payment adjust- ments, including the determination of thresholds or im- provements in quality that would substantiate a payment adjustment, the size of such payments, and the sources of funding for the value-based bonus payments. (D) Methods for the public disclosure of information on the performance of home health agencies. (E) Any other issues determined appropriate by the Secretary. (3) C ONSULTATION .—In developing the plan under para- graph (1), the Secretary shall— (A) consult with relevant affected parties; and (B) consider experience with such demonstrations that the Secretary determines are relevant to the value-based purchasing program described in paragraph (1). (4) R EPORT TO CONGRESS .—Not later than October 1, 2011, the Secretary shall submit to Congress a report containing the plan developed under paragraph (1). ø Section 10301 added a new subsection (f) at the end. There are no subsections (c)-(e) ¿ As added by section MBULATORY S URGICAL C ENTERS .— ø (f) A 10301(a) ¿ June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00287 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

307 288 Sec. 3007 PPACA (Consolidated) N GENERAL .—The Secretary shall develop a plan to im- (1) I plement a value-based purchasing program for payments under the Medicare program under title XVIII of the Social Security Act for ambulatory surgical centers (as described in section 1833(i) of the Social Security Act (42 U.S.C. 1395l(i))). ETAILS .—In developing the plan under paragraph (1), (2) D the Secretary shall consider the following issues: (A) The ongoing development, selection, and modifica- tion process for measures (including under section 1890 of the Social Security Act (42 U.S.C. 1395aaa) and section 1890A of such Act, as added by section 3014), to the extent feasible and practicable, of all dimensions of quality and efficiency in ambulatory surgical centers. (B) The reporting, collection, and validation of quality data. (C) The structure of value-based payment adjust- ments, including the determination of thresholds or im- provements in quality that would substantiate a payment adjustment, the size of such payments, and the sources of funding for the value-based bonus payments. (D) Methods for the public disclosure of information on the performance of ambulatory surgical centers. (E) Any other issues determined appropriate by the Secretary. ONSULTATION .—In developing the plan under para- (3) C graph (1), the Secretary shall— (A) consult with relevant affected parties; and (B) consider experience with such demonstrations that the Secretary determines are relevant to the value-based purchasing program described in paragraph (1). .—Not later than January 1, 2011, EPORT TO CONGRESS (4) R the Secretary shall submit to Congress a report containing the plan developed under paragraph (1). SEC. 3007. VALUE-BASED PAYMENT MODIFIER UNDER THE PHYSICIAN FEE SCHEDULE. Section 1848 of the Social Security Act (42 U.S.C. 1395w–4) is amended— (1) in subsection (b)(1), by inserting ‘‘subject to subsection (p),’’ after ‘‘1998,’’; and (2) by adding at the end the following new subsection: .— STABLISHMENT OF V ALUE - BASED P AYMENT M ODIFIER ‘‘(p) E N GENERAL .—The Secretary shall establish a payment ‘‘(1) I modifier that provides for differential payment to a physician or a group of physicians under the fee schedule established under subsection (b) based upon the quality of care furnished compared to cost (as determined under paragraphs (2) and (3), respectively) during a performance period. Such payment modi- fier shall be separate from the geographic adjustment factors established under subsection (e). ‘‘(2) Q UALITY .— ‘‘(A) I N GENERAL .—For purposes of paragraph (1), quality of care shall be evaluated, to the extent prac- ticable, based on a composite of measures of the quality of June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00288 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

308 289 Sec. 3007 PPACA (Consolidated) care furnished (as established by the Secretary under sub- paragraph (B)). .— EASURES ‘‘(B) M ‘‘(i) The Secretary shall establish appropriate measures of the quality of care furnished by a physi- cian or group of physicians to individuals enrolled under this part, such as measures that reflect health outcomes. Such measures shall be risk adjusted as de- termined appropriate by the Secretary. ‘‘(ii) The Secretary shall seek endorsement of the measures established under this subparagraph by the entity with a contract under section 1890(a). OSTS .—For purposes of paragraph (1), costs shall be ‘‘(3) C evaluated, to the extent practicable, based on a composite of appropriate measures of costs established by the Secretary (such as the composite measure under the methodology estab- lished under subsection (n)(9)(C)(iii)) that eliminate the effect of geographic adjustments in payment rates (as described in subsection (e)), and take into account risk factors (such as so- cioeconomic and demographic characteristics, ethnicity, and health status of individuals (such as to recognize that less healthy individuals may require more intensive interventions) and other factors determined appropriate by the Secretary. ‘‘(4) I .— MPLEMENTATION ‘‘(A) P UBLICATION OF MEASURES , DATES OF IMPLEMEN - TATION , PERFORMANCE PERIOD .—Not later than January 1, 2012, the Secretary shall publish the following: ‘‘(i) The measures of quality of care and costs es- tablished under paragraphs (2) and (3), respectively. ‘‘(ii) The dates for implementation of the payment modifier (as determined under subparagraph (B)). ‘‘(iii) The initial performance period (as specified under subparagraph (B)(ii)). EADLINES FOR IMPLEMENTATION .— ‘‘(B) D NITIAL IMPLEMENTATION .—Subject to the pre- ‘‘(i) I ceding provisions of this subparagraph, the Secretary shall begin implementing the payment modifier estab- lished under this subsection through the rulemaking process during 2013 for the physician fee schedule es- tablished under subsection (b). .— NITIAL PERFORMANCE PERIOD ‘‘(ii) I N GENERAL .—The Secretary shall specify ‘‘(I) I an initial performance period for application of the payment modifier established under this sub- section with respect to 2015. ‘‘(II) P ROVISION OF INFORMATION DURING INI - TIAL PERFORMANCE PERIOD .—During the initial performance period, the Secretary shall, to the ex- tent practicable, provide information to physicians and groups of physicians about the quality of care furnished by the physician or group of physicians to individuals enrolled under this part compared to cost (as determined under paragraphs (2) and June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00289 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

309 290 Sec. 3007 PPACA (Consolidated) (3), respectively) with respect to the performance period. .—The Secretary shall apply the PPLICATION ‘‘(iii) A payment modifier established under this subsection for items and services furnished— ‘‘(I) beginning on January 1, 2015, with re- spect to specific physicians and groups of physi- cians the Secretary determines appropriate; and ‘‘(II) beginning not later than January 1, 2017, with respect to all physicians and groups of physicians. UDGET NEUTRALITY .—The payment modifier es- ‘‘(C) B tablished under this subsection shall be implemented in a budget neutral manner. YSTEMS ‘‘(5) S BASED CARE .—The Secretary shall, as appro- - priate, apply the payment modifier established under this sub- section in a manner that promotes systems-based care. ‘‘(6) C - ONSIDERATION OF SPECIAL CIRCUMSTANCES OF CER TAIN PROVIDERS .—In applying the payment modifier under this subsection, the Secretary shall, as appropriate, take into ac- count the special circumstances of physicians or groups of phy- sicians in rural areas and other underserved communities. ‘‘(7) A PPLICATION .—For purposes of the initial application of the payment modifier established under this subsection dur- ing the period beginning on January 1, 2015, and ending on December 31, 2016, the term ‘physician’ has the meaning given such term in section 1861(r). On or after January 1, 2017, the Secretary may apply this subsection to eligible professionals (as defined in subsection (k)(3)(B)) as the Secretary determines appropriate. ‘‘(8) D .—For purposes of this subsection: EFINITIONS OSTS .—The term ‘costs’ means expenditures per ‘‘(A) C individual as determined appropriate by the Secretary. In making the determination under the preceding sentence, the Secretary may take into account the amount of growth in expenditures per individual for a physician compared to the amount of such growth for other physicians. ERFORMANCE PERIOD .—The term ‘performance ‘‘(B) P period’ means a period specified by the Secretary. ‘‘(9) C OORDINATION WITH OTHER VALUE - BASED PURCHASING REFORMS .—The Secretary shall coordinate the value-based pay- ment modifier established under this subsection with the Phy- sician Feedback Program under subsection (n) and, as the Sec- retary determines appropriate, other similar provisions of this title. ‘‘(10) L IMITATIONS ON REVIEW .—There shall be no adminis- trative or judicial review under section 1869, section 1878, or otherwise of— ‘‘(A) the establishment of the value-based payment modifier under this subsection; ‘‘(B) the evaluation of quality of care under paragraph (2), including the establishment of appropriate measures of the quality of care under paragraph (2)(B); June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00290 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

310 291 Sec. 3008 PPACA (Consolidated) ‘‘(C) the evaluation of costs under paragraph (3), in- cluding the establishment of appropriate measures of costs under such paragraph; ‘‘(D) the dates for implementation of the value-based payment modifier; ‘‘(E) the specification of the initial performance period and any other performance period under paragraphs (4)(B)(ii) and (8)(B), respectively; ‘‘(F) the application of the value-based payment modi- fier under paragraph (7); and ‘‘(G) the determination of costs under paragraph (8)(A).’’. SEC. 3008. PAYMENT ADJUSTMENT FOR CONDITIONS ACQUIRED IN HOSPITALS. N G ENERAL .—Section 1886 of the Social Security Act (42 (a) I U.S.C. 1395ww), as amended by section 3001, is amended by add- ing at the end the following new subsection: ‘‘(p) A DJUSTMENT TO OSPITAL P AYMENTS FOR H OSPITAL A C - H C ONDITIONS .— QUIRED ‘‘(1) I N GENERAL .—In order to provide an incentive for ap- plicable hospitals to reduce hospital acquired conditions under this title, with respect to discharges from an applicable hos- pital occurring during fiscal year 2015 or a subsequent fiscal year, the amount of payment under this section or section 1814(b)(3), as applicable, for such discharges during the fiscal year shall be equal to 99 percent of the amount of payment that would otherwise apply to such discharges under this sec- tion or section 1814(b)(3) (determined after the application of subsections (o) and (q) and section 1814(l)(4) but without re- gard to this subsection). ‘‘(2) A PPLICABLE HOSPITALS .— ‘‘(A) I N GENERAL .—For purposes of this subsection, the term ‘applicable hospital’ means a subsection (d) hospital that meets the criteria described in subparagraph (B). ‘‘(B) C RITERIA DESCRIBED .— ‘‘(i) I N GENERAL .—The criteria described in this subparagraph, with respect to a subsection (d) hos- pital, is that the subsection (d) hospital is in the top quartile of all subsection (d) hospitals, relative to the national average, of hospital acquired conditions dur- ing the applicable period, as determined by the Sec- retary. ‘‘(ii) R ISK ADJUSTMENT .—In carrying out clause (i), the Secretary shall establish and apply an appropriate risk adjustment methodology. ‘‘(C) E XEMPTION .—In the case of a hospital that is paid under section 1814(b)(3), the Secretary may exempt such hospital from the application of this subsection if the State which is paid under such section submits an annual report to the Secretary describing how a similar program in the State for a participating hospital or hospitals achieves or surpasses the measured results in terms of patient health outcomes and cost savings established under this sub- section. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00291 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

311 292 Sec. 3008 PPACA (Consolidated) OSPITAL ACQUIRED CONDITIONS .—For purposes of this ‘‘(3) H subsection, the term ‘hospital acquired condition’ means a con- dition identified for purposes of subsection (d)(4)(D)(iv) and any other condition determined appropriate by the Secretary that an individual acquires during a stay in an applicable hospital, as determined by the Secretary. ‘‘(4) A PPLICABLE PERIOD .—In this subsection, the term ‘ap- plicable period’ means, with respect to a fiscal year, a period specified by the Secretary. ‘‘(5) R .—Prior to fiscal year 2015 EPORTING TO HOSPITALS and each subsequent fiscal year, the Secretary shall provide confidential reports to applicable hospitals with respect to hos- pital acquired conditions of the applicable hospital during the applicable period. ‘‘(6) R .— EPORTING HOSPITAL SPECIFIC INFORMATION N GENERAL ‘‘(A) I .—The Secretary shall make informa- tion available to the public regarding hospital acquired conditions of each applicable hospital. ‘‘(B) O PPORTUNITY TO REVIEW AND SUBMIT CORREC - TIONS .—The Secretary shall ensure that an applicable hos- pital has the opportunity to review, and submit corrections for, the information to be made public with respect to the hospital under subparagraph (A) prior to such information being made public. EBSITE .—Such information shall be posted on ‘‘(C) W the Hospital Compare Internet website in an easily under- standable format. ‘‘(7) L IMITATIONS ON REVIEW .—There shall be no adminis- trative or judicial review under section 1869, section 1878, or otherwise of the following: ‘‘(A) The criteria described in paragraph (2)(A). ‘‘(B) The specification of hospital acquired conditions under paragraph (3). ‘‘(C) The specification of the applicable period under paragraph (4). ‘‘(D) The provision of reports to applicable hospitals under paragraph (5) and the information made available to the public under paragraph (6).’’. TUDY AND R (b) S E XPANSION OF H EALTHCARE A C - EPORT ON QUIRED C ONDITIONS P OLICY TO O THER P ROVIDERS .— (1) S .—The Secretary of Health and Human Services TUDY shall conduct a study on expanding the healthcare acquired conditions policy under subsection (d)(4)(D) of section 1886 of the Social Security Act (42 U.S.C. 1395ww) to payments made to other facilities under the Medicare program under title XVIII of the Social Security Act, including such payments made to inpatient rehabilitation facilities, long-term care hos- pitals (as described in subsection(d)(1)(B)(iv) of such section), hospital outpatient departments, and other hospitals excluded from the inpatient prospective payment system under such sec- tion, skilled nursing facilities, ambulatory surgical centers, and health clinics. Such study shall include an analysis of how such policies could impact quality of patient care, patient safety, and spending under the Medicare program. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00292 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

312 293 Sec. 3011 399HH PHSA PPACA (Consolidated) \ EPORT .—Not later than January 1, 2012, the Sec- (2) R retary shall submit to Congress a report containing the results of the study conducted under paragraph (1), together with rec- ommendations for such legislation and administrative action as the Secretary determines appropriate. PART 2—NATIONAL STRATEGY TO IMPROVE HEALTH CARE QUALITY SEC. 3011. NATIONAL STRATEGY. Title III of the Public Health Service Act (42 U.S.C. 241 et seq.) is amended by adding at the end the following: ‘‘PART S—HEALTH CARE QUALITY PROGRAMS ‘‘Subpart I—National Strategy for Quality Improvement in Health Care ø 42 U.S.C. 280j ‘‘SEC. 399HH . NATIONAL STRATEGY FOR QUALITY IM- ¿ PROVEMENT IN HEALTH CARE. RIORITIES STABLISHMENT OF ATIONAL S TRATEGY AND ‘‘(a) E N .— P ‘‘(1) N ATIONAL STRATEGY .—The Secretary, through a trans- parent collaborative process, shall establish a national strategy to improve the delivery of health care services, patient health outcomes, and population health. .— DENTIFICATION OF PRIORITIES ‘‘(2) I ‘‘(A) I N GENERAL .—The Secretary shall identify na- tional priorities for improvement in developing the strat- egy under paragraph (1). ‘‘(B) R .—The Secretary shall ensure that EQUIREMENTS priorities identified under subparagraph (A) will— ‘‘(i) have the greatest potential for improving the health outcomes, efficiency, and patient-centeredness of health care for all populations, including children and vulnerable populations; ‘‘(ii) identify areas in the delivery of health care services that have the potential for rapid improvement in the quality and efficiency of patient care; ‘‘(iii) address gaps in quality, efficiency, compara- tive effectiveness information (taking into consider- ation the limitations set forth in subsections (c) and (d) of section 1182 of the Social Security Act), and health outcomes measures and data aggregation tech- niques; ø As revised by section 10302 ¿ ‘‘(iv) improve Federal payment policy to emphasize quality and efficiency; ‘‘(v) enhance the use of health care data to im- prove quality, efficiency, transparency, and outcomes; ‘‘(vi) address the health care provided to patients with high-cost chronic diseases; ‘‘(vii) improve research and dissemination of strat- egies and best practices to improve patient safety and June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00293 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

313 294 Sec. 3011 399HH PHSA PPACA (Consolidated) \ reduce medical errors, preventable admissions and re- admissions, and health care-associated infections; ‘‘(viii) reduce health disparities across health dis- parity populations (as defined in section 485E) and ge- ographic areas; and ‘‘(ix) address other areas as determined appro- priate by the Secretary. ONSIDERATIONS .—In identifying priorities under ‘‘(C) C subparagraph (A), the Secretary shall take into consider- ation the recommendations submitted by the entity with a contract under section 1890(a) of the Social Security Act and other stakeholders. OORDINATION WITH STATE AGENCIES .—The Sec- ‘‘(D) C retary shall collaborate, coordinate, and consult with State agencies responsible for administering the Medicaid pro- gram under title XIX of the Social Security Act and the Children’s Health Insurance Program under title XXI of such Act with respect to developing and disseminating strategies, goals, models, and timetables that are con- sistent with the national priorities identified under sub- paragraph (A). ‘‘(b) S TRATEGIC P LAN .— N GENERAL ‘‘(1) I .—The national strategy shall include a comprehensive strategic plan to achieve the priorities described in subsection (a). ‘‘(2) R EQUIREMENTS .—The strategic plan shall include pro- visions for addressing, at a minimum, the following: ‘‘(A) Coordination among agencies within the Depart- ment, which shall include steps to minimize duplication of efforts and utilization of common quality measures, where available. Such common quality measures shall be meas- ures identified by the Secretary under section 1139A or 1139B of the Social Security Act or endorsed under section 1890 of such Act. ‘‘(B) Agency-specific strategic plans to achieve national priorities. ‘‘(C) Establishment of annual benchmarks for each rel- evant agency to achieve national priorities. ‘‘(D) A process for regular reporting by the agencies to the Secretary on the implementation of the strategic plan. ‘‘(E) Strategies to align public and private payers with regard to quality and patient safety efforts. ‘‘(F) Incorporating quality improvement and measure- ment in the strategic plan for health information tech- nology required by the American Recovery and Reinvest- ment Act of 2009 (Public Law 111–5). .—The Secretary ERIODIC U PDATE OF N ATIONAL S TRATEGY ‘‘(c) P shall update the national strategy not less than annually. Any such update shall include a review of short- and long-term goals. ‘‘(d) S UBMISSION AND A VAILABILITY OF N ATIONAL S TRATEGY AND U PDATES .— ‘‘(1) D EADLINE FOR INITIAL SUBMISSION OF NATIONAL STRAT - EGY .—Not later than January 1, 2011, the Secretary shall sub- June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00294 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

314 295 Sec. 3012 PPACA (Consolidated) mit to the relevant committees of Congress the national strat- egy described in subsection (a). .— ‘‘(2) U PDATES ‘‘(A) I .—The Secretary shall submit to the N GENERAL relevant committees of Congress an annual update to the strategy described in paragraph (1). SUBMITTED ‘‘(B) I NFORMATION .—Each update sub- mitted under subparagraph (A) shall include— ‘‘(i) a review of the short- and long-term goals of the national strategy and any gaps in such strategy; ‘‘(ii) an analysis of the progress, or lack of progress, in meeting such goals and any barriers to such progress; ‘‘(iii) the information reported under section 1139A of the Social Security Act, consistent with the report- ing requirements of such section; and ‘‘(iv) in the case of an update required to be sub- mitted on or after January 1, 2014, the information re- ported under section 1139B(b)(4) of the Social Security Act, consistent with the reporting requirements of such section. ‘‘(C) S ATISFACTION OF OTHER REPORTING REQUIRE - MENTS .—Compliance with the requirements of clauses (iii) and (iv) of subparagraph (B) shall satisfy the reporting re- quirements under sections 1139A(a)(6) and 1139B(b)(4), re- spectively, of the Social Security Act. ‘‘(e) H EALTH C ARE Q UALITY I NTERNET W EBSITE .—Not later than January 1, 2011, the Secretary shall create an Internet website to make public information regarding— ‘‘(1) the national priorities for health care quality improve- ment established under subsection (a)(2); ‘‘(2) the agency-specific strategic plans for health care quality described in subsection (b)(2)(B); and ‘‘(3) other information, as the Secretary determines to be appropriate.’’. ø 42 U.S.C. 280j note SEC. 3012 . INTERAGENCY WORKING GROUP ON ¿ HEALTH CARE QUALITY. (a) I N G ENERAL .—The President shall convene a working group to be known as the Interagency Working Group on Health Care Quality (referred to in this section as the ‘‘Working Group’’). OALS .—The goals of the Working Group shall be to (b) G achieve the following: (1) Collaboration, cooperation, and consultation between Federal departments and agencies with respect to developing and disseminating strategies, goals, models, and timetables that are consistent with the national priorities identified under section 399HH(a)(2) of the Public Health Service Act (as added by section 3011). (2) Avoidance of inefficient duplication of quality improve- ment efforts and resources, where practicable, and a stream- lined process for quality reporting and compliance require- ments. (3) Assess alignment of quality efforts in the public sector with private sector initiatives. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00295 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

315 296 Sec. 3013 PPACA (Consolidated) OMPOSITION .— (c) C .—The Working Group shall be composed of (1) I N GENERAL senior level representatives of— (A) the Department of Health and Human Services; (B) the Centers for Medicare & Medicaid Services; (C) the National Institutes of Health; (D) the Centers for Disease Control and Prevention; (E) the Food and Drug Administration; (F) the Health Resources and Services Administration; (G) the Agency for Healthcare Research and Quality; (H) the Office of the National Coordinator for Health Information Technology; (I) the Substance Abuse and Mental Health Services Administration; (J) the Administration for Children and Families; (K) the Department of Commerce; (L) the Office of Management and Budget; (M) the United States Coast Guard; (N) the Federal Bureau of Prisons; (O) the National Highway Traffic Safety Administra- tion; (P) the Federal Trade Commission; (Q) the Social Security Administration; (R) the Department of Labor; (S) the United States Office of Personnel Management; (T) the Department of Defense; (U) the Department of Education; (V) the Department of Veterans Affairs; (W) the Veterans Health Administration; and (X) any other Federal agencies and departments with activities relating to improving health care quality and safety, as determined by the President. .— HAIR AND VICE - CHAIR (2) C .—The Working Group shall be chaired by HAIR (A) C the Secretary of Health and Human Services. (B) V .—Members of the Working Group, ICE CHAIR other than the Secretary of Health and Human Services, shall serve as Vice Chair of the Group on a rotating basis, as determined by the Group. C ONGRESS .—Not later than December 31, 2010, EPORT TO (d) R and annually thereafter, the Working Group shall submit to the relevant Committees of Congress, and make public on an Internet website, a report describing the progress and recommendations of the Working Group in meeting the goals described in subsection (b). SEC. 3013. QUALITY MEASURE DEVELOPMENT. (a) P UBLIC H EALTH S ERVICE A CT .—Title IX of the Public Health Service Act (42 U.S.C. 299 et seq.) is amended— (1) by redesignating part D as part E; (2) by redesignating sections 931 through 938 as sections 941 through 948, respectively; (3) in section 948(1), as so redesignated, by striking ‘‘931’’ and inserting ‘‘941’’; and June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00296 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

316 297 Sec. 3013 931 PHSA PPACA (Consolidated) \ (4) by inserting after section 926 the following: ‘‘PART D—HEALTH CARE QUALITY IMPROVEMENT ‘‘Subpart I—Quality Measure Development ø ¿ . QUALITY MEASURE DEVELOPMENT. 42 U.S.C. 299b–31 ‘‘SEC. 931 M ‘‘(a) Q .—In this subpart, the term ‘quality UALITY EASURE measure’ means a standard for measuring the performance and im- provement of population health or of health plans, providers of services, and other clinicians in the delivery of health care services. ‘‘(b) I Q UALITY DENTIFICATION OF EASURES .— M ‘‘(1) I .—The Secretary, in consultation with DENTIFICATION the Director of the Agency for Healthcare Research and Qual- ity and the Administrator of the Centers for Medicare & Med- icaid Services, shall identify, not less often than triennially, gaps where no quality measures exist and existing quality measures that need improvement, updating, or expansion, con- sistent with the national strategy under section 399HH, to the extent available, for use in Federal health programs. In identi- fying such gaps and existing quality measures that need im- provement, the Secretary shall take into consideration— ‘‘(A) the gaps identified by the entity with a contract under section 1890(a) of the Social Security Act and other stakeholders; ‘‘(B) quality measures identified by the pediatric qual- ity measures program under section 1139A of the Social Security Act; and ‘‘(C) quality measures identified through the Medicaid Quality Measurement Program under section 1139B of the Social Security Act. ‘‘(2) P UBLICATION .—The Secretary shall make available to the public on an Internet website a report on any gaps identi- fied under paragraph (1) and the process used to make such identification. RANTS OR - ONTRACTS FOR Q UALITY M EASURE D EVELOP C ‘‘(c) G MENT .— ‘‘(1) I .—The Secretary shall award grants, con- N GENERAL tracts, or intergovernmental agreements to eligible entities for purposes of developing, improving, updating, or expanding quality measures identified under subsection (b). ‘‘(2) P RIORITIZATION IN THE DEVELOPMENT OF QUALITY MEASURES .—In awarding grants, contracts, or agreements under this subsection, the Secretary shall give priority to the development of quality measures that allow the assessment of— ‘‘(A) health outcomes and functional status of patients; ‘‘(B) the management and coordination of health care across episodes of care and care transitions for patients across the continuum of providers, health care settings, and health plans; June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00297 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

317 298 Sec. 3013 931 PHSA PPACA (Consolidated) \ ‘‘(C) the experience, quality, and use of information provided to and used by patients, caregivers, and author- ized representatives to inform decisionmaking about treat- ment options, including the use of shared decisionmaking tools and preference sensitive care (as defined in section 936); ‘‘(D) the meaningful use of health information tech- nology; ‘‘(E) the safety, effectiveness, patient-centeredness, ap- propriateness, and timeliness of care; ‘‘(F) the efficiency of care; ‘‘(G) the equity of health services and health dispari- ties across health disparity populations (as defined in sec- tion 485E) and geographic areas; ‘‘(H) patient experience and satisfaction; ‘‘(I) the use of innovative strategies and methodologies identified under section 933; and ‘‘(J) other areas determined appropriate by the Sec- retary. LIGIBLE ENTITIES .—To be eligible for a grant or con- ‘‘(3) E tract under this subsection, an entity shall— ‘‘(A) have demonstrated expertise and capacity in the development and evaluation of quality measures; ‘‘(B) have adopted procedures to include in the quality measure development process— ‘‘(i) the views of those providers or payers whose performance will be assessed by the measure; and ‘‘(ii) the views of other parties who also will use the quality measures (such as patients, consumers, and health care purchasers); ‘‘(C) collaborate with the entity with a contract under section 1890(a) of the Social Security Act and other stake- holders, as practicable, and the Secretary so that quality measures developed by the eligible entity will meet the re- quirements to be considered for endorsement by the entity with a contract under such section 1890(a); ‘‘(D) have transparent policies regarding governance and conflicts of interest; and ‘‘(E) submit an application to the Secretary at such time and in such manner, as the Secretary may require. ‘‘(4) U SE OF FUNDS .—An entity that receives a grant, con- tract, or agreement under this subsection shall use such award to develop quality measures that meet the following require- ments: ‘‘(A) Such measures support measures required to be reported under the Social Security Act, where applicable, and in support of gaps and existing quality measures that need improvement, as described in subsection (b)(1)(A). ‘‘(B) Such measures support measures developed under section 1139A of the Social Security Act and the Medicaid Quality Measurement Program under section 1139B of such Act, where applicable. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00298 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

318 299 Sec. 3013 PPACA (Consolidated) ‘‘(C) To the extent practicable, data on such quality measures is able to be collected using health information technologies. ‘‘(D) Each quality measure is free of charge to users of such measure. ‘‘(E) Each quality measure is publicly available on an Internet website. ‘‘(d) O CTIVITIES BY THE S ECRETARY THER A .—The Secretary may use amounts available under this section to update and test, where applicable, quality measures endorsed by the entity with a contract under section 1890(a) of the Social Security Act or adopted by the Secretary. ‘‘(e) C G RANTS .—The Secretary shall ensure OORDINATION OF that grants or contracts awarded under this section are coordinated with grants and contracts awarded under sections 1139A(5) and 1139B(4)(A) of the Social Security Act. ‘‘(f) D O UTCOME M EASURES .— ø As added by sec- EVELOPMENT OF tion 10303(a) ¿ ‘‘(1) I N GENERAL .—The Secretary shall develop, and peri- odically update (not less than every 3 years), provider-level outcome measures for hospitals and physicians, as well as other providers as determined appropriate by the Secretary. ‘‘(2) C ATEGORIES OF MEASURES .—The measures developed under this subsection shall include, to the extent determined appropriate by the Secretary— ‘‘(A) outcome measurement for acute and chronic dis- eases, including, to the extent feasible, the 5 most preva- lent and resource-intensive acute and chronic medical con- ditions; and ‘‘(B) outcome measurement for primary and preventa- tive care, including, to the extent feasible, measurements that cover provision of such care for distinct patient popu- lations (such as healthy children, chronically ill adults, or infirm elderly individuals). OALS .—In developing such measures, the Secretary ‘‘(3) G shall seek to— ‘‘(A) address issues regarding risk adjustment, ac- countability, and sample size; ‘‘(B) include the full scope of services that comprise a cycle of care; and ‘‘(C) include multiple dimensions. ‘‘(4) T IMEFRAME .— ‘‘(A) A CUTE AND CHRONIC DISEASES .—Not later than 24 months after the date of enactment of this Act, the Sec- retary shall develop not less than 10 measures described in paragraph (2)(A). RIMARY AND PREVENTIVE CARE .—Not later than ‘‘(B) P 36 months after the date of enactment of this Act, the Sec- retary shall develop not less than 10 measures described in paragraph (2)(B).’’. (b) S OCIAL S ECURITY A CT .—Section 1890A of the Social Secu- rity Act, as added by section 3014(b), is amended by adding at the end the following new subsection: ø Note: amendment made by sec- tion 10304 strikes ‘‘quality’’ and inserts ‘‘quality and efficiency’’ in June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00299 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

319 300 Sec. 3014 PPACA (Consolidated) section 1890A of the Social Security Act but did not specifically amend headings below (which have different typeface) ¿ Q .— [A ND E FFICIENCY ] M EASURES ‘‘(e) D UALITY EVELOPMENT OF The Administrator of the Center for Medicare & Medicaid Services shall through contracts develop quality and efficiency measures (as determined appropriate by the Administrator) for use under this Act. In developing such measures, the Administrator shall consult with the Director of the Agency for Healthcare Research and Qual- ity. ø A subsection (f) was also added by section 10303 as shown : ¿ below OSPITAL CQUIRED C ONDITIONS .—The Secretary shall, to A ‘‘(f) H the extent practicable, publicly report on measures for hospital-ac- quired conditions that are currently utilized by the Centers for Medicare & Medicaid Services for the adjustment of the amount of payment to hospitals based on rates of hospital-acquired infec- tions.’’. UNDING .—There are authorized to be appropriated to the (c) F Secretary of Health and Human Services to carry out this section, $75,000,000 for each of fiscal years 2010 through 2014. Of the amounts appropriated under the preceding sentence in a fiscal year, not less than 50 percent of such amounts shall be used pursu- ant to subsection (e) of section 1890A of the Social Security Act, as added by subsection (b), with respect to programs under such Act. Amounts appropriated under this subsection for a fiscal year shall remain available until expended. SEC. 3014. QUALITY MEASUREMENT. BASED (a) N C ONSENSUS - UTIES FOR E NTITY .— EW D ULTI - STAKEHOLDER GROUP INPUT .—Section 1890(b) of (1) M the Social Security Act (42 U.S.C. 1395aaa(b)), as amended by section 3003, is amended by adding at the end the following new paragraphs: ø amendment by section 10304 strikes ‘‘qual- ity’’ and inserts ‘‘quality and efficiency’’ in new paragraph (7) but did not specifically amend heading of paragraph (7)(B) ¿ below (which has different typeface). ONVENING MULTI - STAKEHOLDER GROUPS .— ‘‘(7) C .—The entity shall convene multi- N GENERAL ‘‘(A) I stakeholder groups to provide input on— ‘‘(i) the selection of quality and efficiency meas- ures described in subparagraph (B), from among— ‘‘(I) such measures that have been endorsed by the entity; and ‘‘(II) such measures that have not been con- sidered for endorsement by such entity but are used or proposed to be used by the Secretary for the collection or reporting of quality and efficiency measures; and ‘‘(ii) national priorities (as identified under section 399HH of the Public Health Service Act) for improve- ment in population health and in the delivery of health care services for consideration under the na- tional strategy established under section 399HH of the Public Health Service Act. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00300 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

320 301 Sec. 3014 PPACA (Consolidated) UALITY [AND EFFICIENCY] MEASURES .— ‘‘(B) Q .—Subject to clause (ii), the quality ‘‘(i) I N GENERAL and efficiency measures described in this subpara- graph are quality and efficiency measures— ‘‘(I) for use pursuant to sections 1814(i)(5)(D), 1833(i)(7), 1833(t)(17), 1848(k)(2)(C), 1866(k)(3), 1881(h)(2)(A)(iii), 1886(b)(3)(B)(viii), 1886(j)(7)(D), 1886(m)(5)(D), 1886(o)(2), 1886(s)(4)(D), and As revised by section 10322(b) ¿ 1895(b)(3)(B)(v); ø ‘‘(II) for use in reporting performance informa- tion to the public; and ‘‘(III) for use in health care programs other than for use under this Act. ‘‘(ii) E XCLUSION .—Data sets (such as the outcome and assessment information set for home health serv- ices and the minimum data set for skilled nursing fa- cility services) that are used for purposes of classifica- tion systems used in establishing payment rates under this title shall not be quality and efficiency measures described in this subparagraph. ‘‘(C) R .— EQUIREMENT FOR TRANSPARENCY IN PROCESS N GENERAL .—In convening multi-stakeholder ‘‘(i) I groups under subparagraph (A) with respect to the se- lection of quality and efficiency measures, the entity shall provide for an open and transparent process for the activities conducted pursuant to such convening. ELECTION OF ORGANIZATIONS PARTICIPATING ‘‘(ii) S IN - STAKEHOLDER GROUPS .—The process de- MULTI scribed in clause (i) shall ensure that the selection of representatives comprising such groups provides for public nominations for, and the opportunity for public comment on, such selection. ULTI - STAKEHOLDER GROUP DEFINED ‘‘(D) M .—In this paragraph, the term ‘multi-stakeholder group’ means, with respect to a quality and efficiency measure, a voluntary collaborative of organizations representing a broad group of stakeholders interested in or affected by the use of such quality and efficiency measure. ‘‘(8) T RANSMISSION OF MULTI - STAKEHOLDER INPUT .—Not later than February 1 of each year (beginning with 2012), the entity shall transmit to the Secretary the input of multi-stake- holder groups provided under paragraph (7).’’. (2) A NNUAL REPORT .—Section 1890(b)(5)(A) of the Social Security Act (42 U.S.C. 1395aaa(b)(5)(A)) is amended— (A) in clause (ii), by striking ‘‘and’’ at the end; (B) in clause (iii), by striking the period at the end and inserting a semicolon; and (C) by adding at the end the following new clauses: ‘‘(iv) gaps in endorsed quality measures, which shall include measures that are within priority areas identified by the Secretary under the national strategy established under section 399HH of the Public Health Service Act, and where quality measures are unavail- able or inadequate to identify or address such gaps; June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00301 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

321 302 Sec. 3014 1890A SSA PPACA (Consolidated) \ ‘‘(v) areas in which evidence is insufficient to sup- port endorsement of quality measures in priority areas identified by the Secretary under the national strategy established under section 399HH of the Public Health Service Act and where targeted research may address such gaps; and ‘‘(vi) the matters described in clauses (i) and (ii) of paragraph (7)(A).’’. - STAKEHOLDER G ROUP ULTI NPUT I NTO S ELECTION OF I (b) M Q M EASURES UALITY .—Title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) is amended by inserting after section 1890 the ø following: amendment by section 10304 strikes ‘‘quality’’ and in- serts ‘‘quality and efficiency’’ in new section but did not specifically amend headings below (which have different typefaces). ¿ ‘‘ QUALITY [AND EFFICIENCY] MEASUREMENT EC ø 42 U.S.C. 1395aaa–1 ¿ . (a) M ULTI - STAKEHOLDER . 1890A ‘‘S G ROUP I NPUT I NTO S ELECTION OF Q UALITY [A ND E FFICIENCY ] M EASURES .—The Secretary shall establish a pre-rulemaking proc- ess under which the following steps occur with respect to the selec- tion of quality and efficiency measures described in section 1890(b)(7)(B): NPUT .—Pursuant to section 1890(b)(7), the entity with ‘‘(1) I a contract under section 1890 shall convene multi-stakeholder groups to provide input to the Secretary on the selection of quality and efficiency measures described in subparagraph (B) of such paragraph. UBLIC AVAILABILITY OF MEASURES CONSIDERED FOR ‘‘(2) P SELECTION .—Not later than December 1 of each year (begin- ning with 2011), the Secretary shall make available to the pub- lic a list of quality and efficiency measures described in section 1890(b)(7)(B) that the Secretary is considering under this title. - STAKEHOLDER INPUT .—Pursu- RANSMISSION OF MULTI ‘‘(3) T ant to section 1890(b)(8), not later than February 1 of each year (beginning with 2012), the entity shall transmit to the Secretary the input of multi-stakeholder groups described in paragraph (1). ‘‘(4) C - STAKEHOLDER INPUT .—The ONSIDERATION OF MULTI Secretary shall take into consideration the input from multi- stakeholder groups described in paragraph (1) in selecting quality and efficiency measures described in section 1890(b)(7)(B) that have been endorsed by the entity with a con- tract under section 1890 and measures that have not been en- dorsed by such entity. ATIONALE FOR USE OF QUALITY [AND EFFICIENCY] ‘‘(5) R .—The Secretary shall publish in the Federal Reg- MEASURES ister the rationale for the use of any quality and efficiency measure described in section 1890(b)(7)(B) that has not been endorsed by the entity with a contract under section 1890. SSESSMENT OF IMPACT .—Not later than March 1, ‘‘(6) A 2012, and at least once every three years thereafter, the Sec- retary shall— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00302 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

322 303 Sec. 3014 1890A SSA PPACA (Consolidated) \ ‘‘(A) conduct an assessment of the quality and effi- ciency impact of the use of endorsed measures described in section 1890(b)(7)(B); and ‘‘(B) make such assessment available to the public. SED BY THE ISSEMINATION OF M EASURES ROCESS FOR D U ‘‘(b) P S ECRETARY .— N GENERAL ‘‘(1) I .—The Secretary shall establish a process for disseminating quality and efficiency measures used by the Secretary. Such process shall include the following: ‘‘(A) The incorporation of such measures, where appli- cable, in workforce programs, training curricula, and any other means of dissemination determined appropriate by the Secretary. ‘‘(B) The dissemination of such quality and efficiency measures through the national strategy developed under section 399HH of the Public Health Service Act. XISTING METHODS .—To the extent practicable, the ‘‘(2) E Secretary shall utilize and expand existing dissemination methods in disseminating quality and efficiency measures under the process established under paragraph (1). ‘‘(c) R EVIEW OF Q UALITY [A ND E FFICIENCY ] M EASURES U SED BY THE S .— ECRETARY N GENERAL ‘‘(1) I .—The Secretary shall— ‘‘(A) periodically (but in no case less often than once every 3 years) review quality and efficiency measures de- scribed in section 1890(b)(7)(B); and ‘‘(B) with respect to each such measure, determine whether to— ‘‘(i) maintain the use of such measure; or ‘‘(ii) phase out such measure. ‘‘(2) C .—In conducting the review under ONSIDERATIONS paragraph (1), the Secretary shall take steps to— ‘‘(A) seek to avoid duplication of measures used; and ‘‘(B) take into consideration current innovative meth- odologies and strategies for quality and efficiency improve- ment practices in the delivery of health care services that represent best practices for such quality and efficiency im- provement and measures endorsed by the entity with a contract under section 1890 since the previous review by the Secretary. C ONSTRUCTION .—Nothing in this section shall ULE OF ‘‘(d) R preclude a State from using the quality and efficiency measures identified under sections 1139A and 1139B. ø Note: A subsection (e) was also added by section 3013(b) and a subsection (f) was also added by section 10303(b) of HCERA ¿ (c) F UNDING .—For purposes of carrying out the amendments made by this section, the Secretary shall provide for the transfer, from the Federal Hospital Insurance Trust Fund under section 1817 of the Social Security Act (42 U.S.C. 1395i) and the Federal Supplementary Medical Insurance Trust Fund under section 1841 of such Act (42 U.S.C. 1395t), in such proportion as the Secretary determines appropriate, of $20,000,000, to the Centers for Medicare & Medicaid Services Program Management Account for each of fis- June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00303 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

323 304 Sec. 3015 PPACA (Consolidated) cal years 2010 through 2014. Amounts transferred under the pre- ceding sentence shall remain available until expended. SEC. 3015. DATA COLLECTION; PUBLIC REPORTING. Title III of the Public Health Service Act (42 U.S.C. 241 et seq.), as amended by section 3011, is further amended by adding at the end the following: ‘‘SEC. 399II ø ¿ . COLLECTION AND ANALYSIS OF DATA FOR 42 U.S.C. 280–1 QUALITY AND RESOURCE USE MEASURES. N G ENERAL .— ø Replaced by section 10305 ¿ ‘‘(a) I ‘‘(1) E STABLISHMENT OF STRATEGIC FRAMEWORK .—The Sec- retary shall establish and implement an overall strategic framework to carry out the public reporting of performance in- formation, as described in section 399JJ. Such strategic frame- work may include methods and related timelines for imple- menting nationally consistent data collection, data aggregation, and analysis methods. OLLECTION AND AGGREGATION OF DATA .—The Sec- ‘‘(2) C retary shall collect and aggregate consistent data on quality and resource use measures from information systems used to support health care delivery, and may award grants or con- tracts for this purpose. The Secretary shall align such collec- tion and aggregation efforts with the requirements and assist- ance regarding the expansion of health information technology systems, the interoperability of such technology systems, and related standards that are in effect on the date of enactment of the Patient Protection and Affordable Care Act. COPE .—The Secretary shall ensure that the data col- ‘‘(3) S lection, data aggregation, and analysis systems described in paragraph (1) involve an increasingly broad range of patient populations, providers, and geographic areas over time. RANTS OR C ONTRACTS FOR D ATA C ‘‘(b) G .— OLLECTION ‘‘(1) I N GENERAL .—The Secretary may award grants or con- tracts to eligible entities to support new, or improve existing, efforts to collect and aggregate quality and resource use meas- ures described under subsection (c). ‘‘(2) E LIGIBLE ENTITIES .—To be eligible for a grant or con- tract under this subsection, an entity shall— ‘‘(A) be— ‘‘(i) a multi-stakeholder entity that coordinates the development of methods and implementation plans for the consistent reporting of summary quality and cost information; ‘‘(ii) an entity capable of submitting such sum- mary data for a particular population and providers, such as a disease registry, regional collaboration, health plan collaboration, or other population-wide source; or ‘‘(iii) a Federal Indian Health Service program or a health program operated by an Indian tribe (as de- fined in section 4 of the Indian Health Care Improve- ment Act); ‘‘(B) promote the use of the systems that provide data to improve and coordinate patient care; June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00304 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

324 305 Sec. 3015 399JJ PHSA PPACA (Consolidated) \ ‘‘(C) support the provision of timely, consistent quality and resource use information to health care providers, and other groups and organizations as appropriate, with an op- portunity for providers to correct inaccurate measures; and ‘‘(D) agree to report, as determined by the Secretary, measures on quality and resource use to the public in ac- cordance with the public reporting process established under section 399JJ. ‘‘(c) C ATA ONSISTENT GGREGATION .—The Secretary may D A award grants or contracts under this section only to entities that enable summary data that can be integrated and compared across multiple sources. The Secretary shall provide standards for the pro- tection of the security and privacy of patient data. ‘‘(d) M ATCHING UNDS .—The Secretary may not award a grant F or contract under this section to an entity unless the entity agrees that it will make available (directly or through contributions from other public or private entities) non-Federal contributions toward the activities to be carried out under the grant or contract in an amount equal to $1 for each $5 of Federal funds provided under the grant or contract. Such non-Federal matching funds may be pro- vided directly or through donations from public or private entities and may be in cash or in-kind, fairly evaluated, including plant, equipment, or services. ‘‘(e) A UTHORIZATION OF A PPROPRIATIONS .—To carry out this section, there are authorized to be appropriated such sums as may be necessary for fiscal years 2010 through 2014. ‘‘SEC. 399JJ ø 42 U.S.C. 280j–2 ¿ . PUBLIC REPORTING OF PERFORMANCE INFORMATION. ‘‘(a) D P ERFORMANCE W EBSITES .—The Sec- EVELOPMENT OF retary shall make available to the public, through standardized Internet websites, performance information summarizing data on quality measures. Such information shall be tailored to respond to the differing needs of hospitals and other institutional health care providers, physicians and other clinicians, patients, consumers, re- searchers, policymakers, States, and other stakeholders, as the Sec- retary may specify. ‘‘(b) I C ONDITIONS .—The performance informa- NFORMATION ON tion made publicly available on an Internet website, as described in subsection (a), shall include information regarding clinical condi- tions to the extent such information is available, and the informa- tion shall, where appropriate, be provider-specific and sufficiently disaggregated and specific to meet the needs of patients with dif- ferent clinical conditions. ‘‘(c) C ONSULTATION .— N GENERAL .—In carrying out this section, the Sec- ‘‘(1) I retary shall consult with the entity with a contract under sec- tion 1890(a) of the Social Security Act, and other entities, as appropriate, to determine the type of information that is useful to stakeholders and the format that best facilitates use of the reports and of performance reporting Internet websites. ‘‘(2) C ONSULTATION WITH STAKEHOLDERS .—The entity with a contract under section 1890(a) of the Social Security Act shall convene multi-stakeholder groups, as described in such section, to review the design and format of each Internet June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00305 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

325 306 Sec. 3021 PPACA (Consolidated) website made available under subsection (a) and shall transmit to the Secretary the views of such multi-stakeholder groups with respect to each such design and format. .—Where appropriate, the Secretary shall OORDINATION ‘‘(d) C coordinate the manner in which data are presented through Inter- net websites described in subsection (a) and for public reporting of other quality measures by the Secretary, including such quality measures under title XVIII of the Social Security Act. A UTHORIZATION OF .—To carry out this PPROPRIATIONS ‘‘(e) A section, there are authorized to be appropriated such sums as may be necessary for fiscal years 2010 through 2014.’’. PART 3—ENCOURAGING DEVELOPMENT OF NEW PATIENT CARE MODELS SEC. 3021. ESTABLISHMENT OF CENTER FOR MEDICARE AND MED- ICAID INNOVATION WITHIN CMS. N (a) I ENERAL .—Title XI of the Social Security Act is amend- G ed by inserting after section 1115 the following new section: ‘‘ CENTER FOR MEDICARE AND MEDICAID INNOVATION EC . 1115A ø ¿ . (a) C ENTER FOR M EDICARE 42 U.S.C. 1315a ‘‘S AND M EDICAID I NNOVATION E STABLISHED .— N GENERAL .—There is created within the Centers for ‘‘(1) I Medicare & Medicaid Services a Center for Medicare and Med- icaid Innovation (in this section referred to as the ‘CMI’) to carry out the duties described in this section. The purpose of the CMI is to test innovative payment and service delivery models to reduce program expenditures under the applicable ti- tles while preserving or enhancing the quality of care fur- nished to individuals under such titles. In selecting such mod- els, the Secretary shall give preference to models that also im- prove the coordination, quality, and efficiency of health care services furnished to applicable individuals defined in para- graph (4)(A). EADLINE .—The Secretary shall ensure that the CMI ‘‘(2) D is carrying out the duties described in this section by not later than January 1, 2011. ‘‘(3) C ONSULTATION .—In carrying out the duties under this section, the CMI shall consult representatives of relevant Fed- eral agencies, and clinical and analytical experts with expertise in medicine and health care management. The CMI shall use open door forums or other mechanisms to seek input from in- terested parties. ‘‘(4) D EFINITIONS .—In this section: ‘‘(A) A PPLICABLE INDIVIDUAL .—The term ‘applicable in- dividual’ means— ‘‘(i) an individual who is entitled to, or enrolled for, benefits under part A of title XVIII or enrolled for benefits under part B of such title; ‘‘(ii) an individual who is eligible for medical as- sistance under title XIX, under a State plan or waiver; or June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00306 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

326 307 Sec. 3021 1115A SSA PPACA (Consolidated) \ ‘‘(iii) an individual who meets the criteria of both clauses (i) and (ii). .—The term ‘applicable title’ PPLICABLE TITLE ‘‘(B) A means title XVIII, title XIX, or both. ESTING WITHIN CERTAIN GEOGRAPHIC AREAS .—For ‘‘(5) T purposes of testing payment and service delivery models under this section, the Secretary may elect to limit testing of a model to certain geographic areas. ø As added by section 10306(1) ¿ ESTING OF M ODELS (P HASE I).— ‘‘(b) T .—The CMI shall test payment and service N GENERAL ‘‘(1) I delivery models in accordance with selection criteria under paragraph (2) to determine the effect of applying such models under the applicable title (as defined in subsection (a)(4)(B)) on program expenditures under such titles and the quality of care received by individuals receiving benefits under such title. ‘‘(2) S ELECTION OF MODELS TO BE TESTED .— ‘‘(A) I N GENERAL .— ø As revised by section 10306(a)(2)(A) ¿ The Secretary shall select models to be tested from models where the Secretary determines that there is evidence that the model addresses a defined popu- lation for which there are deficits in care leading to poor clinical outcomes or potentially avoidable expenditures. The Secretary shall focus on models expected to reduce program costs under the applicable title while preserving or enhancing the quality of care received by individuals re- ceiving benefits under such title. The models selected under this subparagraph may include, but are not limited to, the models described in subparagraph (B). ‘‘(B) O PPORTUNITIES .—The models described in this subparagraph are the following models: ‘‘(i) Promoting broad payment and practice reform in primary care, including patient-centered medical home models for high-need applicable individuals, medical homes that address women’s unique health care needs, and models that transition primary care practices away from fee-for-service based reimburse- ment and toward comprehensive payment or salary- based payment. ‘‘(ii) Contracting directly with groups of providers of services and suppliers to promote innovative care delivery models, such as through risk-based com- prehensive payment or salary-based payment. ‘‘(iii) Utilizing geriatric assessments and com- prehensive care plans to coordinate the care (including through interdisciplinary teams) of applicable individ- uals with multiple chronic conditions and at least one of the following: ‘‘(I) An inability to perform 2 or more activi- ties of daily living. ‘‘(II) Cognitive impairment, including demen- tia. ‘‘(iv) Promote care coordination between providers of services and suppliers that transition health care June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00307 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

327 308 Sec. 3021 1115A SSA PPACA (Consolidated) \ providers away from fee-for-service based reimburse- ment and toward salary-based payment. ‘‘(v) Supporting care coordination for chronically-ill applicable individuals at high risk of hospitalization through a health information technology-enabled pro- vider network that includes care coordinators, a chron- ic disease registry, and home tele-health technology. ‘‘(vi) Varying payment to physicians who order ad- vanced diagnostic imaging services (as defined in sec- tion 1834(e)(1)(B)) according to the physician’s adher- ence to appropriateness criteria for the ordering of such services, as determined in consultation with phy- sician specialty groups and other relevant stake- holders. ‘‘(vii) Utilizing medication therapy management services, such as those described in section 935 of the Public Health Service Act. ‘‘(viii) Establishing community-based health teams to support small-practice medical homes by assisting the primary care practitioner in chronic care manage- ment, including patient self-management, activities. ‘‘(ix) Assisting applicable individuals in making in- formed health care choices by paying providers of serv- ices and suppliers for using patient decision-support tools, including tools that meet the standards devel- oped and identified under section 936(c)(2)(A) of the Public Health Service Act, that improve applicable in- dividual and caregiver understanding of medical treat- ment options. ‘‘(x) Allowing States to test and evaluate fully in- tegrating care for dual eligible individuals in the State, including the management and oversight of all funds under the applicable titles with respect to such individuals. ‘‘(xi) Allowing States to test and evaluate systems of all-payer payment reform for the medical care of residents of the State, including dual eligible individ- uals. ‘‘(xii) Aligning nationally recognized, evidence- based guidelines of cancer care with payment incen- tives under title XVIII in the areas of treatment plan- ning and follow-up care planning for applicable indi- viduals described in clause (i) or (iii) of subsection (a)(4)(A) with cancer, including the identification of gaps in applicable quality measures. ‘‘(xiii) Improving post-acute care through con- tinuing care hospitals that offer inpatient rehabilita- tion, long-term care hospitals, and home health or skilled nursing care during an inpatient stay and the 30 days immediately following discharge. ‘‘(xiv) Funding home health providers who offer chronic care management services to applicable indi- viduals in cooperation with interdisciplinary teams. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00308 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

328 309 Sec. 3021 1115A SSA PPACA (Consolidated) \ ‘‘(xv) Promoting improved quality and reduced cost by developing a collaborative of high-quality, low-cost health care institutions that is responsible for— ‘‘(I) developing, documenting, and dissemi- nating best practices and proven care methods; ‘‘(II) implementing such best practices and proven care methods within such institutions to demonstrate further improvements in quality and efficiency; and ‘‘(III) providing assistance to other health care institutions on how best to employ such best prac- tices and proven care methods to improve health care quality and lower costs. ‘‘(xvi) Facilitate inpatient care, including intensive care, of hospitalized applicable individuals at their local hospital through the use of electronic monitoring by specialists, including intensivists and critical care specialists, based at integrated health systems. ‘‘(xvii) Promoting greater efficiencies and timely access to outpatient services (such as outpatient phys- ical therapy services) through models that do not re- quire a physician or other health professional to refer the service or be involved in establishing the plan of care for the service, when such service is furnished by a health professional who has the authority to furnish the service under existing State law. ‘‘(xviii) Establishing comprehensive payments to Healthcare Innovation Zones, consisting of groups of providers that include a teaching hospital, physicians, and other clinical entities, that, through their struc- ture, operations, and joint-activity deliver a full spec- trum of integrated and comprehensive health care services to applicable individuals while also incor- porating innovative methods for the clinical training of future health care professionals. ø ¿ Clauses (xix) and (xx) added by section 10306(2)(B) ‘‘(xix) Utilizing, in particular in entities located in medically underserved areas and facilities of the In- dian Health Service (whether operated by such Service or by an Indian tribe or tribal organization (as those terms are defined in section 4 of the Indian Health Care Improvement Act)), telehealth services— ‘‘(I) in treating behavioral health issues (such as post-traumatic stress disorder) and stroke; and ‘‘(II) to improve the capacity of non-medical providers and non-specialized medical providers to provide health services for patients with chronic complex conditions. ‘‘(xx) Utilizing a diverse network of providers of services and suppliers to improve care coordination for applicable individuals described in subsection (a)(4)(A)(i) with 2 or more chronic conditions and a history of prior-year hospitalization through interven- tions developed under the Medicare Coordinated Care June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00309 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

329 310 Sec. 3021 1115A SSA PPACA (Consolidated) \ Demonstration Project under section 4016 of the Bal- anced Budget Act of 1997 (42 U.S.C. 1395b–1 note). .—In se- ‘‘(C) A DDITIONAL FACTORS FOR CONSIDERATION lecting models for testing under subparagraph (A), the CMI may consider the following additional factors: ‘‘(i) Whether the model includes a regular process for monitoring and updating patient care plans in a manner that is consistent with the needs and pref- erences of applicable individuals. ‘‘(ii) Whether the model places the applicable indi- vidual, including family members and other informal caregivers of the applicable individual, at the center of the care team of the applicable individual. ‘‘(iii) Whether the model provides for in-person contact with applicable individuals. ‘‘(iv) Whether the model utilizes technology, such as electronic health records and patient-based remote monitoring systems, to coordinate care over time and across settings. ‘‘(v) Whether the model provides for the mainte- nance of a close relationship between care coordina- tors, primary care practitioners, specialist physicians, community-based organizations, and other providers of services and suppliers. ‘‘(vi) Whether the model relies on a team-based approach to interventions, such as comprehensive care assessments, care planning, and self-management coaching. ‘‘(vii) Whether, under the model, providers of serv- ices and suppliers are able to share information with patients, caregivers, and other providers of services and suppliers on a real time basis. ø ¿ Whether ‘‘(viii) As added by section 10306(2)(C) the model demonstrates effective linkage with other public sector or private sector payers. ‘‘(3) B UDGET NEUTRALITY .— ‘‘(A) I NITIAL PERIOD .—The Secretary shall not require, as a condition for testing a model under paragraph (1), that the design of such model ensure that such model is budget neutral initially with respect to expenditures under the applicable title. ‘‘(B) T .—The Secretary ERMINATION OR MODIFICATION shall terminate or modify the design and implementation of a model unless the Secretary determines (and the Chief Actuary of the Centers for Medicare & Medicaid Services, with respect to program spending under the applicable title, certifies), after testing has begun, that the model is expected to— ‘‘(i) improve the quality of care (as determined by the Administrator of the Centers for Medicare & Med- icaid Services) without increasing spending under the applicable title; ‘‘(ii) reduce spending under the applicable title without reducing the quality of care; or June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00310 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

330 311 Sec. 3021 1115A SSA PPACA (Consolidated) \ ‘‘(iii) improve the quality of care and reduce spending. Such termination may occur at any time after such testing has begun and before completion of the testing. VALUATION .— ‘‘(4) E ‘‘(A) I N GENERAL .—The Secretary shall conduct an evaluation of each model tested under this subsection. Such evaluation shall include an analysis of— ‘‘(i) the quality of care furnished under the model, including the measurement of patient-level outcomes and patient-centeredness criteria determined appro- priate by the Secretary; and ‘‘(ii) the changes in spending under the applicable titles by reason of the model. NFORMATION .—The Secretary shall make the re- ‘‘(B) I sults of each evaluation under this paragraph available to the public in a timely fashion and may establish require- ments for States and other entities participating in the testing of models under this section to collect and report information that the Secretary determines is necessary to monitor and evaluate such models. ‘‘(C) M SELECTION EASURE ø As added by section .— 10306(3) ¿ To the extent feasible, the Secretary shall select measures under this paragraph that reflect national prior- ities for quality improvement and patient-centered care consistent with the measures described in 1890(b)(7)(B). ‘‘(c) E M (P HASE II).—Taking into account XPANSION OF ODELS the evaluation under subsection (b)(4), the Secretary may, through rulemaking, expand (including implementation on a nationwide basis) the duration and the scope of a model that is being tested under subsection (b) or a demonstration project under section 1866C, to the extent determined appropriate by the Secretary, if— ø As revised by section 10306(4) ¿ ‘‘(1) the Secretary determines that such expansion is ex- pected to— ‘‘(A) reduce spending under applicable title without re- ducing the quality of care; or ‘‘(B) improve the quality of patient care without in- creasing spending; ‘‘(2) the Chief Actuary of the Centers for Medicare & Med- icaid Services certifies that such expansion would reduce (or would not result in any increase in) net program spending under applicable titles; and ø Paragraph (3) and succeeding sentence added by section 10306(4) ¿ ‘‘(3) the Secretary determines that such expansion would not deny or limit the coverage or provision of benefits under the applicable title for applicable individuals. In determining which models or demonstration projects to expand under the preceding sentence, the Secretary shall focus on models and demonstration projects that improve the quality of patient care and reduce spending. ‘‘(d) I MPLEMENTATION .— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00311 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

331 312 Sec. 3021 1115A SSA PPACA (Consolidated) \ AIVER AUTHORITY .—The Secretary may waive such ‘‘(1) W requirements of titles XI and XVIII and of sections 1902(a)(1), 1902(a)(13), and 1903(m)(2)(A)(iii) as may be necessary solely for purposes of carrying out this section with respect to testing models described in subsection (b). ‘‘(2) L IMITATIONS ON REVIEW .—There shall be no adminis- trative or judicial review under section 1869, section 1878, or otherwise of— ‘‘(A) the selection of models for testing or expansion under this section; ‘‘(B) the selection of organizations, sites, or partici- pants to test those models selected; ‘‘(C) the elements, parameters, scope, and duration of such models for testing or dissemination; ‘‘(D) determinations regarding budget neutrality under subsection (b)(3); ‘‘(E) the termination or modification of the design and implementation of a model under subsection (b)(3)(B); and ‘‘(F) determinations about expansion of the duration and scope of a model under subsection (c), including the determination that a model is not expected to meet criteria described in paragraph (1) or (2) of such subsection. ‘‘(3) A .—Chapter 35 of title 44, United DMINISTRATION States Code, shall not apply to the testing and evaluation of models or expansion of such models under this section. PPLICATION TO CHIP.—The Center may carry out activi- ‘‘(e) A ties under this section with respect to title XXI in the same man- ner as provided under this section with respect to the program under the applicable titles. UNDING ‘‘(f) F .— ‘‘(1) I N GENERAL .—There are appropriated, from amounts in the Treasury not otherwise appropriated— ‘‘(A) $5,000,000 for the design, implementation, and evaluation of models under subsection (b) for fiscal year 2010; ‘‘(B) $10,000,000,000 for the activities initiated under this section for the period of fiscal years 2011 through 2019; and ‘‘(C) the amount described in subparagraph (B) for the activities initiated under this section for each subsequent 10-year fiscal period (beginning with the 10-year fiscal pe- riod beginning with fiscal year 2020). Amounts appropriated under the preceding sentence shall re- main available until expended. ‘‘(2) U SE OF CERTAIN FUNDS .—Out of amounts appropriated under subparagraphs (B) and (C) of paragraph (1), not less than $25,000,000 shall be made available each such fiscal year to design, implement, and evaluate models under subsection (b). .—Beginning in 2012, and not less EPORT TO C ONGRESS ‘‘(g) R than once every other year thereafter, the Secretary shall submit to Congress a report on activities under this section. Each such re- port shall describe the models tested under subsection (b), includ- ing the number of individuals described in subsection (a)(4)(A)(i) June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00312 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

332 313 Sec. 3022 1899 SSA PPACA (Consolidated) \ and of individuals described in subsection (a)(4)(A)(ii) participating in such models and payments made under applicable titles for serv- ices on behalf of such individuals, any models chosen for expansion under subsection (c), and the results from evaluations under sub- section (b)(4). In addition, each such report shall provide such rec- ommendations as the Secretary determines are appropriate for leg- islative action to facilitate the development and expansion of suc- cessful payment models.’’. (b) M ONFORMING A EDICAID .—Section 1902(a) of C MENDMENT the Social Security Act (42 U.S.C. 1396a(a)), as amended by section 8002(b), is amended— (1) in paragraph (81), by striking ‘‘and’’ at the end; (2) in paragraph (82), by striking the period at the end and inserting ‘‘; and’’; and (3) by inserting after paragraph (82) the following new paragraph: ‘‘(83) provide for implementation of the payment models specified by the Secretary under section 1115A(c) for imple- mentation on a nationwide basis unless the State demonstrates to the satisfaction of the Secretary that implementation would not be administratively feasible or appropriate to the health care delivery system of the State.’’. (c) R H EALTH EVISIONS TO ARE Q UALITY D EMONSTRATION P RO - C GRAM .—Subsections (b) and (f) of section 1866C of the Social Secu- rity Act (42 U.S.C. 1395cc–3) are amended by striking ‘‘5-year’’ each place it appears. SEC. 3022. MEDICARE SHARED SAVINGS PROGRAM. Title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) is amended by adding at the end the following new section: ‘‘ SHARED SAVINGS PROGRAM EC . 1899 ø 42 U.S.C. 1395jjj ‘‘S . (a) E STABLISHMENT .— ¿ ‘‘(1) I N GENERAL .—Not later than January 1, 2012, the Sec- retary shall establish a shared savings program (in this section referred to as the ‘program’) that promotes accountability for a patient population and coordinates items and services under parts A and B, and encourages investment in infrastructure and redesigned care processes for high quality and efficient service delivery. Under such program— ‘‘(A) groups of providers of services and suppliers meeting criteria specified by the Secretary may work to- gether to manage and coordinate care for Medicare fee-for- service beneficiaries through an accountable care organiza- tion (referred to in this section as an ‘ACO’); and ‘‘(B) ACOs that meet quality performance standards established by the Secretary are eligible to receive pay- ments for shared savings under subsection (d)(2). ‘‘(b) E LIGIBLE ACO S .— ‘‘(1) I N GENERAL .—Subject to the succeeding provisions of this subsection, as determined appropriate by the Secretary, the following groups of providers of services and suppliers which have established a mechanism for shared governance June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00313 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

333 314 Sec. 3022 1899 SSA PPACA (Consolidated) \ are eligible to participate as ACOs under the program under this section: ‘‘(A) ACO professionals in group practice arrange- ments. ‘‘(B) Networks of individual practices of ACO profes- sionals. ‘‘(C) Partnerships or joint venture arrangements be- tween hospitals and ACO professionals. ‘‘(D) Hospitals employing ACO professionals. ‘‘(E) Such other groups of providers of services and suppliers as the Secretary determines appropriate. ‘‘(2) R .—An ACO shall meet the following re- EQUIREMENTS quirements: ‘‘(A) The ACO shall be willing to become accountable for the quality, cost, and overall care of the Medicare fee- for-service beneficiaries assigned to it. ‘‘(B) The ACO shall enter into an agreement with the Secretary to participate in the program for not less than a 3-year period (referred to in this section as the ‘agree- ment period’). ‘‘(C) The ACO shall have a formal legal structure that would allow the organization to receive and distribute pay- ments for shared savings under subsection (d)(2) to partici- pating providers of services and suppliers. ‘‘(D) The ACO shall include primary care ACO profes- sionals that are sufficient for the number of Medicare fee- for-service beneficiaries assigned to the ACO under sub- section (c). At a minimum, the ACO shall have at least 5,000 such beneficiaries assigned to it under subsection (c) in order to be eligible to participate in the ACO program. ‘‘(E) The ACO shall provide the Secretary with such information regarding ACO professionals participating in the ACO as the Secretary determines necessary to support the assignment of Medicare fee-for-service beneficiaries to an ACO, the implementation of quality and other reporting requirements under paragraph (3), and the determination of payments for shared savings under subsection (d)(2). ‘‘(F) The ACO shall have in place a leadership and management structure that includes clinical and adminis- trative systems. ‘‘(G) The ACO shall define processes to promote evi- dence-based medicine and patient engagement, report on quality and cost measures, and coordinate care, such as through the use of telehealth, remote patient monitoring, and other such enabling technologies. ‘‘(H) The ACO shall demonstrate to the Secretary that it meets patient-centeredness criteria specified by the Sec- retary, such as the use of patient and caregiver assess- ments or the use of individualized care plans. UALITY AND OTHER REPORTING REQUIREMENTS .— ‘‘(3) Q ‘‘(A) I N GENERAL .—The Secretary shall determine ap- propriate measures to assess the quality of care furnished by the ACO, such as measures of— ‘‘(i) clinical processes and outcomes; June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00314 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

334 315 Sec. 3022 1899 SSA PPACA (Consolidated) \ ‘‘(ii) patient and, where practicable, caregiver ex- perience of care; and ‘‘(iii) utilization (such as rates of hospital admis- sions for ambulatory care sensitive conditions). ‘‘(B) R EPORTING REQUIREMENTS .—An ACO shall sub- mit data in a form and manner specified by the Secretary on measures the Secretary determines necessary for the ACO to report in order to evaluate the quality of care fur- nished by the ACO. Such data may include care transi- tions across health care settings, including hospital dis- charge planning and post-hospital discharge follow-up by ACO professionals, as the Secretary determines appro- priate. ‘‘(C) Q UALITY PERFORMANCE STANDARDS .—The Sec- retary shall establish quality performance standards to as- sess the quality of care furnished by ACOs. The Secretary shall seek to improve the quality of care furnished by ACOs over time by specifying higher standards, new meas- ures, or both for purposes of assessing such quality of care. ‘‘(D) O THER REPORTING REQUIREMENTS .—The Secretary may, as the Secretary determines appropriate, incorporate reporting requirements and incentive payments related to the physician quality reporting initiative (PQRI) under sec- tion 1848, including such requirements and such payments related to electronic prescribing, electronic health records, and other similar initiatives under section 1848, and may use alternative criteria than would otherwise apply under such section for determining whether to make such pay- ments. The incentive payments described in the preceding sentence shall not be taken into consideration when calcu- lating any payments otherwise made under subsection (d). O DUPLICATION IN PARTICIPATION IN SHARED SAVINGS ‘‘(4) N PROGRAMS .—A provider of services or supplier that participates in any of the following shall not be eligible to participate in an ACO under this section: ‘‘(A) A model tested or expanded under section 1115A that involves shared savings under this title, or any other program or demonstration project that involves such shared savings. ‘‘(B) The independence at home medical practice pilot program under section 1866E. ‘‘(c) A M EDICARE F SSIGNMENT OF - FOR - SERVICE B ENEFICIARIES EE TO ACO S .—The Secretary shall determine an appropriate method to assign Medicare fee-for-service beneficiaries to an ACO based on their utilization of primary care services provided under this title by an ACO professional described in subsection (h)(1)(A). AYMENTS AND T S AVINGS .— REATMENT OF ‘‘(d) P ‘‘(1) P AYMENTS .— ‘‘(A) I N GENERAL .—Under the program, subject to paragraph (3), payments shall continue to be made to pro- viders of services and suppliers participating in an ACO under the original Medicare fee-for-service program under parts A and B in the same manner as they would other- wise be made except that a participating ACO is eligible June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00315 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

335 316 Sec. 3022 1899 SSA PPACA (Consolidated) \ to receive payment for shared savings under paragraph (2) if— ‘‘(i) the ACO meets quality performance standards established by the Secretary under subsection (b)(3); and ‘‘(ii) the ACO meets the requirement under sub- paragraph (B)(i). ‘‘(B) S AVINGS REQUIREMENT AND BENCHMARK .— ‘‘(i) D .—In each year of the ETERMINING SAVINGS agreement period, an ACO shall be eligible to receive payment for shared savings under paragraph (2) only if the estimated average per capita Medicare expendi- tures under the ACO for Medicare fee-for-service bene- ficiaries for parts A and B services, adjusted for bene- ficiary characteristics, is at least the percent specified by the Secretary below the applicable benchmark under clause (ii). The Secretary shall determine the appropriate percent described in the preceding sen- tence to account for normal variation in expenditures under this title, based upon the number of Medicare fee-for-service beneficiaries assigned to an ACO. ‘‘(ii) E .—The STABLISH AND UPDATE BENCHMARK Secretary shall estimate a benchmark for each agree- ment period for each ACO using the most recent avail- able 3 years of per-beneficiary expenditures for parts A and B services for Medicare fee-for-service bene- ficiaries assigned to the ACO. Such benchmark shall be adjusted for beneficiary characteristics and such other factors as the Secretary determines appropriate and updated by the projected absolute amount of growth in national per capita expenditures for parts A and B services under the original Medicare fee-for- service program, as estimated by the Secretary. Such benchmark shall be reset at the start of each agree- ment period. AYMENTS FOR SHARED SAVINGS .—Subject to perform- ‘‘(2) P ance with respect to the quality performance standards estab- lished by the Secretary under subsection (b)(3), if an ACO meets the requirements under paragraph (1), a percent (as de- termined appropriate by the Secretary) of the difference be- tween such estimated average per capita Medicare expendi- tures in a year, adjusted for beneficiary characteristics, under the ACO and such benchmark for the ACO may be paid to the ACO as shared savings and the remainder of such difference shall be retained by the program under this title. The Sec- retary shall establish limits on the total amount of shared sav- ings that may be paid to an ACO under this paragraph. ‘‘(3) M ONITORING AVOIDANCE OF AT - RISK PATIENTS .—If the Secretary determines that an ACO has taken steps to avoid pa- tients at risk in order to reduce the likelihood of increasing costs to the ACO the Secretary may impose an appropriate sanction on the ACO, including termination from the program. ERMINATION .—The Secretary may terminate an ‘‘(4) T agreement with an ACO if it does not meet the quality per- June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00316 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

336 317 Sec. 3022 1899 SSA PPACA (Consolidated) \ formance standards established by the Secretary under sub- section (b)(3). .—Chapter 35 of title 44, United States ‘‘(e) A DMINISTRATION Code, shall not apply to the program. ‘‘(f) W AIVER UTHORITY .—The Secretary may waive such re- A quirements of sections 1128A and 1128B and title XVIII of this Act as may be necessary to carry out the provisions of this section. IMITATIONS ON EVIEW .—There shall be no administra- ‘‘(g) L R tive or judicial review under section 1869, section 1878, or other- wise of— ‘‘(1) the specification of criteria under subsection (a)(1)(B); ‘‘(2) the assessment of the quality of care furnished by an ACO and the establishment of performance standards under subsection (b)(3); ‘‘(3) the assignment of Medicare fee-for-service bene- ficiaries to an ACO under subsection (c); ‘‘(4) the determination of whether an ACO is eligible for shared savings under subsection (d)(2) and the amount of such shared savings, including the determination of the estimated average per capita Medicare expenditures under the ACO for Medicare fee-for-service beneficiaries assigned to the ACO and the average benchmark for the ACO under subsection (d)(1)(B); ‘‘(5) the percent of shared savings specified by the Sec- retary under subsection (d)(2) and any limit on the total amount of shared savings established by the Secretary under such subsection; and ‘‘(6) the termination of an ACO under subsection (d)(4). EFINITIONS .—In this section: ‘‘(h) D ‘‘(1) ACO PROFESSIONAL .—The term ‘ACO professional’ means— ‘‘(A) a physician (as defined in section 1861(r)(1)); and ‘‘(B) a practitioner described in section 1842(b)(18)(C)(i). ‘‘(2) H OSPITAL .—The term ‘hospital’ means a subsection (d) hospital (as defined in section 1886(d)(1)(B)). EDICARE FEE - FOR - SERVICE BENEFICIARY .—The term ‘‘(3) M ‘Medicare fee-for-service beneficiary’ means an individual who is enrolled in the original Medicare fee-for-service program under parts A and B and is not enrolled in an MA plan under part C, an eligible organization under section 1876, or a PACE program under section 1894. ø Subsections (i)-(k) added by section 10307 ¿ ‘‘(i) O PTION T O U SE O THER P AYMENT M ODELS .— ‘‘(1) I .—If the Secretary determines appropriate, N GENERAL the Secretary may use any of the payment models described in paragraph (2) or (3) for making payments under the program rather than the payment model described in subsection (d). ‘‘(2) P ARTIAL CAPITATION MODEL .— ‘‘(A) I N GENERAL .—Subject to subparagraph (B), a model described in this paragraph is a partial capitation model in which an ACO is at financial risk for some, but not all, of the items and services covered under parts A and B, such as at risk for some or all physicians’ services or all items and services under part B. The Secretary may June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00317 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

337 318 Sec. 3023 PPACA (Consolidated) limit a partial capitation model to ACOs that are highly integrated systems of care and to ACOs capable of bearing risk, as determined to be appropriate by the Secretary. .—Pay- O ADDITIONAL PROGRAM EXPENDITURES ‘‘(B) N ments to an ACO for items and services under this title for beneficiaries for a year under the partial capitation model shall be established in a manner that does not result in spending more for such ACO for such beneficiaries than would otherwise be expended for such ACO for such bene- ficiaries for such year if the model were not implemented, as estimated by the Secretary. .— THER PAYMENT MODELS ‘‘(3) O N GENERAL .—Subject to subparagraph (B), a ‘‘(A) I model described in this paragraph is any payment model that the Secretary determines will improve the quality and efficiency of items and services furnished under this title. ‘‘(B) N O ADDITIONAL PROGRAM EXPENDITURES .—Sub- paragraph (B) of paragraph (2) shall apply to a payment model under subparagraph (A) in a similar manner as such subparagraph (B) applies to the payment model under paragraph (2). NVOLVEMENT IN P RIVATE P AYER AND O T HIRD P ARTY THER ‘‘(j) I A RRANGEMENTS .—The Secretary may give preference to ACOs who are participating in similar arrangements with other payers. ‘‘(k) T REATMENT OF P HYSICIAN G ROUP P RACTICE D EMONSTRA - TION .—During the period beginning on the date of the enactment of this section and ending on the date the program is established, the Secretary may enter into an agreement with an ACO under the demonstration under section 1866A, subject to rebasing and other modifications deemed appropriate by the Secretary.’’. SEC. 3023. NATIONAL PILOT PROGRAM ON PAYMENT BUNDLING. Title XVIII of the Social Security Act, as amended by section 3021, is amended by inserting after section 1866C the following ø As revised by section 10308(b)(1) ¿ new section: ‘‘ NATIONAL PILOT PROGRAM ON PAYMENT BUNDLING ‘‘S EC . 1866D ø 42 U.S.C. 1395cc–4 ¿ . (a) I MPLEMENTATION .— ‘‘(1) I N GENERAL .—The Secretary shall establish a pilot program for integrated care during an episode of care provided to an applicable beneficiary around a hospitalization in order to improve the coordination, quality, and efficiency of health care services under this title. ‘‘(2) D EFINITIONS .—In this section: ‘‘(A) A PPLICABLE BENEFICIARY .—The term ‘applicable beneficiary’ means an individual who— ‘‘(i) is entitled to, or enrolled for, benefits under part A and enrolled for benefits under part B of such title, but not enrolled under part C or a PACE pro- gram under section 1894; and ‘‘(ii) is admitted to a hospital for an applicable condition. ‘‘(B) A PPLICABLE CONDITION .—The term ‘applicable condition’ means 1 or more of 10 conditions selected by the June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00318 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

338 319 Sec. 3023 1866D SSA PPACA (Consolidated) \ Secretary. In selecting conditions under the preceding sen- tence, the Secretary shall take into consideration the fol- As revised by section 10308(a)(1) ¿ lowing factors: ø ‘‘(i) Whether the conditions selected include a mix of chronic and acute conditions. ‘‘(ii) Whether the conditions selected include a mix of surgical and medical conditions. ‘‘(iii) Whether a condition is one for which there is evidence of an opportunity for providers of services and suppliers to improve the quality of care furnished while reducing total expenditures under this title. ‘‘(iv) Whether a condition has significant variation in— ‘‘(I) the number of readmissions; and ‘‘(II) the amount of expenditures for post- acute care spending under this title. ‘‘(v) Whether a condition is high-volume and has high post-acute care expenditures under this title. ‘‘(vi) Which conditions the Secretary determines are most amenable to bundling across the spectrum of care given practice patterns under this title. PPLICABLE SERVICES .—The term ‘applicable serv- ‘‘(C) A ices’ means the following: ‘‘(i) Acute care inpatient services. ‘‘(ii) Physicians’ services delivered in and outside of an acute care hospital setting. ‘‘(iii) Outpatient hospital services, including emer- gency department services. ‘‘(iv) Post-acute care services, including home health services, skilled nursing services, inpatient re- habilitation services, and inpatient hospital services furnished by a long-term care hospital. ‘‘(v) Other services the Secretary determines ap- propriate. PISODE OF CARE .— ‘‘(D) E N GENERAL .—Subject to clause (ii), the term ‘‘(i) I ‘episode of care’ means, with respect to an applicable condition and an applicable beneficiary, the period that includes— ‘‘(I) the 3 days prior to the admission of the applicable beneficiary to a hospital for the applica- ble condition; ‘‘(II) the length of stay of the applicable bene- ficiary in such hospital; and ‘‘(III) the 30 days following the discharge of the applicable beneficiary from such hospital. ‘‘(ii) E STABLISHMENT OF PERIOD BY THE SEC - RETARY .—The Secretary, as appropriate, may establish a period (other than the period described in clause (i)) for an episode of care under the pilot program. ‘‘(E) P HYSICIANS ’ SERVICES .—The term ‘physicians’ services’ has the meaning given such term in section 1861(q). June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00319 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

339 320 Sec. 3023 1866D SSA PPACA (Consolidated) \ ILOT PROGRAM .—The term ‘pilot program’ means ‘‘(F) P the pilot program under this section. ROVIDER OF SERVICES ‘‘(G) P .—The term ‘provider of services’ has the meaning given such term in section 1861(u). ‘‘(H) R EADMISSION .—The term ‘readmission’ has the meaning given such term in section 1886(q)(5)(E). .—The term ‘supplier’ has the meaning ‘‘(I) S UPPLIER given such term in section 1861(d). ‘‘(3) D EADLINE FOR IMPLEMENTATION .—The Secretary shall establish the pilot program not later than January 1, 2013. EVELOPMENTAL P HASE ‘‘(b) D .— ‘‘(1) D OF PATIENT ASSESSMENT INSTRU - ETERMINATION .—The Secretary shall determine which patient assess- MENT ment instrument (such as the Continuity Assessment Record and Evaluation (CARE) tool) shall be used under the pilot pro- gram to evaluate the applicable condition of an applicable ben- eficiary for purposes of determining the most clinically appro- priate site for the provision of post-acute care to the applicable beneficiary. ‘‘(2) D EVELOPMENT OF QUALITY MEASURES FOR AN EPISODE OF CARE AND FOR POST - ACUTE CARE .— ‘‘(A) I N GENERAL .—The Secretary, in consultation with the Agency for Healthcare Research and Quality and the entity with a contract under section 1890(a) of the Social Security Act, shall develop quality measures for use in the pilot program— ‘‘(i) for episodes of care; and ‘‘(ii) for post-acute care. ITE - - ACUTE CARE QUALITY MEAS - NEUTRAL POST ‘‘(B) S .—Any quality measures developed under subpara- URES graph (A)(ii) shall be site-neutral. ‘‘(C) C - OORDINATION WITH QUALITY MEASURE DEVELOP MENT AND ENDORSEMENT PROCEDURES .—The Secretary shall ensure that the development of quality measures under subparagraph (A) is done in a manner that is con- sistent with the measures developed and endorsed under section 1890 and 1890A that are applicable to all post- acute care settings. ‘‘(c) D ETAILS .— ‘‘(1) D .— URATION ‘‘(A) I N GENERAL .—Subject to subparagraph (B), the pilot program shall be conducted for a period of 5 years. ‘‘(B) E XPANSION .— ø Replaced by section 10308(a)(2) ¿ The Secretary may, at any point after January 1, 2016, ex- pand the duration and scope of the pilot program, to the extent determined appropriate by the Secretary, if— ‘‘(i) the Secretary determines that such expansion is expected to— ‘‘(I) reduce spending under title XVIII of the Social Security Act without reducing the quality of care; or ‘‘(II) improve the quality of care and reduce spending; June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00320 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

340 321 Sec. 3023 1866D SSA PPACA (Consolidated) \ ‘‘(ii) the Chief Actuary of the Centers for Medicare & Medicaid Services certifies that such expansion would reduce program spending under such title XVIII; and ‘‘(iii) the Secretary determines that such expan- sion would not deny or limit the coverage or provision of benefits under this title for individuals. - ARTICIPATING PROVIDERS OF SERVICES AND SUP ‘‘(2) P PLIERS .— N GENERAL .—An entity comprised of providers of ‘‘(A) I services and suppliers, including a hospital, a physician group, a skilled nursing facility, and a home health agen- cy, who are otherwise participating under this title, may submit an application to the Secretary to provide applica- ble services to applicable individuals under this section. EQUIREMENTS .—The Secretary shall develop re- ‘‘(B) R quirements for entities to participate in the pilot program under this section. Such requirements shall ensure that applicable beneficiaries have an adequate choice of pro- viders of services and suppliers under the pilot program. ‘‘(3) P AYMENT METHODOLOGY .— ‘‘(A) I N GENERAL .— ‘‘(i) E STABLISHMENT OF PAYMENT METHODS .—The Secretary shall develop payment methods for the pilot program for entities participating in the pilot program. Such payment methods may include bundled pay- ments and bids from entities for episodes of care. The Secretary shall make payments to the entity for serv- ices covered under this section. ‘‘(ii) N O ADDITIONAL PROGRAM EXPENDITURES .— Payments under this section for applicable items and services under this title (including payment for serv- ices described in subparagraph (B)) for applicable beneficiaries for a year shall be established in a man- ner that does not result in spending more for such en- tity for such beneficiaries than would otherwise be ex- pended for such entity for such beneficiaries for such year if the pilot program were not implemented, as es- timated by the Secretary. .—A payment NCLUSION OF CERTAIN SERVICES ‘‘(B) I methodology tested under the pilot program shall include payment for the furnishing of applicable services and other appropriate services, such as care coordination, medication reconciliation, discharge planning, transitional care serv- ices, and other patient-centered activities as determined appropriate by the Secretary. ‘‘(C) B .— UNDLED PAYMENTS N GENERAL .—A bundled payment under the ‘‘(i) I pilot program shall— ‘‘(I) be comprehensive, covering the costs of applicable services and other appropriate services furnished to an individual during an episode of care (as determined by the Secretary); and June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00321 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

341 322 Sec. 3023 1866D SSA PPACA (Consolidated) \ ‘‘(II) be made to the entity which is partici- pating in the pilot program. EQUIREMENT FOR PROVISION OF APPLICABLE ‘‘(ii) R .—Applica- SERVICES AND OTHER APPROPRIATE SERVICES ble services and other appropriate services for which payment is made under this subparagraph shall be furnished or directed by the entity which is partici- pating in the pilot program. - ACUTE CARE SERVICES AFTER AYMENT FOR POST ‘‘(D) P .—The Secretary shall establish pro- THE EPISODE OF CARE cedures, in the case where an applicable beneficiary re- quires continued post-acute care services after the last day of the episode of care, under which payment for such serv- ices shall be made. ‘‘(4) Q UALITY MEASURES .— ‘‘(A) I N GENERAL .—The Secretary shall establish qual- ity measures (including quality measures of process, out- come, and structure) related to care provided by entities participating in the pilot program. Quality measures estab- lished under the preceding sentence shall include meas- ures of the following: ‘‘(i) Functional status improvement. ‘‘(ii) Reducing rates of avoidable hospital readmis- sions. ‘‘(iii) Rates of discharge to the community. ‘‘(iv) Rates of admission to an emergency room after a hospitalization. ‘‘(v) Incidence of health care acquired infections. ‘‘(vi) Efficiency measures. ‘‘(vii) Measures of patient-centeredness of care. ‘‘(viii) Measures of patient perception of care. ‘‘(ix) Other measures, including measures of pa- tient outcomes, determined appropriate by the Sec- retary. EPORTING ON QUALITY MEASURES .— ‘‘(B) R ‘‘(i) I N GENERAL .—A entity shall submit data to the Secretary on quality measures established under subparagraph (A) during each year of the pilot pro- gram (in a form and manner, subject to clause (iii), specified by the Secretary). UBMISSION OF DATA THROUGH ELECTRONIC ‘‘(ii) S HEALTH RECORD .—To the extent practicable, the Sec- retary shall specify that data on measures be sub- mitted under clause (i) through the use of an qualified electronic health record (as defined in section 3000(13) of the Public Health Service Act (42 U.S.C. 300jj– 11(13)) in a manner specified by the Secretary. AIVER .—The Secretary may waive such provisions of this ‘‘(d) W title and title XI as may be necessary to carry out the pilot pro- gram. - NDEPENDENT E VALUATION AND R EPORTS ON P ILOT P RO ‘‘(e) I GRAM .— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00322 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

342 323 Sec. 3023 1866D SSA PPACA (Consolidated) \ NDEPENDENT EVALUATION .—The Secretary shall con- ‘‘(1) I duct an independent evaluation of the pilot program, including the extent to which the pilot program has— ‘‘(A) improved quality measures established under sub- section (c)(4)(A); ‘‘(B) improved health outcomes; ‘‘(C) improved applicable beneficiary access to care; and ‘‘(D) reduced spending under this title. ‘‘(2) R .— EPORTS ‘‘(A) I NTERIM REPORT .—Not later than 2 years after the implementation of the pilot program, the Secretary shall submit to Congress a report on the initial results of the independent evaluation conducted under paragraph (1). ‘‘(B) F .—Not later than 3 years after the INAL REPORT implementation of the pilot program, the Secretary shall submit to Congress a report on the final results of the independent evaluation conducted under paragraph (1). ‘‘(f) C ONSULTATION .—The Secretary shall consult with rep- resentatives of small rural hospitals, including critical access hos- pitals (as defined in section 1861(mm)(1)), regarding their partici- pation in the pilot program. Such consultation shall include consid- eration of innovative methods of implementing bundled payments in hospitals described in the preceding sentence, taking into consid- eration any difficulties in doing so as a result of the low volume of services provided by such hospitals. PPLICATION OF P ILOT P ROGRAM TO C ONTINUING C ARE ‘‘(g) A H .— ø Replaced by section 10308(a)(3) ¿ OSPITALS N GENERAL ‘‘(1) I .—In conducting the pilot program, the Secretary shall apply the provisions of the program so as to separately pilot test the continuing care hospital model. PECIAL RULES .—In pilot testing the continuing care ‘‘(2) S hospital model under paragraph (1), the following rules shall apply: ‘‘(A) Such model shall be tested without the limitation to the conditions selected under subsection (a)(2)(B). ‘‘(B) Notwithstanding subsection (a)(2)(D), an episode of care shall be defined as the full period that a patient stays in the continuing care hospital plus the first 30 days following discharge from such hospital. ‘‘(3) C ONTINUING CARE HOSPITAL DEFINED .—In this sub- section, the term ‘continuing care hospital’ means an entity that has demonstrated the ability to meet patient care and pa- tient safety standards and that provides under common man- agement the medical and rehabilitation services provided in in- patient rehabilitation hospitals and units (as defined in section 1886(d)(1)(B)(ii)), long term care hospitals (as defined in sec- tion 1886(d)(1)(B)(iv)(I)), and skilled nursing facilities (as de- fined in section 1819(a)) that are located in a hospital de- scribed in section 1886(d). ‘‘(h) A DMINISTRATION .—Chapter 35 of title 44, United States Code, shall not apply to the selection, testing, and evaluation of models or the expansion of such models under this section.’’. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00323 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

343 324 Sec. 3024 PPACA (Consolidated) SEC. 3024. INDEPENDENCE AT HOME DEMONSTRATION PROGRAM. Title XVIII of the Social Security Act is amended by inserting after section 1866D, as inserted by section 3023, the following new As revised by section 10308(b)(2) section: ¿ ø ‘‘ INDEPENDENCE AT HOME MEDICAL PRACTICE DEMONSTRATION PROGRAM ‘‘S ø 42 U.S.C. 1395cc–5 ¿ . (a) E STABLISHMENT .— EC . 1866E N GENERAL ‘‘(1) I .—The Secretary shall conduct a dem- onstration program (in this section referred to as the ‘dem- onstration program’) to test a payment incentive and service delivery model that utilizes physician and nurse practitioner directed home-based primary care teams designed to reduce ex- penditures and improve health outcomes in the provision of items and services under this title to applicable beneficiaries (as defined in subsection (d)). ‘‘(2) R EQUIREMENT .—The demonstration program shall test whether a model described in paragraph (1), which is account- able for providing comprehensive, coordinated, continuous, and accessible care to high-need populations at home and coordi- nating health care across all treatment settings, results in— ‘‘(A) reducing preventable hospitalizations; ‘‘(B) preventing hospital readmissions; ‘‘(C) reducing emergency room visits; ‘‘(D) improving health outcomes commensurate with the beneficiaries’ stage of chronic illness; ‘‘(E) improving the efficiency of care, such as by reduc- ing duplicative diagnostic and laboratory tests; ‘‘(F) reducing the cost of health care services covered under this title; and ‘‘(G) achieving beneficiary and family caregiver satis- faction. ‘‘(b) I H OME M EDICAL P RACTICE .— NDEPENDENCE AT NDEPENDENCE AT HOME MEDICAL PRACTICE DE - ‘‘(1) I FINED .—In this section: ‘‘(A) I N GENERAL .—The term ‘independence at home medical practice’ means a legal entity that— ‘‘(i) is comprised of an individual physician or nurse practitioner or group of physicians and nurse practitioners that provides care as part of a team that includes physicians, nurses, physician assistants, pharmacists, and other health and social services staff as appropriate who have experience providing home- based primary care to applicable beneficiaries, make in-home visits, and are available 24 hours per day, 7 days per week to carry out plans of care that are tai- lored to the individual beneficiary’s chronic conditions and designed to achieve the results in subsection (a); ‘‘(ii) is organized at least in part for the purpose of providing physicians’ services; ‘‘(iii) has documented experience in providing home-based primary care services to high-cost chron- ically ill beneficiaries, as determined appropriate by the Secretary; June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00324 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

344 325 Sec. 3024 1866E SSA PPACA (Consolidated) \ ‘‘(iv) furnishes services to at least 200 applicable beneficiaries (as defined in subsection (d)) during each year of the demonstration program; ‘‘(v) has entered into an agreement with the Sec- retary; ‘‘(vi) uses electronic health information systems, remote monitoring, and mobile diagnostic technology; and ‘‘(vii) meets such other criteria as the Secretary determines to be appropriate to participate in the demonstration program. The entity shall report on quality measures (in such form, manner, and frequency as specified by the Secretary, which may be for the group, for providers of services and suppliers, or both) and report to the Secretary (in a form, manner, and frequency as specified by the Secretary) such data as the Secretary determines appropriate to monitor and evaluate the demonstration program. ‘‘(B) P HYSICIAN .—The term ‘physician’ includes, except as the Secretary may otherwise provide, any individual who furnishes services for which payment may be made as physicians’ services and has the medical training or experi- ence to fulfill the physician’s role described in subpara- graph (A)(i). ARTICIPATION OF NURSE PRACTITIONERS AND PHYSI - ‘‘(2) P CIAN ASSISTANTS .—Nothing in this section shall be construed to prevent a nurse practitioner or physician assistant from par- ticipating in, or leading, a home-based primary care team as part of an independence at home medical practice if— ‘‘(A) all the requirements of this section are met; ‘‘(B) the nurse practitioner or physician assistant, as the case may be, is acting consistent with State law; and ‘‘(C) the nurse practitioner or physician assistant has the medical training or experience to fulfill the nurse prac- titioner or physician assistant role described in paragraph (1)(A)(i). ‘‘(3) I .—Noth- NCLUSION OF PROVIDERS AND PRACTITIONERS ing in this subsection shall be construed as preventing an inde- pendence at home medical practice from including a provider of services or a participating practitioner described in section 1842(b)(18)(C) that is affiliated with the practice under an ar- rangement structured so that such provider of services or prac- titioner participates in the demonstration program and shares in any savings under the demonstration program. ‘‘(4) Q UALITY AND PERFORMANCE STANDARDS .—The Sec- retary shall develop quality performance standards for inde- pendence at home medical practices participating in the dem- onstration program. ‘‘(c) P AYMENT M ETHODOLOGY .— STABLISHMENT OF TARGET SPENDING LEVEL .—The ‘‘(1) E Secretary shall establish an estimated annual spending target, for the amount the Secretary estimates would have been spent in the absence of the demonstration, for items and services cov- ered under parts A and B furnished to applicable beneficiaries June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00325 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

345 326 Sec. 3024 1866E SSA PPACA (Consolidated) \ for each qualifying independence at home medical practice under this section. Such spending targets shall be determined on a per capita basis. Such spending targets shall include a risk corridor that takes into account normal variation in ex- penditures for items and services covered under parts A and B furnished to such beneficiaries with the size of the corridor being related to the number of applicable beneficiaries fur- nished services by each independence at home medical prac- tice. The spending targets may also be adjusted for other fac- tors as the Secretary determines appropriate. NCENTIVE PAYMENTS .—Subject to performance on ‘‘(2) I quality measures, a qualifying independence at home medical practice is eligible to receive an incentive payment under this section if actual expenditures for a year for the applicable beneficiaries it enrolls are less than the estimated spending target established under paragraph (1) for such year. An incen- tive payment for such year shall be equal to a portion (as de- termined by the Secretary) of the amount by which actual ex- penditures (including incentive payments under this para- graph) for applicable beneficiaries under parts A and B for such year are estimated to be less than 5 percent less than the estimated spending target for such year, as determined under paragraph (1). ‘‘(d) A PPLICABLE B ENEFICIARIES .— ‘‘(1) D EFINITION .—In this section, the term ‘applicable ben- eficiary’ means, with respect to a qualifying independence at home medical practice, an individual who the practice has de- termined— ‘‘(A) is entitled to benefits under part A and enrolled for benefits under part B; ‘‘(B) is not enrolled in a Medicare Advantage plan under part C or a PACE program under section 1894; ‘‘(C) has 2 or more chronic illnesses, such as congestive heart failure, diabetes, other dementias designated by the Secretary, chronic obstructive pulmonary disease, ischemic heart disease, stroke, Alzheimer’s Disease and neurodegenerative diseases, and other diseases and condi- tions designated by the Secretary which result in high costs under this title; ‘‘(D) within the past 12 months has had a nonelective hospital admission; ‘‘(E) within the past 12 months has received acute or subacute rehabilitation services; ‘‘(F) has 2 or more functional dependencies requiring the assistance of another person (such as bathing, dress- ing, toileting, walking, or feeding); and ‘‘(G) meets such other criteria as the Secretary deter- mines appropriate. .—The Secretary ATIENT ELECTION TO PARTICIPATE ‘‘(2) P shall determine an appropriate method of ensuring that appli- cable beneficiaries have agreed to enroll in an independence at home medical practice under the demonstration program. En- rollment in the demonstration program shall be voluntary. June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00326 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

346 327 Sec. 3024 1866E SSA PPACA (Consolidated) \ ENEFICIARY ACCESS TO SERVICES .—Nothing in this ‘‘(3) B section shall be construed as encouraging physicians or nurse practitioners to limit applicable beneficiary access to services covered under this title and applicable beneficiaries shall not be required to relinquish access to any benefit under this title as a condition of receiving services from an independence at home medical practice. ‘‘(e) I MPLEMENTATION .— ‘‘(1) S .—The demonstration program shall TARTING DATE begin no later than January 1, 2012. An agreement with an independence at home medical practice under the demonstra- tion program may cover not more than a 3-year period. O PHYSICIAN DUPLICATION IN DEMONSTRATION PAR - ‘‘(2) N .—The Secretary shall not pay an independence at TICIPATION home medical practice under this section that participates in section 1899. ‘‘(3) N O BENEFICIARY DUPLICATION IN DEMONSTRATION PAR - TICIPATION .—The Secretary shall ensure that no applicable beneficiary enrolled in an independence at home medical prac- tice under this section is participating in the programs under section 1899. ‘‘(4) P REFERENCE .—In approving an independence at home medical practice, the Secretary shall give preference to prac- tices that are— ‘‘(A) located in high-cost areas of the country; ‘‘(B) have experience in furnishing health care services to applicable beneficiaries in the home; and ‘‘(C) use electronic medical records, health information technology, and individualized plans of care. .—In selecting IMITATION ON NUMBER OF PRACTICES ‘‘(5) L qualified independence at home medical practices to partici- pate under the demonstration program, the Secretary shall limit the number of such practices so that the number of appli- cable beneficiaries that may participate in the demonstration program does not exceed 10,000. ‘‘(6) W AIVER .—The Secretary may waive such provisions of this title and title XI as the Secretary determines necessary in order to implement the demonstration program. DMINISTRATION .—Chapter 35 of title 44, United ‘‘(7) A States Code, shall not apply to this section. ‘‘(f) E VALUATION AND M ONITORING .— ‘‘(1) I N GENERAL .—The Secretary shall evaluate each inde- pendence at home medical practice under the demonstration program to assess whether the practice achieved the results described in subsection (a). ‘‘(2) M ONITORING APPLICABLE BENEFICIARIES .—The Sec- retary may monitor data on expenditures and quality of serv- ices under this title after an applicable beneficiary discontinues receiving services under this title through a qualifying inde- pendence at home medical practice. ‘‘(g) R EPORTS TO C ONGRESS .—The Secretary shall conduct an independent evaluation of the demonstration program and submit to Congress a final report, including best practices under the dem- onstration program. Such report shall include an analysis of the June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00327 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

347 328 Sec. 3025 PPACA (Consolidated) demonstration program on coordination of care, expenditures under this title, applicable beneficiary access to services, and the quality of health care services provided to applicable beneficiaries. ‘‘(h) F .—For purposes of administering and carrying out UNDING the demonstration program, other than for payments for items and services furnished under this title and incentive payments under subsection (c), in addition to funds otherwise appropriated, there shall be transferred to the Secretary for the Center for Medicare & Medicaid Services Program Management Account from the Fed- eral Hospital Insurance Trust Fund under section 1817 and the Federal Supplementary Medical Insurance Trust Fund under sec- tion 1841 (in proportions determined appropriate by the Secretary) $5,000,000 for each of fiscal years 2010 through 2015. Amounts transferred under this subsection for a fiscal year shall be available until expended. ‘‘(i) T .— ERMINATION ANDATORY TERMINATION ‘‘(1) M .—The Secretary shall termi- nate an agreement with an independence at home medical practice if— ‘‘(A) the Secretary estimates or determines that such practice will not receive an incentive payment for the sec- ond of 2 consecutive years under the demonstration pro- gram; or ‘‘(B) such practice fails to meet quality standards dur- ing any year of the demonstration program. ERMISSIVE TERMINATION .—The Secretary may termi- ‘‘(2) P nate an agreement with an independence at home medical practice for such other reasons determined appropriate by the Secretary.’’. SEC. 3025. HOSPITAL READMISSIONS REDUCTION PROGRAM. (a) I N G ENERAL .—Section 1886 of the Social Security Act (42 U.S.C. 1395ww), as amended by sections 3001 and 3008, is amend- ed by adding at the end the following new subsection: OSPITAL EADMISSIONS R EDUCTION P ROGRAM .— ‘‘(q) H R ‘‘(1) I .—With respect to payment for discharges N GENERAL from an applicable hospital (as defined in paragraph (5)(C)) oc- curring during a fiscal year beginning on or after October 1, 2012, in order to account for excess readmissions in the hos- pital, the Secretary shall make payments (in addition to the payments described in paragraph (2)(A)(ii)) for such a dis- charge to such hospital under subsection (d) (or section 1814(b)(3), as the case may be) in an amount equal to the prod- uct of— As revised by section 10309 ¿ ø ‘‘(A) the base operating DRG payment amount (as de- fined in paragraph (2)) for the discharge; and ‘‘(B) the adjustment factor (described in paragraph (3)(A)) for the hospital for the fiscal year. .— ASE OPERATING DRG PAYMENT AMOUNT DEFINED ‘‘(2) B ‘‘(A) I N GENERAL .—Except as provided in subpara- graph (B), in this subsection, the term ‘base operating DRG payment amount’ means, with respect to a hospital for a fiscal year— June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00328 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

348 329 Sec. 3025 PPACA (Consolidated) ‘‘(i) the payment amount that would otherwise be made under subsection (d) (determined without regard to subsection (o)) for a discharge if this subsection did not apply; reduced by ‘‘(ii) any portion of such payment amount that is attributable to payments under paragraphs (5)(A), (5)(B), (5)(F), and (12) of subsection (d). ‘‘(B) S PECIAL RULES FOR CERTAIN HOSPITALS .— ‘‘(i) S OLE COMMUNITY HOSPITALS AND MEDICARE - DEPENDENT , SMALL RURAL HOSPITALS .—In the case of a medicare-dependent, small rural hospital (with re- spect to discharges occurring during fiscal years 2012 and 2013) or a sole community hospital, in applying subparagraph (A)(i), the payment amount that would otherwise be made under subsection (d) shall be deter- mined without regard to subparagraphs (I) and (L) of subsection (b)(3) and subparagraphs (D) and (G) of subsection (d)(5). ‘‘(ii) H OSPITALS PAID UNDER SECTION 1814 .—In the case of a hospital that is paid under section 1814(b)(3), the Secretary may exempt such hospitals provided that States paid under such section submit an annual report to the Secretary describing how a similar pro- gram in the State for a participating hospital or hos- pitals achieves or surpasses the measured results in terms of patient health outcomes and cost savings es- tablished herein with respect to this section. .— DJUSTMENT FACTOR ‘‘(3) A ‘‘(A) I .—For purposes of paragraph (1), the N GENERAL adjustment factor under this paragraph for an applicable hospital for a fiscal year is equal to the greater of— ‘‘(i) the ratio described in subparagraph (B) for the hospital for the applicable period (as defined in para- graph (5)(D)) for such fiscal year; or ‘‘(ii) the floor adjustment factor specified in sub- paragraph (C). ‘‘(B) R ATIO .—The ratio described in this subparagraph for a hospital for an applicable period is equal to 1 minus the ratio of— ‘‘(i) the aggregate payments for excess readmis- sions (as defined in paragraph (4)(A)) with respect to an applicable hospital for the applicable period; and ‘‘(ii) the aggregate payments for all discharges (as defined in paragraph (4)(B)) with respect to such ap- plicable hospital for such applicable period. LOOR ADJUSTMENT FACTOR .—For purposes of ‘‘(C) F subparagraph (A), the floor adjustment factor specified in this subparagraph for— ‘‘(i) fiscal year 2013 is 0.99; ‘‘(ii) fiscal year 2014 is 0.98; or ‘‘(iii) fiscal year 2015 and subsequent fiscal years is 0.97. GGREGATE PAYMENTS , EXCESS READMISSION RATIO DE - ‘‘(4) A FINED .—For purposes of this subsection: June 9, 2010 VerDate 0ct 09 2002 13:03 Jun 09, 2010 Jkt 000000 PO 00000 Frm 00329 Fmt 9001 Sfmt 6601 F:\P11\NHI\COMP\PPACACON.005 HOLCPC

349 330 Sec. 3025 PPACA (Consolidated) GGREGATE PAYMENTS EXCESS READMIS - ‘‘(A) A FOR .—The term ‘aggregate payments for excess readmis- SIONS sions’ means, for a hospital for an applicable period, the sum, for applicable conditions (as defined in paragraph (5)(A)), of the product, for each applicable condition, of— ‘‘(i) the base operating DRG payment amount for such hospital for such applicable period for such condi- tion; ‘‘(ii) the number of admissions for such condition for such hospital for such applicable period; and ‘‘(iii) the excess readmissions ratio (as defined in subparagraph (C)) for such hospital for such applicable period minus 1. ‘‘(B) A GGREGATE PAYMENTS FOR ALL DISCHARGES .—The term ‘aggregate payments for all discharges’ means, for a hospital for an applicable period, the sum of the base oper- ating DRG payment amounts for all discharges for all con- ditions from such hospital for such applicable period. ‘‘(C) E XCESS READMISSION RATIO .— ‘‘(i) I N GENERAL .—Subject to clause (ii), the term ‘excess readmissions ratio’ means, with respect to an applicable condition for a hospital for an applicable pe- riod, the ratio (but not less than 1.0) of— ‘‘(I) the risk adjusted readmissions based on actual readmissions, as determined consistent with a readmission measure methodology that has been endorsed under paragraph (5)(A)(ii)(I), for an applicable hospital for such condition with respect to such applicable period; to ‘‘(II) the risk adjusted expected readmissions (as determined consistent with such a method- ology) for such hospital for such condition with re- spect to such applicable period. XCLUSION OF CERTAIN READMISSIONS ‘‘(ii) E .—For purposes of clause (i), with respect to a hospital, ex- cess readmissions shall not include readmissions for an applicable condition for which there are fewer than a minimum number (as determined by the Secretary) of discharges for such applicable condition for the ap- plicable period and such hospital. ‘‘(5) D EFINITIONS .—For purposes of this subsection: ‘‘(A) A .—The term ‘applicable PPLICABLE CONDITION condition’ means, subject to subparagraph (B), a condition or procedure selected by the Secretary among conditions and procedures for which— ‘‘(i) readmissions (as defin