HR 3200 IH
111th CONGRESS
1st Session
H. R. 3200
To provide affordable, quality health care for all
Americans and reduce the growth in health care spending, and for other
purposes.
IN THE HOUSE OF REPRESENTATIVES
July 14, 2009
Mr. DINGELL (for himself, Mr. RANGEL, Mr. WAXMAN, Mr. GEORGE MILLER
of California, Mr. STARK, Mr. PALLONE, and Mr. ANDREWS) introduced the
following bill; which was referred to the Committee on Energy and
Commerce, and in addition to the Committees on Ways and Means,
Education and Labor, Oversight and Government Reform, and the Budget,
for a period to be subsequently determined by the Speaker, in each case
for consideration of such provisions as fall within the jurisdiction of
the committee concerned
A BILL
To provide affordable, quality health care for all
Americans and reduce the growth in health care spending, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF DIVISIONS, TITLES, AND SUBTITLES.
(a) Short Title- This Act may be cited as the `America's Affordable Health Choices Act of 2009'.
(b) Table of Divisions, Titles, and Subtitles- This Act is divided into divisions, titles, and subtitles as follows:
DIVISION A--AFFORDABLE HEALTH CARE CHOICES
TITLE I--PROTECTIONS AND STANDARDS FOR QUALIFIED HEALTH BENEFITS PLANS
Subtitle A--General Standards
Subtitle B--Standards Guaranteeing Access to Affordable Coverage
Subtitle C--Standards Guaranteeing Access to Essential Benefits
Subtitle D--Additional Consumer Protections
Subtitle E--Governance
Subtitle F--Relation to Other Requirements; Miscellaneous
Subtitle G--Early Investments
TITLE II--HEALTH INSURANCE EXCHANGE AND RELATED PROVISIONS
Subtitle A--Health Insurance Exchange
Subtitle B--Public Health Insurance Option
Subtitle C--Individual Affordability Credits
TITLE III--SHARED RESPONSIBILITY
Subtitle A--Individual Responsibility
Subtitle B--Employer Responsibility
TITLE IV--AMENDMENTS TO INTERNAL REVENUE CODE OF 1986
Subtitle A--Shared Responsibility
Subtitle B--Credit for Small Business Employee Health Coverage Expenses
Subtitle C--Disclosures To Carry Out Health Insurance Exchange Subsidies
Subtitle D--Other Revenue Provisions
DIVISION B--MEDICARE AND MEDICAID IMPROVEMENTS
TITLE I--IMPROVING HEALTH CARE VALUE
Subtitle A--Provisions Related to Medicare Part A
Subtitle B--Provisions Related to Part B
Subtitle C--Provisions Related to Medicare Parts A and B
Subtitle D--Medicare Advantage Reforms
Subtitle E--Improvements to Medicare Part D
Subtitle F--Medicare Rural Access Protections
TITLE II--MEDICARE BENEFICIARY IMPROVEMENTS
Subtitle A--Improving and Simplifying Financial Assistance for Low Income Medicare Beneficiaries
Subtitle B--Reducing Health Disparities
Subtitle C--Miscellaneous Improvements
TITLE III--PROMOTING PRIMARY CARE, MENTAL HEALTH SERVICES, AND COORDINATED CARE
TITLE IV--QUALITY
Subtitle A--Comparative Effectiveness Research
Subtitle B--Nursing Home Transparency
Subtitle C--Quality Measurements
Subtitle D--Physician Payments Sunshine Provision
Subtitle E--Public Reporting on Health Care-Associated Infections
TITLE V--MEDICARE GRADUATE MEDICAL EDUCATION
TITLE VI--PROGRAM INTEGRITY
Subtitle A--Increased Funding To Fight Waste, Fraud, and Abuse
Subtitle B--Enhanced Penalties for Fraud and Abuse
Subtitle C--Enhanced Program and Provider Protections
Subtitle D--Access to Information Needed To Prevent Fraud, Waste, and Abuse
TITLE VII--MEDICAID AND CHIP
Subtitle A--Medicaid and Health Reform
Subtitle B--Prevention
Subtitle C--Access
Subtitle D--Coverage
Subtitle E--Financing
Subtitle F--Waste, Fraud, and Abuse
Subtitle G--Puerto Rico and the Territories
Subtitle H--Miscellaneous
TITLE VIII--REVENUE-RELATED PROVISIONS
TITLE IX--MISCELLANEOUS PROVISIONS
DIVISION C--PUBLIC HEALTH AND WORKFORCE DEVELOPMENT
TITLE I--COMMUNITY HEALTH CENTERS
TITLE II--WORKFORCE
Subtitle A--Primary Care Workforce
Subtitle B--Nursing Workforce
Subtitle C--Public Health Workforce
Subtitle D--Adapting Workforce to Evolving Health System Needs
TITLE III--PREVENTION AND WELLNESS
TITLE IV--QUALITY AND SURVEILLANCE
TITLE V--OTHER PROVISIONS
Subtitle A--Drug Discount for Rural and Other Hospitals
Subtitle B--School-Based Health Clinics
Subtitle C--National Medical Device Registry
Subtitle D--Grants for Comprehensive Programs To Provide Education to Nurses and Create a Pipeline to Nursing
Subtitle E--States Failing To Adhere to Certain Employment Obligations
DIVISION A--AFFORDABLE HEALTH CARE CHOICES
SEC. 100. PURPOSE; TABLE OF CONTENTS OF DIVISION; GENERAL DEFINITIONS.
(1) IN GENERAL- The purpose of this division is to
provide affordable, quality health care for all Americans and reduce
the growth in health care spending.
(2) BUILDING ON CURRENT SYSTEM- This division achieves
this purpose by building on what works in today's health care system,
while repairing the aspects that are broken.
(3) INSURANCE REFORMS- This division--
(A) enacts strong insurance market reforms;
(B) creates a new Health Insurance Exchange, with a public health insurance option alongside private plans;
(C) includes sliding scale affordability credits; and
(D) initiates shared responsibility among workers, employers, and the government;
so that all Americans have coverage of essential health benefits.
(4) HEALTH DELIVERY REFORM- This division institutes
health delivery system reforms both to increase quality and to reduce
growth in health spending so that health care becomes more affordable
for businesses, families, and government.
(b) Table of Contents of Division- The table of contents of this division is as follows:
Sec. 100. Purpose; table of contents of division; general definitions.
TITLE I--PROTECTIONS AND STANDARDS FOR QUALIFIED HEALTH BENEFITS PLANS
Subtitle A--General Standards
Sec. 101. Requirements reforming health insurance marketplace.
Sec. 102. Protecting the choice to keep current coverage.
Subtitle B--Standards Guaranteeing Access to Affordable Coverage
Sec. 111. Prohibiting pre-existing condition exclusions.
Sec. 112. Guaranteed issue and renewal for insured plans.
Sec. 113. Insurance rating rules.
Sec. 114. Nondiscrimination in benefits; parity in mental health and substance abuse disorder benefits.
Sec. 115. Ensuring adequacy of provider networks.
Sec. 116. Ensuring value and lower premiums.
Subtitle C--Standards Guaranteeing Access to Essential Benefits
Sec. 121. Coverage of essential benefits package.
Sec. 122. Essential benefits package defined.
Sec. 123. Health Benefits Advisory Committee.
Sec. 124. Process for adoption of recommendations; adoption of benefit standards.
Subtitle D--Additional Consumer Protections
Sec. 131. Requiring fair marketing practices by health insurers.
Sec. 132. Requiring fair grievance and appeals mechanisms.
Sec. 133. Requiring information transparency and plan disclosure.
Sec. 134. Application to qualified health benefits plans not offered through the Health Insurance Exchange.
Sec. 135. Timely payment of claims.
Sec. 136. Standardized rules for coordination and subrogation of benefits.
Sec. 137. Application of administrative simplification.
Subtitle E--Governance
Sec. 141. Health Choices Administration; Health Choices Commissioner.
Sec. 142. Duties and authority of Commissioner.
Sec. 143. Consultation and coordination.
Sec. 144. Health Insurance Ombudsman.
Subtitle F--Relation to Other Requirements; Miscellaneous
Sec. 151. Relation to other requirements.
Sec. 152. Prohibiting discrimination in health care.
Sec. 153. Whistleblower protection.
Sec. 154. Construction regarding collective bargaining.
Subtitle G--Early Investments
Sec. 161. Ensuring value and lower premiums.
Sec. 162. Ending health insurance rescission abuse.
Sec. 163. Administrative simplification.
Sec. 164. Reinsurance program for retirees.
TITLE II--HEALTH INSURANCE EXCHANGE AND RELATED PROVISIONS
Subtitle A--Health Insurance Exchange
Sec. 201. Establishment of Health Insurance Exchange; outline of duties; definitions.
Sec. 202. Exchange-eligible individuals and employers.
Sec. 203. Benefits package levels.
Sec. 204. Contracts for the offering of Exchange-participating health benefits plans.
Sec. 205. Outreach and enrollment of Exchange-eligible individuals and employers in Exchange-participating health benefits plan.
Sec. 206. Other functions.
Sec. 207. Health Insurance Exchange Trust Fund.
Sec. 208. Optional operation of State-based health insurance exchanges.
Subtitle B--Public Health Insurance Option
Sec. 221. Establishment and administration of a public health insurance option as an Exchange-qualified health benefits plan.
Sec. 222. Premiums and financing.
Sec. 223. Payment rates for items and services.
Sec. 224. Modernized payment initiatives and delivery system reform.
Sec. 225. Provider participation.
Sec. 226. Application of fraud and abuse provisions.
Subtitle C--Individual Affordability Credits
Sec. 241. Availability through Health Insurance Exchange.
Sec. 242. Affordable credit eligible individual.
Sec. 243. Affordable premium credit.
Sec. 244. Affordability cost-sharing credit.
Sec. 245. Income determinations.
Sec. 246. No Federal payment for undocumented aliens.
TITLE III--SHARED RESPONSIBILITY
Subtitle A--Individual Responsibility
Sec. 301. Individual responsibility.
Subtitle B--Employer Responsibility
Part 1--Health Coverage Participation Requirements
Sec. 311. Health coverage participation requirements.
Sec. 312. Employer responsibility to contribute towards employee and dependent coverage.
Sec. 313. Employer contributions in lieu of coverage.
Sec. 314. Authority related to improper steering.
Part 2--Satisfaction of Health Coverage Participation Requirements
Sec. 321. Satisfaction of health coverage participation requirements under the Employee Retirement Income Security Act of 1974.
Sec. 322. Satisfaction of health coverage participation requirements under the Internal Revenue Code of 1986.
Sec. 323. Satisfaction of health coverage participation requirements under the Public Health Service Act.
Sec. 324. Additional rules relating to health coverage participation requirements.
TITLE IV--AMENDMENTS TO INTERNAL REVENUE CODE OF 1986
Subtitle A--Shared Responsibility
Part 1--Individual Responsibility
Sec. 401. Tax on individuals without acceptable health care coverage.
Part 2--Employer Responsibility
Sec. 411. Election to satisfy health coverage participation requirements.
Sec. 412. Responsibilities of nonelecting employers.
Subtitle B--Credit for Small Business Employee Health Coverage Expenses
Sec. 421. Credit for small business employee health coverage expenses.
Subtitle C--Disclosures To Carry Out Health Insurance Exchange Subsidies
Sec. 431. Disclosures to carry out health insurance exchange subsidies.
Subtitle D--Other Revenue Provisions
Part 1--General Provisions
Sec. 441. Surcharge on high income individuals.
Sec. 442. Delay in application of worldwide allocation of interest.
Part 2--Prevention of Tax Avoidance
Sec. 451. Limitation on treaty benefits for certain deductible payments.
Sec. 452. Codification of economic substance doctrine.
Sec. 453. Penalties for underpayments.
(c) General Definitions- Except as otherwise provided, in this division:
(1) ACCEPTABLE COVERAGE- The term `acceptable coverage' has the meaning given such term in section 202(d)(2).
(2) BASIC PLAN- The term `basic plan' has the meaning given such term in section 203(c).
(3) COMMISSIONER- The term `Commissioner' means the Health Choices Commissioner established under section 141.
(4) COST-SHARING- The term `cost-sharing' includes
deductibles, coinsurance, copayments, and similar charges but does not
include premiums or any network payment differential for covered
services or spending for non-covered services.
(5) DEPENDENT- The term `dependent' has the meaning given such term by the Commissioner and includes a spouse.
(6) EMPLOYMENT-BASED HEALTH PLAN- The term `employment-based health plan'--
(A) means a group health plan (as defined in section 733(a)(1) of the Employee Retirement Income Security Act of 1974); and
(B) includes such a plan that is the following:
(i) FEDERAL, STATE, AND TRIBAL GOVERNMENTAL
PLANS- A governmental plan (as defined in section 3(32) of the Employee
Retirement Income Security Act of 1974), including a health benefits
plan offered under chapter 89 of title 5, United States Code.
(ii) CHURCH PLANS- A church plan (as defined in section 3(33) of the Employee Retirement Income Security Act of 1974).
(7) ENHANCED PLAN- The term `enhanced plan' has the meaning given such term in section 203(c).
(8) ESSENTIAL BENEFITS PACKAGE- The term `essential benefits package' is defined in section 122(a).
(9) FAMILY- The term `family' means an individual and includes the individual's dependents.
(10) FEDERAL POVERTY LEVEL; FPL- The terms `Federal
poverty level' and `FPL' have the meaning given the term `poverty line'
in section 673(2) of the Community Services Block Grant Act (42 U.S.C.
9902(2)), including any revision required by such section.
(11) HEALTH BENEFITS PLAN- The terms `health benefits
plan' means health insurance coverage and an employment-based health
plan and includes the public health insurance option.
(12) HEALTH INSURANCE COVERAGE; HEALTH INSURANCE
ISSUER- The terms `health insurance coverage' and `health insurance
issuer' have the meanings given such terms in section 2791 of the
Public Health Service Act.
(13) HEALTH INSURANCE EXCHANGE- The term `Health
Insurance Exchange' means the Health Insurance Exchange established
under section 201.
(14) MEDICAID- The term `Medicaid' means a State plan
under title XIX of the Social Security Act (whether or not the plan is
operating under a waiver under section 1115 of such Act).
(15) MEDICARE- The term `Medicare' means the health insurance programs under title XVIII of the Social Security Act.
(16) PLAN SPONSOR- The term `plan sponsor' has the
meaning given such term in section 3(16)(B) of the Employee Retirement
Income Security Act of 1974.
(17) PLAN YEAR- The term `plan year' means--
(A) with respect to an employment-based health plan, a plan year as specified under such plan; or
(B) with respect to a health benefits plan other
than an employment-based health plan, a 12-month period as specified by
the Commissioner.
(18) PREMIUM PLAN; PREMIUM-PLUS PLAN- The terms
`premium plan' and `premium-plus plan' have the meanings given such
terms in section 203(c).
(19) QHBP OFFERING ENTITY- The terms `QHBP offering entity' means, with respect to a health benefits plan that is--
(A) a group health plan (as defined, subject to
subsection (d), in section 733(a)(1) of the Employee Retirement Income
Security Act of 1974), the plan sponsor in relation to such group
health plan, except that, in the case of a plan maintained jointly by 1
or more employers and 1 or more employee organizations and with respect
to which an employer is the primary source of financing, such term
means such employer;
(B) health insurance coverage, the health insurance issuer offering the coverage;
(C) the public health insurance option, the Secretary of Health and Human Services;
(D) a non-Federal governmental plan (as defined in
section 2791(d) of the Public Health Service Act), the State or
political subdivision of a State (or agency or instrumentality of such
State or subdivision) which establishes or maintains such plan; or
(E) a Federal governmental plan (as defined in
section 2791(d) of the Public Health Service Act), the appropriate
Federal official.
(20) QUALIFIED HEALTH BENEFITS PLAN- The term
`qualified health benefits plan' means a health benefits plan that
meets the requirements for such a plan under title I and includes the
public health insurance option.
(21) PUBLIC HEALTH INSURANCE OPTION- The term `public
health insurance option' means the public health insurance option as
provided under subtitle B of title II.
(22) SERVICE AREA; PREMIUM RATING AREA- The terms
`service area' and `premium rating area' mean with respect to health
insurance coverage--
(A) offered other than through the Health Insurance
Exchange, such an area as established by the QHBP offering entity of
such coverage in accordance with applicable State law; and
(B) offered through the Health Insurance Exchange,
such an area as established by such entity in accordance with
applicable State law and applicable rules of the Commissioner for
Exchange-participating health benefits plans.
(23) STATE- The term `State' means the 50 States and the District of Columbia.
(24) STATE MEDICAID AGENCY- The term `State Medicaid
agency' means, with respect to a Medicaid plan, the single State agency
responsible for administering such plan under title XIX of the Social
Security Act.
(25) Y1, Y2, ETC- The terms `Y1' , `Y2', `Y3', `Y4',
`Y5', and similar subsequently numbered terms, mean 2013 and subsequent
years, respectively.
TITLE I--PROTECTIONS AND STANDARDS FOR QUALIFIED HEALTH BENEFITS PLANS
Subtitle A--General Standards
SEC. 101. REQUIREMENTS REFORMING HEALTH INSURANCE MARKETPLACE.
(a) Purpose- The purpose of this title is to establish
standards to ensure that new health insurance coverage and
employment-based health plans that are offered meet standards
guaranteeing access to affordable coverage, essential benefits, and
other consumer protections.
(b) Requirements for Qualified Health Benefits Plans- On or
after the first day of Y1, a health benefits plan shall not be a
qualified health benefits plan under this division unless the plan
meets the applicable requirements of the following subtitles for the
type of plan and plan year involved:
(1) Subtitle B (relating to affordable coverage).
(2) Subtitle C (relating to essential benefits).
(3) Subtitle D (relating to consumer protection).
(c) Terminology- In this division:
(1) ENROLLMENT IN EMPLOYMENT-BASED HEALTH PLANS- An
individual shall be treated as being `enrolled' in an employment-based
health plan if the individual is a participant or beneficiary (as such
terms are defined in section 3(7) and 3(8), respectively, of the
Employee Retirement Income Security Act of 1974) in such plan.
(2) INDIVIDUAL AND GROUP HEALTH INSURANCE COVERAGE- The
terms `individual health insurance coverage' and `group health
insurance coverage' mean health insurance coverage offered in the
individual market or large or small group market, respectively, as
defined in section 2791 of the Public Health Service Act.
SEC. 102. PROTECTING THE CHOICE TO KEEP CURRENT COVERAGE.
(a) Grandfathered Health Insurance Coverage Defined-
Subject to the succeeding provisions of this section, for purposes of
establishing acceptable coverage under this division, the term
`grandfathered health insurance coverage' means individual health
insurance coverage that is offered and in force and effect before the
first day of Y1 if the following conditions are met:
(1) LIMITATION ON NEW ENROLLMENT-
(A) IN GENERAL- Except as provided in this
paragraph, the individual health insurance issuer offering such
coverage does not enroll any individual in such coverage if the first
effective date of coverage is on or after the first day of Y1.
(B) DEPENDENT COVERAGE PERMITTED- Subparagraph (A)
shall not affect the subsequent enrollment of a dependent of an
individual who is covered as of such first day.
(2) LIMITATION ON CHANGES IN TERMS OR CONDITIONS-
Subject to paragraph (3) and except as required by law, the issuer does
not change any of its terms or conditions, including benefits and
cost-sharing, from those in effect as of the day before the first day
of Y1.
(3) RESTRICTIONS ON PREMIUM INCREASES- The issuer
cannot vary the percentage increase in the premium for a risk group of
enrollees in specific grandfathered health insurance coverage without
changing the premium for all enrollees in the same risk group at the
same rate, as specified by the Commissioner.
(b) Grace Period for Current Employment-based Health Plans-
(A) IN GENERAL- The Commissioner shall establish a
grace period whereby, for plan years beginning after the end of the
5-year period beginning with Y1, an employment-based health plan in
operation as of the day before the first day of Y1 must meet the same
requirements as apply to a qualified health benefits plan under section
101, including the essential benefit package requirement under section
121.
(B) EXCEPTION FOR LIMITED BENEFITS PLANS-
Subparagraph (A) shall not apply to an employment-based health plan in
which the coverage consists only of one or more of the following:
(i) Any coverage described in section
3001(a)(1)(B)(ii)(IV) of division B of the American Recovery and
Reinvestment Act of 2009 (Public Law 111-5).
(ii) Excepted benefits (as defined in section
733(c) of the Employee Retirement Income Security Act of 1974),
including coverage under a specified disease or illness policy
described in paragraph (3)(A) of such section.
(iii) Such other limited benefits as the Commissioner may specify.
In no case shall an employment-based health plan in
which the coverage consists only of one or more of the coverage or
benefits described in clauses (i) through (iii) be treated as
acceptable coverage under this division
(2) TRANSITIONAL TREATMENT AS ACCEPTABLE COVERAGE-
During the grace period specified in paragraph (1)(A), an
employment-based health plan that is described in such paragraph shall
be treated as acceptable coverage under this division.
(c) Limitation on Individual Health Insurance Coverage-
(1) IN GENERAL- Individual health insurance coverage
that is not grandfathered health insurance coverage under subsection
(a) may only be offered on or after the first day of Y1 as an
Exchange-participating health benefits plan.
(2) SEPARATE, EXCEPTED COVERAGE PERMITTED- Excepted
benefits (as defined in section 2791(c) of the Public Health Service
Act) are not included within the definition of health insurance
coverage. Nothing in paragraph (1) shall prevent the offering, other
than through the Health Insurance Exchange, of excepted benefits so
long as it is offered and priced separately from health insurance
coverage.
Subtitle B--Standards Guaranteeing Access to Affordable Coverage
SEC. 111. PROHIBITING PRE-EXISTING CONDITION EXCLUSIONS.
A qualified health benefits plan may not impose any
pre-existing condition exclusion (as defined in section 2701(b)(1)(A)
of the Public Health Service Act) or otherwise impose any limit or
condition on the coverage under the plan with respect to an individual
or dependent based on any health status-related factors (as defined in
section 2791(d)(9) of the Public Health Service Act) in relation to the
individual or dependent.
SEC. 112. GUARANTEED ISSUE AND RENEWAL FOR INSURED PLANS.
The requirements of sections 2711 (other than subsections
(c) and (e)) and 2712 (other than paragraphs (3), and (6) of subsection
(b) and subsection (e)) of the Public Health Service Act, relating to
guaranteed availability and renewability of health insurance coverage,
shall apply to individuals and employers in all individual and group
health insurance coverage, whether offered to individuals or employers
through the Health Insurance Exchange, through any employment-based
health plan, or otherwise, in the same manner as such sections apply to
employers and health insurance coverage offered in the small group
market, except that such section 2712(b)(1) shall apply only if, before
nonrenewal or discontinuation of coverage, the issuer has provided the
enrollee with notice of non-payment of premiums and there is a grace
period during which the enrollees has an opportunity to correct such
nonpayment. Rescissions of such coverage shall be prohibited except in
cases of fraud as defined in sections 2712(b)(2) of such Act.
SEC. 113. INSURANCE RATING RULES.
(a) In General- The premium rate charged for an insured qualified health benefits plan may not vary except as follows:
(1) LIMITED AGE VARIATION PERMITTED- By age (within
such age categories as the Commissioner shall specify) so long as the
ratio of the highest such premium to the lowest such premium does not
exceed the ratio of 2 to 1.
(2) BY AREA- By premium rating area (as permitted by
State insurance regulators or, in the case of Exchange-participating
health benefits plans, as specified by the Commissioner in consultation
with such regulators).
(3) BY FAMILY ENROLLMENT- By family enrollment (such as
variations within categories and compositions of families) so long as
the ratio of the premium for family enrollment (or enrollments) to the
premium for individual enrollment is uniform, as specified under State
law and consistent with rules of the Commissioner.
(1) STUDY- The Commissioner, in coordination with the
Secretary of Health and Human Services and the Secretary of Labor,
shall conduct a study of the large group insured and self-insured
employer health care markets. Such study shall examine the following:
(A) The types of employers by key characteristics,
including size, that purchase insured products versus those that
self-insure.
(B) The similarities and differences between typical insured and self-insured health plans.
(C) The financial solvency and capital reserve levels of employers that self-insure by employer size.
(D) The risk of self-insured employers not being able to pay obligations or otherwise becoming financially insolvent.
(E) The extent to which rating rules are likely to
cause adverse selection in the large group market or to encourage small
and mid size employers to self-insure
(2) REPORTS- Not later than 18 months after the date of
the enactment of this Act, the Commissioner shall submit to Congress
and the applicable agencies a report on the study conducted under
paragraph (1). Such report shall include any recommendations the
Commissioner deems appropriate to ensure that the law does not provide
incentives for small and mid-size employers to self-insure or create
adverse selection in the risk pools of large group insurers and
self-insured employers. Not later than 18 months after the first day of
Y1, the Commissioner shall submit to Congress and the applicable
agencies an updated report on such study, including updates on such
recommendations.
SEC. 114. NONDISCRIMINATION IN BENEFITS; PARITY IN MENTAL HEALTH AND SUBSTANCE ABUSE DISORDER BENEFITS.
(a) Nondiscrimination in Benefits- A qualified health
benefits plan shall comply with standards established by the
Commissioner to prohibit discrimination in health benefits or benefit
structures for qualifying health benefits plans, building from sections
702 of Employee Retirement Income Security Act of 1974, 2702 of the
Public Health Service Act, and section 9802 of the Internal Revenue
Code of 1986.
(b) Parity in Mental Health and Substance Abuse Disorder
Benefits- To the extent such provisions are not superceded by or
inconsistent with subtitle C, the provisions of section 2705 (other
than subsections (a)(1), (a)(2), and (c)) of section 2705 of the Public
Health Service Act shall apply to a qualified health benefits plan,
regardless of whether it is offered in the individual or group market,
in the same manner as such provisions apply to health insurance
coverage offered in the large group market.
SEC. 115. ENSURING ADEQUACY OF PROVIDER NETWORKS.
(a) In General- A qualified health benefits plan that uses
a provider network for items and services shall meet such standards
respecting provider networks as the Commissioner may establish to
assure the adequacy of such networks in ensuring enrollee access to
such items and services and transparency in the cost-sharing
differentials between in-network coverage and out-of-network coverage.
(b) Provider Network Defined- In this division, the term
`provider network' means the providers with respect to which covered
benefits, treatments, and services are available under a health
benefits plan.
SEC. 116. ENSURING VALUE AND LOWER PREMIUMS.
(a) In General- A qualified health benefits plan shall meet
a medical loss ratio as defined by the Commissioner. For any plan year
in which the qualified health benefits plan does not meet such medical
loss ratio, QHBP offering entity shall provide in a manner specified by
the Commissioner for rebates to enrollees of payment sufficient to meet
such loss ratio.
(b) Building on Interim Rules- In implementing subsection
(a), the Commissioner shall build on the definition and methodology
developed by the Secretary of Health and Human Services under the
amendments made by section 161 for determining how to calculate the
medical loss ratio. Such methodology shall be set at the highest level
medical loss ratio possible that is designed to ensure adequate
participation by QHBP offering entities, competition in the health
insurance market in and out of the Health Insurance Exchange, and value
for consumers so that their premiums are used for services.
Subtitle C--Standards Guaranteeing Access to Essential Benefits
SEC. 121. COVERAGE OF ESSENTIAL BENEFITS PACKAGE.
(a) In General- A qualified health benefits plan shall
provide coverage that at least meets the benefit standards adopted
under section 124 for the essential benefits package described in
section 122 for the plan year involved.
(1) NON-EXCHANGE-PARTICIPATING HEALTH BENEFITS PLANS-
In the case of a qualified health benefits plan that is not an
Exchange-participating health benefits plan, such plan may offer such
coverage in addition to the essential benefits package as the QHBP
offering entity may specify.
(2) EXCHANGE-PARTICIPATING HEALTH BENEFITS PLANS- In
the case of an Exchange-participating health benefits plan, such plan
is required under section 203 to provide specified levels of benefits
and, in the case of a plan offering a premium-plus level of benefits,
provide additional benefits.
(3) CONTINUATION OF OFFERING OF SEPARATE EXCEPTED
BENEFITS COVERAGE- Nothing in this division shall be construed as
affecting the offering of health benefits in the form of excepted
benefits (described in section 102(b)(1)(B)(ii)) if such benefits are
offered under a separate policy, contract, or certificate of insurance.
(c) No Restrictions on Coverage Unrelated to Clinical
Appropriateness- A qualified health benefits plan may not impose any
restriction (other than cost-sharing) unrelated to clinical
appropriateness on the coverage of the health care items and services.
SEC. 122. ESSENTIAL BENEFITS PACKAGE DEFINED.
(a) In General- In this division, the term `essential
benefits package' means health benefits coverage, consistent with
standards adopted under section 124 to ensure the provision of quality
health care and financial security, that--
(1) provides payment for the items and services
described in subsection (b) in accordance with generally accepted
standards of medical or other appropriate clinical or professional
practice;
(2) limits cost-sharing for such covered health care
items and services in accordance with such benefit standards,
consistent with subsection (c);
(3) does not impose any annual or lifetime limit on the coverage of covered health care items and services;
(4) complies with section 115(a) (relating to network adequacy); and
(5) is equivalent, as certified by Office of the
Actuary of the Centers for Medicare & Medicaid Services, to the
average prevailing employer-sponsored coverage.
(b) Minimum Services To Be Covered- The items and services described in this subsection are the following:
(2) Outpatient hospital and outpatient clinic services, including emergency department services.
(3) Professional services of physicians and other health professionals.
(4) Such services, equipment, and supplies incident to
the services of a physician's or a health professional's delivery of
care in institutional settings, physician offices, patients' homes or
place of residence, or other settings, as appropriate.
(6) Rehabilitative and habilitative services.
(7) Mental health and substance use disorder services.
(8) Preventive services, including those services
recommended with a grade of A or B by the Task Force on Clinical
Preventive Services and those vaccines recommended for use by the
Director of the Centers for Disease Control and Prevention.
(10) Well baby and well child care and oral health,
vision, and hearing services, equipment, and supplies at least for
children under 21 years of age.
(c) Requirements Relating to Cost-sharing and Minimum Actuarial Value-
(1) NO COST-SHARING FOR PREVENTIVE SERVICES- There
shall be no cost-sharing under the essential benefits package for
preventive items and services (as specified under the benefit
standards), including well baby and well child care.
(A) ANNUAL LIMITATION- The cost-sharing incurred
under the essential benefits package with respect to an individual (or
family) for a year does not exceed the applicable level specified in
subparagraph (B).
(B) APPLICABLE LEVEL- The applicable level
specified in this subparagraph for Y1 is $5,000 for an individual and
$10,000 for a family. Such levels shall be increased (rounded to the
nearest $100) for each subsequent year by the annual percentage
increase in the Consumer Price Index (United States city average)
applicable to such year.
(C) USE OF COPAYMENTS- In establishing cost-sharing
levels for basic, enhanced, and premium plans under this subsection,
the Secretary shall, to the maximum extent possible, use only
copayments and not coinsurance.
(3) MINIMUM ACTUARIAL VALUE-
(A) IN GENERAL- The cost-sharing under the
essential benefits package shall be designed to provide a level of
coverage that is designed to provide benefits that are actuarially
equivalent to approximately 70 percent of the full actuarial value of
the benefits provided under the reference benefits package described in
subparagraph (B).
(B) REFERENCE BENEFITS PACKAGE DESCRIBED- The
reference benefits package described in this subparagraph is the
essential benefits package if there were no cost-sharing imposed.
SEC. 123. HEALTH BENEFITS ADVISORY COMMITTEE.
(1) IN GENERAL- There is established a private-public
advisory committee which shall be a panel of medical and other experts
to be known as the Health Benefits Advisory Committee to recommend
covered benefits and essential, enhanced, and premium plans.
(2) CHAIR- The Surgeon General shall be a member and the chair of the Health Benefits Advisory Committee.
(3) MEMBERSHIP- The Health Benefits Advisory Committee
shall be composed of the following members, in addition to the Surgeon
General:
(A) 9 members who are not Federal employees or officers and who are appointed by the President.
(B) 9 members who are not Federal employees or
officers and who are appointed by the Comptroller General of the United
States in a manner similar to the manner in which the Comptroller
General appoints members to the Medicare Payment Advisory Commission
under section 1805(c) of the Social Security Act.
(C) Such even number of members (not to exceed 8) who are Federal employees and officers, as the President may appoint.
Such initial appointments shall be made not later than 60 days after the date of the enactment of this Act.
(4) TERMS- Each member of the Health Benefits Advisory
Committee shall serve a 3-year term on the Committee, except that the
terms of the initial members shall be adjusted in order to provide for
a staggered term of appointment for all such members.
(5) PARTICIPATION- The membership of the Health
Benefits Advisory Committee shall at least reflect providers, consumer
representatives, employers, labor, health insurance issuers, experts in
health care financing and delivery, experts in racial and ethnic
disparities, experts in care for those with disabilities,
representatives of relevant governmental agencies. and at least one
practicing physician or other health professional and an expert on
children's health and shall represent a balance among various sectors
of the health care system so that no single sector unduly influences
the recommendations of such Committee.
(1) RECOMMENDATIONS ON BENEFIT STANDARDS- The Health
Benefits Advisory Committee shall recommend to the Secretary of Health
and Human Services (in this subtitle referred to as the `Secretary')
benefit standards (as defined in paragraph (4)), and periodic updates
to such standards. In developing such recommendations, the Committee
shall take into account innovation in health care and consider how such
standards could reduce health disparities.
(2) DEADLINE- The Health Benefits Advisory Committee
shall recommend initial benefit standards to the Secretary not later
than 1 year after the date of the enactment of this Act.
(3) PUBLIC INPUT- The Health Benefits Advisory
Committee shall allow for public input as a part of developing
recommendations under this subsection.
(4) BENEFIT STANDARDS DEFINED- In this subtitle, the term `benefit standards' means standards respecting--
(A) the essential benefits package described in
section 122, including categories of covered treatments, items and
services within benefit classes, and cost-sharing; and
(B) the cost-sharing levels for enhanced plans and
premium plans (as provided under section 203(c)) consistent with
paragraph (5).
(5) LEVELS OF COST-SHARING FOR ENHANCED AND PREMIUM PLANS-
(A) ENHANCED PLAN- The level of cost-sharing for
enhanced plans shall be designed so that such plans have benefits that
are actuarially equivalent to approximately 85 percent of the actuarial
value of the benefits provided under the reference benefits package
described in section 122(c)(3)(B).
(B) PREMIUM PLAN- The level of cost-sharing for
premium plans shall be designed so that such plans have benefits that
are actuarially equivalent to approximately 95 percent of the actuarial
value of the benefits provided under the reference benefits package
described in section 122(c)(3)(B).
(1) PER DIEM PAY- Each member of the Health Benefits
Advisory Committee shall receive travel expenses, including per diem in
accordance with applicable provisions under subchapter I of chapter 57
of title 5, United States Code, and shall otherwise serve without
additional pay.
(2) MEMBERS NOT TREATED AS FEDERAL EMPLOYEES- Members
of the Health Benefits Advisory Committee shall not be considered
employees of the Federal government solely by reason of any service on
the Committee.
(3) APPLICATION OF FACA- The Federal Advisory Committee
Act (5 U.S.C. App.), other than section 14, shall apply to the Health
Benefits Advisory Committee.
(d) Publication- The Secretary shall provide for
publication in the Federal Register and the posting on the Internet
website of the Department of Health and Human Services of all
recommendations made by the Health Benefits Advisory Committee under
this section.
SEC. 124. PROCESS FOR ADOPTION OF RECOMMENDATIONS; ADOPTION OF BENEFIT STANDARDS.
(a) Process for Adoption of Recommendations-
(1) REVIEW OF RECOMMENDED STANDARDS- Not later than 45
days after the date of receipt of benefit standards recommended under
section 123 (including such standards as modified under paragraph
(2)(B)), the Secretary shall review such standards and shall determine
whether to propose adoption of such standards as a package.
(2) DETERMINATION TO ADOPT STANDARDS- If the Secretary determines--
(A) to propose adoption of benefit standards so
recommended as a package, the Secretary shall, by regulation under
section 553 of title 5, United States Code, propose adoption such
standards; or
(B) not to propose adoption of such standards as a
package, the Secretary shall notify the Health Benefits Advisory
Committee in writing of such determination and the reasons for not
proposing the adoption of such recommendation and provide the Committee
with a further opportunity to modify its previous recommendations and
submit new recommendations to the Secretary on a timely basis.
(3) CONTINGENCY- If, because of the application of
paragraph (2)(B), the Secretary would otherwise be unable to propose
initial adoption of such recommended standards by the deadline
specified in subsection (b)(1), the Secretary shall, by regulation
under section 553 of title 5, United States Code, propose adoption of
initial benefit standards by such deadline.
(4) PUBLICATION- The Secretary shall provide for
publication in the Federal Register of all determinations made by the
Secretary under this subsection.
(b) Adoption of Standards-
(1) INITIAL STANDARDS- Not later than 18 months after
the date of the enactment of this Act, the Secretary shall, through the
rulemaking process consistent with subsection (a), adopt an initial set
of benefit standards.
(2) PERIODIC UPDATING STANDARDS- Under subsection (a),
the Secretary shall provide for the periodic updating of the benefit
standards previously adopted under this section.
(3) REQUIREMENT- The Secretary may not adopt any
benefit standards for an essential benefits package or for level of
cost-sharing that are inconsistent with the requirements for such a
package or level under sections 122 and 123(b)(5).
Subtitle D--Additional Consumer Protections
SEC. 131. REQUIRING FAIR MARKETING PRACTICES BY HEALTH INSURERS.
The Commissioner shall establish uniform marketing standards that all insured QHBP offering entities shall meet.
SEC. 132. REQUIRING FAIR GRIEVANCE AND APPEALS MECHANISMS.
(a) In General- A QHBP offering entity shall provide for
timely grievance and appeals mechanisms that the Commissioner shall
establish.
(b) Internal Claims and Appeals Process- Under a qualified
health benefits plan the QHBP offering entity 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. Reg. 70246) and shall update such process in
accordance with any standards that the Commissioner may establish.
(c) External Review Process-
(1) IN GENERAL- The Commissioner shall establish an
external review process (including procedures for expedited reviews of
urgent claims) that provides for an impartial, independent, and de novo
review of denied claims under this division.
(2) REQUIRING FAIR GRIEVANCE AND APPEALS MECHANISMS- A
determination made, with respect to a qualified health benefits plan
offered by a QHBP offering entity, under the external review process
established under this subsection shall be binding on the plan and the
entity.
(d) Construction- Nothing in this section shall be
construed as affecting the availability of judicial review under State
law for adverse decisions under subsection (b) or (c), subject to
section 151.
SEC. 133. REQUIRING INFORMATION TRANSPARENCY AND PLAN DISCLOSURE.
(a) Accurate and Timely Disclosure-
(1) IN GENERAL- A qualified health benefits plan shall
comply with standards established by the Commissioner for the accurate
and timely disclosure of plan documents, plan terms and conditions,
claims payment policies and practices, periodic financial disclosure,
data on enrollment, data on disenrollment, data on the number of claims
denials, data on rating practices, information on cost-sharing and
payments with respect to any out-of-network coverage, and other
information as determined appropriate by the Commissioner. The
Commissioner shall require that such disclosure be provided in plain
language.
(2) PLAIN LANGUAGE- In this subsection, the term `plain
language' means language that the intended audience, including
individuals with limited English proficiency, can readily understand
and use because that language is clean, concise, well-organized, and
follows other best practices of plain language writing.
(3) GUIDANCE- The Commissioner shall develop and issue guidance on best practices of plain language writing.
(b) Contracting Reimbursement- A qualified health benefits
plan shall comply with standards established by the Commissioner to
ensure transparency to each health care provider relating to
reimbursement arrangements between such plan and such provider.
(c) Advance Notice of Plan Changes- A change in a qualified
health benefits plan shall not be made without such reasonable and
timely advance notice to enrollees of such change.
SEC. 134. APPLICATION TO QUALIFIED HEALTH BENEFITS PLANS NOT OFFERED THROUGH THE HEALTH INSURANCE EXCHANGE.
The requirements of the previous provisions of this
subtitle shall apply to qualified health benefits plans that are not
being offered through the Health Insurance Exchange only to the extent
specified by the Commissioner.
SEC. 135. TIMELY PAYMENT OF CLAIMS.
A QHBP offering entity shall comply with the requirements
of section 1857(f) of the Social Security Act with respect to a
qualified health benefits plan it offers in the same manner an Medicare
Advantage organization is required to comply with such requirements
with respect to a Medicare Advantage plan it offers under part C of
Medicare.
SEC. 136. STANDARDIZED RULES FOR COORDINATION AND SUBROGATION OF BENEFITS.
The Commissioner shall establish standards for the
coordination and subrogation of benefits and reimbursement of payments
in cases involving individuals and multiple plan coverage.
SEC. 137. APPLICATION OF ADMINISTRATIVE SIMPLIFICATION.
A QHBP offering entity is required to comply with standards
for electronic financial and administrative transactions under section
1173A of the Social Security Act, added by section 163(a).
Subtitle E--Governance
SEC. 141. HEALTH CHOICES ADMINISTRATION; HEALTH CHOICES COMMISSIONER.
(a) In General- There is hereby established, as an
independent agency in the executive branch of the Government, a Health
Choices Administration (in this division referred to as the
`Administration').
(1) IN GENERAL- The Administration shall be headed by a
Health Choices Commissioner (in this division referred to as the
`Commissioner') who shall be appointed by the President, by and with
the advice and consent of the Senate.
(2) COMPENSATION; ETC- The provisions of paragraphs
(2), (5), and (7) of subsection (a) (relating to compensation, terms,
general powers, rulemaking, and delegation) of section 702 of the
Social Security Act (42 U.S.C. 902) shall apply to the Commissioner and
the Administration in the same manner as such provisions apply to the
Commissioner of Social Security and the Social Security Administration.
SEC. 142. DUTIES AND AUTHORITY OF COMMISSIONER.
(a) Duties- The Commissioner is responsible for carrying out the following functions under this division:
(1) QUALIFIED PLAN STANDARDS- The establishment of
qualified health benefits plan standards under this title, including
the enforcement of such standards in coordination with State insurance
regulators and the Secretaries of Labor and the Treasury.
(2) HEALTH INSURANCE EXCHANGE- The establishment and operation of a Health Insurance Exchange under subtitle A of title II.
(3) INDIVIDUAL AFFORDABILITY CREDITS- The
administration of individual affordability credits under subtitle C of
title II, including determination of eligibility for such credits.
(4) ADDITIONAL FUNCTIONS- Such additional functions as may be specified in this division.
(b) Promoting Accountability-
(1) IN GENERAL- The Commissioner shall undertake
activities in accordance with this subtitle to promote accountability
of QHBP offering entities in meeting Federal health insurance
requirements, regardless of whether such accountability is with respect
to qualified health benefits plans offered through the Health Insurance
Exchange or outside of such Exchange.
(2) COMPLIANCE EXAMINATION AND AUDITS-
(A) IN GENERAL- The commissioner shall, in
coordination with States, conduct audits of qualified health benefits
plan compliance with Federal requirements. Such audits may include
random compliance audits and targeted audits in response to complaints
or other suspected non-compliance.
(B) RECOUPMENT OF COSTS IN CONNECTION WITH
EXAMINATION AND AUDITS- The Commissioner is authorized to recoup from
qualified health benefits plans reimbursement for the costs of such
examinations and audit of such QHBP offering entities.
(c) Data Collection- The Commissioner shall collect data
for purposes of carrying out the Commissioner's duties, including for
purposes of promoting quality and value, protecting consumers, and
addressing disparities in health and health care and may share such
data with the Secretary of Health and Human Services.
(1) IN GENERAL- In the case that the Commissioner
determines that a QHBP offering entity violates a requirement of this
title, the Commissioner may, in coordination with State insurance
regulators and the Secretary of Labor, provide, in addition to any
other remedies authorized by law, for any of the remedies described in
paragraph (2).
(2) REMEDIES- The remedies described in this paragraph,
with respect to a qualified health benefits plan offered by a QHBP
offering entity, are--
(A) civil money penalties of not more than the
amount that would be applicable under similar circumstances for similar
violations under section 1857(g) of the Social Security Act;
(B) suspension of enrollment of individuals under
such plan after the date the Commissioner notifies the entity of a
determination under paragraph (1) and until the Commissioner is
satisfied that the basis for such determination has been corrected and
is not likely to recur;
(C) in the case of an Exchange-participating health
benefits plan, suspension of payment to the entity under the Health
Insurance Exchange for individuals enrolled in such plan after the date
the Commissioner notifies the entity of a determination under paragraph
(1) and until the Secretary is satisfied that the basis for such
determination has been corrected and is not likely to recur; or
(D) working with State insurance regulators to
terminate plans for repeated failure by the offering entity to meet the
requirements of this title.
(e) Standard Definitions of Insurance and Medical Terms-
The Commissioner shall provide for the development of standards for the
definitions of terms used in health insurance coverage, including
insurance-related terms.
(f) Efficiency in Administration- The Commissioner shall
issue regulations for the effective and efficient administration of the
Health Insurance Exchange and affordability credits under subtitle C,
including, with respect to the determination of eligibility for
affordability credits, the use of personnel who are employed in
accordance with the requirements of title 5, United States Code, to
carry out the duties of the Commissioner or, in the case of sections
208 and 241(b)(2), the use of State personnel who are employed in
accordance with standards prescribed by the Office of Personnel
Management pursuant to section 208 of the Intergovernmental Personnel
Act of 1970 (42 U.S.C. 4728).
SEC. 143. CONSULTATION AND COORDINATION.
(a) Consultation- In carrying out the Commissioner's duties
under this division, the Commissioner, as appropriate, shall consult
with at least with the following:
(1) The National Association of Insurance
Commissioners, State attorneys general, and State insurance regulators,
including concerning the standards for insured qualified health
benefits plans under this title and enforcement of such standards.
(2) Appropriate State agencies, specifically concerning
the administration of individual affordability credits under subtitle C
of title II and the offering of Exchange-participating health benefits
plans, to Medicaid eligible individuals under subtitle A of such title.
(3) Other appropriate Federal agencies.
(4) Indian tribes and tribal organizations.
(5) The National Association of Insurance Commissioners
for purposes of using model guidelines established by such association
for purposes of subtitles B and D.
(1) IN GENERAL- In carrying out the functions of the
Commissioner, including with respect to the enforcement of the
provisions of this division, the Commissioner shall work in
coordination with existing Federal and State entities to the maximum
extent feasible consistent with this division and in a manner that
prevents conflicts of interest in duties and ensures effective
enforcement.
(2) UNIFORM STANDARDS- The Commissioner, in
coordination with such entities, shall seek to achieve uniform
standards that adequately protect consumers in a manner that does not
unreasonably affect employers and insurers.
SEC. 144. HEALTH INSURANCE OMBUDSMAN.
(a) In General- The Commissioner shall appoint within the
Health Choices Administration a Qualified Health Benefits Plan
Ombudsman who shall have expertise and experience in the fields of
health care and education of (and assistance to) individuals.
(b) Duties- The Qualified Health Benefits Plan Ombudsman shall, in a linguistically appropriate manner--
(1) receive complaints, grievances, and requests for information submitted by individuals;
(2) provide assistance with respect to complaints, grievances, and requests referred to in paragraph (1), including--
(A) helping individuals determine the relevant information needed to seek an appeal of a decision or determination;
(B) assistance to such individuals with any problems arising from disenrollment from such a plan;
(C) assistance to such individuals in choosing a qualified health benefits plan in which to enroll; and
(D) assistance to such individuals in presenting information under subtitle C (relating to affordability credits); and
(3) submit annual reports to Congress and the
Commissioner that describe the activities of the Ombudsman and that
include such recommendations for improvement in the administration of
this division as the Ombudsman determines appropriate. The Ombudsman
shall not serve as an advocate for any increases in payments or new
coverage of services, but may identify issues and problems in payment
or coverage policies.
Subtitle F--Relation to Other Requirements; Miscellaneous
SEC. 151. RELATION TO OTHER REQUIREMENTS.
(a) Coverage Not Offered Through Exchange-
(1) IN GENERAL- In the case of health insurance
coverage not offered through the Health Insurance Exchange (whether or
not offered in connection with an employment-based health plan), and in
the case of employment-based health plans, the requirements of this
title do not supercede any requirements applicable under titles XXII
and XXVII of the Public Health Service Act, parts 6 and 7 of subtitle B
of title I of the Employee Retirement Income Security Act of 1974, or
State law, except insofar as such requirements prevent the application
of a requirement of this division, as determined by the Commissioner.
(2) CONSTRUCTION- Nothing in paragraph (1) shall be
construed as affecting the application of section 514 of the Employee
Retirement Income Security Act of 1974.
(b) Coverage Offered Through Exchange-
(1) IN GENERAL- In the case of health insurance coverage offered through the Health Insurance Exchange--
(A) the requirements of this title do not supercede
any requirements (including requirements relating to genetic
information nondiscrimination and mental health) applicable under title
XXVII of the Public Health Service Act or under State law, except
insofar as such requirements prevent the application of a requirement
of this division, as determined by the Commissioner; and
(B) individual rights and remedies under State laws shall apply.
(2) CONSTRUCTION- In the case of coverage described in
paragraph (1), nothing in such paragraph shall be construed as
preventing the application of rights and remedies under State laws with
respect to any requirement referred to in paragraph (1)(A).
SEC. 152. PROHIBITING DISCRIMINATION IN HEALTH CARE.
(a) In General- Except as otherwise explicitly permitted by
this Act and by subsequent regulations consistent with this Act, all
health care and related services (including insurance coverage and
public health activities) covered by this Act shall be provided without
regard to personal characteristics extraneous to the provision of high
quality health care or related services.
(b) Implementation- To implement the requirement set forth
in subsection (a), the Secretary of Health and Human Services shall,
not later than 18 months after the date of the enactment of this Act,
promulgate such regulations as are necessary or appropriate to insure
that all health care and related services (including insurance coverage
and public health activities) covered by this Act are provided (whether
directly or through contractual, licensing, or other arrangements)
without regard to personal characteristics extraneous to the provision
of high quality health care or related services.
SEC. 153. WHISTLEBLOWER PROTECTION.
(a) Retaliation Prohibited- No employer may discharge any
employee or otherwise discriminate against any employee with respect to
his compensation, terms, conditions, or other privileges of employment
because the employee (or any person acting pursuant to a request of the
employee)--
(1) provided, caused to be provided, or is about to
provide or cause to be provided to the employer, the Federal
Government, or the attorney general of a State information relating to
any violation of, or any act or omission the employee reasonably
believes to be a violation of any provision of this Act or any order,
rule, or regulation promulgated under this Act;
(2) testified or is about to testify in a proceeding concerning such violation;
(3) assisted or participated or is about to assist or participate in such a proceeding; or
(4) objected to, or refused to participate in, any
activity, policy, practice, or assigned task that the employee (or
other such person) reasonably believed to be in violation of any
provision of this Act or any order, rule, or regulation promulgated
under this Act.
(b) Enforcement Action- An employee covered by this section
who alleges discrimination by an employer in violation of subsection
(a) may bring an action governed by the rules, procedures, legal
burdens of proof, and remedies set forth in section 40(b) of the
Consumer Product Safety Act (15 U.S.C. 2087(b)).
(c) Employer Defined- As used in this section, the term
`employer' means any person (including one or more individuals,
partnerships, associations, corporations, trusts, professional
membership organization including a certification, disciplinary, or
other professional body, unincorporated organizations, nongovernmental
organizations, or trustees) engaged in profit or nonprofit business or
industry whose activities are governed by this Act, and any agent,
contractor, subcontractor, grantee, or consultant of such person.
(d) Rule of Construction- The rule of construction set
forth in section 20109(h) of title 49, United States Code, shall also
apply to this section.
SEC. 154. CONSTRUCTION REGARDING COLLECTIVE BARGAINING.
Nothing in this division shall be construed to alter of
supercede any statutory or other obligation to engage in collective
bargaining over the terms and conditions of employment related to
health care.
SEC. 155. SEVERABILITY.
If any provision of this Act, or any application of such
provision to any person or circumstance, is held to be
unconstitutional, the remainder of the provisions of this Act and the
application of the provision to any other person or circumstance shall
not be affected.
Subtitle G--Early Investments
SEC. 161. ENSURING VALUE AND LOWER PREMIUMS.
(a) Group Health Insurance Coverage- Title XXVII of the
Public Health Service Act is amended by inserting after section 2713
the following new section:
`SEC. 2714. ENSURING VALUE AND LOWER PREMIUMS.
`(a) In General- Each health insurance issuer that offers
health insurance coverage in the small or large group market shall
provide that for any plan year in which the coverage has a medical loss
ratio below a level specified by the Secretary, the issuer shall
provide in a manner specified by the Secretary for rebates to enrollees
of payment sufficient to meet such loss ratio. Such methodology shall
be set at the highest level medical loss ratio possible that is
designed to ensure adequate participation by issuers, competition in
the health insurance market, and value for consumers so that their
premiums are used for services.
`(b) Uniform Definitions- The Secretary shall establish a
uniform definition of medical loss ratio and methodology for
determining how to calculate the medical loss ratio. Such methodology
shall be designed to take into account the special circumstances of
smaller plans, different types of plans, and newer plans.'.
(b) Individual Health Insurance Coverage- Such title is
further amended by inserting after section 2753 the following new
section:
`SEC. 2754. ENSURING VALUE AND LOWER PREMIUMS.
`The provisions of section 2714 shall apply to health
insurance coverage offered in the individual market in the same manner
as such provisions apply to health insurance coverage offered in the
small or large group market.'.
(c) Immediate Implementation- The amendments made by this
section shall apply in the group and individual market for plan years
beginning on or after January 1, 2011.
SEC. 162. ENDING HEALTH INSURANCE RESCISSION ABUSE.
(a) Clarification Regarding Application of Guaranteed
Renewability of Individual Health Insurance Coverage- Section 2742 of
the Public Health Service Act (42 U.S.C. 300gg-42) is amended--
(1) in its heading, by inserting `and continuation in
force, including prohibition of rescission,' after `guaranteed
renewability'; and
(2) in subsection (a), by inserting `, including without rescission,' after `continue in force'.
(b) Secretarial Guidance Regarding Rescissions- Section
2742 of such Act (42 U.S.C. 300gg-42) is amended by adding at the end
the following:
`(f) Rescission- A health insurance issuer may rescind
health insurance coverage only upon clear and convincing evidence of
fraud described in subsection (b)(2). The Secretary, no later than July
1, 2010, shall issue guidance implementing this requirement, including
procedures for independent, external third party review.'.
(c) Opportunity for Independent, External Third Party
Review in Certain Cases- Subpart 1 of part B of title XXVII of such Act
(42 U.S.C. 300gg-41 et seq.) is amended by adding at the end the
following:
`SEC. 2746. OPPORTUNITY FOR INDEPENDENT, EXTERNAL THIRD PARTY REVIEW IN CASES OF RESCISSION.
`(a) Notice and Review Right- If a health insurance issuer
determines to rescind health insurance coverage for an individual in
the individual market, before such rescission may take effect the
issuer shall provide the individual with notice of such proposed
rescission and an opportunity for a review of such determination by an
independent, external third party under procedures specified by the
Secretary under section 2742(f).
`(b) Independent Determination- If the individual requests
such review by an independent, external third party of a rescission of
health insurance coverage, the coverage shall remain in effect until
such third party determines that the coverage may be rescinded under
the guidance issued by the Secretary under section 2742(f).'.
(d) Effective Date- The amendments made by this section
shall apply on and after October 1, 2010, with respect to health
insurance coverage issued before, on, or after such date.
SEC. 163. ADMINISTRATIVE SIMPLIFICATION.
(a) Standardizing Electronic Administrative Transactions-
(1) IN GENERAL- Part C of title XI of the Social
Security Act (42 U.S.C. 1320d et seq.) is amended by inserting after
section 1173 the following new section:
`SEC. 1173A. STANDARDIZE ELECTRONIC ADMINISTRATIVE TRANSACTIONS.
`(a) Standards for Financial and Administrative Transactions-
`(1) IN GENERAL- The Secretary shall adopt and
regularly update standards consistent with the goals described in
paragraph (2).
`(2) GOALS FOR FINANCIAL AND ADMINISTRATIVE
TRANSACTIONS- The goals for standards under paragraph (1) are that such
standards shall--
`(A) be unique with no conflicting or redundant standards;
`(B) be authoritative, permitting no additions or constraints for electronic transactions, including companion guides;
`(C) be comprehensive, efficient and robust,
requiring minimal augmentation by paper transactions or clarification
by further communications;
`(D) enable the real-time (or near real-time)
determination of an individual's financial responsibility at the point
of service and, to the extent possible, prior to service, including
whether the individual is eligible for a specific service with a
specific physician at a specific facility, which may include
utilization of a machine-readable health plan beneficiary
identification card;
`(E) enable, where feasible, near real-time adjudication of claims;
`(F) provide for timely acknowledgment, response,
and status reporting applicable to any electronic transaction deemed
appropriate by the Secretary;
`(G) describe all data elements (such as reason and
remark codes) in unambiguous terms, not permit optional fields, require
that data elements be either required or conditioned upon set values in
other fields, and prohibit additional conditions; and
`(H) harmonize all common data elements across administrative and clinical transaction standards.
`(3) TIME FOR ADOPTION- Not later than 2 years after
the date of implementation of the X12 Version 5010 transaction
standards implemented under this part, the Secretary shall adopt
standards under this section.
`(4) REQUIREMENTS FOR SPECIFIC STANDARDS- The standards under this section shall be developed, adopted and enforced so as to--
`(A) clarify, refine, complete, and expand, as needed, the standards required under section 1173;
`(B) require paper versions of standardized
transactions to comply with the same standards as to data content such
that a fully compliant, equivalent electronic transaction can be
populated from the data from a paper version;
`(C) enable electronic funds transfers, in order to
allow automated reconciliation with the related health care payment and
remittance advice;
`(D) require timely and transparent claim and
denial management processes, including tracking, adjudication, and
appeal processing;
`(E) require the use of a standard electronic
transaction with which health care providers may quickly and
efficiently enroll with a health plan to conduct the other electronic
transactions provided for in this part; and
`(F) provide for other requirements relating to
administrative simplification as identified by the Secretary, in
consultation with stakeholders.
`(5) BUILDING ON EXISTING STANDARDS- In developing the
standards under this section, the Secretary shall build upon existing
and planned standards.
`(6) IMPLEMENTATION AND ENFORCEMENT- Not later than 6
months after the date of the enactment of this section, the Secretary
shall submit to the appropriate committees of Congress a plan for the
implementation and enforcement, by not later than 5 years after such
date of enactment, of the standards under this section. Such plan shall
include--
`(A) a process and timeframe with milestones for developing the complete set of standards;
`(B) an expedited upgrade program for continually
developing and approving additions and modifications to the standards
as often as annually to improve their quality and extend their
functionality to meet evolving requirements in health care;
`(C) programs to provide incentives for, and ease
the burden of, implementation for certain health care providers, with
special consideration given to such providers serving rural or
underserved areas and ensure coordination with standards,
implementation specifications, and certification criteria being adopted
under the HITECH Act;
`(D) programs to provide incentives for, and ease
the burden of, health care providers who volunteer to participate in
the process of setting standards for electronic transactions;
`(E) an estimate of total funds needed to ensure timely completion of the implementation plan; and
`(F) an enforcement process that includes timely
investigation of complaints, random audits to ensure compliance, civil
monetary and programmatic penalties for non-compliance consistent with
existing laws and regulations, and a fair and reasonable appeals
process building off of enforcement provisions under this part.
`(b) Limitations on Use of Data- Nothing in this section
shall be construed to permit the use of information collected under
this section in a manner that would adversely affect any individual.
`(c) Protection of Data- The Secretary shall ensure
(through the promulgation of regulations or otherwise) that all data
collected pursuant to subsection (a) are--
`(1) used and disclosed in a manner that meets the
HIPAA privacy and security law (as defined in section 3009(a)(2) of the
Public Health Service Act), including any privacy or security standard
adopted under section 3004 of such Act; and
`(2) protected from all inappropriate internal use by
any entity that collects, stores, or receives the data, including use
of such data in determinations of eligibility (or continued
eligibility) in health plans, and from other inappropriate uses, as
defined by the Secretary.'.
(2) DEFINITIONS- Section 1171 of such Act (42 U.S.C. 1320d) is amended--
(A) in paragraph (7), by striking `with reference
to' and all that follows and inserting `with reference to a transaction
or data element of health information in section 1173 means
implementation specifications, certification criteria, operating rules,
messaging formats, codes, and code sets adopted or established by the
Secretary for the electronic exchange and use of information'; and
(B) by adding at the end the following new paragraph:
`(9) OPERATING RULES- The term `operating rules' means
business rules for using and processing transactions. Operating rules
should address the following:
`(A) Requirements for data content using available and established national standards.
`(B) Infrastructure requirements that establish
best practices for streamlining data flow to yield timely execution of
transactions.
`(C) Policies defining the transaction related
rights and responsibilities for entities that are transmitting or
receiving data.'.
(3) CONFORMING AMENDMENT- Section 1179(a) of such Act (42 U.S.C. 1320d-8(a)) is amended, in the matter before paragraph (1)--
(A) by inserting `on behalf of an individual' after `1978)'; and
(B) by inserting `on behalf of an individual' after `for a financial institution.'
(b) Standards for Claims Attachments and Coordination of Benefits -
(1) STANDARD FOR HEALTH CLAIMS ATTACHMENTS- Not later
than 1 year after the date of the enactment of this Act, the Secretary
of Health and Human Services shall promulgate a final rule to establish
a standard for health claims attachment transaction described in
section 1173(a)(2)(B) of the Social Security Act (42 U.S.C.
1320d-2(a)(2)(B)) and coordination of benefits.
(2) REVISION IN PROCESSING PAYMENT TRANSACTIONS BY FINANCIAL INSTITUTIONS-
(A) IN GENERAL- Section 1179 of the Social Security Act (42 U.S.C. 1320d-8) is amended, in the matter before paragraph (1)--
(i) by striking `or is engaged' and inserting `and is engaged'; and
(ii) by inserting `(other than as a business associate for a covered entity)' after `for a financial institution'.
(B) EFFECTIVE DATE- The amendments made by
paragraph (1) shall apply to transactions occurring on or after such
date (not later than 6 months after the date of the enactment of this
Act) as the Secretary of Health and Human Services shall specify.
SEC. 164. REINSURANCE PROGRAM FOR RETIREES.
(1) IN GENERAL- Not later than 90 days after the date
of the enactment of this Act, the Secretary of Health and Human
Services shall establish a temporary reinsurance program (in this
section referred to as the `reinsurance program') to provide
reimbursement to assist participating employment-based plans with the
cost of providing health benefits to retirees and to eligible spouses,
surviving spouses and dependents of such retirees.
(2) DEFINITIONS- For purposes of this section:
(A) The term `eligible employment-based plan' means a group health benefits plan that--
(i) is maintained by one or more employers,
former employers or employee associations, or a voluntary employees'
beneficiary association, or a committee or board of individuals
appointed to administer such plan, and
(ii) provides health benefits to retirees.
(B) The term `health benefits' means medical,
surgical, hospital, prescription drug, and such other benefits as shall
be determined by the Secretary, whether self-funded or delivered
through the purchase of insurance or otherwise.
(C) The term `participating employment-based plan'
means an eligible employment-based plan that is participating in the
reinsurance program.
(D) The term `retiree' means, with respect to a participating employment-benefit plan, an individual who--
(i) is 55 years of age or older;
(ii) is not eligible for coverage under title XVIII of the Social Security Act; and
(iii) is not an active employee of an employer
maintaining the plan or of any employer that makes or has made
substantial contributions to fund such plan.
(E) The term `Secretary' means Secretary of Health and Human Services.
(b) Participation- To be eligible to participate in the
reinsurance program, an eligible employment-based plan shall submit to
the Secretary an application for participation in the program, at such
time, in such manner, and containing such information as the Secretary
shall require.
(1) SUBMISSION OF CLAIMS-
(A) IN GENERAL- Under the reinsurance program, a
participating employment-based plan shall submit claims for
reimbursement to the Secretary which shall contain documentation of the
actual costs of the items and services for which each claim is being
submitted.
(B) BASIS FOR CLAIMS- Each claim submitted under
subparagraph (A) shall be based on the actual amount expended by the
participating employment-based plan involved within the plan year for
the appropriate employment based health benefits provided to a retiree
or to the spouse, surviving spouse, or dependent of a retiree. In
determining the amount of any claim for purposes of this subsection,
the participating employment-based plan shall take into account any
negotiated price concessions (such as discounts, direct or indirect
subsidies, rebates, and direct or indirect remunerations) obtained by
such plan with respect to such health benefits. For purposes of
calculating the amount of any claim, the costs paid by the retiree or
by the spouse, surviving spouse, or dependent of the retiree in the
form of deductibles, co-payments, and co-insurance shall be included
along with the amounts paid by the participating employment-based plan.
(2) PROGRAM PAYMENTS AND LIMIT- If the Secretary
determines that a participating employment-based plan has submitted a
valid claim under paragraph (1), the Secretary shall reimburse such
plan for 80 percent of that portion of the costs attributable to such
claim that exceeds $15,000, but is less than $90,000. Such amounts
shall be adjusted each year based on the percentage increase in the
medical care component of the Consumer Price Index (rounded to the
nearest multiple of $1,000) for the year involved.
(3) USE OF PAYMENTS- Amounts paid to a participating
employment-based plan under this subsection shall be used to lower the
costs borne directly by the participants and beneficiaries for health
benefits provided under such plan in the form of premiums, co-payments,
deductibles, co-insurance, or other out-of-pocket costs. Such payments
shall not be used to reduce the costs of an employer maintaining the
participating employment-based plan. The Secretary shall develop a
mechanism to monitor the appropriate use of such payments by such plans.
(4) APPEALS AND PROGRAM PROTECTIONS- The Secretary shall establish--
(A) an appeals process to permit participating
employment-based plans to appeal a determination of the Secretary with
respect to claims submitted under this section; and
(B) procedures to protect against fraud, waste, and abuse under the program.
(5) AUDITS- The Secretary shall conduct annual audits
of claims data submitted by participating employment-based plans under
this section to ensure that they are in compliance with the
requirements of this section.
(d) Retiree Reserve Trust Fund-
(A) IN GENERAL- There is established in the
Treasury of the United States a trust fund to be known as the `Retiree
Reserve Trust Fund' (referred to in this section as the `Trust Fund'),
that shall consist of such amounts as may be appropriated or credited
to the Trust Fund as provided for in this subsection to enable the
Secretary to carry out the reinsurance program. Such amounts shall
remain available until expended.
(B) FUNDING- There are hereby appropriated to the
Trust Fund, out of any moneys in the Treasury not otherwise
appropriated, an amount requested by the Secretary as necessary to
carry out this section, except that the total of all such amounts
requested shall not exceed $10,000,000,000.
(C) APPROPRIATIONS FROM THE TRUST FUND-
(i) IN GENERAL- Amounts in the Trust Fund are
appropriated to provide funding to carry out the reinsurance program
and shall be used to carry out such program.
(ii) BUDGETARY IMPLICATIONS- Amounts
appropriated under clause (i), and outlays flowing from such
appropriations, shall not be taken into account for purposes of any
budget enforcement procedures including allocations under section
302(a) and (b) of the Balanced Budget and Emergency Deficit Control Act
and budget resolutions for fiscal years during which appropriations are
made from the Trust Fund.
(iii) LIMITATION TO AVAILABLE FUNDS- The
Secretary has the authority to stop taking applications for
participation in the program or take such other steps in reducing
expenditures under the reinsurance program in order to ensure that
expenditures under the reinsurance program do not exceed the funds
available under this subsection.
TITLE II--HEALTH INSURANCE EXCHANGE AND RELATED PROVISIONS
Subtitle A--Health Insurance Exchange
SEC. 201. ESTABLISHMENT OF HEALTH INSURANCE EXCHANGE; OUTLINE OF DUTIES; DEFINITIONS.
(a) Establishment- There is established within the Health
Choices Administration and under the direction of the Commissioner a
Health Insurance Exchange in order to facilitate access of individuals
and employers, through a transparent process, to a variety of choices
of affordable, quality health insurance coverage, including a public
health insurance option.
(b) Outline of Duties of Commissioner- In accordance with
this subtitle and in coordination with appropriate Federal and State
officials as provided under section 143(b), the Commissioner shall--
(1) under section 204 establish standards for, accept
bids from, and negotiate and enter into contracts with, QHBP offering
entities for the offering of health benefits plans through the Health
Insurance Exchange, with different levels of benefits required under
section 203, and including with respect to oversight and enforcement;
(2) under section 205 facilitate outreach and
enrollment in such plans of Exchange-eligible individuals and employers
described in section 202; and
(3) conduct such activities related to the Health
Insurance Exchange as required, including establishment of a risk
pooling mechanism under section 206 and consumer protections under
subtitle D of title I.
(c) Exchange-participating Health Benefits Plan Defined- In
this division, the term `Exchange-participating health benefits plan'
means a qualified health benefits plan that is offered through the
Health Insurance Exchange.
SEC. 202. EXCHANGE-ELIGIBLE INDIVIDUALS AND EMPLOYERS.
(a) Access to Coverage- In accordance with this section,
all individuals are eligible to obtain coverage through enrollment in
an Exchange-participating health benefits plan offered through the
Health Insurance Exchange unless such individuals are enrolled in
another qualified health benefits plan or other acceptable coverage.
(b) Definitions- In this division:
(1) EXCHANGE-ELIGIBLE INDIVIDUAL- The term
`Exchange-eligible individual' means an individual who is eligible
under this section to be enrolled through the Health Insurance Exchange
in an Exchange-participating health benefits plan and, with respect to
family coverage, includes dependents of such individual.
(2) EXCHANGE-ELIGIBLE EMPLOYER- The term
`Exchange-eligible employer' means an employer that is eligible under
this section to enroll through the Health Insurance Exchange employees
of the employer (and their dependents) in Exchange-eligible health
benefits plans.
(3) EMPLOYMENT-RELATED DEFINITIONS- The terms
`employer', `employee', `full-time employee', and `part-time employee'
have the meanings given such terms by the Commissioner for purposes of
this division.
(c) Transition- Individuals and employers shall only be
eligible to enroll or participate in the Health Insurance Exchange in
accordance with the following transition schedule:
(1) FIRST YEAR- In Y1 (as defined in section 100(c))--
(A) individuals described in subsection (d)(1),
including individuals described in paragraphs (3) and (4) of subsection
(d); and
(B) smallest employers described in subsection (e)(1).
(A) individuals and employers described in paragraph (1); and
(B) smaller employers described in subsection (e)(2).
(3) THIRD AND SUBSEQUENT YEARS- In Y3 and subsequent years--
(A) individuals and employers described in paragraph (2); and
(B) larger employers as permitted by the Commissioner under subsection (e)(3).
(1) INDIVIDUAL DESCRIBED- Subject to the succeeding
provisions of this subsection, an individual described in this
paragraph is an individual who--
(A) is not enrolled in coverage described in subparagraphs (C) through (F) of paragraph (2); and
(B) is not enrolled in coverage as a full-time
employee (or as a dependent of such an employee) under a group health
plan if the coverage and an employer contribution under the plan meet
the requirements of section 312.
For purposes of subparagraph (B), in the case of an
individual who is self-employed, who has at least 1 employee, and who
meets the requirements of section 312, such individual shall be deemed
a full-time employee described in such subparagraph.
(2) ACCEPTABLE COVERAGE- For purposes of this division, the term `acceptable coverage' means any of the following:
(A) QUALIFIED HEALTH BENEFITS PLAN COVERAGE- Coverage under a qualified health benefits plan.
(B) GRANDFATHERED HEALTH INSURANCE COVERAGE;
COVERAGE UNDER CURRENT GROUP HEALTH PLAN- Coverage under a
grandfathered health insurance coverage (as defined in subsection (a)
of section 102) or under a current group health plan (described in
subsection (b) of such section).
(C) MEDICARE- Coverage under part A of title XVIII of the Social Security Act.
(D) MEDICAID- Coverage for medical assistance under
title XIX of the Social Security Act, excluding such coverage that is
only available because of the application of subsection (u), (z), or
(aa) of section 1902 of such Act.
(E) MEMBERS OF THE ARMED FORCES AND DEPENDENTS
(INCLUDING TRICARE)- Coverage under chapter 55 of title 10, United
States Code, including similar coverage furnished under section 1781 of
title 38 of such Code.
(F) VA- Coverage under the veteran's health care
program under chapter 17 of title 38, United States Code, but only if
the coverage for the individual involved is determined by the
Commissioner in coordination with the Secretary of Treasury to be not
less than a level specified by the Commissioner and Secretary of
Veteran's Affairs, in coordination with the Secretary of Treasury,
based on the individual's priority for services as provided under
section 1705(a) of such title.
(G) OTHER COVERAGE- Such other health benefits
coverage, such as a State health benefits risk pool, as the
Commissioner, in coordination with the Secretary of the Treasury,
recognizes for purposes of this paragraph.
The Commissioner shall make determinations under this paragraph in coordination with the Secretary of the Treasury.
(3) TREATMENT OF CERTAIN NON-TRADITIONAL MEDICAID
ELIGIBLE INDIVIDUALS- An individual who is a non-traditional Medicaid
eligible individual (as defined in section 205(e)(4)(C)) in a State may
be an Exchange-eligible individual if the individual was enrolled in a
qualified health benefits plan, grandfathered health insurance
coverage, or current group health plan during the 6 months before the
individual became a non-traditional Medicaid eligible individual.
During the period in which such an individual has chosen to enroll in
an Exchange-participating health benefits plan, the individual is not
also eligible for medical assistance under Medicaid.
(4) CONTINUING ELIGIBILITY PERMITTED-
(A) IN GENERAL- Except as provided in subparagraph
(B), once an individual qualifies as an Exchange-eligible individual
under this subsection (including as an employee or dependent of an
employee of an Exchange-eligible employer) and enrolls under an
Exchange-participating health benefits plan through the Health
Insurance Exchange, the individual shall continue to be treated as an
Exchange-eligible individual until the individual is no longer enrolled
with an Exchange-participating health benefits plan.
(i) IN GENERAL- Subparagraph (A) shall not apply to an individual once the individual becomes eligible for coverage--
(I) under part A of the Medicare program;
(II) under the Medicaid program as a Medicaid eligible individual, except as permitted under paragraph (3) or clause (ii); or
(III) in such other circumstances as the Commissioner may provide.
(ii) TRANSITION PERIOD- In the case described
in clause (i)(II), the Commissioner shall permit the individual to
continue treatment under subparagraph (A) until such limited time as
the Commissioner determines it is administratively feasible, consistent
with minimizing disruption in the individual's access to health care.
(1) SMALLEST EMPLOYER- Subject to paragraph (4),
smallest employers described in this paragraph are employers with 10 or
fewer employees.
(2) SMALLER EMPLOYERS- Subject to paragraph (4),
smaller employers described in this paragraph are employers that are
not smallest employers described in paragraph (1) and have 20 or fewer
employees.
(A) IN GENERAL- Beginning with Y3, the Commissioner
may permit employers not described in paragraph (1) or (2) to be
Exchange-eligible employers.
(B) PHASE-IN- In applying subparagraph (A), the
Commissioner may phase-in the application of such subparagraph based on
the number of full-time employees of an employer and such other
considerations as the Commissioner deems appropriate.
(4) CONTINUING ELIGIBILITY- Once an employer is
permitted to be an Exchange-eligible employer under this subsection and
enrolls employees through the Health Insurance Exchange, the employer
shall continue to be treated as an Exchange-eligible employer for each
subsequent plan year regardless of the number of employees involved
unless and until the employer meets the requirement of section 311(a)
through paragraph (1) of such section by offering a group health plan
and not through offering Exchange-participating health benefits plan.
(5) EMPLOYER PARTICIPATION AND CONTRIBUTIONS-
(A) SATISFACTION OF EMPLOYER RESPONSIBILITY- For
any year in which an employer is an Exchange-eligible employer, such
employer may meet the requirements of section 312 with respect to
employees of such employer by offering such employees the option of
enrolling with Exchange-participating health benefits plans through the
Health Insurance Exchange consistent with the provisions of subtitle B
of title III.
(B) EMPLOYEE CHOICE- Any employee offered
Exchange-participating health benefits plans by the employer of such
employee under subparagraph (A) may choose coverage under any such
plan. That choice includes, with respect to family coverage, coverage
of the dependents of such employee.
(6) AFFILIATED GROUPS- Any employer which is part of a
group of employers who are treated as a single employer under
subsection (b), (c), (m), or (o) of section 414 of the Internal Revenue
Code of 1986 shall be treated, for purposes of this subtitle, as a
single employer.
(7) OTHER COUNTING RULES- The Commissioner shall
establish rules relating to how employees are counted for purposes of
carrying out this subsection.
(f) Special Situation Authority- The Commissioner shall
have the authority to establish such rules as may be necessary to deal
with special situations with regard to uninsured individuals and
employers participating as Exchange-eligible individuals and employers,
such as transition periods for individuals and employers who gain, or
lose, Exchange-eligible participation status, and to establish grace
periods for premium payment.
(g) Surveys of Individuals and Employers- The Commissioner
shall provide for periodic surveys of Exchange-eligible individuals and
employers concerning satisfaction of such individuals and employers
with the Health Insurance Exchange and Exchange-participating health
benefits plans.
(h) Exchange Access Study-
(1) IN GENERAL- The Commissioner shall conduct a study
of access to the Health Insurance Exchange for individuals and for
employers, including individuals and employers who are not eligible and
enrolled in Exchange-participating health benefits plans. The goal of
the study is to determine if there are significant groups and types of
individuals and employers who are not Exchange eligible individuals or
employers, but who would have improved benefits and affordability if
made eligible for coverage in the Exchange.
(2) ITEMS INCLUDED IN STUDY- Such study also shall examine--
(A) the terms, conditions, and affordability of
group health coverage offered by employers and QHBP offering entities
outside of the Exchange compared to Exchange-participating health
benefits plans; and
(B) the affordability-test standard for access of certain employed individuals to coverage in the Health Insurance Exchange.
(3) REPORT- Not later than January 1 of Y3, in Y6, and
thereafter, the Commissioner shall submit to Congress on the study
conducted under this subsection and shall include in such report
recommendations regarding changes in standards for Exchange eligibility
for for individuals and employers.
SEC. 203. BENEFITS PACKAGE LEVELS.
(a) In General- The Commissioner shall specify the benefits
to be made available under Exchange-participating health benefits plans
during each plan year, consistent with subtitle C of title I and this
section.
(b) Limitation on Health Benefits Plans Offered by Offering
Entities- The Commissioner may not enter into a contract with a QHBP
offering entity under section 204(c) for the offering of an
Exchange-participating health benefits plan in a service area unless
the following requirements are met:
(1) REQUIRED OFFERING OF BASIC PLAN- The entity offers only one basic plan for such service area.
(2) OPTIONAL OFFERING OF ENHANCED PLAN- If and only if
the entity offers a basic plan for such service area, the entity may
offer one enhanced plan for such area.
(3) OPTIONAL OFFERING OF PREMIUM PLAN- If and only if
the entity offers an enhanced plan for such service area, the entity
may offer one premium plan for such area.
(4) OPTIONAL OFFERING OF PREMIUM-PLUS PLANS- If and
only if the entity offers a premium plan for such service area, the
entity may offer one or more premium-plus plans for such area.
All such plans may be offered under a single contract with the Commissioner.
(c) Specification of Benefit Levels for Plans-
(1) IN GENERAL- The Commissioner shall establish the following standards consistent with this subsection and title I:
(A) BASIC, ENHANCED, AND PREMIUM PLANS- Standards
for 3 levels of Exchange-participating health benefits plans: basic,
enhanced, and premium (in this division referred to as a `basic plan',
`enhanced plan', and `premium plan', respectively).
(B) PREMIUM-PLUS PLAN BENEFITS- Standards for
additional benefits that may be offered, consistent with this
subsection and subtitle C of title I, under a premium plan (such a plan
with additional benefits referred to in this division as a
`premium-plus plan').
(A) IN GENERAL- A basic plan shall offer the
essential benefits package required under title I for a qualified
health benefits plan.
(B) TIERED COST-SHARING FOR AFFORDABLE CREDIT
ELIGIBLE INDIVIDUALS- In the case of an affordable credit eligible
individual (as defined in section 242(a)(1)) enrolled in an
Exchange-participating health benefits plan, the benefits under a basic
plan are modified to provide for the reduced cost-sharing for the
income tier applicable to the individual under section 244(c).
(3) ENHANCED PLAN- A enhanced plan shall offer, in
addition to the level of benefits under the basic plan, a lower level
of cost-sharing as provided under title I consistent with section
123(b)(5)(A).
(4) PREMIUM PLAN- A premium plan shall offer, in
addition to the level of benefits under the basic plan, a lower level
of cost-sharing as provided under title I consistent with section
123(b)(5)(B).
(5) PREMIUM-PLUS PLAN- A premium-plus plan is a premium
plan that also provides additional benefits, such as adult oral health
and vision care, approved by the Commissioner. The portion of the
premium that is attributable to such additional benefits shall be
separately specified.
(6) RANGE OF PERMISSIBLE VARIATION IN COST-SHARING- The
Commissioner shall establish a permissible range of variation of
cost-sharing for each basic, enhanced, and premium plan, except with
respect to any benefit for which there is no cost-sharing permitted
under the essential benefits package. Such variation shall permit a
variation of not more than plus (or minus) 10 percent in cost-sharing
with respect to each benefit category specified under section 122.
(d) Treatment of State Benefit Mandates- Insofar as a State
requires a health insurance issuer offering health insurance coverage
to include benefits beyond the essential benefits package, such
requirement shall continue to apply to an Exchange-participating health
benefits plan, if the State has entered into an arrangement
satisfactory to the Commissioner to reimburse the Commissioner for the
amount of any net increase in affordability premium credits under
subtitle C as a result of an increase in premium in basic plans as a
result of application of such requirement.
SEC. 204. CONTRACTS FOR THE OFFERING OF EXCHANGE-PARTICIPATING HEALTH BENEFITS PLANS.
(a) Contracting Duties- In carrying out section 201(b)(1) and consistent with this subtitle:
(1) OFFERING ENTITY AND PLAN STANDARDS- The Commissioner shall--
(A) establish standards necessary to implement the requirements of this title and title I for--
(i) QHBP offering entities for the offering of an Exchange-participating health benefits plan; and
(ii) for Exchange-participating health benefits plans; and
(B) certify QHBP offering entities and qualified
health benefits plans as meeting such standards and requirements of
this title and title I for purposes of this subtitle.
(2) SOLICITING AND NEGOTIATING BIDS; CONTRACTS- The Commissioner shall--
(A) solicit bids from QHBP offering entities for the offering of Exchange-participating health benefits plans;
(B) based upon a review of such bids, negotiate with such entities for the offering of such plans; and
(C) enter into contracts with such entities for the
offering of such plans through the Health Insurance Exchange under
terms (consistent with this title) negotiated between the Commissioner
and such entities.
(3) FAR NOT APPLICABLE- The provisions of the Federal
Acquisition Regulation shall not apply to contracts between the
Commissioner and QHBP offering entities for the offering of
Exchange-participating health benefits plans under this title.
(b) Standards for QHBP Offering Entities To Offer
Exchange-Participating Health Benefits Plans- The standards established
under subsection (a)(1)(A) shall require that, in order for a QHBP
offering entity to offer an Exchange-participating health benefits
plan, the entity must meet the following requirements:
(1) LICENSED- The entity shall be licensed to offer
health insurance coverage under State law for each State in which it is
offering such coverage.
(2) DATA REPORTING- The entity shall provide for the
reporting of such information as the Commissioner may specify,
including information necessary to administer the risk pooling
mechanism described in section 206(b) and information to address
disparities in health and health care.
(3) IMPLEMENTING AFFORDABILITY CREDITS- The entity
shall provide for implementation of the affordability credits provided
for enrollees under subtitle C, including the reduction in cost-sharing
under section 244(c).
(4) ENROLLMENT- The entity shall accept all enrollments
under this subtitle, subject to such exceptions (such as capacity
limitations) in accordance with the requirements under title I for a
qualified health benefits plan. The entity shall notify the
Commissioner if the entity projects or anticipates reaching such a
capacity limitation that would result in a limitation in enrollment.
(5) RISK POOLING PARTICIPATION- The entity shall
participate in such risk pooling mechanism as the Commissioner
establishes under section 206(b).
(6) ESSENTIAL COMMUNITY PROVIDERS- With respect to the
basic plan offered by the entity, the entity shall contract for
outpatient services with covered entities (as defined in section
340B(a)(4) of the Public Health Service Act, as in effect as of July 1,
2009). The Commissioner shall specify the extent to which and manner in
which the previous sentence shall apply in the case of a basic plan
with respect to which the Commissioner determines provides
substantially all benefits through a health maintenance organization,
as defined in section 2791(b)(3) of the Public Health Service Act.
(7) CULTURALLY AND LINGUISTICALLY APPROPRIATE SERVICES
AND COMMUNICATIONS- The entity shall provide for culturally and
linguistically appropriate communication and health services.
(8) ADDITIONAL REQUIREMENTS- The entity shall comply
with other applicable requirements of this title, as specified by the
Commissioner, which shall include standards regarding billing and
collection practices for premiums and related grace periods and which
may include standards to ensure that the entity does not use coercive
practices to force providers not to contract with other entities
offering coverage through the Health Insurance Exchange.
(1) BID APPLICATION- To be eligible to enter into a
contract under this section, a QHBP offering entity shall submit to the
Commissioner a bid at such time, in such manner, and containing such
information as the Commissioner may require.
(2) TERM- Each contract with a QHBP offering entity
under this section shall be for a term of not less than one year, but
may be made automatically renewable from term to term in the absence of
notice of termination by either party.
(3) ENFORCEMENT OF NETWORK ADEQUACY- In the case of a
health benefits plan of a QHBP offering entity that uses a provider
network, the contract under this section with the entity shall provide
that if--
(A) the Commissioner determines that such provider
network does not meet such standards as the Commissioner shall
establish under section 115; and
(B) an individual enrolled in such plan receives an item or service from a provider that is not within such network;
then any cost-sharing for such item or service shall be
equal to the amount of such cost-sharing that would be imposed if such
item or service was furnished by a provider within such network.
(4) OVERSIGHT AND ENFORCEMENT RESPONSIBILITIES- The
Commissioner shall establish processes, in coordination with State
insurance regulators, to oversee, monitor, and enforce applicable
requirements of this title with respect to QHBP offering entities
offering Exchange-participating health benefits plans and such plans,
including the marketing of such plans. Such processes shall include the
following:
(A) GRIEVANCE AND COMPLAINT MECHANISMS- The
Commissioner shall establish, in coordination with State insurance
regulators, a process under which Exchange-eligible individuals and
employers may file complaints concerning violations of such standards.
(B) ENFORCEMENT- In carrying out authorities under
this division relating to the Health Insurance Exchange, the
Commissioner may impose one or more of the intermediate sanctions
described in section 142(c).
(i) IN GENERAL- The Commissioner may terminate
a contract with a QHBP offering entity under this section for the
offering of an Exchange-participating health benefits plan if such
entity fails to comply with the applicable requirements of this title.
Any determination by the Commissioner to terminate a contract shall be
made in accordance with formal investigation and compliance procedures
established by the Commissioner under which--
(I) the Commissioner provides the entity
with the reasonable opportunity to develop and implement a corrective
action plan to correct the deficiencies that were the basis of the
Commissioner's determination; and
(II) the Commissioner provides the entity
with reasonable notice and opportunity for hearing (including the right
to appeal an initial decision) before terminating the contract.
(ii) EXCEPTION FOR IMMINENT AND SERIOUS RISK TO
HEALTH- Clause (i) shall not apply if the Commissioner determines that
a delay in termination, resulting from compliance with the procedures
specified in such clause prior to termination, would pose an imminent
and serious risk to the health of individuals enrolled under the
qualified health benefits plan of the QHBP offering entity.
(D) CONSTRUCTION- Nothing in this subsection shall
be construed as preventing the application of other sanctions under
subtitle E of title I with respect to an entity for a violation of such
a requirement.
SEC. 205. OUTREACH AND ENROLLMENT OF EXCHANGE-ELIGIBLE INDIVIDUALS AND EMPLOYERS IN EXCHANGE-PARTICIPATING HEALTH BENEFITS PLAN.
(1) OUTREACH- The Commissioner shall conduct outreach
activities consistent with subsection (c), including through use of
appropriate entities as described in paragraph (4) of such subsection,
to inform and educate individuals and employers about the Health
Insurance Exchange and Exchange-participating health benefits plan
options. Such outreach shall include outreach specific to vulnerable
populations, such as children, individuals with disabilities,
individuals with mental illness, and individuals with other cognitive
impairments.
(2) ELIGIBILITY- The Commissioner shall make timely
determinations of whether individuals and employers are
Exchange-eligible individuals and employers (as defined in section 202).
(3) ENROLLMENT- The Commissioner shall establish and
carry out an enrollment process for Exchange-eligible individuals and
employers, including at community locations, in accordance with
subsection (b).
(1) IN GENERAL- The Commissioner shall establish a
process consistent with this title for enrollments in
Exchange-participating health benefits plans. Such process shall
provide for enrollment through means such as the mail, by telephone,
electronically, and in person.
(A) OPEN ENROLLMENT PERIOD- The Commissioner shall
establish an annual open enrollment period during which an
Exchange-eligible individual or employer may elect to enroll in an
Exchange-participating health benefits plan for the following plan year
and an enrollment period for affordability credits under subtitle C.
Such periods shall be during September through November of each year,
or such other time that would maximize timeliness of income
verification for purposes of such subtitle. The open enrollment period
shall not be less than 30 days.
(B) SPECIAL ENROLLMENT- The Commissioner shall also
provide for special enrollment periods to take into account special
circumstances of individuals and employers, such as an individual who--
(i) loses acceptable coverage;
(ii) experiences a change in marital or other dependent status;
(iii) moves outside the service area of the
Exchange-participating health benefits plan in which the individual is
enrolled; or
(iv) experiences a significant change in income.
(C) ENROLLMENT INFORMATION- The Commissioner shall
provide for the broad dissemination of information to prospective
enrollees on the enrollment process, including before each open
enrollment period. In carrying out the previous sentence, the
Commissioner may work with other appropriate entities to facilitate
such provision of information.
(3) AUTOMATIC ENROLLMENT FOR NON-MEDICAID ELIGIBLE INDIVIDUALS-
(A) IN GENERAL- The Commissioner shall provide for
a process under which individuals who are Exchange-eligible individuals
described in subparagraph (B) are automatically enrolled under an
appropriate Exchange-participating health benefits plan. Such process
may involve a random assignment or some other form of assignment that
takes into account the health care providers used by the individual
involved or such other relevant factors as the Commissioner may specify.
(B) SUBSIDIZED INDIVIDUALS DESCRIBED- An individual
described in this subparagraph is an Exchange-eligible individual who
is either of the following:
(i) AFFORDABILITY CREDIT ELIGIBLE INDIVIDUALS- The individual--
(I) has applied for, and been determined eligible for, affordability credits under subtitle C;
(II) has not opted out from receiving such affordability credit; and
(III) does not otherwise enroll in another Exchange-participating health benefits plan.
(ii) INDIVIDUALS ENROLLED IN A TERMINATED PLAN-
The individual is enrolled in an Exchange-participating health benefits
plan that is terminated (during or at the end of a plan year) and who
does not otherwise enroll in another Exchange-participating health
benefits plan.
(4) DIRECT PAYMENT OF PREMIUMS TO PLANS- Under the
enrollment process, individuals enrolled in an Exchange-partcipating
health benefits plan shall pay such plans directly, and not through the
Commissioner or the Health Insurance Exchange.
(c) Coverage Information and Assistance-
(1) COVERAGE INFORMATION- The Commissioner shall
provide for the broad dissemination of information on
Exchange-participating health benefits plans offered under this title.
Such information shall be provided in a comparative manner, and shall
include information on benefits, premiums, cost-sharing, quality,
provider networks, and consumer satisfaction.
(2) CONSUMER ASSISTANCE WITH CHOICE- To provide
assistance to Exchange-eligible individuals and employers, the
Commissioner shall--
(A) provide for the operation of a toll-free
telephone hotline to respond to requests for assistance and maintain an
Internet website through which individuals may obtain information on
coverage under Exchange-participating health benefits plans and file
complaints;
(B) develop and disseminate information to Exchange-eligible enrollees on their rights and responsibilities;
(C) assist Exchange-eligible individuals in
selecting Exchange-participating health benefits plans and obtaining
benefits through such plans; and
(D) ensure that the Internet website described in
subparagraph (A) and the information described in subparagraph (B) is
developed using plain language (as defined in section 133(a)(2)).
(3) USE OF OTHER ENTITIES- In carrying out this
subsection, the Commissioner may work with other appropriate entities
to facilitate the dissemination of information under this subsection
and to provide assistance as described in paragraph (2).
(d) Special Duties Related to Medicaid and CHIP-
(1) COVERAGE FOR CERTAIN NEWBORNS-
(A) IN GENERAL- In the case of a child born in the
United States who at the time of birth is not otherwise covered under
acceptable coverage, for the period of time beginning on the date of
birth and ending on the date the child otherwise is covered under
acceptable coverage (or, if earlier, the end of the month in which the
60-day period, beginning on the date of birth, ends), the child shall
be deemed--
(i) to be a non-traditional Medicaid eligible
individual (as defined in subsection (e)(5)) for purposes of this
division and Medicaid; and
(ii) to have elected to enroll in Medicaid through the application of paragraph (3).
(B) EXTENDED TREATMENT AS TRADITIONAL MEDICAID
ELIGIBLE INDIVIDUAL- In the case of a child described in subparagraph
(A) who at the end of the period referred to in such subparagraph is
not otherwise covered under acceptable coverage, the child shall be
deemed (until such time as the child obtains such coverage or the State
otherwise makes a determination of the child's eligibility for medical
assistance under its Medicaid plan pursuant to section 1943(c)(1) of
the Social Security Act) to be a traditional Medicaid eligible
individual described in section 1902(l)(1)(B) of such Act.
(2) CHIP TRANSITION- A child who, as of the day before
the first day of Y1, is eligible for child health assistance under
title XXI of the Social Security Act (including a child receiving
coverage under an arrangement described in section 2101(a)(2) of such
Act) is deemed as of such first day to be an Exchange-eligible
individual unless the individual is a traditional Medicaid eligible
individual as of such day.
(3) AUTOMATIC ENROLLMENT OF MEDICAID ELIGIBLE
INDIVIDUALS INTO MEDICAID- The Commissioner shall provide for a process
under which an individual who is described in section 202(d)(3) and has
not elected to enroll in an Exchange-participating health benefits plan
is automatically enrolled under Medicaid.
(4) NOTIFICATIONS- The Commissioner shall notify each
State in Y1 and for purposes of section 1902(gg)(1) of the Social
Security Act (as added by section 1703(a)) whether the Health Insurance
Exchange can support enrollment of children described in paragraph (2)
in such State in such year.
(e) Medicaid Coverage for Medicaid Eligible Individuals-
(A) CHOICE FOR LIMITED EXCHANGE-ELIGIBLE
INDIVIDUALS- As part of the enrollment process under subsection (b),
the Commissioner shall provide the option, in the case of an
Exchange-eligible individual described in section 202(d)(3), for the
individual to elect to enroll under Medicaid instead of under an
Exchange-participating health benefits plan. Such an individual may
change such election during an enrollment period under subsection
(b)(2).
(B) MEDICAID ENROLLMENT OBLIGATION- An Exchange
eligible individual may apply, in the manner described in section
241(b)(1), for a determination of whether the individual is a
Medicaid-eligible individual. If the individual is determined to be so
eligible, the Commissioner, through the Medicaid memorandum of
understanding, shall provide for the enrollment of the individual under
the State Medicaid plan in accordance with the Medicaid memorandum of
understanding under paragraph (4). In the case of such an enrollment,
the State shall provide for the same periodic redetermination of
eligibility under Medicaid as would otherwise apply if the individual
had directly applied for medical assistance to the State Medicaid
agency.
(2) NON-TRADITIONAL MEDICAID ELIGIBLE INDIVIDUALS- In
the case of a non-traditional Medicaid eligible individual described in
section 202(d)(3) who elects to enroll under Medicaid under paragraph
(1)(A), the Commissioner shall provide for the enrollment of the
individual under the State Medicaid plan in accordance with the
Medicaid memorandum of understanding under paragraph (4).
(3) COORDINATED ENROLLMENT WITH STATE THROUGH
MEMORANDUM OF UNDERSTANDING- The Commissioner, in consultation with the
Secretary of Health and Human Services, shall enter into a memorandum
of understanding with each State (each in this division referred to as
a `Medicaid memorandum of understanding') with respect to coordinating
enrollment of individuals in Exchange-participating health benefits
plans and under the State's Medicaid program consistent with this
section and to otherwise coordinate the implementation of the
provisions of this division with respect to the Medicaid program. Such
memorandum shall permit the exchange of information consistent with the
limitations described in section 1902(a)(7) of the Social Security Act.
Nothing in this section shall be construed as permitting such
memorandum to modify or vitiate any requirement of a State Medicaid
plan.
(4) MEDICAID ELIGIBLE INDIVIDUALS- For purposes of this division:
(A) MEDICAID ELIGIBLE INDIVIDUAL- The term
`Medicaid eligible individual' means an individual who is eligible for
medical assistance under Medicaid.
(B) TRADITIONAL MEDICAID ELIGIBLE INDIVIDUAL- The
term `traditional Medicaid eligible individual' means a Medicaid
eligible individual other than an individual who is--
(i) a Medicaid eligible individual by reason of
the application of subclause (VIII) of section 1902(a)(10)(A)(i) of the
Social Security Act; or
(ii) a childless adult not described in section
1902(a)(10) (A) or (C) of such Act (as in effect as of the day before
the date of the enactment of this Act).
(C) NON-TRADITIONAL MEDICAID ELIGIBLE INDIVIDUAL-
The term `non-traditional Medicaid eligible individual' means a
Medicaid eligible individual who is not a traditional Medicaid eligible
individual.
(f) Effective Culturally and Linguistically Appropriate
Communication- In carrying out this section, the Commissioner shall
establish effective methods for communicating in plain language and a
culturally and linguistically appropriate manner.
SEC. 206. OTHER FUNCTIONS.
(a) Coordination of Affordability Credits- The Commissioner
shall coordinate the distribution of affordability premium and
cost-sharing credits under subtitle C to QHBP offering entities
offering Exchange-participating health benefits plans.
(b) Coordination of Risk Pooling- The Commissioner shall
establish a mechanism whereby there is an adjustment made of the
premium amounts payable among QHBP offering entities offering
Exchange-participating health benefits plans of premiums collected for
such plans that takes into account (in a manner specified by the
Commissioner) the differences in the risk characteristics of
individuals and employers enrolled under the different
Exchange-participating health benefits plans offered by such entities
so as to minimize the impact of adverse selection of enrollees among
the plans offered by such entities.
(c) Special Inspector General for the Health Insurance Exchange-
(1) ESTABLISHMENT; APPOINTMENT- There is hereby
established the Office of the Special Inspector General for the Health
Insurance Exchange, to be headed by a Special Inspector General for the
Health Insurance Exchange (in this subsection referred to as the
`Special Inspector General') to be appointed by the President, by and
with the advice and consent of the Senate. The nomination of an
individual as Special Inspector General shall be made as soon as
practicable after the establishment of the program under this subtitle.
(2) DUTIES- The Special Inspector General shall--
(A) conduct, supervise, and coordinate audits,
evaluations and investigations of the Health Insurance Exchange to
protect the integrity of the Health Insurance Exchange, as well as the
health and welfare of participants in the Exchange;
(B) report both to the Commissioner and to the
Congress regarding program and management problems and recommendations
to correct them;
(C) have other duties (described in paragraphs (2)
and (3) of section 121 of division A of Public Law 110-343) in relation
to the duties described in the previous subparagraphs; and
(D) have the authorities provided in section 6 of
the Inspector General Act of 1978 in carrying out duties under this
paragraph.
(3) APPLICATION OF OTHER SPECIAL INSPECTOR GENERAL
PROVISIONS- The provisions of subsections (b) (other than paragraphs
(1) and (3)), (d) (other than paragraph (1)), and (e) of section 121 of
division A of the Emergency Economic Stabilization Act of 2009 (Public
Law 110-343) shall apply to the Special Inspector General under this
subsection in the same manner as such provisions apply to the Special
Inspector General under such section.
(4) REPORTS- Not later than one year after the
confirmation of the Special Inspector General, and annually thereafter,
the Special Inspector General shall submit to the appropriate
committees of Congress a report summarizing the activities of the
Special Inspector General during the one year period ending on the date
such report is submitted.
(5) TERMINATION- The Office of the Special Inspector
General shall terminate five years after the date of the enactment of
this Act.
SEC. 207. HEALTH INSURANCE EXCHANGE TRUST FUND.
(a) Establishment of Health Insurance Exchange Trust Fund-
There is created within the Treasury of the United States a trust fund
to be known as the `Health Insurance Exchange Trust Fund' (in this
section referred to as the `Trust Fund'), consisting of such amounts as
may be appropriated or credited to the Trust Fund under this section or
any other provision of law.
(b) Payments From Trust Fund- The Commissioner shall pay
from time to time from the Trust Fund such amounts as the Commissioner
determines are necessary to make payments to operate the Health
Insurance Exchange, including payments under subtitle C (relating to
affordability credits).
(c) Transfers to Trust Fund-
(1) DEDICATED PAYMENTS- There is hereby appropriated to the Trust Fund amounts equivalent to the following:
(A) TAXES ON INDIVIDUALS NOT OBTAINING ACCEPTABLE
COVERAGE- The amounts received in the Treasury under section 59B of the
Internal Revenue Code of 1986 (relating to requirement of health
insurance coverage for individuals).
(B) EMPLOYMENT TAXES ON EMPLOYERS NOT PROVIDING
ACCEPTABLE COVERAGE- The amounts received in the Treasury under section
3111(c) of the Internal Revenue Code of 1986 (relating to employers
electing to not provide health benefits).
(C) EXCISE TAX ON FAILURES TO MEET CERTAIN HEALTH
COVERAGE REQUIREMENTS- The amounts received in the Treasury under
section 4980H(b) (relating to excise tax with respect to failure to
meet health coverage participation requirements).
(2) APPROPRIATIONS TO COVER GOVERNMENT CONTRIBUTIONS-
There are hereby appropriated, out of any moneys in the Treasury not
otherwise appropriated, to the Trust Fund, an amount equivalent to the
amount of payments made from the Trust Fund under subsection (b) plus
such amounts as are necessary reduced by the amounts deposited under
paragraph (1).
(d) Application of Certain Rules- Rules similar to the
rules of subchapter B of chapter 98 of the Internal Revenue Code of
1986 shall apply with respect to the Trust Fund.
SEC. 208. OPTIONAL OPERATION OF STATE-BASED HEALTH INSURANCE EXCHANGES.
(1) a State (or group of States, subject to the
approval of the Commissioner) applies to the Commissioner for approval
of a State-based Health Insurance Exchange to operate in the State (or
group of States); and
(2) the Commissioner approves such State-based Health Insurance Exchange,
then, subject to subsections (c) and (d), the State-based
Health Insurance Exchange shall operate, instead of the Health
Insurance Exchange, with respect to such State (or group of States).
The Commissioner shall approve a State-based Health Insurance Exchange
if it meets the requirements for approval under subsection (b).
(b) Requirements for Approval- The Commissioner may not
approve a State-based Health Insurance Exchange under this section
unless the following requirements are met:
(1) The State-based Health Insurance Exchange must
demonstrate the capacity to and provide assurances satisfactory to the
Commissioner that the State-based Health Insurance Exchange will carry
out the functions specified for the Health Insurance Exchange in the
State (or States) involved, including--
(A) negotiating and contracting with QHBP offering
entities for the offering of Exchange-participating health benefits
plan, which satisfy the standards and requirements of this title and
title I;
(B) enrolling Exchange-eligible individuals and employers in such State in such plans;
(C) the establishment of sufficient local offices to meet the needs of Exchange-eligible individuals and employers;
(D) administering affordability credits under
subtitle B using the same methodologies (and at least the same income
verification methods) as would otherwise apply under such subtitle and
at a cost to the Federal Government which does exceed the cost to the
Federal Government if this section did not apply; and
(E) enforcement activities consistent with federal requirements.
(2) There is no more than one Health Insurance Exchange operating with respect to any one State.
(3) The State provides assurances satisfactory to the
Commissioner that approval of such an Exchange will not result in any
net increase in expenditures to the Federal Government.
(4) The State provides for reporting of such
information as the Commissioner determines and assurances satisfactory
to the Commissioner that it will vigorously enforce violations of
applicable requirements.
(5) Such other requirements as the Commissioner may specify.
(1) IN GENERAL- A State-based Health Insurance Exchange
may, at the option of each State involved, and only after providing
timely and reasonable notice to the Commissioner, cease operation as
such an Exchange, in which case the Health Insurance Exchange shall
operate, instead of such State-based Health Insurance Exchange, with
respect to such State (or States).
(2) TERMINATION; HEALTH INSURANCE EXCHANGE RESUMPTION
OF FUNCTIONS- The Commissioner may terminate the approval (for some or
all functions) of a State-based Health Insurance Exchange under this
section if the Commissioner determines that such Exchange no longer
meets the requirements of subsection (b) or is no longer capable of
carrying out such functions in accordance with the requirements of this
subtitle. In lieu of terminating such approval, the Commissioner may
temporarily assume some or all functions of the State-based Health
Insurance Exchange until such time as the Commissioner determines the
State-based Health Insurance Exchange meets such requirements of
subsection (b) and is capable of carrying out such functions in
accordance with the requirements of this subtitle.
(3) EFFECTIVENESS- The ceasing or termination of a
State-based Health Insurance Exchange under this subsection shall be
effective in such time and manner as the Commissioner shall specify.
(d) Retention of Authority-
(1) AUTHORITY RETAINED- Enforcement authorities of the Commissioner shall be retained by the Commissioner.
(2) DISCRETION TO RETAIN ADDITIONAL AUTHORITY- The Commissioner may specify functions of the Health Insurance Exchange that--
(A) may not be performed by a State-based Health Insurance Exchange under this section; or
(B) may be performed by the Commissioner and by such a State-based Health Insurance Exchange.
(e) References- In the case of a State-based Health
Insurance Exchange, except as the Commissioner may otherwise specify
under subsection (d), any references in this subtitle to the Health
Insurance Exchange or to the Commissioner in the area in which the
State-based Health Insurance Exchange operates shall be deemed a
reference to the State-based Health Insurance Exchange and the head of
such Exchange, respectively.
(f) Funding- In the case of a State-based Health Insurance
Exchange, there shall be assistance provided for the operation of such
Exchange in the form of a matching grant with a State share of
expenditures required.
Subtitle B--Public Health Insurance Option
SEC. 221. ESTABLISHMENT AND ADMINISTRATION OF A PUBLIC HEALTH INSURANCE OPTION AS AN EXCHANGE-QUALIFIED HEALTH BENEFITS PLAN.
(a) Establishment- For years beginning with Y1, the
Secretary of Health and Human Services (in this subtitle referred to as
the `Secretary') shall provide for the offering of an
Exchange-participating health benefits plan (in this division referred
to as the `public health insurance option') that ensures choice,
competition, and stability of affordable, high quality coverage
throughout the United States in accordance with this subtitle. In
designing the option, the Secretary's primary responsibility is to
create a low-cost plan without comprimising quality or access to care.
(b) Offering as an Exchange-participating Health Benefits Plan-
(1) EXCLUSIVE TO THE EXCHANGE- The public health
insurance option shall only be made available through the Health
Insurance Exchange.
(2) ENSURING A LEVEL PLAYING FIELD- Consistent with
this subtitle, the public health insurance option shall comply with
requirements that are applicable under this title to an
Exchange-participating health benefits plan, including requirements
related to benefits, benefit levels, provider networks, notices,
consumer protections, and cost sharing.
(3) PROVISION OF BENEFIT LEVELS- The public health insurance option--
(A) shall offer basic, enhanced, and premium plans; and
(B) may offer premium-plus plans.
(c) Administrative Contracting- The Secretary may enter
into contracts for the purpose of performing administrative functions
(including functions described in subsection (a)(4) of section 1874A of
the Social Security Act) with respect to the public health insurance
option in the same manner as the Secretary may enter into contracts
under subsection (a)(1) of such section. The Secretary has the same
authority with respect to the public health insurance option as the
Secretary has under subsections (a)(1) and (b) of section 1874A of the
Social Security Act with respect to title XVIII of such Act. Contracts
under this subsection shall not involve the transfer of insurance risk
to such entity.
(d) Ombudsman- The Secretary shall establish an office of
the ombudsman for the public health insurance option which shall have
duties with respect to the public health insurance option similar to
the duties of the Medicare Beneficiary Ombudsman under section
1808(c)(2) of the Social Security Act.
(e) Data Collection- The Secretary shall collect such data
as may be required to establish premiums and payment rates for the
public health insurance option and for other purposes under this
subtitle, including to improve quality and to reduce racial, ethnic,
and other disparities in health and health care.
(f) Treatment of Public Health Insurance Option- With
respect to the public health insurance option, the Secretary shall be
treated as a QHBP offering entity offering an Exchange-participating
health benefits plan.
(g) Access to Federal Courts- The provisions of Medicare
(and related provisions of title II of the Social Security Act)
relating to access of Medicare beneficiaries to Federal courts for the
enforcement of rights under Medicare, including with respect to amounts
in controversy, shall apply to the public health insurance option and
individuals enrolled under such option under this title in the same
manner as such provisions apply to Medicare and Medicare beneficiaries.
SEC. 222. PREMIUMS AND FINANCING.
(a) Establishment of Premiums-
(1) IN GENERAL- The Secretary shall establish
geographically-adjusted premium rates for the public health insurance
option in a manner--
(A) that complies with the premium rules
established by the Commissioner under section 113 for
Exchange-participating health benefit plans; and
(B) at a level sufficient to fully finance the costs of--
(i) health benefits provided by the public health insurance option; and
(ii) administrative costs related to operating the public health insurance option.
(2) CONTINGENCY MARGIN- In establishing premium rates
under paragraph (1), the Secretary shall include an appropriate amount
for a contingency margin.
(1) ESTABLISHMENT- There is established in the Treasury
of the United States an Account for the receipts and disbursements
attributable to the operation of the public health insurance option,
including the start-up funding under paragraph (2). Section 1854(g) of
the Social Security Act shall apply to receipts described in the
previous sentence in the same manner as such section applies to
payments or premiums described in such section.
(A) IN GENERAL- In order to provide for the
establishment of the public health insurance option there is hereby
appropriated to the Secretary, out of any funds in the Treasury not
otherwise appropriated, $2,000,000,000. In order to provide for initial
claims reserves before the collection of premiums, there is hereby
appropriated to the Secretary, out of any funds in the Treasury not
otherwise appropriated, such sums as necessary to cover 90 days worth
of claims reserves based on projected enrollment.
(B) AMORTIZATION OF START-UP FUNDING- The Secretary
shall provide for the repayment of the startup funding provided under
subparagraph (A) to the Treasury in an amortized manner over the
10-year period beginning with Y1.
(C) LIMITATION ON FUNDING- Nothing in this section
shall be construed as authorizing any additional appropriations to the
Account, other than such amounts as are otherwise provided with respect
to other Exchange-participating health benefits plans.
SEC. 223. PAYMENT RATES FOR ITEMS AND SERVICES.
(a) Rates Established by Secretary-
(1) IN GENERAL- The Secretary shall establish payment
rates for the public health insurance option for services and health
care providers consistent with this section and may change such payment
rates in accordance with section 224.
(2) INITIAL PAYMENT RULES-
(A) IN GENERAL- Except as provided in subparagraph
(B) and subsection (b)(1), during Y1, Y2, and Y3, the Secretary shall
base the payment rates under this section for services and providers
described in paragraph (1) on the payment rates for similar services
and providers under parts A and B of Medicare.
(i) Practitioners' SERVICES- Payment rates for
practitioners' services otherwise established under the fee schedule
under section 1848 of the Social Security Act shall be applied without
regard to the provisions under subsection (f) of such section and the
update under subsection (d)(4) under such section for a year as applied
under this paragraph shall be not less than 1 percent.
(ii) ADJUSTMENTS- The Secretary may determine
the extent to which Medicare adjustments applicable to base payment
rates under parts A and B of Medicare shall apply under this subtitle.
(3) FOR NEW SERVICES- The Secretary shall modify
payment rates described in paragraph (2) in order to accommodate
payments for services, such as well-child visits, that are not
otherwise covered under Medicare.
(4) PRESCRIPTION DRUGS- Payment rates under this
section for prescription drugs that are not paid for under part A or
part B of Medicare shall be at rates negotiated by the Secretary.
(b) Incentives for Participating Providers-
(1) INITIAL INCENTIVE PERIOD-
(A) IN GENERAL- The Secretary shall provide, in the
case of services described in subparagraph (B) furnished during Y1, Y2,
and Y3, for payment rates that are 5 percent greater than the rates
established under subsection (a).
(B) SERVICES DESCRIBED- The services described in
this subparagraph are items and professional services, under the public
health insurance option by a physician or other health care
practitioner who participates in both Medicare and the public health
insurance option.
(C) SPECIAL RULES- A pediatrician and any other
health care practitioner who is a type of practitioner that does not
typically participate in Medicare (as determined by the Secretary)
shall also be eligible for the increased payment rates under
subparagraph (A).
(2) SUBSEQUENT PERIODS- Beginning with Y4 and for
subsequent years, the Secretary shall continue to use an administrative
process to set such rates in order to promote payment accuracy, to
ensure adequate beneficiary access to providers, and to promote
affordablility and the efficient delivery of medical care consistent
with section 221(a). Such rates shall not be set at levels expected to
increase overall medical costs under the option beyond what would be
expected if the process under subsection (a)(2) and paragraph (1) of
this subsection were continued.
(3) ESTABLISHMENT OF A PROVIDER NETWORK- Health care
providers participating under Medicare are participating providers in
the public health insurance option unless they opt out in a process
established by the Secretary.
(c) Administrative Process for Setting Rates- Chapter 5 of
title 5, United States Code shall apply to the process for the initial
establishment of payment rates under this section but not to the
specific methodology for establishing such rates or the calculation of
such rates.
(d) Construction- Nothing in this subtitle shall be
construed as limiting the Secretary's authority to correct for payments
that are excessive or deficient, taking into account the provisions of
section 221(a) and the amounts paid for similar health care providers
and services under other Exchange-participating health benefits plans.
(e) Construction- Nothing in this subtitle shall be
construed as affecting the authority of the Secretary to establish
payment rates, including payments to provide for the more efficient
delivery of services, such as the initiatives provided for under
section 224.
(f) Limitations on Review- There shall be no administrative
or judicial review of a payment rate or methodology established under
this section or under section 224.
SEC. 224. MODERNIZED PAYMENT INITIATIVES AND DELIVERY SYSTEM REFORM.
(a) In General- For plan years beginning with Y1, the
Secretary may utilize innovative payment mechanisms and policies to
determine payments for items and services under the public health
insurance option. The payment mechanisms and policies under this
section may include patient-centered medical home and other care
management payments, accountable care organizations, value-based
purchasing, bundling of services, differential payment rates,
performance or utilization based payments, partial capitation, and
direct contracting with providers.
(b) Requirements for Innovative Payments- The Secretary
shall design and implement the payment mechanisms and policies under
this section in a manner that--
(A) improve health outcomes;
(B) reduce health disparities (including racial, ethnic, and other disparities);
(C) provide efficent and affordable care;
(D) address geographic variation in the provision of health services; or
(E) prevent or manage chronic illness; and
(2) promotes care that is integrated, patient-centered, quality, and efficient.
(c) Encouraging the Use of High Value Services- To the
extent allowed by the benefit standards applied to all
Exchange-participating health benefits plans, the public health
insurance option may modify cost sharing and payment rates to encourage
the use of services that promote health and value.
(d) Non-uniformity Permitted- Nothing in this subtitle
shall prevent the Secretary from varying payments based on different
payment structure models (such as accountable care organizations and
medical homes) under the public health insurance option for different
geographic areas.
SEC. 225. PROVIDER PARTICIPATION.
(a) In General- The Secretary shall establish conditions of
participation for health care providers under the public health
insurance option.
(b) Licensure or Certification- The Secretary shall not
allow a health care provider to participate in the public health
insurance option unless such provider is appropriately licensed or
certified under State law.
(c) Payment Terms for Providers-
(1) PHYSICIANS- The Secretary shall provide for the
annual participation of physicians under the public health insurance
option, for which payment may be made for services furnished during the
year, in one of 2 classes:
(A) PREFERRED PHYSICIANS- Those physicians who
agree to accept the payment rate established under section 223 (without
regard to cost-sharing) as the payment in full.
(B) PARTICIPATING, NON-PREFERRED PHYSICIANS- Those
physicians who agree not to impose charges (in relation to the payment
rate described in section 223 for such physicians) that exceed the
ratio permitted under section 1848(g)(2)(C) of the Social Security Act.
(2) OTHER PROVIDERS- The Secretary shall provide for
the participation (on an annual or other basis specified by the
Secretary) of health care providers (other than physicians) under the
public health insurance option under which payment shall only be
available if the provider agrees to accept the payment rate established
under section 223 (without regard to cost-sharing) as the payment in
full.
(d) Exclusion of Certain Providers- The Secretary shall
exclude from participation under the public health insurance option a
health care provider that is excluded from participation in a Federal
health care program (as defined in section 1128B(f) of the Social
Security Act).
SEC. 226. APPLICATION OF FRAUD AND ABUSE PROVISIONS.
Provisions of law (other than criminal law provisions)
identified by the Secretary by regulation, in consultation with the
Inspector General of the Department of Health and Human Services, that
impose sanctions with respect to waste, fraud, and abuse under
Medicare, such as the False Claims Act (31 U.S.C. 3729 et seq.), shall
also apply to the public health insurance option.
Subtitle C--Individual Affordability Credits
SEC. 241. AVAILABILITY THROUGH HEALTH INSURANCE EXCHANGE.
(a) In General- Subject to the succeeding provisions of
this subtitle, in the case of an affordable credit eligible individual
enrolled in an Exchange-participating health benefits plan--
(1) the individual shall be eligible for, in accordance with this subtitle, affordability credits consisting of--
(A) an affordability premium credit under section
243 to be applied against the premium for the Exchange-participating
health benefits plan in which the individual is enrolled; and
(B) an affordability cost-sharing credit under
section 244 to be applied as a reduction of the cost-sharing otherwise
applicable to such plan; and
(2) the Commissioner shall pay the QHBP offering entity
that offers such plan from the Health Insurance Exchange Trust Fund the
aggregate amount of affordability credits for all affordable credit
eligible individuals enrolled in such plan.
(1) IN GENERAL- An Exchange eligible individual may
apply to the Commissioner through the Health Insurance Exchange or
through another entity under an arrangement made with the Commissioner,
in a form and manner specified by the Commissioner. The Commissioner
through the Health Insurance Exchange or through another public entity
under an arrangement made with the Commissioner shall make a
determination as to eligibility of an individual for affordability
credits under this subtitle. The Commissioner shall establish a process
whereby, on the basis of information otherwise available, individuals
may be deemed to be affordable credit eligible individuals. In carrying
this subtitle, the Commissioner shall establish effective methods that
ensure that individuals with limited English proficiency are able to
apply for affordability credits.
(2) USE OF STATE MEDICAID AGENCIES- If the Commissioner
determines that a State Medicaid agency has the capacity to make a
determination of eligibility for affordability credits under this
subtitle and under the same standards as used by the Commissioner,
under the Medicaid memorandum of understanding (as defined in section
205(c)(4))--
(A) the State Medicaid agency is authorized to
conduct such determinations for any Exchange-eligible individual who
requests such a determination; and
(B) the Commissioner shall reimburse the State Medicaid agency for the costs of conducting such determinations.
(3) MEDICAID SCREEN AND ENROLL OBLIGATION- In the case
of an application made under paragraph (1), there shall be a
determination of whether the individual is a Medicaid-eligible
individual. If the individual is determined to be so eligible, the
Commissioner, through the Medicaid memorandum of understanding, shall
provide for the enrollment of the individual under the State Medicaid
plan in accordance with the Medicaid memorandum of understanding. In
the case of such an enrollment, the State shall provide for the same
periodic redetermination of eligibility under Medicaid as would
otherwise apply if the individual had directly applied for medical
assistance to the State Medicaid agency.
(c) Use of Affordability Credits-
(1) IN GENERAL- In Y1 and Y2 an affordable credit
eligible individual may use an affordability credit only with respect
to a basic plan.
(2) FLEXIBILITY IN PLAN ENROLLMENT AUTHORIZED-
Beginning with Y3, the Commissioner shall establish a process to allow
an affordability credit to be used for enrollees in enhanced or premium
plans. In the case of an affordable credit eligible individual who
enrolls in an enhanced or premium plan, the individual shall be
responsible for any difference between the premium for such plan and
the affordable credit amount otherwise applicable if the individual had
enrolled in a basic plan.
(d) Access to Data- In carrying out this subtitle, the
Commissioner shall request from the Secretary of the Treasury
consistent with section 6103 of the Internal Revenue Code of 1986 such
information as may be required to carry out this subtitle.
(e) No Cash Rebates- In no case shall an affordable credit
eligible individual receive any cash payment as a result of the
application of this subtitle.
SEC. 242. AFFORDABLE CREDIT ELIGIBLE INDIVIDUAL.
(1) IN GENERAL- For purposes of this division, the term
`affordable credit eligible individual' means, subject to subsection
(b), an individual who is lawfully present in a State in the United
States (other than as a nonimmigrant described in a subparagraph
(excluding subparagraphs (K), (T), (U), and (V)) of section 101(a)(15)
of the Immigration and Nationality Act)--
(A) who is enrolled under an Exchange-participating
health benefits plan and is not enrolled under such plan as an employee
(or dependent of an employee) through an employer qualified health
benefits plan that meets the requirements of section 312;
(B) with family income below 400 percent of the Federal poverty level for a family of the size involved; and
(C) who is not a Medicaid eligible individual,
other than an individual described in section 202(d)(3) or an
individual during a transition period under section 202(d)(4)(B)(ii).
(2) TREATMENT OF FAMILY- Except as the Commissioner may
otherwise provide, members of the same family who are affordable credit
eligible individuals shall be treated as a single affordable credit
individual eligible for the applicable credit for such a family under
this subtitle.
(b) Limitations on Employee and Dependent Disqualification-
(1) IN GENERAL- Subject to paragraph (2), the term
`affordable credit eligible individual' does not include a full-time
employee of an employer if the employer offers the employee coverage
(for the employee and dependents) as a full-time employee under a group
health plan if the coverage and employer contribution under the plan
meet the requirements of section 312.
(A) FOR CERTAIN FAMILY CIRCUMSTANCES- The
Commissioner shall establish such exceptions and special rules in the
case described in paragraph (1) as may be appropriate in the case of a
divorced or separated individual or such a dependent of an employee who
would otherwise be an affordable credit eligible individual.
(B) FOR UNAFFORDABLE EMPLOYER COVERAGE- Beginning
in Y2, in the case of full-time employees for which the cost of the
employee premium for coverage under a group health plan would exceed 11
percent of current family income (determined by the Commissioner on the
basis of verifiable documentation and without regard to section 245),
paragraph (1) shall not apply.
(1) IN GENERAL- In this title, the term `income' means
modified adjusted gross income (as defined in section 59B of the
Internal Revenue Code of 1986).
(2) STUDY OF INCOME DISREGARDS- The Commissioner shall
conduct a study that examines the application of income disregards for
purposes of this subtitle. Not later than the first day of Y2, the
Commissioner shall submit to Congress a report on such study and shall
include such recommendations as the Commissioner determines appropriate.
(d) Clarification of Treatment of Affordability Credits-
Affordabilty credits under this subtitle shall not be treated, for
purposes of title IV of the Personal Responsibility and Work
Opportunity Reconciliation Act of 1996, to be a benefit provided under
section 403 of such title.
SEC. 243. AFFORDABLE PREMIUM CREDIT.
(a) In General- The affordability premium credit under this
section for an affordable credit eligible individual enrolled in an
Exchange-participating health benefits plan is in an amount equal to
the amount (if any) by which the premium for the plan (or, if less, the
reference premium amount specified in subsection (c)), exceeds the
affordable premium amount specified in subsection (b) for the
individual.
(b) Affordable Premium Amount-
(1) IN GENERAL- The affordable premium amount specified
in this subsection for an individual for monthly premium in a plan year
shall be equal to 1/12 of the product of--
(A) the premium percentage limit specified in
paragraph (2) for the individual based upon the individual's family
income for the plan year; and
(B) the individual's family income for such plan year.
(2) PREMIUM PERCENTAGE LIMITS BASED ON TABLE- The
Commissioner shall establish premium percentage limits so that for
individuals whose family income is within an income tier specified in
the table in subsection (d) such percentage limits shall increase, on a
sliding scale in a linear manner, from the initial premium percentage
to the final premium percentage specified in such table for such income
tier.
(c) Reference Premium Amount- The reference premium amount
specified in this subsection for a plan year for an individual in a
premium rating area is equal to the average premium for the 3 basic
plans in the area for the plan year with the lowest premium levels. In
computing such amount the Commissioner may exclude plans with extremely
limited enrollments.
(d) Table of Premium Percentage Limits and Actuarial Value Percentages Based on Income Tier-
(1) IN GENERAL- For purposes of this subtitle, the table specified in this subsection is as follows:
----------------------------------------------------------------------------------------------------------------------------
The initial premium percentage is-- The final premium percentage is-- The actuarial value percentage is--
----------------------------------------------------------------------------------------------------------------------------
133% through 150% 1.5% 3% 97%
150% through 200% 3% 5% 93%
200% through 250% 5% 7% 85%
250% through 300% 7% 9% 78%
300% through 350% 9% 10% 72%
350% through 400% 10% 11% 70%
----------------------------------------------------------------------------------------------------------------------------
(2) SPECIAL RULES- For purposes of applying the table under paragraph (1)--
(A) FOR LOWEST LEVEL OF INCOME- In the case of an
individual with income that does not exceed 133 percent of FPL, the
individual shall be considered to have income that is 133 percent of
FPL.
(B) APPLICATION OF HIGHER ACTUARIAL VALUE
PERCENTAGE AT TIER TRANSITION POINTS- If two actuarial value
percentages may be determined with respect to an individual, the
actuarial value percentage shall be the higher of such percentages.
SEC. 244. AFFORDABILITY COST-SHARING CREDIT.
(a) In General- The affordability cost-sharing credit under
this section for an affordable credit eligible individual enrolled in
an Exchange-participating health benefits plan is in the form of the
cost-sharing reduction described in subsection (b) provided under this
section for the income tier in which the individual is classified based
on the individual's family income.
(b) Cost-sharing Reductions- The Commissioner shall specify
a reduction in cost-sharing amounts and the annual limitation on
cost-sharing specified in section 122(c)(2)(B) under a basic plan for
each income tier specified in the table under section 243(d), with
respect to a year, in a manner so that, as estimated by the
Commissioner, the actuarial value of the coverage with such reduced
cost-sharing amounts (and the reduced annual cost-sharing limit) is
equal to the actuarial value percentage (specified in the table under
section 243(d) for the income tier involved) of the full actuarial
value if there were no cost-sharing imposed under the plan.
(c) Determination and Payment of Cost-sharing Affordability
Credit- In the case of an affordable credit eligible individual in a
tier enrolled in an Exchange-participating health benefits plan offered
by a QHBP offering entity, the Commissioner shall provide for payment
to the offering entity of an amount equivalent to the increased
actuarial value of the benefits under the plan provided under section
203(c)(2)(B) resulting from the reduction in cost-sharing described in
subsection (b).
SEC. 245. INCOME DETERMINATIONS.
(a) In General- In applying this subtitle for an
affordability credit for an individual for a plan year, the
individual's income shall be the income (as defined in section 242(c))
for the individual for the most recent taxable year (as determined in
accordance with rules of the Commissioner). The Federal poverty level
applied shall be such level in effect as of the date of the application.
(b) Program Integrity; Income Verification Procedures-
(1) PROGRAM INTEGRITY- The Commissioner shall take such
steps as may be appropriate to ensure the accuracy of determinations
and redeterminations under this subtitle.
(A) IN GENERAL- Upon an initial application of an
individual for an affordability credit under this subtitle (or in
applying section 242(b)) or upon an application for a change in the
affordability credit based upon a significant change in family income
described in subparagraph (A)--
(i) the Commissioner shall request from the
Secretary of the Treasury the disclosure to the Commissioner of such
information as may be permitted to verify the information contained in
such application; and
(ii) the Commissioner shall use the information so disclosed to verify such information.
(B) ALTERNATIVE PROCEDURES- The Commissioner shall
establish procedures for the verification of income for purposes of
this subtitle if no income tax return is available for the most recent
completed tax year.
(1) CHANGES IN INCOME AS A PERCENT OF FPL- In the case
that an individual's income (expressed as a percentage of the Federal
poverty level for a family of the size involved) for a plan year is
expected (in a manner specified by the Commissioner) to be
significantly different from the income (as so expressed) used under
subsection (a), the Commissioner shall establish rules requiring an
individual to report, consistent with the mechanism established under
paragraph (2), significant changes in such income (including a
significant change in family composition) to the Commissioner and
requiring the substitution of such income for the income otherwise
applicable.
(2) REPORTING OF SIGNIFICANT CHANGES IN INCOME- The
Commissioner shall establish rules under which an individual determined
to be an affordable credit eligible individual would be required to
inform the Commissioner when there is a significant change in the
family income of the individual (expressed as a percentage of the FPL
for a family of the size involved) and of the information regarding
such change. Such mechanism shall provide for guidelines that specify
the circumstances that qualify as a significant change, the verifiable
information required to document such a change, and the process for
submission of such information. If the Commissioner receives new
information from an individual regarding the family income of the
individual, the Commissioner shall provide for a redetermination of the
individual's eligibility to be an affordable credit eligible individual.
(3) TRANSITION FOR CHIP- In the case of a child
described in section 202(d)(2), the Commissioner shall establish rules
under which the family income of the child is deemed to be no greater
than the family income of the child as most recently determined before
Y1 by the State under title XXI of the Social Security Act.
(4) STUDY OF GEOGRAPHIC VARIATION IN APPLICATION OF
FPL- The Commissioner shall examine the feasibility and implication of
adjusting the application of the Federal poverty level under 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 Commissioner determines that an adjustment is feasible, the study
should include a methodology to make such an adjustment. Not later than
the first day of Y2, the Commissioner shall submit to Congress a report
on such study and shall include such recommendations as the
Commissioner determines appropriate.
(d) Penalties for Misrepresentation- In the case of an
individual intentionally misrepresents family income or the individual
fails (without regard to intent) to disclose to the Commissioner a
significant change in family income under subsection (c) in a manner
that results in the individual becoming an affordable credit eligible
individual when the individual is not or in the amount of the
affordability credit exceeding the correct amount--
(1) the individual is liable for repayment of the amount of the improper affordability credit; and
(2) in the case of such an intentional
misrepresentation or other egregious circumstances specified by the
Commissioner, the Commissioner may impose an additional penalty.
SEC. 246. NO FEDERAL PAYMENT FOR UNDOCUMENTED ALIENS.
Nothing in this subtitle shall allow Federal payments for
affordability credits on behalf of individuals who are not lawfully
present in the United States.
TITLE III--SHARED RESPONSIBILITY
Subtitle A--Individual Responsibility
SEC. 301. INDIVIDUAL RESPONSIBILITY.
For an individual's responsibility to obtain acceptable
coverage, see section 59B of the Internal Revenue Code of 1986 (as
added by section 401 of this Act).
Subtitle B--Employer Responsibility
PART 1--HEALTH COVERAGE PARTICIPATION REQUIREMENTS
SEC. 311. HEALTH COVERAGE PARTICIPATION REQUIREMENTS.
An employer meets the requirements of this section if such employer does all of the following:
(1) OFFER OF COVERAGE- The employer offers each
employee individual and family coverage under a qualified health
benefits plan (or under a current employment-based health plan (within
the meaning of section 102(b))) in accordance with section 312.
(2) CONTRIBUTION TOWARDS COVERAGE- If an employee
accepts such offer of coverage, the employer makes timely contributions
towards such coverage in accordance with section 312.
(3) CONTRIBUTION IN LIEU OF COVERAGE- Beginning with
Y2, if an employee declines such offer but otherwise obtains coverage
in an Exchange-participating health benefits plan (other than by reason
of being covered by family coverage as a spouse or dependent of the
primary insured), the employer shall make a timely contribution to the
Health Insurance Exchange with respect to each such employee in
accordance with section 313.
SEC. 312. EMPLOYER RESPONSIBILITY TO CONTRIBUTE TOWARDS EMPLOYEE AND DEPENDENT COVERAGE.
(a) In General- An employer meets the requirements of this
section with respect to an employee if the following requirements are
met:
(1) OFFERING OF COVERAGE- The employer offers the
coverage described in section 311(1) either through an
Exchange-participating health benefits plan or other than through such
a plan.
(2) EMPLOYER REQUIRED CONTRIBUTION- The employer timely
pays to the issuer of such coverage an amount not less than the
employer required contribution specified in subsection (b) for such
coverage.
(3) PROVISION OF INFORMATION- The employer provides the
Health Choices Commissioner, the Secretary of Labor, the Secretary of
Health and Human Services, and the Secretary of the Treasury, as
applicable, with such information as the Commissioner may require to
ascertain compliance with the requirements of this section.
(4) AUTOENROLLMENT OF EMPLOYEES- The employer provides for autoenrollment of the employee in accordance with subsection (c).
(b) Reduction of Employee Premiums Through Minimum Employer Contribution-
(1) FULL-TIME EMPLOYEES- The minimum employer
contribution described in this subsection for coverage of a full-time
employee (and, if any, the employee's spouse and qualifying children
(as defined in section 152(c) of the Internal Revenue Code of 1986)
under a qualified health benefits plan (or current employment-based
health plan) is equal to--
(A) in case of individual coverage, not less than
72.5 percent of the applicable premium (as defined in section
4980B(f)(4) of such Code, subject to paragraph (2)) of the lowest cost
plan offered by the employer that is a qualified health benefits plan
(or is such current employment-based health plan); and
(B) in the case of family coverage which includes
coverage of such spouse and children, not less 65 percent of such
applicable premium of such lowest cost plan.
(2) APPLICABLE PREMIUM FOR EXCHANGE COVERAGE- In this
subtitle, the amount of the applicable premium of the lowest cost plan
with respect to coverage of an employee under an Exchange-participating
health benefits plan is the reference premium amount under section
243(c) for individual coverage (or, if elected, family coverage) for
the premium rating area in which the individual or family resides.
(3) MINIMUM EMPLOYER CONTRIBUTION FOR EMPLOYEES OTHER
THAN FULL-TIME EMPLOYEES- In the case of coverage for an employee who
is not a full-time employee, the amount of the minimum employer
contribution under this subsection shall be a proportion (as determined
in accordance with rules of the Health Choices Commissioner, the
Secretary of Labor, the Secretary of Health and Human Services, and the
Secretary of the Treasury, as applicable) of the minimum employer
contribution under this subsection with respect to a full-time employee
that reflects the proportion of--
(A) the average weekly hours of employment of the employee by the employer, to
(B) the minimum weekly hours specified by the Commissioner for an employee to be a full-time employee.
(4) SALARY REDUCTIONS NOT TREATED AS EMPLOYER
CONTRIBUTIONS- For purposes of this section, any contribution on behalf
of an employee with respect to which there is a corresponding reduction
in the compensation of the employee shall not be treated as an amount
paid by the employer.
(c) Automatic Enrollment for Employer Sponsored Health Benefits-
(1) IN GENERAL- The requirement of this subsection with
respect to an employer and an employee is that the employer
automatically enroll suchs employee into the employment-based health
benefits plan for individual coverage under the plan option with the
lowest applicable employee premium.
(2) OPT-OUT- In no case may an employer automatically
enroll an employee in a plan under paragraph (1) if such employee makes
an affirmative election to opt out of such plan or to elect coverage
under an employment-based health benefits plan offered by such
employer. An employer shall provide an employee with a 30-day period to
make such an affirmative election before the employer may automatically
enroll the employee in such a plan.
(A) IN GENERAL- Each employer described in
paragraph (1) who automatically enrolls an employee into a plan as
described in such paragraph shall provide the employees, within a
reasonable period before the beginning of each plan year (or, in the
case of new employees, within a reasonable period before the end of the
enrollment period for such a new employee), written notice of the
employees' rights and obligations relating to the automatic enrollment
requirement under such paragraph. Such notice must be comprehensive and
understood by the average employee to whom the automatic enrollment
requirement applies.
(B) INCLUSION OF SPECIFIC INFORMATION- The written
notice under subparagraph (A) must explain an employee's right to opt
out of being automatically enrolled in a plan and in the case that more
than one level of benefits or employee premium level is offered by the
employer involved, the notice must explain which level of benefits and
employee premium level the employee will be automatically enrolled in
the absence of an affirmative election by the employee.
SEC. 313. EMPLOYER CONTRIBUTIONS IN LIEU OF COVERAGE.
(a) In General- A contribution is made in accordance with
this section with respect to an employee if such contribution is equal
to an amount equal to 8 percent of the average wages paid by the
employer during the period of enrollment (determined by taking into
account all employees of the employer and in such manner as the
Commissioner provides, including rules providing for the appropriate
aggregation of related employers). Any such contribution--
(1) shall be paid to the Health Choices Commissioner for deposit into the Health Insurance Exchange Trust Fund, and
(2) shall not be applied against the premium of the
employee under the Exchange-participating health benefits plan in which
the employee is enrolled.
(b) Special Rules for Small Employers-
(1) IN GENERAL- In the case of any employer who is a
small employer for any calendar year, subsection (a) shall be applied
by substituting the applicable percentage determined in accordance with
the following table for `8 percent':
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
If the annual payroll of such employer for the preceding calendar year: The applicable percentage is:
Does not exceed $250,000 0 percent
Exceeds $250,000, but does not exceed $300,000 2 percent
Exceeds $300,000, but does not exceed $350,000 4 percent
Exceeds $350,000, but does not exceed $400,000 6 percent
--------------------------------------------------------------------------------------------------------------------
(2) SMALL EMPLOYER- For purposes of this subsection,
the term `small employer' means any employer for any calendar year if
the annual payroll of such employer for the preceding calendar year
does not exceed $400,000.
(3) ANNUAL PAYROLL- For purposes of this paragraph, the
term `annual payroll' means, with respect to any employer for any
calendar year, the aggregate wages paid by the employer during such
calendar year.
(4) AGGREGATION RULES- Related employers and
predecessors shall be treated as a single employer for purposes of this
subsection.
SEC. 314. AUTHORITY RELATED TO IMPROPER STEERING.
The Health Choices Commissioner (in coordination with the
Secretary of Labor, the Secretary of Health and Human Services, and the
Secretary of the Treasury) shall have authority to set standards for
determining whether employers or insurers are undertaking any actions
to affect the risk pool within the Health Insurance Exchange by
inducing individuals to decline coverage under a qualified health
benefits plan (or current employment-based health plan (within the
meaning of section 102(b))) offered by the employer and instead to
enroll in an Exchange-participating health benefits plan. An employer
violating such standards shall be treated as not meeting the
requirements of this section.
PART 2--SATISFACTION OF HEALTH COVERAGE PARTICIPATION REQUIREMENTS
SEC. 321. SATISFACTION OF HEALTH COVERAGE PARTICIPATION REQUIREMENTS UNDER THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974.
(a) In General- Subtitle B of title I of the Employee
Retirement Income Security Act of 1974 is amended by adding at the end
the following new part:
`PART 8--NATIONAL HEALTH COVERAGE PARTICIPATION REQUIREMENTS
`SEC. 801. ELECTION OF EMPLOYER TO BE SUBJECT TO NATIONAL HEALTH COVERAGE PARTICIPATION REQUIREMENTS.
`(a) In General- An employer may make an election with the
Secretary to be subject to the health coverage participation
requirements.
`(b) Time and Manner- An election under subsection (a) may
be made at such time and in such form and manner as the Secretary may
prescribe.
`SEC. 802. TREATMENT OF COVERAGE RESULTING FROM ELECTION.
`(a) In General- If an employer makes an election to the Secretary under section 801--
`(1) such election shall be treated as the
establishment and maintenance of a group health plan (as defined in
section 733(a)) for purposes of this title, subject to section 151 of
the America's Affordable Health Choices Act of 2009, and
`(2) the health coverage participation requirements shall be deemed to be included as terms and conditions of such plan.
`(b) Periodic Investigations To Discover Noncompliance- The
Secretary shall regularly audit a representative sampling of employers
and group health plans and conduct investigations and other activities
under section 504 with respect to such sampling of plans so as to
discover noncompliance with the health coverage participation
requirements in connection with such plans. The Secretary shall
communicate findings of noncompliance made by the Secretary under this
subsection to the Secretary of the Treasury and the Health Choices
Commissioner. The Secretary shall take such timely enforcement action
as appropriate to achieve compliance.
`SEC. 803. HEALTH COVERAGE PARTICIPATION REQUIREMENTS.
`For purposes of this part, the term `health coverage
participation requirements' means the requirements of part 1 of
subtitle B of title III of division A of America's Affordable Health
Choices Act of 2009 (as in effect on the date of the enactment of such
Act).
`SEC. 804. RULES FOR APPLYING REQUIREMENTS.
`(a) Affiliated Groups- In the case of any employer which
is part of a group of employers who are treated as a single employer
under subsection (b), (c), (m), or (o) of section 414 of the Internal
Revenue Code of 1986, the election under section 801 shall be made by
such employer as the Secretary may provide. Any such election, once
made, shall apply to all members of such group.
`(b) Separate Elections- Under regulations prescribed by
the Secretary, separate elections may be made under section 801 with
respect to--
`(1) separate lines of business, and
`(2) full-time employees and employees who are not full-time employees.
`SEC. 805. TERMINATION OF ELECTION IN CASES OF SUBSTANTIAL NONCOMPLIANCE.
`The Secretary may terminate the election of any employer
under section 801 if the Secretary (in coordination with the Health
Choices Commissioner) determines that such employer is in substantial
noncompliance with the health coverage participation requirements and
shall refer any such determination to the Secretary of the Treasury as
appropriate.
`SEC. 806. REGULATIONS.
`The Secretary may promulgate such regulations as may be
necessary or appropriate to carry out the provisions of this part, in
accordance with section 324(a) of the America's Affordable Health
Choices Act of 2009. The Secretary may promulgate any interim final
rules as the Secretary determines are appropriate to carry out this
part.'.
(b) Enforcement of Health Coverage Participation Requirements- Section 502 of such Act (29 U.S.C. 1132) is amended--
(1) in subsection (a)(6), by striking `paragraph' and
all that follows through `subsection (c)' and inserting `paragraph (2),
(4), (5), (6), (7), (8), (9), (10), or (11) of subsection (c)'; and
(2) in subsection (c), by redesignating the second
paragraph (10) as paragraph (12) and by inserting after the first
paragraph (10) the following new paragraph:
`(11) HEALTH COVERAGE PARTICIPATION REQUIREMENTS-
`(A) CIVIL PENALTIES- In the case of any employer
who fails (during any period with respect to which an election under
section 801(a) is in effect) to satisfy the health coverage
participation requirements with respect to any employee, the Secretary
may assess a civil penalty against the employer of $100 for each day in
the period beginning on the date such failure first occurs and ending
on the date such failure is corrected.
`(B) HEALTH COVERAGE PARTICIPATION REQUIREMENTS-
For purposes of this paragraph, the term `health coverage participation
requirements' has the meaning provided in section 803.
`(C) LIMITATIONS ON AMOUNT OF PENALTY-
`(i) PENALTY NOT TO APPLY WHERE FAILURE NOT
DISCOVERED EXERCISING REASONABLE DILIGENCE- No penalty shall be
assessed under subparagraph (A) with respect to any failure during any
period for which it is established to the satisfaction of the Secretary
that the employer did not know, or exercising reasonable diligence
would not have known, that such failure existed.
`(ii) PENALTY NOT TO APPLY TO FAILURES
CORRECTED WITHIN 30 DAYS- No penalty shall be assessed under
subparagraph (A) with respect to any failure if--
`(I) such failure was due to reasonable cause and not to willful neglect, and
`(II) such failure is corrected during the
30-day period beginning on the 1st date that the employer knew, or
exercising reasonable diligence would have known, that such failure
existed.
`(iii) OVERALL LIMITATION FOR UNINTENTIONAL
FAILURES- In the case of failures which are due to reasonable cause and
not to willful neglect, the penalty assessed under subparagraph (A) for
failures during any 1-year period shall not exceed the amount equal to
the lesser of--
`(I) 10 percent of the aggregate amount
paid or incurred by the employer (or predecessor employer) during the
preceding 1-year period for group health plans, or
`(D) ADVANCE NOTIFICATION OF FAILURE PRIOR TO
ASSESSMENT- Before a reasonable time prior to the assessment of any
penalty under this paragraph with respect to any failure by an
employer, the Secretary shall inform the employer in writing of such
failure and shall provide the employer information regarding efforts
and procedures which may be undertaken by the employer to correct such
failure.
`(E) COORDINATION WITH EXCISE TAX- Under
regulations prescribed in accordance with section 324 of the America's
Affordable Health Choices Act of 2009, the Secretary and the Secretary
of the Treasury shall coordinate the assessment of penalties under this
section in connection with failures to satisfy health coverage
participation requirements with the imposition of excise taxes on such
failures under section 4980H(b) of the Internal Revenue Code of 1986 so
as to avoid duplication of penalties with respect to such failures.
`(F) DEPOSIT OF PENALTY COLLECTED- Any amount of
penalty collected under this paragraph shall be deposited as
miscellaneous receipts in the Treasury of the United States.'.
(c) Clerical Amendments- The table of contents in section 1
of such Act is amended by inserting after the item relating to section
734 the following new items:
`Part 8--National Health Coverage Participation Requirements
`Sec. 801. Election of employer to be subject to national health coverage participation requirements.
`Sec. 802. Treatment of coverage resulting from election.
`Sec. 803. Health coverage participation requirements.
`Sec. 804. Rules for applying requirements.
`Sec. 805. Termination of election in cases of substantial noncompliance.
`Sec. 806. Regulations.'.
(d) Effective Date- The amendments made by this section shall apply to periods beginning after December 31, 2012.
SEC. 322. SATISFACTION OF HEALTH COVERAGE PARTICIPATION REQUIREMENTS UNDER THE INTERNAL REVENUE CODE OF 1986.
(a) Failure To Elect, or Substantially Comply With, Health
Coverage Participation Requirements- For employment tax on employers
who fail to elect, or substantially comply with, the health coverage
participation requirements described in part 1, see section 3111(c) of
the Internal Revenue Code of 1986 (as added by section 412 of this Act).
(b) Other Failures- For excise tax on other failures of
electing employers to comply with such requirements, see section 4980H
of the Internal Revenue Code of 1986 (as added by section 411 of this
Act).
SEC. 323. SATISFACTION OF HEALTH COVERAGE PARTICIPATION REQUIREMENTS UNDER THE PUBLIC HEALTH SERVICE ACT.
(a) In General- Part C of title XXVII of the Public Health
Service Act is amended by adding at the end the following new section:
`SEC. 2793. NATIONAL HEALTH COVERAGE PARTICIPATION REQUIREMENTS.
`(a) Election of Employer To Be Subject to National Health Coverage Participation Requirements-
`(1) IN GENERAL- An employer may make an election with
the Secretary to be subject to the health coverage participation
requirements.
`(2) TIME AND MANNER- An election under paragraph (1)
may be made at such time and in such form and manner as the Secretary
may prescribe.
`(b) Treatment of Coverage Resulting From Election-
`(1) IN GENERAL- If an employer makes an election to the Secretary under subsection (a)--
`(A) such election shall be treated as the
establishment and maintenance of a group health plan for purposes of
this title, subject to section 151 of the America's Affordable Health
Choices Act of 2009, and
`(B) the health coverage participation requirements shall be deemed to be included as terms and conditions of such plan.
`(2) PERIODIC INVESTIGATIONS TO DETERMINE COMPLIANCE
WITH HEALTH COVERAGE PARTICIPATION REQUIREMENTS- The Secretary shall
regularly audit a representative sampling of employers and conduct
investigations and other activities with respect to such sampling of
employers so as to discover noncompliance with the health coverage
participation requirements in connection with such employers (during
any period with respect to which an election under subsection (a) is in
effect). The Secretary shall communicate findings of noncompliance made
by the Secretary under this subsection to the Secretary of the Treasury
and the Health Choices Commissioner. The Secretary shall take such
timely enforcement action as appropriate to achieve compliance.
`(c) Health Coverage Participation Requirements- For
purposes of this section, the term `health coverage participation
requirements' means the requirements of part 1 of subtitle B of title
III of division A of the America's Affordable Health Choices Act of
2009 (as in effect on the date of the enactment of this section).
`(d) Separate Elections- Under regulations prescribed by
the Secretary, separate elections may be made under subsection (a) with
respect to full-time employees and employees who are not full-time
employees.
`(e) Termination of Election in Cases of Substantial
Noncompliance- The Secretary may terminate the election of any employer
under subsection (a) if the Secretary (in coordination with the Health
Choices Commissioner) determines that such employer is in substantial
noncompliance with the health coverage participation requirements and
shall refer any such determination to the Secretary of the Treasury as
appropriate.
`(f) Enforcement of Health Coverage Participation Requirements-
`(1) CIVIL PENALTIES- In the case of any employer who
fails (during any period with respect to which the election under
subsection (a) is in effect) to satisfy the health coverage
participation requirements with respect to any employee, the Secretary
may assess a civil penalty against the employer of $100 for each day in
the period beginning on the date such failure first occurs and ending
on the date such failure is corrected.
`(2) LIMITATIONS ON AMOUNT OF PENALTY-
`(A) PENALTY NOT TO APPLY WHERE FAILURE NOT
DISCOVERED EXERCISING REASONABLE DILIGENCE- No penalty shall be
assessed under paragraph (1) with respect to any failure during any
period for which it is established to the satisfaction of the Secretary
that the employer did not know, or exercising reasonable diligence
would not have known, that such failure existed.
`(B) PENALTY NOT TO APPLY TO FAILURES CORRECTED
WITHIN 30 DAYS- No penalty shall be assessed under paragraph (1) with
respect to any failure if--
`(i) such failure was due to reasonable cause and not to willful neglect, and
`(ii) such failure is corrected during the
30-day period beginning on the 1st date that the employer knew, or
exercising reasonable diligence would have known, that such failure
existed.
`(C) OVERALL LIMITATION FOR UNINTENTIONAL FAILURES-
In the case of failures which are due to reasonable cause and not to
willful neglect, the penalty assessed under paragraph (1) for failures
during any 1-year period shall not exceed the amount equal to the
lesser of--
`(i) 10 percent of the aggregate amount paid or
incurred by the employer (or predecessor employer) during the preceding
taxable year for group health plans, or
`(3) ADVANCE NOTIFICATION OF FAILURE PRIOR TO
ASSESSMENT- Before a reasonable time prior to the assessment of any
penalty under paragraph (1) with respect to any failure by an employer,
the Secretary shall inform the employer in writing of such failure and
shall provide the employer information regarding efforts and procedures
which may be undertaken by the employer to correct such failure.
`(4) ACTIONS TO ENFORCE ASSESSMENTS- The Secretary may
bring a civil action in any District Court of the United States to
collect any civil penalty under this subsection.
`(5) COORDINATION WITH EXCISE TAX- Under regulations
prescribed in accordance with section 324 of the America's Affordable
Health Choices Act of 2009, the Secretary and the Secretary of the
Treasury shall coordinate the assessment of penalties under paragraph
(1) in connection with failures to satisfy health coverage
participation requirements with the imposition of excise taxes on such
failures under section 4980H(b) of the Internal Revenue Code of 1986 so
as to avoid duplication of penalties with respect to such failures.
`(6) DEPOSIT OF PENALTY COLLECTED- Any amount of
penalty collected under this subsection shall be deposited as
miscellaneous receipts in the Treasury of the United States.
`(g) Regulations- The Secretary may promulgate such
regulations as may be necessary or appropriate to carry out the
provisions of this section, in accordance with section 324(a) of the
America's Affordable Health Choices Act of 2009. The Secretary may
promulgate any interim final rules as the Secretary determines are
appropriate to carry out this section.'.
(b) Effective Date- The amendments made by subsection (a) shall apply to periods beginning after December 31, 2012.
SEC. 324. ADDITIONAL RULES RELATING TO HEALTH COVERAGE PARTICIPATION REQUIREMENTS.
(a) Assuring Coordination- The officers consisting of the
Secretary of Labor, the Secretary of the Treasury, the Secretary of
Health and Human Services, and the Health Choices Commissioner shall
ensure, through the execution of an interagency memorandum of
understanding among such officers, that--
(1) regulations, rulings, and interpretations issued by
such officers relating to the same matter over which two or more of
such officers have responsibility under subpart B of part 6 of subtitle
B of title I of the Employee Retirement Income Security Act of 1974,
section 4980H of the Internal Revenue Code of 1986, and section 2793 of
the Public Health Service Act are administered so as to have the same
effect at all times; and
(2) coordination of policies relating to enforcing the
same requirements through such officers in order to have a coordinated
enforcement strategy that avoids duplication of enforcement efforts and
assigns priorities in enforcement.
(b) Multiemployer Plans- In the case of a group health plan
that is a multiemployer plan (as defined in section 3(37) of the
Employee Retirement Income Security Act of 1974), the regulations
prescribed in accordance with subsection (a) by the officers referred
to in subsection (a) shall provide for the application of the health
coverage participation requirements to the plan sponsor and
contributing sponsors of such plan.
TITLE IV--AMENDMENTS TO INTERNAL REVENUE CODE OF 1986
Subtitle A--Shared Responsibility
PART 1--INDIVIDUAL RESPONSIBILITY
SEC. 401. TAX ON INDIVIDUALS WITHOUT ACCEPTABLE HEALTH CARE COVERAGE.
(a) In General- Subchapter A of chapter 1 of the Internal
Revenue Code of 1986 is amended by adding at the end the following new
part:
`PART VIII--HEALTH CARE RELATED TAXES
`subpart a. tax on individuals without acceptable health care coverage.
`Subpart A--Tax on Individuals Without Acceptable Health Care Coverage
`Sec. 59B. Tax on individuals without acceptable health care coverage.
`SEC. 59B. TAX ON INDIVIDUALS WITHOUT ACCEPTABLE HEALTH CARE COVERAGE.
`(a) Tax Imposed- In the case of any individual who does
not meet the requirements of subsection (d) at any time during the
taxable year, there is hereby imposed a tax equal to 2.5 percent of the
excess of--
`(1) the taxpayer's modified adjusted gross income for the taxable year, over
`(2) the amount of gross income specified in section 6012(a)(1) with respect to the taxpayer.
`(1) TAX LIMITED TO AVERAGE PREMIUM-
`(A) IN GENERAL- The tax imposed under subsection
(a) with respect to any taxpayer for any taxable year shall not exceed
the applicable national average premium for such taxable year.
`(B) APPLICABLE NATIONAL AVERAGE PREMIUM-
`(i) IN GENERAL- For purposes of subparagraph
(A), the `applicable national average premium' means, with respect to
any taxable year, the average premium (as determined by the Secretary,
in coordination with the Health Choices Commissioner) for self-only
coverage under a basic plan which is offered in a Health Insurance
Exchange for the calendar year in which such taxable year begins.
`(ii) FAILURE TO PROVIDE COVERAGE FOR MORE THAN
ONE INDIVIDUAL- In the case of any taxpayer who fails to meet the
requirements of subsection (e) with respect to more than one individual
during the taxable year, clause (i) shall be applied by substituting
`family coverage' for `self-only coverage'.
`(2) PRORATION FOR PART YEAR FAILURES- The tax imposed
under subsection (a) with respect to any taxpayer for any taxable year
shall not exceed the amount which bears the same ratio to the amount of
tax so imposed (determined without regard to this paragraph and after
application of paragraph (1)) as--
`(A) the aggregate periods during such taxable year
for which such individual failed to meet the requirements of subsection
(d), bears to
`(B) the entire taxable year.
`(1) DEPENDENTS- Subsection (a) shall not apply to any
individual for any taxable year if a deduction is allowable under
section 151 with respect to such individual to another taxpayer for any
taxable year beginning in the same calendar year as such taxable year.
`(2) NONRESIDENT ALIENS- Subsection (a) shall not apply to any individual who is a nonresident alien.
`(3) INDIVIDUALS RESIDING OUTSIDE UNITED STATES- Any
qualified individual (as defined in section 911(d)) (and any qualifying
child residing with such individual) shall be treated for purposes of
this section as covered by acceptable coverage during the period
described in subparagraph (A) or (B) of section 911(d)(1), whichever is
applicable.
`(4) INDIVIDUALS RESIDING IN POSSESSIONS OF THE UNITED
STATES- Any individual who is a bona fide resident of any possession of
the United States (as determined under section 937(a)) for any taxable
year (and any qualifying child residing with such individual) shall be
treated for purposes of this section as covered by acceptable coverage
during such taxable year.
`(5) RELIGIOUS CONSCIENCE EXEMPTION-
`(A) IN GENERAL- Subsection (a) shall not apply to
any individual (and any qualifying child residing with such individual)
for any period if such individual has in effect an exemption which
certifies that such individual is a member of a recognized religious
sect or division thereof described in section 1402(g)(1) and an
adherent of established tenets or teachings of such sect or division as
described in such section.
`(B) EXEMPTION- An application for the exemption
described in subparagraph (A) shall be filed with the Secretary at such
time and in such form and manner as the Secretary may prescribe. Any
such exemption granted by the Secretary shall be effective for such
period as the Secretary determines appropriate.
`(d) Acceptable Coverage Requirement-
`(1) IN GENERAL- The requirements of this subsection
are met with respect to any individual for any period if such
individual (and each qualifying child of such individual) is covered by
acceptable coverage at all times during such period.
`(2) ACCEPTABLE COVERAGE- For purposes of this section, the term `acceptable coverage' means any of the following:
`(A) QUALIFIED HEALTH BENEFITS PLAN COVERAGE-
Coverage under a qualified health benefits plan (as defined in section
100(c) of the America's Affordable Health Choices Act of 2009).
`(B) GRANDFATHERED HEALTH INSURANCE COVERAGE;
COVERAGE UNDER GRANDFATHERED EMPLOYMENT-BASED HEALTH PLAN- Coverage
under a grandfathered health insurance coverage (as defined in
subsection (a) of section 102 of the America's Affordable Health
Choices Act of 2009) or under a current employment-based health plan
(within the meaning of subsection (b) of such section).
`(C) MEDICARE- Coverage under part A of title XVIII of the Social Security Act.
`(D) MEDICAID- Coverage for medical assistance under title XIX of the Social Security Act.
`(E) MEMBERS OF THE ARMED FORCES AND DEPENDENTS
(INCLUDING TRICARE)- Coverage under chapter 55 of title 10, United
States Code, including similar coverage furnished under section 1781 of
title 38 of such Code.
`(F) VA- Coverage under the veteran's health care
program under chapter 17 of title 38, United States Code, but only if
the coverage for the individual involved is determined by the Secretary
in coordination with the Health Choices Commissioner to be not less
than the level specified by the Secretary of the Treasury, in
coordination with the Secretary of Veteran's Affairs and the Health
Choices Commissioner, based on the individual's priority for services
as provided under section 1705(a) of such title.
`(G) OTHER COVERAGE- Such other health benefits
coverage as the Secretary, in coordination with the Health Choices
Commissioner, recognizes for purposes of this subsection.
`(e) Other Definitions and Special Rules-
`(1) QUALIFYING CHILD- For purposes of this section,
the term `qualifying child' has the meaning given such term by section
152(c).
`(2) BASIC PLAN- For purposes of this section, the term
`basic plan' has the meaning given such term under section 100(c) of
the America's Affordable Health Choices Act of 2009.
`(3) HEALTH INSURANCE EXCHANGE- For purposes of this
section, the term `Health Insurance Exchange' has the meaning given
such term under section 100(c) of the America's Affordable Health
Choices Act of 2009, including any State-based health insurance
exchange approved for operation under section 208 of such Act.
`(4) FAMILY COVERAGE- For purposes of this section, the
term `family coverage' means any coverage other than self-only coverage.
`(5) MODIFIED ADJUSTED GROSS INCOME- For purposes of
this section, the term `modified adjusted gross income' means adjusted
gross income--
`(A) determined without regard to section 911, and
`(B) increased by the amount of interest received or accrued by the taxpayer during the taxable year which is exempt from tax.
`(6) NOT TREATED AS TAX IMPOSED BY THIS CHAPTER FOR
CERTAIN PURPOSES- The tax imposed under this section shall not be
treated as tax imposed by this chapter for purposes of determining the
amount of any credit under this chapter or for purposes of section 55.
`(f) Regulations- The Secretary shall prescribe such
regulations or other guidance as may be necessary or appropriate to
carry out the purposes of this section, including regulations or other
guidance (developed in coordination with the Health Choices
Commissioner) which provide--
`(1) exemption from the tax imposed under subsection (a) in cases of de minimis lapses of acceptable coverage, and
`(2) a process for applying for a waiver of the application of subsection (a) in cases of hardship.'.
(b) Information Reporting-
(1) IN GENERAL- Subpart B of part III of subchapter A
of chapter 61 of such Code is amended by inserting after section 6050W
the following new section:
`SEC. 6050X. RETURNS RELATING TO HEALTH INSURANCE COVERAGE.
`(a) Requirement of Reporting- Every person who provides
acceptable coverage (as defined in section 59B(d)) to any individual
during any calendar year shall, at such time as the Secretary may
prescribe, make the return described in subsection (b) with respect to
such individual.
`(b) Form and Manner of Returns- A return is described in this subsection if such return--
`(1) is in such form as the Secretary may prescribe, and
`(A) the name, address, and TIN of the primary
insured and the name of each other individual obtaining coverage under
the policy,
`(B) the period for which each such individual was provided with the coverage referred to in subsection (a), and
`(C) such other information as the Secretary may require.
`(c) Statements To Be Furnished to Individuals With Respect
to Whom Information Is Required- Every person required to make a return
under subsection (a) shall furnish to each primary insured whose name
is required to be set forth in such return a written statement showing--
`(1) the name and address of the person required to
make such return and the phone number of the information contact for
such person, and
`(2) the information required to be shown on the return with respect to such individual.
The written statement required under the preceding sentence
shall be furnished on or before January 31 of the year following the
calendar year for which the return under subsection (a) is required to
be made.
`(d) Coverage Provided by Governmental Units- In the case
of coverage provided by any governmental unit or any agency or
instrumentality thereof, the officer or employee who enters into the
agreement to provide such coverage (or the person appropriately
designated for purposes of this section) shall make the returns and
statements required by this section.'.
(2) PENALTY FOR FAILURE TO FILE-
(A) RETURN- Subparagraph (B) of section 6724(d)(1)
of such Code 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 adding at the end the following new clause:
`(xxiv) section 6050X (relating to returns relating to health insurance coverage), and'.
(B) STATEMENT- Paragraph (2) of section 6724(d) of
such Code is amended by striking `or' at the end of subparagraph (EE),
by striking the period at the end of subparagraph (FF) and inserting `,
or', and by inserting after subparagraph (FF) the following new
subparagraph:
`(GG) section 6050X (relating to returns relating to health insurance coverage).'.
(c) Return Requirement- Subsection (a) of section 6012 of
such Code is amended by inserting after paragraph (9) the following new
paragraph:
`(10) Every individual to whom section 59B(a) applies
and who fails to meet the requirements of section 59B(d) with respect
to such individual or any qualifying child (as defined in section
152(c)) of such individual.'.
(1) The table of parts for subchapter A of chapter 1 of
the Internal Revenue Code of 1986 is amended by adding at the end the
following new item:
`Part VIII. Health Care Related Taxes.'.
(2) The table of sections for subpart B of part III of
subchapter A of chapter 61 is amended by adding at the end the
following new item:
`Sec. 6050X. Returns relating to health insurance coverage.'.
(e) Section 15 Not To Apply- The amendment made by
subsection (a) shall not be treated as a change in a rate of tax for
purposes of section 15 of the Internal Revenue Code of 1986.
(1) IN GENERAL- The amendments made by this section shall apply to taxable years beginning after December 31, 2012.
(2) RETURNS- The amendments made by subsection (b) shall apply to calendar years beginning after December 31, 2012.
PART 2--EMPLOYER RESPONSIBILITY
SEC. 411. ELECTION TO SATISFY HEALTH COVERAGE PARTICIPATION REQUIREMENTS.
(a) In General- Chapter 43 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:
`SEC. 4980H. ELECTION WITH RESPECT TO HEALTH COVERAGE PARTICIPATION REQUIREMENTS.
`(a) Election of Employer Responsibility To Provide Health Coverage-
`(1) IN GENERAL- Subsection (b) shall apply to any employer with respect to whom an election under paragraph (2) is in effect.
`(2) TIME AND MANNER- An employer may make an election
under this paragraph at such time and in such form and manner as the
Secretary may prescribe.
`(3) AFFILIATED GROUPS- In the case of any employer
which is part of a group of employers who are treated as a single
employer under subsection (b), (c), (m), or (o) of section 414, the
election under paragraph (2) shall be made by such person as the
Secretary may provide. Any such election, once made, shall apply to all
members of such group.
`(4) SEPARATE ELECTIONS- Under regulations prescribed
by the Secretary, separate elections may be made under paragraph (2)
with respect to--
`(A) separate lines of business, and
`(B) full-time employees and employees who are not full-time employees.
`(5) TERMINATION OF ELECTION IN CASES OF SUBSTANTIAL
NONCOMPLIANCE- The Secretary may terminate the election of any employer
under paragraph (2) if the Secretary (in coordination with the Health
Choices Commissioner) determines that such employer is in substantial
noncompliance with the health coverage participation requirements.
`(b) Excise Tax With Respect to Failure To Meet Health Coverage Participation Requirements-
`(1) IN GENERAL- In the case of any employer who fails
(during any period with respect to which the election under subsection
(a) is in effect) to satisfy the health coverage participation
requirements with respect to any employee to whom such election
applies, there is hereby imposed on each such failure with respect to
each such employee a tax of $100 for each day in the period beginning
on the date such failure first occurs and ending on the date such
failure is corrected.
`(2) LIMITATIONS ON AMOUNT OF TAX-
`(A) TAX NOT TO APPLY WHERE FAILURE NOT DISCOVERED
EXERCISING REASONABLE DILIGENCE- No tax shall be imposed by paragraph
(1) on any failure during any period for which it is established to the
satisfaction of the Secretary that the employer neither knew, nor
exercising reasonable diligence would have known, that such failure
existed.
`(B) TAX NOT TO APPLY TO FAILURES CORRECTED WITHIN 30 DAYS- No tax shall be imposed by paragraph (1) on any failure if--
`(i) such failure was due to reasonable cause and not to willful neglect, and
`(ii) such failure is corrected during the
30-day period beginning on the 1st date that the employer knew, or
exercising reasonable diligence would have known, that such failure
existed.
`(C) OVERALL LIMITATION FOR UNINTENTIONAL FAILURES-
In the case of failures which are due to reasonable cause and not to
willful neglect, the tax imposed by subsection (a) for failures during
the taxable year of the employer shall not exceed the amount equal to
the lesser of--
`(i) 10 percent of the aggregate amount paid or
incurred by the employer (or predecessor employer) during the preceding
taxable year for employment-based health plans, or
`(D) COORDINATION WITH OTHER ENFORCEMENT
PROVISIONS- The tax imposed under paragraph (1) with respect to any
failure shall be reduced (but not below zero) by the amount of any
civil penalty collected under section 502(c)(11) of the Employee
Retirement Income Security Act of 1974 or section 2793(g) of the Public
Health Service Act with respect to such failure.
`(c) Health Coverage Participation Requirements- For
purposes of this section, the term `health coverage participation
requirements' means the requirements of part I of subtitle B of title
III of the America's Affordable Health Choices Act of 2009 (as in
effect on the date of the enactment of this section).'.
(b) Clerical Amendment- The table of sections for chapter
43 of such Code is amended by adding at the end the following new item:
`Sec. 4980H. Election to satisfy health coverage participation requirements.'.
(c) Effective Date- The amendments made by this section shall apply to periods beginning after December 31, 2012.
SEC. 412. RESPONSIBILITIES OF NONELECTING EMPLOYERS.
(a) In General- Section 3111 of the Internal Revenue Code
of 1986 is amended by redesignating subsection (c) as subsection (d)
and by inserting after subsection (b) the following new subsection:
`(c) Employers Electing to Not Provide Health Benefits-
`(1) IN GENERAL- In addition to other taxes, there is
hereby imposed on every nonelecting employer an excise tax, with
respect to having individuals in his employ, equal to 8 percent of the
wages (as defined in section 3121(a)) paid by him with respect to
employment (as defined in section 3121(b)).
`(2) SPECIAL RULES FOR SMALL EMPLOYERS-
`(A) IN GENERAL- In the case of any employer who is
small employer for any calendar year, paragraph (1) shall be applied by
substituting the applicable percentage determined in accordance with
the following table for `8 percent':
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
`If the annual payroll of such employer for the preceding calendar year: The applicable percentage is:
Does not exceed $250,000 0 percent
Exceeds $250,000, but does not exceed $300,000 2 percent
Exceeds $300,000, but does not exceed $350,000 4 percent
Exceeds $350,000, but does not exceed $400,000 6 percent
---------------------------------------------------------------------------------------------------------------------
`(B) SMALL EMPLOYER- For purposes of this
paragraph, the term `small employer' means any employer for any
calendar year if the annual payroll of such employer for the preceding
calendar year does not exceed $400,000.
`(C) ANNUAL PAYROLL- For purposes of this
paragraph, the term `annual payroll' means, with respect to any
employer for any calendar year, the aggregate wages (as defined in
section 3121(a)) paid by him with respect to employment (as defined in
section 3121(b)) during such calendar year.
`(3) NONELECTING EMPLOYER- For purposes of paragraph
(1), the term `nonelecting employer' means any employer for any period
with respect to which such employer does not have an election under
section 4980H(a) in effect.
`(4) SPECIAL RULE FOR SEPARATE ELECTIONS- In the case
of an employer who makes a separate election described in section
4980H(a)(4) for any period, paragraph (1) shall be applied for such
period by taking into account only the wages paid to employees who are
not subject to such election.
`(5) AGGREGATION; PREDECESSORS- For purposes of this subsection--
`(A) all persons treated as a single employer under
subsection (b), (c), (m), or (o) of section 414 shall be treated as 1
employer, and
`(B) any reference to any person shall be treated as including a reference to any predecessor of such person.'.
(b) Definitions- Section 3121 of such Code is amended by adding at the end the following new subsection:
`(aa) Special Rules for Tax on Employers Electing Not To Provide Health Benefits- For purposes of section 3111(c)--
`(1) Paragraphs (1), (5), and (19) of subsection (b) shall not apply.
`(2) Paragraph (7) of subsection (b) shall apply by
treating all services as not covered by the retirement systems referred
to in subparagraphs (C) and (F) thereof.
`(3) Subsection (e) shall not apply and the term `State' shall include the District of Columbia.'.
(c) Conforming Amendment- Subsection (d) of section 3111 of
such Code, as redesignated by this section, is amended by striking
`this section' and inserting `subsections (a) and (b)'.
(d) Application to Railroads-
(1) IN GENERAL- Section 3221 of such Code is amended by
redesignating subsection (c) as subsection (d) and by inserting after
subsection (b) the following new subsection:
`(c) Employers Electing to Not Provide Health Benefits-
`(1) IN GENERAL- In addition to other taxes, there is
hereby imposed on every nonelecting employer an excise tax, with
respect to having individuals in his employ, equal to 8 percent of the
compensation paid during any calendar year by such employer for
services rendered to such employer.
`(2) EXCEPTION FOR SMALL EMPLOYERS- Rules similar to
the rules of section 3111(c)(2) shall apply for purposes of this
subsection.
`(3) NONELECTING EMPLOYER- For purposes of paragraph
(1), the term `nonelecting employer' means any employer for any period
with respect to which such employer does not have an election under
section 4980H(a) in effect.
`(4) SPECIAL RULE FOR SEPARATE ELECTIONS- In the case
of an employer who makes a separate election described in section
4980H(a)(4) for any period, subsection (a) shall be applied for such
period by taking into account only the wages paid to employees who are
not subject to such election.'.
(2) DEFINITIONS- Subsection (e) of section 3231 of such Code is amended by adding at the end the following new paragraph:
`(13) SPECIAL RULES FOR TAX ON EMPLOYERS ELECTING NOT TO PROVIDE HEALTH BENEFITS- For purposes of section 3221(c)--
`(A) Paragraph (1) shall be applied without regard to the third sentence thereof.
`(B) Paragraph (2) shall not apply.'.
(3) CONFORMING AMENDMENT- Subsection (d) of section
3221 of such Code, as redesignated by this section, is amended by
striking `subsections (a) and (b), see section 3231(e)(2)' and
inserting `this section, see paragraphs (2) and (13)(B) of section
3231(e)'.
(e) Effective Date- The amendments made by this section shall apply to periods beginning after December 31, 2012.
Subtitle B--Credit for Small Business Employee Health Coverage Expenses
SEC. 421. CREDIT FOR SMALL BUSINESS EMPLOYEE HEALTH COVERAGE EXPENSES.
(a) In General- Subpart D of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (relating to
business-related credits) is amended by adding at the end the following
new section:
`SEC. 45R. SMALL BUSINESS EMPLOYEE HEALTH COVERAGE CREDIT.
`(a) In General- For purposes of section 38, in the case of
a qualified small employer, the small business employee health coverage
credit determined under this section for the taxable year is an amount
equal to the applicable percentage of the qualified employee health
coverage expenses of such employer for such taxable year.
`(b) Applicable Percentage-
`(1) IN GENERAL- For purposes of this section, the applicable percentage is 50 percent.
`(2) PHASEOUT BASED ON AVERAGE COMPENSATION OF
EMPLOYEES- In the case of an employer whose average annual employee
compensation for the taxable year exceeds $20,000, the percentage
specified in paragraph (1) shall be reduced by a number of percentage
points which bears the same ratio to 50 as such excess bears to $20,000.
`(1) PHASEOUT BASED ON EMPLOYER SIZE- In the case of an
employer who employs more than 10 qualified employees during the
taxable year, the credit determined under subsection (a) shall be
reduced by an amount which bears the same ratio to the amount of such
credit (determined without regard to this paragraph and after the
application of the other provisions of this section) as--
`(i) the number of qualified employees employed by the employer during the taxable year, over
`(2) CREDIT NOT ALLOWED WITH RESPECT TO CERTAIN HIGHLY
COMPENSATED EMPLOYEES- No credit shall be allowed under subsection (a)
with respect to qualified employee health coverage expenses paid or
incurred with respect to any employee for any taxable year if the
aggregate compensation paid by the employer to such employee during
such taxable year exceeds $80,000.
`(d) Qualified Employee Health Coverage Expenses- For purposes of this section--
`(1) IN GENERAL- The term `qualified employee health
coverage expenses' means, with respect to any employer for any taxable
year, the aggregate amount paid or incurred by such employer during
such taxable year for coverage of any qualified employee of the
employer (including any family coverage which covers such employee)
under qualified health coverage.
`(2) QUALIFIED HEALTH COVERAGE- The term `qualified
health coverage' means acceptable coverage (as defined in section
59B(d)) which--
`(A) is provided pursuant to an election under section 4980H(a), and
`(B) satisfies the requirements referred to in section 4980H(c).
`(e) Other Definitions- For purposes of this section--
`(1) QUALIFIED SMALL EMPLOYER- For purposes of this
section, the term `qualified small employer' means any employer for any
taxable year if--
`(A) the number of qualified employees employed by such employer during the taxable year does not exceed 25, and
`(B) the average annual employee compensation of
such employer for such taxable year does not exceed the sum of the
dollar amounts in effect under subsection (b)(2).
`(2) QUALIFIED EMPLOYEE- The term `qualified employee'
means any employee of an employer for any taxable year of the employer
if such employee received at least $5,000 of compensation from such
employer during such taxable year.
`(3) AVERAGE ANNUAL EMPLOYEE COMPENSATION- The term
`average annual employee compensation' means, with respect to any
employer for any taxable year, the average amount of compensation paid
by such employer to qualified employees of such employer during such
taxable year.
`(4) COMPENSATION- The term `compensation' has the meaning given such term in section 408(p)(6)(A).
`(5) FAMILY COVERAGE- The term `family coverage' means any coverage other than self-only coverage.
`(f) Special Rules- For purposes of this section--
`(1) SPECIAL RULE FOR PARTNERSHIPS AND SELF-EMPLOYED-
In the case of a partnership (or a trade or business carried on by an
individual) which has one or more qualified employees (determined
without regard to this paragraph) with respect to whom the election
under 4980H(a) applies, each partner (or, in the case of a trade or
business carried on by an individual, such individual) shall be treated
as an employee.
`(2) AGGREGATION RULE- All persons treated as a single
employer under subsection (b), (c), (m), or (o) of section 414 shall be
treated as 1 employer.
`(3) DENIAL OF DOUBLE BENEFIT- Any deduction otherwise
allowable with respect to amounts paid or incurred for health insurance
coverage to which subsection (a) applies shall be reduced by the amount
of the credit determined under this section.
`(4) INFLATION ADJUSTMENT- In the case of any taxable
year beginning after 2013, each of the dollar amounts in subsections
(b)(2), (c)(2), and (e)(2) shall be increased by an amount equal to--
`(A) such dollar amount, multiplied by
`(B) the cost of living adjustment determined under
section 1(f)(3) for the calendar year in which the taxable year begins
determined by substituting `calendar year 2012' for `calendar year
1992' in subparagraph (B) thereof.
If any increase determined under this paragraph is not a
multiple of $50, such increase shall be rounded to the next lowest
multiple of $50.'.
(b) Credit To Be Part of General Business Credit-
Subsection (b) of section 38 of such Code (relating to general 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 adding at the end the following new paragraph:
`(36) in the case of a qualified small employer (as
defined in section 45R(e)), the small business employee health coverage
credit determined under section 45R(a).'.
(c) Clerical Amendment- The table of sections for subpart D
of part IV of subchapter A of chapter 1 of such Code is amended by
inserting after the item relating to section 45Q the following new item:
`Sec. 45R. Small business employee health coverage credit.'.
(d) Effective Date- The amendments made by this section shall apply to taxable years beginning after December 31, 2012.
Subtitle C--Disclosures To Carry Out Health Insurance Exchange Subsidies
SEC. 431. DISCLOSURES TO CARRY OUT HEALTH INSURANCE EXCHANGE SUBSIDIES.
(a) In General- Subsection (l) of section 6103 of the
Internal Revenue Code of 1986 is amended by adding at the end the
following new paragraph:
`(21) DISCLOSURE OF RETURN INFORMATION TO CARRY OUT HEALTH INSURANCE EXCHANGE SUBSIDIES-
`(A) IN GENERAL- The Secretary, upon written
request from the Health Choices Commissioner or the head of a
State-based health insurance exchange approved for operation under
section 208 of the America's Affordable Health Choices Act of 2009,
shall disclose to officers and employees of the Health Choices
Administration or such State-based health insurance exchange, as the
case may be, return information of any taxpayer whose income is
relevant in determining any affordability credit described in subtitle
C of title II of the America's Affordable Health Choices Act of 2009.
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 modified adjusted gross income of such taxpayer (as defined in section 59B(e)(5)),
`(iv) the number of dependents of the taxpayer,
`(v) such other information as is prescribed by
the Secretary by regulation as might indicate whether the taxpayer is
eligible for such affordability credits (and the amount thereof), and
`(vi) the taxable year with respect to which
the preceding information relates or, if applicable, the fact that such
information is not available.
`(B) RESTRICTION ON USE OF DISCLOSED INFORMATION-
Return information disclosed under subparagraph (A) may be used by
officers and employees of the Health Choices Administration or such
State-based health insurance exchange, as the case may be, only for the
purposes of, and to the extent necessary in, establishing and verifying
the appropriate amount of any affordability credit described in
subtitle C of title II of the America's Affordable Health Choices Act
of 2009 and providing for the repayment of any such credit which was in
excess of such appropriate amount.'.
(b) Procedures and Recordkeeping Related to Disclosures- Paragraph (4) of section 6103(p) of such Code is amended--
(1) by inserting `, or any entity described in subsection (l)(21),' after `or (20)' in the matter preceding subparagraph (A),
(2) by inserting `or any entity described in subsection (l)(21),' after `or (o)(1)(A)' in subparagraph (F)(ii), and
(3) by inserting `or any entity described in subsection
(l)(21),' after `or (20)' both places it appears in the matter after
subparagraph (F).
(c) Unauthorized Disclosure or Inspection- Paragraph (2) of
section 7213(a) of such Code is amended by striking `or (20)' and
inserting `(20), or (21)'.
Subtitle D--Other Revenue Provisions
PART 1--GENERAL PROVISIONS
SEC. 441. SURCHARGE ON HIGH INCOME INDIVIDUALS.
(a) In General- Part VIII of subchapter A of chapter 1 of
the Internal Revenue Code of 1986, as added by this title, is amended
by adding at the end the following new subpart:
`Subpart B--Surcharge on High Income Individuals
`Sec. 59C. Surcharge on high income individuals.
`SEC. 59C. SURCHARGE ON HIGH INCOME INDIVIDUALS.
`(a) General Rule- In the case of a taxpayer other than a
corporation, there is hereby imposed (in addition to any other tax
imposed by this subtitle) a tax equal to--
`(1) 1 percent of so much of the modified adjusted
gross income of the taxpayer as exceeds $350,000 but does not exceed
$500,000,
`(2) 1.5 percent of so much of the modified adjusted
gross income of the taxpayer as exceeds $500,000 but does not exceed
$1,000,000, and
`(3) 5.4 percent of so much of the modified adjusted gross income of the taxpayer as exceeds $1,000,000.
`(b) Taxpayers Not Making a Joint Return- In the case of
any taxpayer other than a taxpayer making a joint return under section
6013 or a surviving spouse (as defined in section 2(a)), subsection (a)
shall be applied by substituting for each of the dollar amounts therein
(after any increase determined under subsection (e)) a dollar amount
equal to--
`(1) 50 percent of the dollar amount so in effect in the case of a married individual filing a separate return, and
`(2) 80 percent of the dollar amount so in effect in any other case.
`(c) Adjustments Based on Federal Health Reform Savings-
`(1) IN GENERAL- Except as provided in paragraph (2),
in the case of any taxable year beginning after December 31, 2012,
subsection (a) shall be applied--
`(A) by substituting `2 percent' for `1 percent', and
`(B) by substituting `3 percent' for `1.5 percent'.
`(2) ADJUSTMENTS BASED ON EXCESS FEDERAL HEALTH REFORM SAVINGS-
`(A) EXCEPTION IF FEDERAL HEALTH REFORM SAVINGS
SIGNIFICANTLY EXCEEDS BASE AMOUNT- If the excess Federal health reform
savings is more than $150,000,000,000 but not more than
$175,000,000,000, paragraph (1) shall not apply.
`(B) FURTHER ADJUSTMENT FOR ADDITIONAL FEDERAL
HEALTH REFORM SAVINGS- If the excess Federal health reform savings is
more than $175,000,000,000, paragraphs (1) and (2) of subsection (a)
(and paragraph (1) of this subsection) shall not apply to any taxable
year beginning after December 31, 2012.
`(C) EXCESS FEDERAL HEALTH REFORM SAVINGS- For
purposes of this subsection, the term `excess Federal health reform
savings' means the excess of--
`(i) the Federal health reform savings, over
`(D) FEDERAL HEALTH REFORM SAVINGS- The term
`Federal health reform savings' means the sum of the amounts described
in subparagraphs (A) and (B) of paragraph (3).
`(3) DETERMINATION OF FEDERAL HEALTH REFORM SAVINGS-
Not later than December 1, 2012, the Director of the Office of
Management and Budget shall--
`(A) determine, on the basis of the study conducted
under paragraph (4), the aggregate reductions in Federal expenditures
which have been achieved as a result of the provisions of, and
amendments made by, division B of the America's Affordable Health
Choices Act of 2009 during the period beginning on October 1, 2009, and
ending with the latest date with respect to which the Director has
sufficient data to make such determination, and
`(B) estimate, on the basis of such study and the
determination under subparagraph (A), the aggregate reductions in
Federal expenditures which will be achieved as a result of such
provisions and amendments during so much of the period beginning with
fiscal year 2010 and ending with fiscal year 2019 as is not taken into
account under subparagraph (A).
`(4) STUDY OF FEDERAL HEALTH REFORM SAVINGS- The
Director of the Office of Management and Budget shall conduct a study
of the reductions in Federal expenditures during fiscal years 2010
through 2019 which are attributable to the provisions of, and
amendments made by, division B of the America's Affordable Health
Choices Act of 2009. The Director shall complete such study not later
than December 1, 2012.
`(5) REDUCTIONS IN FEDERAL EXPENDITURES DETERMINED
WITHOUT REGARD TO PROGRAM INVESTMENTS- For purposes of paragraphs (3)
and (4), reductions in Federal expenditures shall be determined without
regard to section 1121 of the America's Affordable Health Choices Act
of 2009 and other program investments under division B thereof.
`(d) Modified Adjusted Gross Income- For purposes of this
section, the term `modified adjusted gross income' means adjusted gross
income reduced by any deduction allowed for investment interest (as
defined in section 163(d)). In the case of an estate or trust, adjusted
gross income shall be determined as provided in section 67(e).
`(e) Inflation Adjustments-
`(1) IN GENERAL- In the case of taxable years beginning
after 2011, the dollar amounts in subsection (a) shall be increased by
an amount equal to--
`(A) such dollar amount, multiplied by
`(B) the cost-of-living adjustment determined under
section 1(f)(3) for the calendar year in which the taxable year begins,
by substituting `calendar year 2010' for `calendar year 1992' in
subparagraph (B) thereof.
`(2) ROUNDING- If any amount as adjusted under
paragraph (1) is not a multiple of $5,000, such amount shall be rounded
to the next lowest multiple of $5,000.
`(1) NONRESIDENT ALIEN- In the case of a nonresident
alien individual, only amounts taken into account in connection with
the tax imposed under section 871(b) shall be taken into account under
this section.
`(2) CITIZENS AND RESIDENTS LIVING ABROAD- The dollar
amounts in effect under subsection (a) (after the application of
subsections (b) and (e)) shall be decreased by the excess of--
`(A) the amounts excluded from the taxpayer's gross income under section 911, over
`(B) the amounts of any deductions or exclusions
disallowed under section 911(d)(6) with respect to the amounts
described in subparagraph (A).
`(3) CHARITABLE TRUSTS- Subsection (a) shall not apply
to a trust all the unexpired interests in which are devoted to one or
more of the purposes described in section 170(c)(2)(B).
`(4) NOT TREATED AS TAX IMPOSED BY THIS CHAPTER FOR
CERTAIN PURPOSES- The tax imposed under this section shall not be
treated as tax imposed by this chapter for purposes of determining the
amount of any credit under this chapter or for purposes of section 55.'.
(b) Clerical Amendment- The table of subparts for part VIII
of subchapter A of chapter 1 of such Code, as added by this title, is
amended by inserting after the item relating to subpart A the following
new item:
`subpart b. surcharge on high income individuals.'.
(c) Section 15 Not To Apply- The amendment made by
subsection (a) shall not be treated as a change in a rate of tax for
purposes of section 15 of the Internal Revenue Code of 1986.
(d) Effective Date- The amendments made by this section shall apply to taxable years beginning after December 31, 2010.
SEC. 442. DELAY IN APPLICATION OF WORLDWIDE ALLOCATION OF INTEREST.
(a) In General- Paragraphs (5)(D) and (6) of section 864(f)
of the Internal Revenue Code of 1986 are each amended by striking
`December 31, 2010' and inserting `December 31, 2019'.
(b) Transition- Subsection (f) of section 864 of such Code is amended by striking paragraph (7).
PART 2--PREVENTION OF TAX AVOIDANCE
SEC. 451. LIMITATION ON TREATY BENEFITS FOR CERTAIN DEDUCTIBLE PAYMENTS.
(a) In General- Section 894 of the Internal Revenue Code of
1986 (relating to income affected by treaty) is amended by adding at
the end the following new subsection:
`(d) Limitation on Treaty Benefits for Certain Deductible Payments-
`(1) IN GENERAL- In the case of any deductible
related-party payment, any withholding tax imposed under chapter 3 (and
any tax imposed under subpart A or B of this part) with respect to such
payment may not be reduced under any treaty of the United States unless
any such withholding tax would be reduced under a treaty of the United
States if such payment were made directly to the foreign parent
corporation.
`(2) DEDUCTIBLE RELATED-PARTY PAYMENT- For purposes of
this subsection, the term `deductible related-party payment' means any
payment made, directly or indirectly, by any person to any other person
if the payment is allowable as a deduction under this chapter and both
persons are members of the same foreign controlled group of entities.
`(3) FOREIGN CONTROLLED GROUP OF ENTITIES- For purposes of this subsection--
`(A) IN GENERAL- The term `foreign controlled group
of entities' means a controlled group of entities the common parent of
which is a foreign corporation.
`(B) CONTROLLED GROUP OF ENTITIES- The term
`controlled group of entities' means a controlled group of corporations
as defined in section 1563(a)(1), except that--
`(i) `more than 50 percent' shall be substituted for `at least 80 percent' each place it appears therein, and
`(ii) the determination shall be made without regard to subsections (a)(4) and (b)(2) of section 1563.
A partnership or any other entity (other than a
corporation) shall be treated as a member of a controlled group of
entities if such entity is controlled (within the meaning of section
954(d)(3)) by members of such group (including any entity treated as a
member of such group by reason of this sentence).
`(4) FOREIGN PARENT CORPORATION- For purposes of this
subsection, the term `foreign parent corporation' means, with respect
to any deductible related-party payment, the common parent of the
foreign controlled group of entities referred to in paragraph (3)(A).
`(5) REGULATIONS- The Secretary may prescribe such
regulations or other guidance as are necessary or appropriate to carry
out the purposes of this subsection, including regulations or other
guidance which provide for--
`(A) the treatment of two or more persons as
members of a foreign controlled group of entities if such persons would
be the common parent of such group if treated as one corporation, and
`(B) the treatment of any member of a foreign
controlled group of entities as the common parent of such group if such
treatment is appropriate taking into account the economic relationships
among such entities.'.
(b) Effective Date- The amendment made by this section
shall apply to payments made after the date of the enactment of this
Act.
SEC. 452. CODIFICATION OF ECONOMIC SUBSTANCE DOCTRINE.
(a) In General- Section 7701 of the Internal Revenue Code
of 1986 is amended by redesignating subsection (o) as subsection (p)
and by inserting after subsection (n) the following new subsection:
`(o) Clarification of Economic Substance Doctrine-
`(1) APPLICATION OF DOCTRINE- In the case of any
transaction to which the economic substance doctrine is relevant, such
transaction shall be treated as having economic substance only if--
`(A) the transaction changes in a meaningful way (apart from Federal income tax effects) the taxpayer's economic position, and
`(B) the taxpayer has a substantial purpose (apart from Federal income tax effects) for entering into such transaction.
`(2) SPECIAL RULE WHERE TAXPAYER RELIES ON PROFIT POTENTIAL-
`(A) IN GENERAL- The potential for profit of a
transaction shall be taken into account in determining whether the
requirements of subparagraphs (A) and (B) of paragraph (1) are met with
respect to the transaction only if the present value of the reasonably
expected pre-tax profit from the transaction is substantial in relation
to the present value of the expected net tax benefits that would be
allowed if the transaction were respected.
`(B) TREATMENT OF FEES AND FOREIGN TAXES- Fees and
other transaction expenses and foreign taxes shall be taken into
account as expenses in determining pre-tax profit under subparagraph
(A).
`(3) STATE AND LOCAL TAX BENEFITS- For purposes of
paragraph (1), any State or local income tax effect which is related to
a Federal income tax effect shall be treated in the same manner as a
Federal income tax effect.
`(4) FINANCIAL ACCOUNTING BENEFITS- For purposes of
paragraph (1)(B), achieving a financial accounting benefit shall not be
taken into account as a purpose for entering into a transaction if the
origin of such financial accounting benefit is a reduction of Federal
income tax.
`(5) DEFINITIONS AND SPECIAL RULES- For purposes of this subsection--
`(A) ECONOMIC SUBSTANCE DOCTRINE- The term
`economic substance doctrine' means the common law doctrine under which
tax benefits under subtitle A with respect to a transaction are not
allowable if the transaction does not have economic substance or lacks
a business purpose.
`(B) EXCEPTION FOR PERSONAL TRANSACTIONS OF
INDIVIDUALS- In the case of an individual, paragraph (1) shall apply
only to transactions entered into in connection with a trade or
business or an activity engaged in for the production of income.
`(C) OTHER COMMON LAW DOCTRINES NOT AFFECTED-
Except as specifically provided in this subsection, the provisions of
this subsection shall not be construed as altering or supplanting any
other rule of law, and the requirements of this subsection shall be
construed as being in addition to any such other rule of law.
`(D) DETERMINATION OF APPLICATION OF DOCTRINE NOT
AFFECTED- The determination of whether the economic substance doctrine
is relevant to a transaction (or series of transactions) shall be made
in the same manner as if this subsection had never been enacted.
`(6) REGULATIONS- The Secretary shall prescribe such
regulations as may be necessary or appropriate to carry out the
purposes of this subsection.'.
(b) Effective Date- The amendments made by this section
shall apply to transactions entered into after the date of the
enactment of this Act.
SEC. 453. PENALTIES FOR UNDERPAYMENTS.
(a) Penalty for Underpayments Attributable to Transactions Lacking Economic Substance-
(1) IN GENERAL- Subsection (b) of section 6662 of the
Internal Revenue Code of 1986 is amended by inserting after paragraph
(5) the following new paragraph:
`(6) Any disallowance of claimed tax benefits by reason
of a transaction lacking economic substance (within the meaning of
section 7701(o)) or failing to meet the requirements of any similar
rule of law.'.
(2) INCREASED PENALTY FOR NONDISCLOSED TRANSACTIONS-
Section 6662 of such Code is amended by adding at the end the following
new subsection:
`(i) Increase in Penalty in Case of Nondisclosed Noneconomic Substance Transactions-
`(1) IN GENERAL- In the case of any portion of an
underpayment which is attributable to one or more nondisclosed
noneconomic substance transactions, subsection (a) shall be applied
with respect to such portion by substituting `40 percent' for `20
percent'.
`(2) NONDISCLOSED NONECONOMIC SUBSTANCE TRANSACTIONS-
For purposes of this subsection, the term `nondisclosed noneconomic
substance transaction' means any portion of a transaction described in
subsection (b)(6) with respect to which the relevant facts affecting
the tax treatment are not adequately disclosed in the return nor in a
statement attached to the return.
`(3) SPECIAL RULE FOR AMENDED RETURNS- Except as
provided in regulations, in no event shall any amendment or supplement
to a return of tax be taken into account for purposes of this
subsection if the amendment or supplement is filed after the earlier of
the date the taxpayer is first contacted by the Secretary regarding the
examination of the return or such other date as is specified by the
Secretary.'.
(3) CONFORMING AMENDMENT- Subparagraph (B) of section 6662A(e)(2) of such Code is amended--
(A) by striking `section 6662(h)' and inserting `subsections (h) or (i) of section 6662', and
(B) by striking `GROSS VALUATION MISSTATEMENT
PENALTY' in the heading and inserting `CERTAIN INCREASED UNDERPAYMENT
PENALTIES'.
(b) Reasonable Cause Exception Not Applicable to
Noneconomic Substance Transactions, Tax Shelters, and Certain Large or
Publicly Traded Persons- Subsection (c) of section 6664 of such Code is
amended--
(1) by redesignating paragraphs (2) and (3) as paragraphs (3) and (4), respectively,
(2) by striking `paragraph (2)' in paragraph (4), as so redesignated, and inserting `paragraph (3)', and
(3) by inserting after paragraph (1) the following new paragraph:
`(2) EXCEPTION- Paragraph (1) shall not apply to--
`(A) to any portion of an underpayment which is
attributable to one or more tax shelters (as defined in section
6662(d)(2)(C)) or transactions described in section 6662(b)(6), and
`(B) to any taxpayer if such taxpayer is a specified person (as defined in section 6662(d)(2)(D)(ii)).'.
(c) Application of Penalty for Erroneous Claim for Refund
or Credit to Noneconomic Substance Transactions- Section 6676 of such
Code is amended by redesignating subsection (c) as subsection (d) and
inserting after subsection (b) the following new subsection:
`(c) Noneconomic Substance Transactions Treated as Lacking
Reasonable Basis- For purposes of this section, any excessive amount
which is attributable to any transaction described in section
6662(b)(6) shall not be treated as having a reasonable basis.'.
(d) Special Understatement Reduction Rule for Certain Large or Publicly Traded Persons-
(1) IN GENERAL- Paragraph (2) of section 6662(d) of such Code is amended by adding at the end the following new subparagraph:
`(D) SPECIAL REDUCTION RULE FOR CERTAIN LARGE OR PUBLICLY TRADED PERSONS-
`(i) IN GENERAL- In the case of any specified person--
`(I) subparagraph (B) shall not apply, and
`(II) the amount of the understatement
under subparagraph (A) shall be reduced by that portion of the
understatement which is attributable to any item with respect to which
the taxpayer has a reasonable belief that the tax treatment of such
item by the taxpayer is more likely than not the proper tax treatment
of such item.
`(ii) SPECIFIED PERSON- For purposes of this subparagraph, the term `specified person' means--
`(I) any person required to file periodic or other reports under section 13 of the Securities Exchange Act of 1934, and
`(II) any corporation with gross receipts in excess of $100,000,000 for the taxable year involved.
All persons treated as a single employer under section 52(a) shall be treated as one person for purposes of subclause (II).'.
(2) CONFORMING AMENDMENT- Subparagraph (C) of section
6662(d)(2) of such Code is amended by striking `Subparagraph (B)' and
inserting `Subparagraphs (B) and (D)(i)(II)'.
(e) Effective Date- The amendments made by this section
shall apply to transactions entered into after the date of the
enactment of this Act.
DIVISION B--MEDICARE AND MEDICAID IMPROVEMENTS
SEC. 1001. TABLE OF CONTENTS OF DIVISION.
The table of contents for this division is as follows:
DIVISION B--MEDICARE AND MEDICAID IMPROVEMENTS
Sec. 1001. Table of contents of division.
TITLE I--IMPROVING HEALTH CARE VALUE
Subtitle A--Provisions Related to Medicare Part A
Part 1--Market Basket Updates
Sec. 1101. Skilled nursing facility payment update.
Sec. 1102. Inpatient rehabilitation facility payment update.
Sec. 1103. Incorporating productivity improvements into market basket updates that do not already incorporate such improvements.
Part 2--Other Medicare Part A Provisions
Sec. 1111. Payments to skilled nursing facilities.
Sec. 1112. Medicare DSH report and payment adjustments in response to coverage expansion.
Subtitle B--Provisions Related to Part B
Part 1--Physicians' Services
Sec. 1121. Sustainable growth rate reform.
Sec. 1122. Misvalued codes under the physician fee schedule.
Sec. 1123. Payments for efficient areas.
Sec. 1124. Modifications to the Physician Quality Reporting Initiative (PQRI).
Sec. 1125. Adjustment to Medicare payment localities.
Part 2--Market Basket Updates
Sec. 1131. Incorporating productivity improvements into market basket updates that do not already incorporate such improvements.
Part 3--Other Provisions
Sec. 1141. Rental and purchase of power-driven wheelchairs.
Sec. 1142. Extension of payment rule for brachytherapy.
Sec. 1143. Home infusion therapy report to congress.
Sec. 1144. Require ambulatory surgical centers (ASCs) to submit cost data and other data.
Sec. 1145. Treatment of certain cancer hospitals.
Sec. 1146. Medicare Improvement Fund.
Sec. 1147. Payment for imaging services.
Sec. 1148. Durable medical equipment program improvements.
Sec. 1149. MedPAC study and report on bone mass measurement.
Subtitle C--Provisions Related to Medicare Parts A and B
Sec. 1151. Reducing potentially preventable hospital readmissions.
Sec. 1152. Post acute care services payment reform plan and bundling pilot program.
Sec. 1153. Home health payment update for 2010.
Sec. 1154. Payment adjustments for home health care.
Sec. 1155. Incorporating productivity improvements into market basket update for home health services.
Sec. 1156. Limitation on Medicare exceptions to the prohibition on certain physician referrals made to hospitals.
Sec. 1157. Institute of Medicine study of geographic adjustment factors under Medicare.
Sec. 1158. Revision of Medicare payment systems to address geographic inequities.
Subtitle D--Medicare Advantage Reforms
Part 1--Payment and Administration
Sec. 1161. Phase-in of payment based on fee-for-service costs.
Sec. 1162. Quality bonus payments.
Sec. 1163. Extension of Secretarial coding intensity adjustment authority.
Sec. 1164. Simplification of annual beneficiary election periods.
Sec. 1165. Extension of reasonable cost contracts.
Sec. 1166. Limitation of waiver authority for employer group plans.
Sec. 1167. Improving risk adjustment for payments.
Sec. 1168. Elimination of MA Regional Plan Stabilization Fund.
Part 2--Beneficiary Protections and Anti-Fraud
Sec. 1171. Limitation on cost-sharing for individual health services.
Sec. 1172. Continuous open enrollment for enrollees in plans with enrollment suspension.
Sec. 1173. Information for beneficiaries on MA plan administrative costs.
Sec. 1174. Strengthening audit authority.
Sec. 1175. Authority to deny plan bids.
Part 3--Treatment of Special Needs Plans
Sec. 1176. Limitation on enrollment outside open
enrollment period of individuals into chronic care specialized MA plans
for special needs individuals.
Sec. 1177. Extension of authority of special needs plans to restrict enrollment.
Subtitle E--Improvements to Medicare Part D
Sec. 1181. Elimination of coverage gap.
Sec. 1182. Discounts for certain part D drugs in original coverage gap.
Sec. 1183. Repeal of provision relating to submission of
claims by pharmacies located in or contracting with long-term care
facilities.
Sec. 1184. 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. 1185. Permitting mid-year changes in enrollment for formulary changes that adversely impact an enrollee.
Subtitle F--Medicare Rural Access Protections
Sec. 1191. Telehealth expansion and enhancements.
Sec. 1192. Extension of outpatient hold harmless provision.
Sec. 1193. Extension of section 508 hospital reclassifications.
Sec. 1194. Extension of geographic floor for work.
Sec. 1195. Extension of payment for technical component of certain physician pathology services.
Sec. 1196. Extension of ambulance add-ons.
TITLE II--MEDICARE BENEFICIARY IMPROVEMENTS
Subtitle A--Improving and Simplifying Financial Assistance for Low Income Medicare Beneficiaries
Sec. 1201. Improving assets tests for Medicare Savings Program and low-income subsidy program.
Sec. 1202. Elimination of part D cost-sharing for certain non-institutionalized full-benefit dual eligible individuals.
Sec. 1203. Eliminating barriers to enrollment.
Sec. 1204. Enhanced oversight relating to reimbursements for retroactive low income subsidy enrollment.
Sec. 1205. Intelligent assignment in enrollment.
Sec. 1206. Special enrollment period and automatic enrollment process for certain subsidy eligible individuals.
Sec. 1207. Application of MA premiums prior to rebate in calculation of low income subsidy benchmark.
Subtitle B--Reducing Health Disparities
Sec. 1221. Ensuring effective communication in Medicare.
Sec. 1222. Demonstration to promote access for Medicare
beneficiaries with limited English proficiency by providing
reimbursement for culturally and linguistically appropriate services.
Sec. 1223. IOM report on impact of language access services.
Subtitle C--Miscellaneous Improvements
Sec. 1231. Extension of therapy caps exceptions process.
Sec. 1232. Extended months of coverage of
immunosuppressive drugs for kidney transplant patients and other renal
dialysis provisions.
Sec. 1233. Advance care planning consultation.
Sec. 1234. Part B special enrollment period and waiver of limited enrollment penalty for TRICARE beneficiaries.
Sec. 1235. Exception for use of more recent tax year in
case of gains from sale of primary residence in computing part B
income-related premium.
Sec. 1236. Demonstration program on use of patient decisions aids.
TITLE III--PROMOTING PRIMARY CARE, MENTAL HEALTH SERVICES, AND COORDINATED CARE
Sec. 1301. Accountable Care Organization pilot program.
Sec. 1302. Medical home pilot program.
Sec. 1303. Payment incentive for selected primary care services.
Sec. 1304. Increased reimbursement rate for certified nurse-midwives.
Sec. 1305. Coverage and waiver of cost-sharing for preventive services.
Sec. 1306. Waiver of deductible for colorectal cancer
screening tests regardless of coding, subsequent diagnosis, or
ancillary tissue removal.
Sec. 1307. Excluding clinical social worker services
from coverage under the medicare skilled nursing facility prospective
payment system and consolidated payment.
Sec. 1308. Coverage of marriage and family therapist services and mental health counselor services.
Sec. 1309. Extension of physician fee schedule mental health add-on.
Sec. 1310. Expanding access to vaccines.
TITLE IV--QUALITY
Subtitle A--Comparative Effectiveness Research
Sec. 1401. Comparative effectiveness research.
Subtitle B--Nursing Home Transparency
Part 1--Improving Transparency of Information on Skilled Nursing Facilities and Nursing Facilities
Sec. 1411. Required disclosure of ownership and additional disclosable parties information.
Sec. 1412. Accountability requirements.
Sec. 1413. Nursing home compare Medicare website.
Sec. 1414. Reporting of expenditures.
Sec. 1415. Standardized complaint form.
Sec. 1416. Ensuring staffing accountability.
Part 2--Targeting Enforcement
Sec. 1421. Civil money penalties.
Sec. 1422. National independent monitor pilot program.
Sec. 1423. Notification of facility closure.
Part 3--Improving Staff Training
Sec. 1431. Dementia and abuse prevention training.
Sec. 1432. Study and report on training required for certified nurse aides and supervisory staff.
Subtitle C--Quality Measurements
Sec. 1441. Establishment of national priorities for quality improvement.
Sec. 1442. Development of new quality measures; GAO evaluation of data collection process for quality measurement.
Sec. 1443. Multi-stakeholder pre-rulemaking input into selection of quality measures.
Sec. 1444. Application of quality measures.
Sec. 1445. Consensus-based entity funding.
Subtitle D--Physician Payments Sunshine Provision
Sec. 1451. Reports on financial relationships between
manufacturers and distributors of covered drugs, devices, biologicals,
or medical supplies under Medicare, Medicaid, or CHIP and physicians
and other health care entities and between physicians and other health
care entities.
Subtitle E--Public Reporting on Health Care-Associated Infections
Sec. 1461. Requirement for public reporting by hospitals and ambulatory surgical centers on health care-associated infections.
TITLE V--MEDICARE GRADUATE MEDICAL EDUCATION
Sec. 1501. Distribution of unused residency positions.
Sec. 1502. Increasing training in nonprovider settings.
Sec. 1503. Rules for counting resident time for didactic and scholarly activities and other activities.
Sec. 1504. Preservation of resident cap positions from closed hospitals.
Sec. 1505. Improving accountability for approved medical residency training.
TITLE VI--PROGRAM INTEGRITY
Subtitle A--Increased Funding To Fight Waste, Fraud, and Abuse
Sec. 1601. Increased funding and flexibility to fight fraud and abuse.
Subtitle B--Enhanced Penalties for Fraud and Abuse
Sec. 1611. Enhanced penalties for false statements on provider or supplier enrollment applications.
Sec. 1612. Enhanced penalties for submission of false statements material to a false claim.
Sec. 1613. Enhanced penalties for delaying inspections.
Sec. 1614. Enhanced hospice program safeguards.
Sec. 1615. Enhanced penalties for individuals excluded from program participation.
Sec. 1616. Enhanced penalties for provision of false information by Medicare Advantage and part D plans.
Sec. 1617. Enhanced penalties for Medicare Advantage and part D marketing violations.
Sec. 1618. Enhanced penalties for obstruction of program audits.
Sec. 1619. Exclusion of certain individuals and entities from participation in Medicare and State health care programs.
Subtitle C--Enhanced Program and Provider Protections
Sec. 1631. Enhanced CMS program protection authority.
Sec. 1632. Enhanced Medicare, Medicaid, and CHIP program disclosure requirements relating to previous affiliations.
Sec. 1633. Required inclusion of payment modifier for certain evaluation and management services.
Sec. 1634. Evaluations and reports required under Medicare Integrity Program.
Sec. 1635. Require providers and suppliers to adopt programs to reduce waste, fraud, and abuse.
Sec. 1636. Maximum period for submission of Medicare claims reduced to not more than 12 months.
Sec. 1637. Physicians who order durable medical
equipment or home health services required to be Medicare enrolled
physicians or eligible professionals.
Sec. 1638. Requirement for physicians to provide documentation on referrals to programs at high risk of waste and abuse.
Sec. 1639. Face to face encounter with patient required
before physicians may certify eligibility for home health services or
durable medical equipment under Medicare.
Sec. 1640. Extension of testimonial subpoena authority to program exclusion investigations.
Sec. 1641. Required repayments of Medicare and Medicaid overpayments.
Sec. 1642. Expanded application of hardship waivers for OIG exclusions to beneficiaries of any Federal health care program.
Sec. 1643. Access to certain information on renal dialysis facilities.
Sec. 1644. Billing agents, clearinghouses, or other alternate payees required to register under Medicare.
Sec. 1645. Conforming civil monetary penalties to False Claims Act amendments.
Subtitle D--Access to Information Needed To Prevent Fraud, Waste, and Abuse
Sec. 1651. Access to Information Necessary to Identify Fraud, Waste, and Abuse.
Sec. 1652. Elimination of duplication between the
Healthcare Integrity and Protection Data Bank and the National
Practitioner Data Bank.
Sec. 1653. Compliance with HIPAA privacy and security standards.
TITLE VII--MEDICAID AND CHIP
Subtitle A--Medicaid and Health Reform
Sec. 1701. Eligibility for individuals with income below 133 1/3 percent of the Federal poverty level.
Sec. 1702. Requirements and special rules for certain Medicaid eligible individuals.
Sec. 1703. CHIP and Medicaid maintenance of effort.
Sec. 1704. Reduction in Medicaid DSH.
Sec. 1705. Expanded outstationing.
Subtitle B--Prevention
Sec. 1711. Required coverage of preventive services.
Sec. 1712. Tobacco cessation.
Sec. 1713. Optional coverage of nurse home visitation services.
Sec. 1714. State eligibility option for family planning services.
Subtitle C--Access
Sec. 1721. Payments to primary care practitioners.
Sec. 1722. Medical home pilot program.
Sec. 1723. Translation or interpretation services.
Sec. 1724. Optional coverage for freestanding birth center services.
Sec. 1725. Inclusion of public health clinics under the vaccines for children program.
Subtitle D--Coverage
Sec. 1731. Optional medicaid coverage of low-income HIV-infected individuals.
Sec. 1732. Extending transitional Medicaid Assistance (TMA).
Sec. 1733. Requirement of 12-month continuous coverage under certain CHIP programs.
Subtitle E--Financing
Sec. 1741. Payments to pharmacists.
Sec. 1742. Prescription drug rebates.
Sec. 1743. Extension of prescription drug discounts to enrollees of medicaid managed care organizations.
Sec. 1744. Payments for graduate medical education.
Subtitle F--Waste, Fraud, and Abuse
Sec. 1751. Health-care acquired conditions.
Sec. 1752. Evaluations and reports required under Medicaid Integrity Program.
Sec. 1753. Require providers and suppliers to adopt programs to reduce waste, fraud, and abuse.
Sec. 1755. Managed Care Organizations.
Sec. 1756. Termination of provider participation under
Medicaid and CHIP if terminated under Medicare or other State plan or
child health plan.
Sec. 1757. Medicaid and CHIP exclusion from participation relating to certain ownership, control, and management affiliations.
Sec. 1758. Requirement to report expanded set of data elements under MMIS to detect fraud and abuse.
Sec. 1759. Billing agents, clearinghouses, or other alternate payees required to register under Medicaid.
Sec. 1760. Denial of payments for litigation-related misconduct.
Subtitle G--Puerto Rico and the Territories
Sec. 1771. Puerto Rico and territories.
Subtitle H--Miscellaneous
Sec. 1781. Technical corrections.
Sec. 1782. Extension of QI program.
TITLE VIII--REVENUE-RELATED PROVISIONS
Sec. 1801. Disclosures to facilitate identification of
individuals likely to be ineligible for the low-income assistance under
the Medicare prescription drug program to assist Social Security
Administration's outreach to eligible individuals.
Sec. 1802. Comparative Effectiveness Research Trust Fund; financing for Trust Fund.
TITLE IX--MISCELLANEOUS PROVISIONS
Sec. 1901. Repeal of trigger provision.
Sec. 1902. Repeal of comparative cost adjustment (CCA) program.
Sec. 1903. Extension of gainsharing demonstration.
Sec. 1904. Grants to States for quality home visitation
programs for families with young children and families expecting
children.
Sec. 1905. Improved coordination and protection for dual eligibles.
TITLE I--IMPROVING HEALTH CARE VALUE
Subtitle A--Provisions Related to Medicare Part A
PART 1--MARKET BASKET UPDATES
SEC. 1101. SKILLED NURSING FACILITY PAYMENT UPDATE.
(a) In General- Section 1888(e)(4)(E)(ii) of the Social Security Act (42 U.S.C. 1395yy(e)(4)(E)(ii)) is amended--
(1) in subclause (III), by striking `and' at the end;
(2) by redesignating subclause (IV) as subclause (VI); and
(3) by inserting after subclause (III) the following new subclauses:
`(IV) for each of fiscal years 2004 through
2009, the rate computed for the previous fiscal year increased by the
skilled nursing facility market basket percentage change for the fiscal
year involved;
`(V) for fiscal year 2010, the rate computed for the previous fiscal year; and'.
(b) Delayed Effective Date- Section 1888(e)(4)(E)(ii)(V) of
the Social Security Act, as inserted by subsection (a)(3), shall not
apply to payment for days before January 1, 2010.
SEC. 1102. INPATIENT REHABILITATION FACILITY PAYMENT UPDATE.
(a) In General- Section 1886(j)(3)(C) of the Social
Security Act (42 U.S.C. 1395ww(j)(3)(C)) is amended by striking `and
2009' and inserting `through 2010'.
(b) Delayed Effective Date- The amendment made by
subsection (a) shall not apply to payment units occurring before
January 1, 2010.
SEC. 1103. INCORPORATING PRODUCTIVITY IMPROVEMENTS INTO MARKET BASKET UPDATES THAT DO NOT ALREADY INCORPORATE SUCH IMPROVEMENTS.
(a) Inpatient Acute Hospitals- Section 1886(b)(3)(B) of the Social Security Act (42 U.S.C. 1395ww(b)(3)(B)) is amended--
(A) by striking `(iii) For purposes of this
subparagraph,' and inserting `(iii)(I) For purposes of this
subparagraph, subject to the productivity adjustment described in
subclause (II),'; and
(B) by adding at the end the following new subclause:
`(II) The productivity adjustment described in this
subclause, with respect to an increase or change for a fiscal year or
year or cost reporting period, or other annual period, is a
productivity offset equal to the percentage change in the 10-year
moving average of annual economy-wide private nonfarm business
multi-factor productivity (as recently published before the
promulgation of such increase for the year or period involved). Except
as otherwise provided, any reference to the increase described in this
clause shall be a reference to the percentage increase described in
subclause (I) minus the percentage change under this subclause.';
(2) in the first sentence of clause (viii)(I), by inserting `(but not below zero)' after `shall be reduced'; and
(3) in the first sentence of clause (ix)(I)--
(A) by inserting `(determined without regard to clause (iii)(II)' after `clause (i)' the second time it appears; and
(B) by inserting `(but not below zero)' after `reduced'.
(b) Skilled Nursing Facilities- Section 1888(e)(5)(B) of
such Act (42 U.S.C. 1395yy(e)(5)(B)) is amended by inserting `subject
to the productivity adjustment described in section
1886(b)(3)(B)(iii)(II)' after `as calculated by the Secretary'.
(c) Long-Term Care Hospitals- Section 1886(m) of the Social
Security Act (42 U.S.C. 1395ww(m)) is amended by adding at the end the
following new paragraph:
`(3) PRODUCTIVITY ADJUSTMENT- In implementing the
system described in paragraph (1) for discharges occurring during the
rate year ending in 2010 or any subsequent rate year for a hospital, to
the extent that an annual percentage increase factor applies to a base
rate for such discharges for the hospital, such factor shall be subject
to the productivity adjustment described in section
1886(b)(3)(B)(iii)(II).'.
(d) Inpatient Rehabilitation Facilities- The second
sentence of section 1886(j)(3)(C) of the Social Security Act (42 U.S.C.
1395ww(j)(3)(C)) is amended by inserting `(subject to the productivity
adjustment described in section 1886(b)(3)(B)(iii)(II))' after
`appropriate percentage increase'.
(e) Psychiatric Hospitals- Section 1886 of the Social
Security Act (42 U.S.C. 1395ww) is amended by adding at the end the
following new subsection:
`(o) Prospective Payment for Psychiatric Hospitals-
`(1) REFERENCE TO ESTABLISHMENT AND IMPLEMENTATION OF
SYSTEM- For provisions related to the establishment and implementation
of a prospective payment system for payments under this title for
inpatient hospital services furnished by psychiatric hospitals (as
described in clause (i) of subsection (d)(1)(B)) and psychiatric units
(as described in the matter following clause (v) of such subsection),
see section 124 of the Medicare, Medicaid, and SCHIP Balanced Budget
Refinement Act of 1999.
`(2) PRODUCTIVITY ADJUSTMENT- In implementing the
system described in paragraph (1) for discharges occurring during the
rate year ending in 2011 or any subsequent rate year for a psychiatric
hospital or unit described in such paragraph, to the extent that an
annual percentage increase factor applies to a base rate for such
discharges for the hospital or unit, respectively, such factor shall be
subject to the productivity adjustment described in section
1886(b)(3)(B)(iii)(II).'.
(f) Hospice Care- Subclause (VII) of section
1814(i)(1)(C)(ii) of the Social Security Act (42 U.S.C.
1395f(i)(1)(C)(ii)) is amended by inserting after `the market basket
percentage increase' the following: `(which is subject to the
productivity adjustment described in section 1886(b)(3)(B)(iii)(II))'.
(g) Effective Date- The amendments made by subsections (a),
(b), (d), and (f) shall apply to annual increases effected for fiscal
years beginning with fiscal year 2010.
PART 2--OTHER MEDICARE PART A PROVISIONS
SEC. 1111. PAYMENTS TO SKILLED NURSING FACILITIES.
(a) Change in Recalibration Factor-
(1) ANALYSIS- The Secretary of Health and Human
Services shall conduct, using calendar year 2006 claims data, an
initial analysis comparing total payments under title XVIII of the
Social Security Act for skilled nursing facility services under the
RUG-53 and under the RUG-44 classification systems.
(2) ADJUSTMENT IN RECALIBRATION FACTOR- Based on the
initial analysis under paragraph (1), the Secretary shall adjust the
case mix indexes under section 1888(e)(4)(G)(i) of the Social Security
Act (42 U.S.C. 1395yy(e)(4)(G)(i)) for fiscal year 2010 by the
appropriate recalibration factor as proposed in the proposed rule for
Medicare skilled nursing facilities issued by such Secretary on May 12,
2009 (74 Federal Register 22214 et seq.).
(b) Change in Payment for Nontherapy Ancillary (NTA) Services and Therapy Services-
(1) CHANGES UNDER CURRENT SNF CLASSIFICATION SYSTEM-
(A) IN GENERAL- Subject to subparagraph (B), the
Secretary of Health and Human Services shall, under the system for
payment of skilled nursing facility services under section 1888(e) of
the Social Security Act (42 U.S.C. 1395yy(e)), increase payment by 10
percent for non-therapy ancillary services (as specified by the
Secretary in the notice issued on November 27, 1998 (63 Federal
Register 65561 et seq.)) and shall decrease payment for the therapy
case mix component of such rates by 5.5 percent.
(B) EFFECTIVE DATE- The changes in payment
described in subparagraph (A) shall apply for days on or after January
1, 2010, and until the Secretary implements an alternative case mix
classification system for payment of skilled nursing facility services
under section 1888(e) of the Social Security Act (42 U.S.C. 1395yy(e)).
(C) IMPLEMENTATION- Notwithstanding any other
provision of law, the Secretary may implement by program instruction or
otherwise the provisions of this paragraph.
(2) CHANGES UNDER A FUTURE SNF CASE MIX CLASSIFICATION SYSTEM-
(i) IN GENERAL- The Secretary of Health and
Human Services shall analyze payments for non-therapy ancillary
services under a future skilled nursing facility classification system
to ensure the accuracy of payment for non-therapy ancillary services.
Such analysis shall consider use of appropriate indicators which may
include age, physical and mental status, ability to perform activities
of daily living, prior nursing home stay, broad RUG category, and a
proxy for length of stay.
(ii) APPLICATION- Such analysis shall be
conducted in a manner such that the future skilled nursing facility
classification system is implemented to apply to services furnished
during a fiscal year beginning with fiscal year 2011.
(B) CONSULTATION- In conducting the analysis under
subparagraph (A), the Secretary shall consult with interested parties,
including the Medicare Payment Advisory Commission and other interested
stakeholders, to identify appropriate predictors of nontherapy
ancillary costs.
(C) RULEMAKING- The Secretary shall include the
result of the analysis under subparagraph (A) in the fiscal year 2011
rulemaking cycle for purposes of implementation beginning for such
fiscal year.
(D) IMPLEMENTATION- Subject to subparagraph (E) and
consistent with subparagraph (A)(ii), the Secretary shall implement
changes to payments for non-therapy ancillary services (which may
include a separate rate component for non-therapy ancillary services
and may include use of a model that predicts payment amounts applicable
for non-therapy ancillary services) under such future skilled nursing
facility services classification system as the Secretary determines
appropriate based on the analysis conducted pursuant to subparagraph
(A).
(E) BUDGET NEUTRALITY- The Secretary shall
implement changes described in subparagraph (D) in a manner such that
the estimated expenditures under such future skilled nursing facility
services classification system for a fiscal year beginning with fiscal
year 2011 with such changes would be equal to the estimated
expenditures that would otherwise occur under title XVIII of the Social
Security Act under such future skilled nursing facility services
classification system for such year without such changes.
(c) Outlier Policy for NTA and Therapy- Section 1888(e) of
the Social Security Act (42 U.S.C. 1395yy(e)) is amended by adding at
the end the following new paragraph:
`(13) OUTLIERS FOR NTA AND THERAPY-
`(A) IN GENERAL- With respect to outliers because
of unusual variations in the type or amount of medically necessary
care, beginning with October 1, 2010, the Secretary--
`(i) shall provide for an addition or
adjustment to the payment amount otherwise made under this section with
respect to non-therapy ancillary services in the case of such outliers;
and
`(ii) may provide for such an addition or
adjustment to the payment amount otherwise made under this section with
respect to therapy services in the case of such outliers.
`(B) OUTLIERS BASED ON AGGREGATE COSTS- Outlier
adjustments or additional payments described in subparagraph (A) shall
be based on aggregate costs during a stay in a skilled nursing facility
and not on the number of days in such stay.
`(C) BUDGET NEUTRALITY- The Secretary shall reduce
estimated payments that would otherwise be made under the prospective
payment system under this subsection with respect to a fiscal year by 2
percent. The total amount of the additional payments or payment
adjustments for outliers made under this paragraph with respect to a
fiscal year may not exceed 2 percent of the total payments projected or
estimated to be made based on the prospective payment system under this
subsection for the fiscal year.'.
(d) Conforming Amendments- Section 1888(e)(8) of such Act (42 U.S.C. 1395yy(e)(8)) is amended--
(1) in subparagraph (A), by inserting `and adjustment
under section 1111(b) of the America's Affordable Health Choices Act of
2009;
(2) in subparagraph (B), by striking `and';
(3) in subparagraph (C), by striking the period and inserting `; and'; and
(4) by adding at the end the following new subparagraph:
`(D) the establishment of outliers under paragraph (13).'.
SEC. 1112. MEDICARE DSH REPORT AND PAYMENT ADJUSTMENTS IN RESPONSE TO COVERAGE EXPANSION.
(1) IN GENERAL- Not later than January 1, 2016, the
Secretary of Health and Human Services shall submit to Congress a
report on Medicare DSH taking into account the impact of the health
care reforms carried out under division A in reducing the number of
uninsured individuals. The report shall include recommendations
relating to the following:
(A) The appropriate amount, targeting, and
distribution of Medicare DSH to compensate for higher Medicare costs
associated with serving low-income beneficiaries (taking into account
variations in the empirical justification for Medicare DSH attributable
to hospital characteristics, including bed size), consistent with the
original intent of Medicare DSH.
(B) The appropriate amount, targeting, and
distribution of Medicare DSH to hospitals given their continued
uncompensated care costs, to the extent such costs remain.
(2) COORDINATION WITH MEDICAID DSH REPORT- The
Secretary shall coordinate the report under this subsection with the
report on Medicaid DSH under section 1704(a).
(b) Payment Adjustments in Response to Coverage Expansion-
(1) IN GENERAL- If there is a significant decrease in
the national rate of uninsurance as a result of this Act (as determined
under paragraph (2)(A)), then the Secretary of Health and Human
Services shall, beginning in fiscal year 2017, implement the following
adjustments to Medicare DSH:
(A) The amount of Medicare DSH shall be adjusted
based on the recommendations of the report under subsection (a)(1)(A)
and shall take into account variations in the empirical justification
for Medicare DSH attributable to hospital characteristics, including
bed size.
(B) Subject to paragraph (3), increase Medicare DSH
for a hospital by an additional amount that is based on the amount of
uncompensated care provided by the hospital based on criteria for
uncompensated care as determined by the Secretary, which shall exclude
bad debt.
(2) SIGNIFICANT DECREASE IN NATIONAL RATE OF UNINSURANCE AS A RESULT OF THIS ACT- For purposes of this subsection--
(A) IN GENERAL- There is a `significant decrease in
the national rate of uninsurance as a result of this Act' if there is a
decrease in the national rate of uninsurance (as defined in
subparagraph (B)) from 2012 to 2014 that exceeds 8 percentage points.
(B) NATIONAL RATE OF UNINSURANCE DEFINED- The term
`national rate of uninsurance' means, for a year, such rate for the
under-65 population for the year as determined and published by the
Bureau of the Census in its Current Population Survey in or about
September of the succeeding year.
(3) UNCOMPENSATED CARE INCREASE-
(A) COMPUTATION OF DSH SAVINGS- For each fiscal
year (beginning with fiscal year 2017), the Secretary shall estimate
the aggregate reduction in Medicare DSH that will result from the
adjustment under paragraph (1)(A).
(B) STRUCTURE OF PAYMENT INCREASE- The Secretary
shall compute the increase in Medicare DSH under paragraph (1)(B) for a
fiscal year in accordance with a formula established by the Secretary
that provides that--
(i) the aggregate amount of such increase for
the fiscal year does not exceed 50 percent of the aggregate reduction
in Medicare DSH estimated by the Secretary for such fiscal year; and
(ii) hospitals with higher levels of uncompensated care receive a greater increase.
(c) Medicare DSH- In this section, the term `Medicare DSH'
means adjustments in payments under section 1886(d)(5)(F) of the Social
Security Act (42 U.S.C. 1395ww(d)(5)(F)) for inpatient hospital
services furnished by disproportionate share hospitals.
Subtitle B--Provisions Related to Part B
PART 1--PHYSICIANS' SERVICES
SEC. 1121. SUSTAINABLE GROWTH RATE REFORM.
(a) Transitional Update for 2010- Section 1848(d) of the
Social Security Act (42 U.S.C. 1395w-4(d)) is amended by adding at the
end the following new paragraph:
`(10) UPDATE FOR 2010- The update to the single
conversion factor established in paragraph (1)(C) for 2010 shall be the
percentage increase in the MEI (as defined in section 1842(i)(3)) for
that year.'.
(b) Rebasing SGR Using 2009; Limitation on Cumulative
Adjustment Period- Section 1848(d)(4) of such Act (42 U.S.C.
1395w-4(d)(4)) is amended--
(1) in subparagraph (B), by striking `subparagraph (D)' and inserting `subparagraphs (D) and (G)'; and
(2) by adding at the end the following new subparagraph:
`(G) REBASING USING 2009 FOR FUTURE UPDATE
ADJUSTMENTS- In determining the update adjustment factor under
subparagraph (B) for 2011 and subsequent years--
`(i) the allowed expenditures for 2009 shall be
equal to the amount of the actual expenditures for physicians' services
during 2009; and
`(ii) the reference in subparagraph (B)(ii)(I)
to `April 1, 1996' shall be treated as a reference to `January 1, 2009
(or, if later, the first day of the fifth year before the year
involved)'.'.
(c) Limitation on Physicians' Services Included in Target
Growth Rate Computation to Services Covered Under Physician Fee
Schedule- Effective for services furnished on or after January 1, 2009,
section 1848(f)(4)(A) of such Act is amended striking `(such as
clinical' and all that follows through `in a physician's office' and
inserting `for which payment under this part is made under the fee
schedule under this section, for services for practitioners described
in section 1842(b)(18)(C) on a basis related to such fee schedule, or
for services described in section 1861(p) (other than such services
when furnished in the facility of a provider of services)'.
(d) Establishment of Separate Target Growth Rates for Categories of Services-
(1) ESTABLISHMENT OF SERVICE CATEGORIES- Subsection (j)
of section 1848 of the Social Security Act (42 U.S.C. 1395w-4) is
amended by adding at the end the following new paragraph:
`(5) SERVICE CATEGORIES- For services furnished on or
after January 1, 2009, each of the following categories of physicians'
services (as defined in paragraph (3)) shall be treated as a separate
`service category':
`(A) Evaluation and management services that are procedure codes (for services covered under this title) for--
`(i) services in the category designated
Evaluation and Management in the Health Care Common Procedure Coding
System (established by the Secretary under subsection (c)(5) as of
December 31, 2009, and as subsequently modified by the Secretary); and
`(ii) preventive services (as defined in section 1861(iii)) for which payment is made under this section.
`(B) All other services not described in subparagraph (A).
Service categories established under this paragraph
shall apply without regard to the specialty of the physician furnishing
the service.'.
(2) ESTABLISHMENT OF SEPARATE CONVERSION FACTORS FOR
EACH SERVICE CATEGORY- Subsection (d)(1) of section 1848 of the Social
Security Act (42 U.S.C. 1395w-4) is amended--
(A) in subparagraph (A)--
(i) by designating the sentence beginning `The
conversion factor' as clause (i) with the heading `APPLICATION OF
SINGLE CONVERSION FACTOR- ' and with appropriate indentation;
(ii) by striking `The conversion factor' and inserting `Subject to clause (ii), the conversion factor'; and
(iii) by adding at the end the following new clause:
`(ii) APPLICATION OF MULTIPLE CONVERSION FACTORS BEGINNING WITH 2011-
`(I) IN GENERAL- In applying clause (i) for
years beginning with 2011, separate conversion factors shall be
established for each service category of physicians' services (as
defined in subsection (j)(5)) and any reference in this section to a
conversion factor for such years shall be deemed to be a reference to
the conversion factor for each of such categories.
`(II) INITIAL CONVERSION FACTORS- Such
factors for 2011 shall be based upon the single conversion factor for
the previous year multiplied by the update established under paragraph
(11) for such category for 2011.
`(III) UPDATING OF CONVERSION FACTORS- Such
factor for a service category for a subsequent year shall be based upon
the conversion factor for such category for the previous year and
adjusted by the update established for such category under paragraph
(11) for the year involved.'; and
(B) in subparagraph (D), by striking `other
physicians' services' and inserting `for physicians' services described
in the service category described in subsection (j)(5)(B)'.
(3) ESTABLISHING UPDATES FOR CONVERSION FACTORS FOR
SERVICE CATEGORIES- Section 1848(d) of the Social Security Act (42
U.S.C. 1395w-4(d)), as amended by subsection (a), is amended--
(A) in paragraph (4)(C)(iii), by striking `The allowed' and inserting `Subject to paragraph (11)(B), the allowed'; and
(B) by adding at the end the following new paragraph:
`(11) UPDATES FOR SERVICE CATEGORIES BEGINNING WITH 2011-
`(A) IN GENERAL- In applying paragraph (4) for a year beginning with 2011, the following rules apply:
`(i) APPLICATION OF SEPARATE UPDATE ADJUSTMENTS
FOR EACH SERVICE CATEGORY- Pursuant to paragraph (1)(A)(ii)(I), the
update shall be made to the conversion factor for each service category
(as defined in subsection (j)(5)) based upon an update adjustment
factor for the respective category and year and the update adjustment
factor shall be computed, for a year, separately for each service
category.
`(ii) COMPUTATION OF ALLOWED AND ACTUAL
EXPENDITURES BASED ON SERVICE CATEGORIES- In computing the prior year
adjustment component and the cumulative adjustment component under
clauses (i) and (ii) of paragraph (4)(B), the following rules apply:
`(I) APPLICATION BASED ON SERVICE
CATEGORIES- The allowed expenditures and actual expenditures shall be
the allowed and actual expenditures for the service category, as
determined under subparagraph (B).
`(II) APPLICATION OF CATEGORY SPECIFIC
TARGET GROWTH RATE- The growth rate applied under clause (ii)(II) of
such paragraph shall be the target growth rate for the service category
involved under subsection (f)(5).
`(B) DETERMINATION OF ALLOWED EXPENDITURES- In
applying paragraph (4) for a year beginning with 2010, notwithstanding
subparagraph (C)(iii) of such paragraph, the allowed expenditures for a
service category for a year is an amount computed by the Secretary as
follows:
`(I) TOTAL 2009 ACTUAL EXPENDITURES FOR ALL
SERVICES INCLUDED IN SGR COMPUTATION FOR EACH SERVICE CATEGORY- Compute
total actual expenditures for physicians' services (as defined in
subsection (f)(4)(A)) for 2009 for each service category.
`(II) INCREASE BY GROWTH RATE TO OBTAIN
2010 ALLOWED EXPENDITURES FOR SERVICE CATEGORY- Compute allowed
expenditures for the service category for 2010 by increasing the
allowed expenditures for the service category for 2009 computed under
subclause (I) by the target growth rate for such service category under
subsection (f) for 2010.
`(ii) FOR SUBSEQUENT YEARS- For a subsequent
year, take the amount of allowed expenditures for such category for the
preceding year (under clause (i) or this clause) and increase it by the
target growth rate determined under subsection (f) for such category
and year.'.
(4) APPLICATION OF SEPARATE TARGET GROWTH RATES FOR EACH CATEGORY-
(A) IN GENERAL- Section 1848(f) of the Social
Security Act (42 U.S.C. 1395w-4(f)) is amended by adding at the end the
following new paragraph:
`(5) APPLICATION OF SEPARATE TARGET GROWTH RATES FOR
EACH SERVICE CATEGORY BEGINNING WITH 2010- The target growth rate for a
year beginning with 2010 shall be computed and applied separately under
this subsection for each service category (as defined in subsection
(j)(5)) and shall be computed using the same method for computing the
target growth rate except that the factor described in paragraph (2)(C)
for--
`(A) the service category described in subsection (j)(5)(A) shall be increased by 0.02; and
`(B) the service category described in subsection (j)(5)(B) shall be increased by 0.01.'.
(B) USE OF TARGET GROWTH RATES- Section 1848 of such Act is further amended--
(I) in paragraph (1)(E)(ii), by inserting `or target' after `sustainable'; and
(II) in paragraph (4)(B)(ii)(II), by inserting `or target' after `sustainable'; and
(ii) in the heading of subsection (f), by inserting `and Target Growth Rate' after `Sustainable Growth Rate';
(iii) in subsection (f)(1)--
(I) by striking `and' at the end of subparagraph (A);
(II) in subparagraph (B), by inserting
`before 2010' after `each succeeding year' and by striking the period
at the end and inserting `; and'; and
(III) by adding at the end the following new subparagraph:
`(C) November 1 of each succeeding year the target
growth rate for such succeeding year and each of the 2 preceding
years.'; and
(iv) in subsection (f)(2), in the matter before
subparagraph (A), by inserting after `beginning with 2000' the
following: `and ending with 2009'.
(e) Application to Accountable Care Organization Pilot
Program- In applying the target growth rate under subsections (d) and
(f) of section 1848 of the Social Security Act to services furnished by
a practitioner to beneficiaries who are attributable to an accountable
care organization under the pilot program provided under section 1866D
of such Act, the Secretary of Health and Human Services shall develop,
not later than January 1, 2012, for application beginning with 2012, a
method that--
(1) allows each such organization to have its own
expenditure targets and updates for such practitioners, with respect to
beneficiaries who are attributable to that organization, that are
consistent with the methodologies described in such subsection (f); and
(2) provides that the target growth rate applicable to
other physicians shall not apply to such physicians to the extent that
the physicians' services are furnished through the accountable care
organization.
In applying paragraph (1), the Secretary of Health and Human
Services may apply the difference in the update under such paragraph on
a claim-by-claim or lump sum basis and such a payment shall be taken
into account under the pilot program.
SEC. 1122. MISVALUED CODES UNDER THE PHYSICIAN FEE SCHEDULE.
(a) In General- Section 1848(c)(2) of the Social Security
Act (42 U.S.C. 1395w-4(c)(2)) is amended by adding at the end the
following new subparagraphs:
`(K) POTENTIALLY MISVALUED CODES-
`(i) IN GENERAL- The Secretary shall--
`(I) periodically identify services as being potentially misvalued using criteria specified in clause (ii); and
`(II) review and make appropriate
adjustments to the relative values established under this paragraph for
services identified as being potentially misvalued under subclause (I).
`(ii) IDENTIFICATION OF POTENTIALLY MISVALUED
CODES- For purposes of identifying potentially misvalued services
pursuant to clause (i)(I), the Secretary shall examine (as the
Secretary determines to be appropriate) codes (and families of codes as
appropriate) for which there has been the fastest growth; codes (and
families of codes as appropriate) that have experienced substantial
changes in practice expenses; codes for new technologies or services
within an appropriate period (such as three years) after the relative
values are initially established for such codes; multiple codes that
are frequently billed in conjunction with furnishing a single service;
codes with low relative values, particularly those that are often
billed multiple times for a single treatment; codes which have not been
subject to review since the implementation of the RBRVS (the so-called
`Harvard-valued codes'); and such other codes determined to be
appropriate by the Secretary.
`(iii) REVIEW AND ADJUSTMENTS-
`(I) The Secretary may use existing
processes to receive recommendations on the review and appropriate
adjustment of potentially misvalued services described clause (i)(II).
`(II) The Secretary may conduct surveys,
other data collection activities, studies, or other analyses as the
Secretary determines to be appropriate to facilitate the review and
appropriate adjustment described in clause (i)(II).
`(III) The Secretary may use analytic
contractors to identify and analyze services identified under clause
(i)(I), conduct surveys or collect data, and make recommendations on
the review and appropriate adjustment of services described in clause
(i)(II).
`(IV) The Secretary may coordinate the
review and appropriate adjustment described in clause (i)(II) with the
periodic review described in subparagraph (B).
`(V) As part of the review and adjustment
described in clause (i)(II), including with respect to codes with low
relative values described in clause (ii), the Secretary may make
appropriate coding revisions (including using existing processes for
consideration of coding changes) which may include consolidation of
individual services into bundled codes for payment under the fee
schedule under subsection (b).
`(VI) The provisions of subparagraph
(B)(ii)(II) shall apply to adjustments to relative value units made
pursuant to this subparagraph in the same manner as such provisions
apply to adjustments under subparagraph (B)(ii)(II).
`(L) VALIDATING RELATIVE VALUE UNITS-
`(i) IN GENERAL- The Secretary shall establish
a process to validate relative value units under the fee schedule under
subsection (b).
`(ii) COMPONENTS AND ELEMENTS OF WORK- The
process described in clause (i) may include validation of work elements
(such as time, mental effort and professional judgment, technical skill
and physical effort, and stress due to risk) involved with furnishing a
service and may include validation of the pre, post, and intra-service
components of work.
`(iii) SCOPE OF CODES- The validation of work
relative value units shall include a sampling of codes for services
that is the same as the codes listed under subparagraph (K)(ii).
`(iv) METHODS- The Secretary may conduct the
validation under this subparagraph using methods described in
subclauses (I) through (V) of subparagraph (K)(iii) as the Secretary
determines to be appropriate.
`(v) ADJUSTMENTS- The Secretary shall make
appropriate adjustments to the work relative value units under the fee
schedule under subsection (b). The provisions of subparagraph
(B)(ii)(II) shall apply to adjustments to relative value units made
pursuant to this subparagraph in the same manner as such provisions
apply to adjustments under subparagraph (B)(ii)(II).'.
(1) FUNDING- For purposes of carrying out the
provisions of subparagraphs (K) and (L) of 1848(c)(2) of the Social
Security Act, as added by subsection (a), in addition to funds
otherwise available, out of any funds in the Treasury not otherwise
appropriated, there are appropriated to the Secretary of Health and
Human Services for the Center for Medicare & Medicaid Services
Program Management Account $20,000,000 for fiscal year 2010 and each
subsequent fiscal year. Amounts appropriated under this paragraph for a
fiscal year shall be available until expended.
(A) Chapter 35 of title 44, United States Code and
the provisions of the Federal Advisory Committee Act (5 U.S.C. App.)
shall not apply to this section or the amendment made by this section.
(B) Notwithstanding any other provision of law, the
Secretary may implement subparagraphs (K) and (L) of 1848(c)(2) of the
Social Security Act, as added by subsection (a), by program instruction
or otherwise.
(C) Section 4505(d) of the Balanced Budget Act of 1997 is repealed.
(D) Except for provisions related to
confidentiality of information, the provisions of the Federal
Acquisition Regulation shall not apply to this section or the amendment
made by this section.
(3) FOCUSING CMS RESOURCES ON POTENTIALLY OVERVALUED
CODES- Section 1868(a) of the Social Security Act (42 U.S.C. 1395ee(a))
is repealed.
SEC. 1123. PAYMENTS FOR EFFICIENT AREAS.
Section 1833 of the Social Security Act (42 U.S.C. 1395l) is amended by adding at the end the following new subsection:
`(x) Incentive Payments for Efficient Areas-
`(1) IN GENERAL- In the case of services furnished
under the physician fee schedule under section 1848 on or after January
1, 2011, and before January 1, 2013, by a supplier that is paid under
such fee schedule in an efficient area (as identified under paragraph
(2)), in addition to the amount of payment that would otherwise be made
for such services under this part, there also shall be paid (on a
monthly or quarterly basis) an amount equal to 5 percent of the payment
amount for the services under this part.
`(2) IDENTIFICATION OF EFFICIENT AREAS-
`(A) IN GENERAL- Based upon available data, the
Secretary shall identify those counties or equivalent areas in the
United States in the lowest fifth percentile of utilization based on
per capita spending under this part and part A for services provided in
the most recent year for which data are available as of the date of the
enactment of this subsection, as standardized to eliminate the effect
of geographic adjustments in payment rates.
`(B) IDENTIFICATION OF COUNTIES WHERE SERVICE IS
FURNISHED- For purposes of paying the additional amount specified in
paragraph (1), if the Secretary uses the 5-digit postal ZIP Code where
the service is furnished, the dominant county of the postal ZIP Code
(as determined by the United States Postal Service, or otherwise) shall
be used to determine whether the postal ZIP Code is in a county
described in subparagraph (A).
`(C) LIMITATION ON REVIEW- There shall be no
administrative or judicial review under section 1869, 1878, or
otherwise, respecting--
`(i) the identification of a county or other area under subparagraph (A); or
`(ii) the assignment of a postal ZIP Code to a county or other area under subparagraph (B).
`(D) PUBLICATION OF LIST OF COUNTIES; POSTING ON
WEBSITE- With respect to a year for which a county or area is
identified under this paragraph, the Secretary shall identify such
counties or areas as part of the proposed and final rule to implement
the physician fee schedule under section 1848 for the applicable year.
The Secretary shall post the list of counties identified under this
paragraph on the Internet website of the Centers for Medicare &
Medicaid Services.'.
SEC. 1124. MODIFICATIONS TO THE PHYSICIAN QUALITY REPORTING INITIATIVE (PQRI).
(a) Feedback- Section 1848(m)(5) of the Social Security Act
(42 U.S.C. 1395w-4(m)(5)) is amended by adding at the end the following
new subparagraph:
`(H) FEEDBACK- The Secretary shall provide timely
feedback to eligible professionals on the performance of the eligible
professional with respect to satisfactorily submitting data on quality
measures under this subsection.'.
(b) Appeals- Such section is further amended--
(1) in subparagraph (E), by striking `There shall be' and inserting `Subject to subparagraph (I), there shall be'; and
(2) by adding at the end the following new subparagraph:
`(I) INFORMAL APPEALS PROCESS- Notwithstanding
subparagraph (E), by not later than January 1, 2011, the Secretary
shall establish and have in place an informal process for eligible
professionals to appeal the determination that an eligible professional
did not satisfactorily submit data on quality measures under this
subsection.'.
(c) Integration of Physician Quality Reporting and EHR
Reporting- Section 1848(m) of such Act is amended by adding at the end
the following new paragraph:
`(7) INTEGRATION OF PHYSICIAN QUALITY REPORTING AND EHR
REPORTING- Not later than January 1, 2012, the Secretary shall develop
a plan to integrate clinical reporting on quality measures under this
subsection with reporting requirements under subsection (o) relating to
the meaningful use of electronic health records. Such integration shall
consist of the following:
`(A) The development of measures, the reporting of which would both demonstrate--
`(i) meaningful use of an electronic health record for purposes of subsection (o); and
`(ii) clinical quality of care furnished to an individual.
`(B) The collection of health data to identify
deficiencies in the quality and coordination of care for individuals
eligible for benefits under this part.
`(C) Such other activities as specified by the Secretary.'.
(d) Extension of Incentive Payments- Section 1848(m)(1) of such Act (42 U.S.C. 1395w-4(m)(1)) is amended--
(1) in subparagraph (A), by striking `2010' and inserting `2012'; and
(2) in subparagraph (B)(ii), by striking `2009 and 2010' and inserting `for each of the years 2009 through 2012'.
SEC. 1125. ADJUSTMENT TO MEDICARE PAYMENT LOCALITIES.
(a) In General- Section 1848(e) of the Social Security Act
(42 U.S.C.1395w-4(e)) is amended by adding at the end the following new
paragraph:
`(6) TRANSITION TO USE OF MSAS AS FEE SCHEDULE AREAS IN CALIFORNIA-
`(i) REVISION- Subject to clause (ii) and
notwithstanding the previous provisions of this subsection, for
services furnished on or after January 1, 2011, the Secretary shall
revise the fee schedule areas used for payment under this section
applicable to the State of California using the Metropolitan
Statistical Area (MSA) iterative Geographic Adjustment Factor
methodology as follows:
`(I) The Secretary shall configure the
physician fee schedule areas using the Core-Based Statistical
Areas-Metropolitan Statistical Areas (each in this paragraph referred
to as an `MSA'), as defined by the Director of the Office of Management
and Budget, as the basis for the fee schedule areas. The Secretary
shall employ an iterative process to transition fee schedule areas.
First, the Secretary shall list all MSAs within the State by Geographic
Adjustment Factor described in paragraph (2) (in this paragraph
referred to as a `GAF') in descending order. In the first iteration,
the Secretary shall compare the GAF of the highest cost MSA in the
State to the weighted-average GAF of the group of remaining MSAs in the
State. If the ratio of the GAF of the highest cost MSA to the
weighted-average GAF of the rest of State is 1.05 or greater then the
highest cost MSA becomes a separate fee schedule area.
`(II) In the next iteration, the Secretary
shall compare the MSA of the second-highest GAF to the weighted-average
GAF of the group of remaining MSAs. If the ratio of the second-highest
MSA's GAF to the weighted-average of the remaining lower cost MSAs is
1.05 or greater, the second-highest MSA becomes a separate fee schedule
area. The iterative process continues until the ratio of the GAF of the
highest-cost remaining MSA to the weighted-average of the remaining
lower-cost MSAs is less than 1.05, and the remaining group of lower
cost MSAs form a single fee schedule area, If two MSAs have identical
GAFs, they shall be combined in the iterative comparison.
`(ii) TRANSITION- For services furnished on or
after January 1, 2011, and before January 1, 2016, in the State of
California, after calculating the work, practice expense, and
malpractice geographic indices described in clauses (i), (ii), and
(iii) of paragraph (1)(A) that would otherwise apply through
application of this paragraph, the Secretary shall increase any such
index to the county-based fee schedule area value on December 31, 2009,
if such index would otherwise be less than the value on January 1, 2010.
`(B) SUBSEQUENT REVISIONS-
`(i) PERIODIC REVIEW AND ADJUSTMENTS IN FEE
SCHEDULE AREAS- Subsequent to the process outlined in paragraph (1)(C),
not less often than every three years, the Secretary shall review and
update the California Rest-of-State fee schedule area using MSAs as
defined by the Director of the Office of Management and Budget and the
iterative methodology described in subparagraph (A)(i).
`(ii) LINK WITH GEOGRAPHIC INDEX DATA REVISION-
The revision described in clause (i) shall be made effective
concurrently with the application of the periodic review of the
adjustment factors required under paragraph (1)(C) for California for
2012 and subsequent periods. Upon request, the Secretary shall make
available to the public any county-level or MSA derived data used to
calculate the geographic practice cost index.
`(C) REFERENCES TO FEE SCHEDULE AREAS- Effective
for services furnished on or after January 1, 2010, for the State of
California, any reference in this section to a fee schedule area shall
be deemed a reference to an MSA in the State.'.
(b) Conforming Amendment to Definition of Fee Schedule
Area- Section 1848(j)(2) of the Social Security Act (42 U.S.C.
1395w(j)(2)) is amended by striking `The term' and inserting `Except as
provided in subsection (e)(6)(C), the term'.
PART 2--MARKET BASKET UPDATES
SEC. 1131. INCORPORATING PRODUCTIVITY IMPROVEMENTS INTO MARKET BASKET UPDATES THAT DO NOT ALREADY INCORPORATE SUCH IMPROVEMENTS.
(a) Outpatient Hospitals-
(1) IN GENERAL- The first sentence of section
1833(t)(3)(C)(iv) of the Social Security Act (42 U.S.C.
1395l(t)(3)(C)(iv)) is amended--
(A) by inserting `(which is subject to the
productivity adjustment described in subclause (II) of such section)'
after `1886(b)(3)(B)(iii)'; and
(B) by inserting `(but not below 0)' after `reduced'.
(2) EFFECTIVE DATE- The amendments made by paragraph
(1) shall apply to increase factors for services furnished in years
beginning with 2010.
(b) Ambulance Services- Section 1834(l)(3)(B) of such Act
(42 U.S.C. 1395m(l)(3)(B))) is amended by inserting before the period
at the end the following: `and, in the case of years beginning with
2010, subject to the productivity adjustment described in section
1886(b)(3)(B)(iii)(II)'.
(c) Ambulatory Surgical Center Services- Section 1833(i)(2)(D) of such Act (42 U.S.C. 1395l(i)(2)(D)) is amended--
(1) by redesignating clause (v) as clause (vi); and
(2) by inserting after clause (iv) the following new clause:
`(v) In implementing the system described in clause (i),
for services furnished during 2010 or any subsequent year, to the
extent that an annual percentage change factor applies, such factor
shall be subject to the productivity adjustment described in section
1886(b)(3)(B)(iii)(II).'.
(d) Laboratory Services- Section 1833(h)(2)(A) of such Act (42 U.S.C. 1395l(h)(2)(A)) is amended--
(1) in clause (i), by striking `for each of years 2009 through 2013' and inserting `for 2009'; and
(A) by striking `and' at the end of subclause (III);
(B) by striking the period at the end of subclause (IV) and inserting `; and'; and
(C) by adding at the end the following new subclause:
`(V) the annual adjustment in the fee schedules
determined under clause (i) for years beginning with 2010 shall be
subject to the productivity adjustment described in section
1886(b)(3)(B)(iii)(II).'.
(e) Certain Durable Medical Equipment- Section 1834(a)(14) of such Act (42 U.S.C. 1395m(a)(14)) is amended--
(1) in subparagraph (K), by inserting before the
semicolon at the end the following: `, subject to the productivity
adjustment described in section 1886(b)(3)(B)(iii)(II)';
(2) in subparagraph (L)(i), by inserting after `June
2013,' the following: `subject to the productivity adjustment described
in section 1886(b)(3)(B)(iii)(II),';
(3) in subparagraph (L)(ii), by inserting after `June
2013' the following: `, subject to the productivity adjustment
described in section 1886(b)(3)(B)(iii)(II)'; and
(4) in subparagraph (M), by inserting before the period
at the end the following: `, subject to the productivity adjustment
described in section 1886(b)(3)(B)(iii)(II)'.
PART 3--OTHER PROVISIONS
SEC. 1141. RENTAL AND PURCHASE OF POWER-DRIVEN WHEELCHAIRS.
(a) In General- Section 1834(a)(7)(A)(iii) of the Social Security Act (42 U.S.C. 1395m(a)(7)(A)(iii)) is amended--
(1) in the heading, by inserting `CERTAIN COMPLEX REHABILITATIVE' after `OPTION FOR'; and
(2) by striking `power-driven wheelchair' and inserting
`complex rehabilitative power-driven wheelchair recognized by the
Secretary as classified within group 3 or higher'.
(b) Effective Date- The amendments made by subsection (a)
shall take effect on January 1, 2011, and shall apply to power-driven
wheelchairs furnished on or after such date. Such amendments shall not
apply to contracts entered into under section 1847 of the Social
Security Act (42 U.S.C. 1395w-3) pursuant to a bid submitted under such
section before October 1, 2010, under subsection (a)(1)(B)(i)(I) of
such section.
SEC. 1142. EXTENSION OF PAYMENT RULE FOR BRACHYTHERAPY.
Section 1833(t)(16)(C) of the Social Security Act (42
U.S.C. 1395l(t)(16)(C)), as amended by section 142 of the Medicare
Improvements for Patients and Providers Act of 2008 (Public Law
110-275), is amended by striking, the first place it appears, `January
1, 2010' and inserting `January 1, 2012'.
SEC. 1143. HOME INFUSION THERAPY REPORT TO CONGRESS.
Not later than 12 months after the date of enactment of
this Act, the Medicare Payment Advisory Commission shall submit to
Congress a report on the following:
(1) The scope of coverage for home infusion therapy in
the fee-for-service Medicare program under title XVIII of the Social
Security Act, Medicare Advantage under part C of such title, the
veteran's health care program under chapter 17 of title 38, United
States Code, and among private payers, including an analysis of the
scope of services provided by home infusion therapy providers to their
patients in such programs.
(2) The benefits and costs of providing such coverage
under the Medicare program, including a calculation of the potential
savings achieved through avoided or shortened hospital and nursing home
stays as a result of Medicare coverage of home infusion therapy.
(3) An assessment of sources of data on the costs of
home infusion therapy that might be used to construct payment
mechanisms in the Medicare program.
(4) Recommendations, if any, on the structure of a
payment system under the Medicare program for home infusion therapy,
including an analysis of the payment methodologies used under Medicare
Advantage plans and private health plans for the provision of home
infusion therapy and their applicability to the Medicare program.
SEC. 1144. REQUIRE AMBULATORY SURGICAL CENTERS (ASCS) TO SUBMIT COST DATA AND OTHER DATA.
(1) IN GENERAL- Section 1833(i) of the Social Security
Act (42 U.S.C. 1395l(i)) is amended by adding at the end the following
new paragraph:
`(8) The Secretary shall require, as a condition of the
agreement described in section 1832(a)(2)(F)(i), the submission of such
cost report as the Secretary may specify, taking into account the
requirements for such reports under section 1815 in the case of a
hospital.'.
(2) DEVELOPMENT OF COST REPORT- Not later than 3 years
after the date of the enactment of this Act, the Secretary of Health
and Human Services shall develop a cost report form for use under
section 1833(i)(8) of the Social Security Act, as added by paragraph
(1).
(3) AUDIT REQUIREMENT- The Secretary shall provide for
periodic auditing of cost reports submitted under section 1833(i)(8) of
the Social Security Act, as added by paragraph (1).
(4) EFFECTIVE DATE- The amendment made by paragraph (1)
shall apply to agreements applicable to cost reporting periods
beginning 18 months after the date the Secretary develops the cost
report form under paragraph (2).
(b) Additional Data on Quality-
(1) IN GENERAL- Section 1833(i)(7) of such Act (42 U.S.C. 1395l(i)(7)) is amended--
(A) in subparagraph (B), by inserting `subject to subparagraph (C),' after `may otherwise provide,'; and
(B) by adding at the end the following new subparagraph:
`(C) Under subparagraph (B) the Secretary shall require the
reporting of such additional data relating to quality of services
furnished in an ambulatory surgical facility, including data on health
care associated infections, as the Secretary may specify.'.
(2) EFFECTIVE DATE- The amendment made by paragraph (1) shall to reporting for years beginning with 2012.
SEC. 1145. TREATMENT OF CERTAIN CANCER HOSPITALS.
Section 1833(t) of the Social Security Act (42 U.S.C. 1395l(t)) is amended by adding at the end the following new paragraph:
`(18) AUTHORIZATION OF ADJUSTMENT FOR CANCER HOSPITALS-
`(A) STUDY- The Secretary shall conduct a study to
determine if, under the system under this subsection, costs incurred by
hospitals described in section 1886(d)(1)(B)(v) with respect to
ambulatory payment classification groups exceed those costs incurred by
other hospitals furnishing services under this subsection (as
determined appropriate by the Secretary).
`(B) AUTHORIZATION OF ADJUSTMENT- Insofar as the
Secretary determines under subparagraph (A) that costs incurred by
hospitals described in section 1886(d)(1)(B)(v) exceed those costs
incurred by other hospitals furnishing services under this subsection,
the Secretary shall provide for an appropriate adjustment under
paragraph (2)(E) to reflect those higher costs effective for services
furnished on or after January 1, 2011.'.
SEC. 1146. MEDICARE IMPROVEMENT FUND.
Section 1898(b)(1)(A) of the Social Security Act (42 U.S.C. 1395iii(b)(1)(A)) is amended to read as follows:
`(A) the period beginning with fiscal year 2011 and ending with fiscal year 2019, $8,000,000,000; and'.
SEC. 1147. PAYMENT FOR IMAGING SERVICES.
(a) Adjustment in Practice Expense to Reflect Higher
Presumed Utilization- Section 1848 of the Social Security Act (42
U.S.C. 1395w) is amended--
(1) in subsection (b)(4)--
(A) in subparagraph (B), by striking `subparagraph (A)' and inserting `this paragraph'; and
(B) by adding at the end the following new subparagraph:
`(C) ADJUSTMENT IN PRACTICE EXPENSE TO REFLECT
HIGHER PRESUMED UTILIZATION- In computing the number of practice
expense relative value units under subsection (c)(2)(C)(ii) with
respect to advanced diagnostic imaging services (as defined in section
1834(e)(1)(B)), the Secretary shall adjust such number of units so it
reflects a 75 percent (rather than 50 percent) presumed rate of
utilization of imaging equipment.'; and
(2) in subsection (c)(2)(B)(v)(II), by inserting `AND OTHER PROVISIONS' after `OPD PAYMENT CAP'.
(b) Adjustment in Technical Component `discount' on
Single-session Imaging to Consecutive Body Parts- Section 1848(b)(4) of
such Act is further amended by adding at the end the following new
subparagraph:
`(D) ADJUSTMENT IN TECHNICAL COMPONENT DISCOUNT ON
SINGLE-SESSION IMAGING INVOLVING CONSECUTIVE BODY PARTS- The Secretary
shall increase the reduction in expenditures attributable to the
multiple procedure payment reduction applicable to the technical
component for imaging under the final rule published by the Secretary
in the Federal Register on November 21, 2005 (part 405 of title 42,
Code of Federal Regulations) from 25 percent to 50 percent.'.
(c) Effective Date- Except as otherwise provided, this
section, and the amendments made by this section, shall apply to
services furnished on or after January 1, 2011.
SEC. 1148. DURABLE MEDICAL EQUIPMENT PROGRAM IMPROVEMENTS.
(a) Waiver of Surety Bond Requirement- Section 1834(a)(16)
of the Social Security Act (42 U.S.C. 1395m(a)(16)) is amended by
adding at the end the following: `The requirement for a surety bond
described in subparagraph (B) shall not apply in the case of a pharmacy
(i) that has been enrolled under section 1866(j) as a supplier of
durable medical equipment, prosthetics, orthotics, and supplies and has
been issued (which may include renewal of) a provider number (as
described in the first sentence of this paragraph) for at least 5
years, and (ii) for which a final adverse action (as defined in section
424.57(a) of title 42, Code of Federal Regulations) has never been
imposed.'.
(b) Ensuring Supply of Oxygen Equipment-
(1) IN GENERAL- Section 1834(a)(5)(F) of the Social Security Act (42 U.S.C. 1395m(a)(5)(F)) is amended--
(A) in clause (ii), by striking `After the' and inserting `Except as provided in clause (iii), after the'; and
(B) by adding at the end the following new clause:
`(iii) CONTINUATION OF SUPPLY- In the case of a
supplier furnishing such equipment to an individual under this
subsection as of the 27th month of the 36 months described in clause
(i), the supplier furnishing such equipment as of such month shall
continue to furnish such equipment to such individual (either directly
or though arrangements with other suppliers of such equipment) during
any subsequent period of medical need for the remainder of the
reasonable useful lifetime of the equipment, as determined by the
Secretary, regardless of the location of the individual, unless another
supplier has accepted responsibility for continuing to furnish such
equipment during the remainder of such period.'.
(2) EFFECTIVE DATE- The amendments made by paragraph
(1) shall take effect as of the date of the enactment of this Act and
shall apply to the furnishing of equipment to individuals for whom the
27th month of a continuous period of use of oxygen equipment described
in section 1834(a)(5)(F) of the Social Security Act occurs on or after
July 1, 2010.
(c) Treatment of Current Accreditation Applications-
Section 1834(a)(20)(F) of such Act (42 U.S.C. 1395m(a)(20)(F)) is
amended--
(A) by striking `clause (ii)' and inserting `clauses (ii) and (iii)'; and
(B) by striking `and' at the end;
(2) by striking the period at the end of clause (ii)(II) and by inserting `; and'; and
(3) by adding at the end the following:
`(iii) the requirement for accreditation
described in clause (i) shall not apply for purposes of supplying
diabetic testing supplies, canes, and crutches in the case of a
pharmacy that is enrolled under section 1866(j) as a supplier of
durable medical equipment, prosthetics, orthotics, and supplies.
Any supplier that has submitted an application for
accreditation before August 1, 2009, shall be deemed as meeting
applicable standards and accreditation requirement under this
subparagraph until such time as the independent accreditation
organization takes action on the supplier's application.'.
(d) Restoring 36-Month Oxygen Rental Period in Case of
Supplier Bankruptcy for Certain Individuals- Section 1834(a)(5)(F) of
such Act (42 U.S.C. 1395m(a)(5)(F)) is amended by adding at the end the
following new clause:
`(iii) EXCEPTION FOR BANKRUPTCY- If a supplier
of oxygen to an individual is declared bankrupt and its assets are
liquidated and at the time of such declaration and liquidation more
than 24 months of rental payments have been made, the individual may
begin under this subparagraph a new 36-month rental period with another
supplier of oxygen.'.
SEC. 1149. MEDPAC STUDY AND REPORT ON BONE MASS MEASUREMENT.
(a) In General- The Medicare Payment Advisory Commission
shall conduct a study regarding bone mass measurement, including
computed tomography, duel-energy x-ray absorptriometry, and vertebral
fracture assessment. The study shall focus on the following:
(1) An assessment of the adequacy of Medicare payment
rates for such services, taking into account costs of acquiring the
necessary equipment, professional work time, and practice expense costs.
(2) The impact of Medicare payment changes since 2006
on beneficiary access to bone mass measurement benefits in general and
in rural and minority communities specifically.
(3) A review of the clinically appropriate and
recommended use among Medicare beneficiaries and how usage rates among
such beneficiaries compares to such recommendations.
(4) In conjunction with the findings under (3),
recommendations, if necessary, regarding methods for reaching
appropriate use of bone mass measurement studies among Medicare
beneficiaries.
(b) Report- The Commission shall submit a report to the
Congress, not later than 9 months after the date of the enactment of
this Act, containing a description of the results of the study
conducted under subsection (a) and the conclusions and recommendations,
if any, regarding each of the issues described in paragraphs (1), (2),
(3), and (4) of such subsection.
Subtitle C--Provisions Related to Medicare Parts A and B
SEC. 1151. REDUCING POTENTIALLY PREVENTABLE HOSPITAL READMISSIONS.
(1) IN GENERAL- Section 1886 of the Social Security Act
(42 U.S.C. 1395ww), as amended by section 1103(a), is amended by adding
at the end the following new subsection:
`(p) Adjustment to Hospital Payments for Excess Readmissions-
`(1) IN GENERAL- With respect to payment for discharges
from an applicable hospital (as defined in paragraph (5)(C)) occurring
during a fiscal year beginning on or after October 1, 2011, in order to
account for excess readmissions in the hospital, the Secretary shall
reduce the payments that would otherwise be made to such hospital under
subsection (d) (or section 1814(b)(3), as the case may be) for such a
discharge by an amount equal to the product of--
`(A) the base operating DRG payment amount (as defined in paragraph (2)) for the discharge; and
`(B) the adjustment factor (described in paragraph (3)(A)) for the hospital for the fiscal year.
`(2) BASE OPERATING DRG PAYMENT AMOUNT-
`(A) IN GENERAL- Except as provided in subparagraph
(B), for purposes of this subsection, the term `base operating DRG
payment amount' means, with respect to a hospital for a fiscal year,
the payment amount that would otherwise be made under subsection (d)
for a discharge if this subsection did not apply, reduced by any
portion of such amount that is attributable to payments under
subparagraphs (B) and (F) of paragraph (5).
`(B) ADJUSTMENTS- For purposes of subparagraph (A),
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.
`(A) IN GENERAL- For purposes of paragraph (1), the
adjustment factor under this paragraph for an applicable hospital for a
fiscal year is equal to the greater of--
`(i) the ratio described in subparagraph (B)
for the hospital for the applicable period (as defined in paragraph
(5)(D)) for such fiscal year; or
`(ii) the floor adjustment factor specified in subparagraph (C).
`(B) RATIO- The ratio described in this
subparagraph for a hospital for an applicable period is equal to 1
minus the ratio of--
`(i) the aggregate payments for excess
readmissions (as defined in paragraph (4)(A)) with respect to an
applicable hospital for the applicable period; and
`(ii) the aggregate payments for all discharges
(as defined in paragraph (4)(B)) with respect to such applicable
hospital for such applicable period.
`(C) FLOOR ADJUSTMENT FACTOR- For purposes of
subparagraph (A), the floor adjustment factor specified in this
subparagraph for--
`(i) fiscal year 2012 is 0.99;
`(ii) fiscal year 2013 is 0.98;
`(iii) fiscal year 2014 is 0.97; or
`(iv) a subsequent fiscal year is 0.95.
`(4) AGGREGATE PAYMENTS, EXCESS READMISSION RATIO DEFINED- For purposes of this subsection:
`(A) AGGREGATE PAYMENTS FOR EXCESS READMISSIONS-
The term `aggregate payments for excess readmissions' means, for a
hospital for a fiscal year, 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 fiscal year for such condition;
`(ii) the number of admissions for such condition for such hospital for such fiscal year; and
`(iii) the excess readmissions ratio (as
defined in subparagraph (C)) for such hospital for the applicable
period for such fiscal year minus 1.
`(B) AGGREGATE PAYMENTS FOR ALL DISCHARGES- The
term `aggregate payments for all discharges' means, for a hospital for
a fiscal year, the sum of the base operating DRG payment amounts for
all discharges for all conditions from such hospital for such fiscal
year.
`(C) EXCESS READMISSION RATIO-
`(i) IN GENERAL- Subject to clauses (ii) and
(iii), the term `excess readmissions ratio' means, with respect to an
applicable condition for a hospital for an applicable period, the ratio
(but not less than 1.0) of--
`(I) the risk adjusted readmissions based
on actual readmissions, as determined consistent with a readmission
measure methodology that has been endorsed under paragraph
(5)(A)(ii)(I), for an applicable hospital for such condition with
respect to the applicable period; to
`(II) the risk adjusted expected
readmissions (as determined consistent with such a methodology) for
such hospital for such condition with respect to such applicable period.
`(ii) EXCLUSION OF CERTAIN READMISSIONS- For
purposes of clause (i), with respect to a hospital, excess readmissions
shall not include readmissions for an applicable condition for which
there are fewer than a minimum number (as determined by the Secretary)
of discharges for such applicable condition for the applicable period
and such hospital.
`(iii) ADJUSTMENT- In order to promote a
reduction over time in the overall rate of readmissions for applicable
conditions, the Secretary may provide, beginning with discharges for
fiscal year 2014, for the determination of the excess readmissions
ratio under subparagraph (C) to be based on a ranking of hospitals by
readmission ratios (from lower to higher readmission ratios) normalized
to a benchmark that is lower than the 50th percentile.
`(5) DEFINITIONS- For purposes of this subsection:
`(A) APPLICABLE CONDITION- The term `applicable
condition' means, subject to subparagraph (B), a condition or procedure
selected by the Secretary among conditions and procedures for which--
`(i) readmissions (as defined in subparagraph
(E)) that represent conditions or procedures that are high volume or
high expenditures under this title (or other criteria specified by the
Secretary); and
`(ii) measures of such readmissions--
`(I) have been endorsed by the entity with a contract under section 1890(a); and
`(II) such endorsed measures have
appropriate exclusions for readmissions that are unrelated to the prior
discharge (such as a planned readmission or transfer to another
applicable hospital).
`(B) EXPANSION OF APPLICABLE CONDITIONS- Beginning
with fiscal year 2013, the Secretary shall expand the applicable
conditions beyond the 3 conditions for which measures have been
endorsed as described in subparagraph (A)(ii)(I) as of the date of the
enactment of this subsection to the additional 4 conditions that have
been so identified by the Medicare Payment Advisory Commission in its
report to Congress in June 2007 and to other conditions and procedures
which may include an all-condition measure of readmissions, as
determined appropriate by the Secretary. In expanding such applicable
conditions, the Secretary shall seek the endorsement described in
subparagraph (A)(ii)(I) but may apply such measures without such an
endorsement.
`(C) APPLICABLE HOSPITAL- The term `applicable
hospital' means a subsection (d) hospital or a hospital that is paid
under section 1814(b)(3).
`(D) APPLICABLE PERIOD- The term `applicable
period' means, with respect to a fiscal year, such period as the
Secretary shall specify for purposes of determining excess readmissions.
`(E) READMISSION- The term `readmission' means, in
the case of an individual who is discharged from an applicable
hospital, the admission of the individual to the same or another
applicable hospital within a time period specified by the Secretary
from the date of such discharge. Insofar as the discharge relates to an
applicable condition for which there is an endorsed measure described
in subparagraph (A)(ii)(I), such time period (such as 30 days) shall be
consistent with the time period specified for such measure.
`(6) LIMITATIONS ON REVIEW- There shall be no
administrative or judicial review under section 1869, section 1878, or
otherwise of--
`(A) the determination of base operating DRG payment amounts;
`(B) the methodology for determining the adjustment
factor under paragraph (3), including excess readmissions ratio under
paragraph (4)(C), aggregate payments for excess readmissions under
paragraph (4)(A), and aggregate payments for all discharges under
paragraph (4)(B), and applicable periods and applicable conditions
under paragraph (5);
`(C) the measures of readmissions as described in paragraph (5)(A)(ii); and
`(D) the determination of a targeted hospital under
paragraph (8)(B)(i), the increase in payment under paragraph
(8)(B)(ii), the aggregate cap under paragraph (8)(C)(i), the
hospital-specific limit under paragraph (8)(C)(ii), and the form of
payment made by the Secretary under paragraph (8)(D).
`(7) MONITORING INAPPROPRIATE CHANGES IN ADMISSIONS
PRACTICES- The Secretary shall monitor the activities of applicable
hospitals to determine if such hospitals have taken steps to avoid
patients at risk in order to reduce the likelihood of increasing
readmissions for applicable conditions. If the Secretary determines
that such a hospital has taken such a step, after notice to the
hospital and opportunity for the hospital to undertake action to
alleviate such steps, the Secretary may impose an appropriate sanction.
`(8) ASSISTANCE TO CERTAIN HOSPITALS-
`(A) IN GENERAL- For purposes of providing funds to
applicable hospitals to take steps described in subparagraph (E) to
address factors that may impact readmissions of individuals who are
discharged from such a hospital, for fiscal years beginning on or after
October 1, 2011, the Secretary shall make a payment adjustment for a
hospital described in subparagraph (B), with respect to each such
fiscal year, by a percent estimated by the Secretary to be consistent
with subparagraph (C).
`(B) TARGETED HOSPITALS- Subparagraph (A) shall apply to an applicable hospital that--
`(i) received (or, in the case of an 1814(b)(3)
hospital, otherwise would have been eligible to receive) $10,000,000 or
more in disproportionate share payments using the latest available data
as estimated by the Secretary; and
`(ii) provides assurances satisfactory to the
Secretary that the increase in payment under this paragraph shall be
used for purposes described in subparagraph (E).
`(i) AGGREGATE CAP- The aggregate amount of the
payment adjustment under this paragraph for a fiscal year shall not
exceed 5 percent of the estimated difference in the spending that would
occur for such fiscal year with and without application of the
adjustment factor described in paragraph (3) and applied pursuant to
paragraph (1).
`(ii) HOSPITAL-SPECIFIC LIMIT- The aggregate
amount of the payment adjustment for a hospital under this paragraph
shall not exceed the estimated difference in spending that would occur
for such fiscal year for such hospital with and without application of
the adjustment factor described in paragraph (3) and applied pursuant
to paragraph (1).
`(D) FORM OF PAYMENT- The Secretary may make the
additional payments under this paragraph on a lump sum basis, a
periodic basis, a claim by claim basis, or otherwise.
`(E) USE OF ADDITIONAL PAYMENT- Funding under this
paragraph shall be used by targeted hospitals for transitional care
activities designed to address the patient noncompliance issues that
result in higher than normal readmission rates, such as one or more of
the following:
`(i) Providing care coordination services to assist in transitions from the targeted hospital to other settings.
`(ii) Hiring translators and interpreters.
`(iii) Increasing services offered by discharge planners.
`(iv) Ensuring that individuals receive a summary of care and medication orders upon discharge.
`(v) Developing a quality improvement plan to assess and remedy preventable readmission rates.
`(vi) Assigning discharged individuals to a medical home.
`(vii) Doing other activities as determined appropriate by the Secretary.
`(F) GAO REPORT ON USE OF FUNDS- Not later than 3
years after the date on which funds are first made available under this
paragraph, the Comptroller General of the United States shall submit to
Congress a report on the use of such funds.
`(G) DISPROPORTIONATE SHARE HOSPITAL PAYMENT- In
this paragraph, the term `disproportionate share hospital payment'
means an additional payment amount under subsection (d)(5)(F).'.
(b) Application to Critical Access Hospitals- Section 1814(l) of the Social Security Act (42 U.S.C. 1395f(l)) is amended--
(A) by striking `and' at the end of subparagraph (C);
(B) by striking the period at the end of subparagraph (D) and inserting `; and';
(C) by inserting at the end the following new subparagraph:
`(E) The methodology for determining the adjustment
factor under paragraph (5), including the determination of aggregate
payments for actual and expected readmissions, applicable periods,
applicable conditions and measures of readmissions.'; and
(D) by redesignating such paragraph as paragraph (6); and
(2) by inserting after paragraph (4) the following new paragraph:
`(5) The adjustment factor described in section 1886(p)(3)
shall apply to payments with respect to a critical access hospital with
respect to a cost reporting period beginning in fiscal year 2012 and
each subsequent fiscal year (after application of paragraph (4) of this
subsection) in a manner similar to the manner in which such section
applies with respect to a fiscal year to an applicable hospital as
described in section 1886(p)(2).'.
(c) Post Acute Care Providers-
(A) IN GENERAL- With respect to a readmission to an
applicable hospital or a critical access hospital (as described in
section 1814(l) of the Social Security Act) from a post acute care
provider (as defined in paragraph (3)) and such a readmission is not
governed by section 412.531 of title 42, Code of Federal Regulations,
if the claim submitted by such a post-acute care provider under title
XVIII of the Social Security Act indicates that the individual was
readmitted to a hospital from such a post-acute care provider or
admitted from home and under the care of a home health agency within 30
days of an initial discharge from an applicable hospital or critical
access hospital, the payment under such title on such claim shall be
the applicable percent specified in subparagraph (B) of the payment
that would otherwise be made under the respective payment system under
such title for such post-acute care provider if this subsection did not
apply.
(B) APPLICABLE PERCENT DEFINED- For purposes of subparagraph (A), the applicable percent is--
(i) for fiscal or rate year 2012 is 0.996;
(ii) for fiscal or rate year 2013 is 0.993; and
(iii) for fiscal or rate year 2014 is 0.99.
(C) EFFECTIVE DATE- Subparagraph (1) shall apply to
discharges or services furnished (as the case may be with respect to
the applicable post acute care provider) on or after the first day of
the fiscal year or rate year, beginning on or after October 1, 2011,
with respect to the applicable post acute care provider.
(2) DEVELOPMENT AND APPLICATION OF PERFORMANCE MEASURES-
(A) IN GENERAL- The Secretary of Health and Human
Services shall develop appropriate measures of readmission rates for
post acute care providers. The Secretary shall seek endorsement of such
measures by the entity with a contract under section 1890(a) of the
Social Security Act but may adopt and apply such measures under this
paragraph without such an endorsement. The Secretary shall expand such
measures in a manner similar to the manner in which applicable
conditions are expanded under paragraph (5)(B) of section 1886(p) of
the Social Security Act, as added by subsection (a).
(B) IMPLEMENTATION- The Secretary shall apply, on
or after October 1, 2014, with respect to post acute care providers,
policies similar to the policies applied with respect to applicable
hospitals and critical access hospitals under the amendments made by
subsection (a). The provisions of paragraph (1) shall apply with
respect to any period on or after October 1, 2014, and before such
application date described in the previous sentence in the same manner
as such provisions apply with respect to fiscal or rate year 2014.
(C) MONITORING AND PENALTIES- The provisions of
paragraph (7) of such section 1886(p) shall apply to providers under
this paragraph in the same manner as they apply to hospitals under such
section.
(3) DEFINITIONS- For purposes of this subsection:
(A) POST ACUTE CARE PROVIDER- The term `post acute care provider' means--
(i) a skilled nursing facility (as defined in section 1819(a) of the Social Security Act);
(ii) an inpatient rehabilitation facility (described in section 1886(h)(1)(A) of such Act);
(iii) a home health agency (as defined in section 1861(o) of such Act); and
(iv) a long term care hospital (as defined in section 1861(ccc) of such Act).
(B) OTHER TERMS- The terms `applicable condition',
`applicable hospital', and `readmission' have the meanings given such
terms in section 1886(p)(5) of the Social Security Act, as added by
subsection (a)(1).
(1) STUDY- The Secretary of Health and Human Services
shall conduct a study to determine how the readmissions policy
described in the previous subsections could be applied to physicians.
(2) CONSIDERATIONS- In conducting the study, the Secretary shall consider approaches such as--
(A) creating a new code (or codes) and payment
amount (or amounts) under the fee schedule in section 1848 of the
Social Security Act (in a budget neutral manner) for services furnished
by an appropriate physician who sees an individual within the first
week after discharge from a hospital or critical access hospital;
(B) developing measures of rates of readmission for individuals treated by physicians;
(C) applying a payment reduction for physicians who
treat the patient during the initial admission that results in a
readmission; and
(D) methods for attributing payments or payment reductions to the appropriate physician or physicians.
(3) REPORT- The Secretary shall issue a public report
on such study not later than the date that is one year after the date
of the enactment of this Act.
(e) Funding- For purposes of carrying out the provisions of
this section, in addition to funds otherwise available, out of any
funds in the Treasury not otherwise appropriated, there are
appropriated to the Secretary of Health and Human Services for the
Center for Medicare & Medicaid Services Program Management Account
$25,000,000 for each fiscal year beginning with 2010. Amounts
appropriated under this subsection for a fiscal year shall be available
until expended.
SEC. 1152. POST ACUTE CARE SERVICES PAYMENT REFORM PLAN AND BUNDLING PILOT PROGRAM.
(1) IN GENERAL- The Secretary of Health and Human
Services (in this section referred to as the `Secretary') shall develop
a detailed plan to reform payment for post acute care (PAC) services
under the Medicare program under title XVIII of the Social Security Act
(in this section referred to as the `Medicare program)'. The goals of
such payment reform are to--
(A) improve the coordination, quality, and efficiency of such services; and
(B) improve outcomes for individuals such as reducing the need for readmission to hospitals from providers of such services.
(2) BUNDLING POST ACUTE SERVICES- The plan described in
paragraph (1) shall include detailed specifications for a bundled
payment for post acute services (in this section referred to as the
`post acute care bundle'), and may include other approaches determined
appropriate by the Secretary.
(3) POST ACUTE SERVICES- For purposes of this section,
the term `post acute services' means services for which payment may be
made under the Medicare program that are furnished by skilled nursing
facilities, inpatient rehabilitation facilities, long term care
hospitals, hospital based outpatient rehabilitation facilities and home
health agencies to an individual after discharge of such individual
from a hospital, and such other services determined appropriate by the
Secretary.
(b) Details- The plan described in subsection (a)(1) shall include consideration of the following issues:
(1) The nature of payments under a post acute care
bundle, including the type of provider or entity to whom payment should
be made, the scope of activities and services included in the bundle,
whether payment for physicians' services should be included in the
bundle, and the period covered by the bundle.
(2) Whether the payment should be consolidated with the
payment under the inpatient prospective system under section 1886 of
the Social Security Act (in this section referred to as MS-DRGs) or a
separate payment should be established for such bundle, and if a
separate payment is established, whether it should be made only upon
use of post acute care services or for every discharge.
(3) Whether the bundle should be applied across all
categories of providers of inpatient services (including critical
access hospitals) and post acute care services or whether it should be
limited to certain categories of providers, services, or discharges,
such as high volume or high cost MS-DRGs.
(4) The extent to which payment rates could be
established to achieve offsets for efficiencies that could be expected
to be achieved with a bundle payment, whether such rates should be
established on a national basis or for different geographic areas,
should vary according to discharge, case mix, outliers, and geographic
differences in wages or other appropriate adjustments, and how to
update such rates.
(5) The nature of protections needed for individuals
under a system of bundled payments to ensure that individuals receive
quality care, are furnished the level and amount of services needed as
determined by an appropriate assessment instrument, are offered choice
of provider, and the extent to which transitional care services would
improve quality of care for individuals and the functioning of a
bundled post-acute system.
(6) The nature of relationships that may be required
between hospitals and providers of post acute care services to
facilitate bundled payments, including the application of gainsharing,
anti-referral, anti-kickback, and anti-trust laws.
(7) Quality measures that would be appropriate for
reporting by hospitals and post acute providers (such as measures that
assess changes in functional status and quality measures appropriate
for each type of post acute services provider including how the
reporting of such quality measures could be coordinated with other
reporting of such quality measures by such providers otherwise
required).
(8) How cost-sharing for a post acute care bundle
should be treated relative to current rules for cost-sharing for
inpatient hospital, home health, skilled nursing facility, and other
services.
(9) How other programmatic issues should be treated in
a post acute care bundle, including rules specific to various types of
post-acute providers such as the post-acute transfer policy, three-day
hospital stay to qualify for services furnished by skilled nursing
facilities, and the coordination of payments and care under the
Medicare program and the Medicaid program.
(10) Such other issues as the Secretary deems appropriate.
(c) Consultations and Analysis-
(1) CONSULTATION WITH STAKEHOLDERS- In developing the
plan under subsection (a)(1), the Secretary shall consult with relevant
stakeholders and shall consider experience with such research studies
and demonstrations that the Secretary determines appropriate.
(2) ANALYSIS AND DATA COLLECTION- In developing such plan, the Secretary shall--
(A) analyze the issues described in subsection (b) and other issues that the Secretary determines appropriate;
(B) analyze the impacts (including geographic
impacts) of post acute service reform approaches, including bundling of
such services on individuals, hospitals, post acute care providers, and
physicians;
(C) use existing data (such as data submitted on
claims) and collect such data as the Secretary determines are
appropriate to develop such plan required in this section; and
(D) if patient functional status measures are
appropriate for the analysis, to the extent practical, build upon the
CARE tool being developed pursuant to section 5008 of the Deficit
Reduction Act of 2005.
(1) FUNDING- For purposes of carrying out the
provisions of this section, in addition to funds otherwise available,
out of any funds in the Treasury not otherwise appropriated, there are
appropriated to the Secretary for the Center for Medicare &
Medicaid Services Program Management Account $15,000,000 for each of
the fiscal years 2010 through 2012. Amounts appropriated under this
paragraph for a fiscal year shall be available until expended.
(2) EXPEDITED DATA COLLECTION- Chapter 35 of title 44, United States Code shall not apply to this section.
(1) INTERIM REPORTS- The Secretary shall issue interim
public reports on a periodic basis on the plan described in subsection
(a)(1), the issues described in subsection (b), and impact analyses as
the Secretary determines appropriate.
(2) FINAL REPORT- Not later than the date that is 3
years after the date of the enactment of this Act, the Secretary shall
issue a final public report on such plan, including analysis of issues
described in subsection (b) and impact analyses.
(f) Conversion of Acute Care Episode Demonstration to Pilot Program and Expansion To Include Post Acute Services-
(1) IN GENERAL- Part E of title XVIII of the Social
Security Act is amended by inserting after section 1866C the following
new section:
`SEC. 1866D. CONVERSION OF ACUTE CARE EPISODE DEMONSTRATION TO PILOT PROGRAM AND EXPANSION TO INCLUDE POST ACUTE SERVICES.
`(a) In General- By not later than January 1, 2011, the
Secretary shall, for the purpose of promoting the use of bundled
payments to promote efficient and high quality delivery of care--
`(1) convert the acute care episode demonstration program conducted under section 1866C to a pilot program; and
`(2) subject to subsection (c), expand such program as
so converted to include post acute services and such other services the
Secretary determines to be appropriate, which may include transitional
services.
`(b) Scope- The pilot program under subsection (a) may
include additional geographic areas and additional conditions which
account for significant program spending, as defined by the Secretary.
Nothing in this subsection shall be construed as limiting the number of
hospital and physician groups or the number of hospital and post-acute
provider groups that may participate in the pilot program.
`(c) Limitation- The Secretary shall only expand the pilot program under subsection (a)(2) if the Secretary finds that--
`(1) the demonstration program under section 1866C and
pilot program under this section maintain or increase the quality of
care received by individuals enrolled under this title; and
`(2) such demonstration program and pilot program
reduce program expenditures and, based on the certification under
subsection (d), that the expansion of such pilot program would result
in estimated spending that would be less than what spending would
otherwise be in the absence of this section.
`(d) Certification- For purposes of subsection (c), the
Chief Actuary of the Centers for Medicare & Medicaid Services shall
certify whether expansion of the pilot program under this section would
result in estimated spending that would be less than what spending
would otherwise be in the absence of this section.
`(e) Voluntary Participation- Nothing in this paragraph
shall be construed as requiring the participation of an entity in the
pilot program under this section.'.
(2) CONFORMING AMENDMENT- Section 1866C(b) of the
Social Security Act (42 U.S.C. 1395cc-3(b)) is amended by striking `The
Secretary' and inserting `Subject to section 1866D, the Secretary'.
SEC. 1153. HOME HEALTH PAYMENT UPDATE FOR 2010.
Section 1895(b)(3)(B)(ii) of the Social Security Act (42 U.S.C. 1395fff(b)(3)(B)(ii)) is amended--
(1) in subclause (IV), by striking `and';
(2) by redesignating subclause (V) as subclause (VII); and
(3) by inserting after subclause (IV) the following new subclauses:
`(V) 2007, 2008, and 2009, subject to clause (v), the home health market basket percentage increase;
`(VI) 2010, subject to clause (v), 0 percent; and'.
SEC. 1154. PAYMENT ADJUSTMENTS FOR HOME HEALTH CARE.
(a) Acceleration of Adjustment for Case Mix Changes-
Section 1895(b)(3)(B) of the Social Security Act (42 U.S.C.
1395fff(b)(3)(B)) is amended--
(1) in clause (iv), by striking `Insofar as' and inserting `Subject to clause (vi), insofar as'; and
(2) by adding at the end the following new clause:
`(vi) SPECIAL RULE FOR CASE MIX CHANGES FOR 2011-
`(I) IN GENERAL- With respect to the case
mix adjustments established in section 484.220(a) of title 42, Code of
Federal Regulations, the Secretary shall apply, in 2010, the adjustment
established in paragraph (3) of such section for 2011, in addition to
applying the adjustment established in paragraph (2) for 2010.
`(II) CONSTRUCTION- Nothing in this clause
shall be construed as limiting the amount of adjustment for case mix
for 2010 or 2011 if more recent data indicate an appropriate adjustment
that is greater than the amount established in the section described in
subclause (I).'.
(b) Rebasing Home Health Prospective Payment Amount-
Section 1895(b)(3)(A) of the Social Security Act (42 U.S.C.
1395fff(b)(3)(A)) is amended--
(A) in subclause (III), by inserting `and before 2011' after `after the period described in subclause (II)'; and
(B) by inserting after subclause (III) the following new subclauses:
`(IV) Subject to clause (iii)(I), for 2011,
such amount (or amounts) shall be adjusted by a uniform percentage
determined to be appropriate by the Secretary based on analysis of
factors such as changes in the average number and types of visits in an
episode, the change in intensity of visits in an episode, growth in
cost per episode, and other factors that the Secretary considers to be
relevant.
`(V) Subject to clause (iii)(II), for a
year after 2011, such a amount (or amounts) shall be equal to the
amount (or amounts) determined under this clause for the previous year,
updated under subparagraph (B).'; and
(2) by adding at the end the following new clause:
`(iii) SPECIAL RULE IN CASE OF INABILITY TO EFFECT TIMELY REBASING-
`(I) APPLICATION OF PROXY AMOUNT FOR 2011-
If the Secretary is not able to compute the amount (or amounts) under
clause (i)(IV) so as to permit, on a timely basis, the application of
such clause for 2011, the Secretary shall substitute for such amount
(or amounts) 95 percent of the amount (or amounts) that would otherwise
be specified under clause (i)(III) if it applied for 2011.
`(II) ADJUSTMENT FOR SUBSEQUENT YEARS BASED
ON DATA- If the Secretary applies subclause (I), the Secretary before
July 1, 2011, shall compare the amount (or amounts) applied under such
subclause with the amount (or amounts) that should have been applied
under clause (i)(IV). The Secretary shall decrease or increase the
prospective payment amount (or amounts) under clause (i)(V) for 2012
(or, at the Secretary's discretion, over a period of several years
beginning with 2012) by the amount (if any) by which the amount (or
amounts) applied under subclause (I) is greater or less, respectively,
than the amount (or amounts) that should have been applied under clause
(i)(IV).'.
SEC. 1155. INCORPORATING PRODUCTIVITY IMPROVEMENTS INTO MARKET BASKET UPDATE FOR HOME HEALTH SERVICES.
(a) In General- Section 1895(b)(3)(B) of the Social Security Act (42 U.S.C. 1395fff(b)(3)(B)) is amended--
(1) in clause (iii), by inserting `(including being
subject to the productivity adjustment described in section
1886(b)(3)(B)(iii)(II))' after `in the same manner'; and
(2) in clause (v)(I), by inserting `(but not below 0)' after `reduced'.
(b) Effective Date- The amendment made by subsection (a)
shall apply to home health market basket percentage increases for years
beginning with 2010.
SEC. 1156. LIMITATION ON MEDICARE EXCEPTIONS TO THE PROHIBITION ON CERTAIN PHYSICIAN REFERRALS MADE TO HOSPITALS.
(a) In General- Section 1877 of the Social Security Act (42 U.S.C. 1395nn) is amended--
(1) in subsection (d)(2)--
(A) in subparagraph (A), by striking `and' at the end;
(B) in subparagraph (B), by striking the period at the end and inserting `; and'; and
(C) by adding at the end the following new subparagraph:
`(C) in the case where the entity is a hospital, the hospital meets the requirements of paragraph (3)(D).';
(2) in subsection (d)(3)--
(A) in subparagraph (B), by striking `and' at the end;
(B) in subparagraph (C), by striking the period at the end and inserting `; and'; and
(C) by adding at the end the following new subparagraph:
`(D) the hospital meets the requirements described in subsection (i)(1).';
(3) by amending subsection (f) to read as follows:
`(f) Reporting and Disclosure Requirements-
`(1) IN GENERAL- Each entity providing covered items or
services for which payment may be made under this title shall provide
the Secretary with the information concerning the entity's ownership,
investment, and compensation arrangements, including--
`(A) the covered items and services provided by the entity, and
`(B) the names and unique physician identification
numbers of all physicians with an ownership or investment interest (as
described in subsection (a)(2)(A)), or with a compensation arrangement
(as described in subsection (a)(2)(B)), in the entity, or whose
immediate relatives have such an ownership or investment interest or
who have such a compensation relationship with the entity.
Such information shall be provided in such form, manner,
and at such times as the Secretary shall specify. The requirement of
this subsection shall not apply to designated health services provided
outside the United States or to entities which the Secretary determines
provide services for which payment may be made under this title very
infrequently.
`(2) REQUIREMENTS FOR HOSPITALS WITH PHYSICIAN
OWNERSHIP OR INVESTMENT- In the case of a hospital that meets the
requirements described in subsection (i)(1), the hospital shall--
`(A) submit to the Secretary an initial report, and
periodic updates at a frequency determined by the Secretary, containing
a detailed description of the identity of each physician owner and
physician investor and any other owners or investors of the hospital;
`(B) require that any referring physician owner or
investor discloses to the individual being referred, by a time that
permits the individual to make a meaningful decision regarding the
receipt of services, as determined by the Secretary, the ownership or
investment interest, as applicable, of such referring physician in the
hospital; and
`(C) disclose the fact that the hospital is
partially or wholly owned by one or more physicians or has one or more
physician investors--
`(i) on any public website for the hospital; and
`(ii) in any public advertising for the hospital.
The information to be reported or disclosed under this
paragraph shall be provided in such form, manner, and at such times as
the Secretary shall specify. The requirements of this paragraph shall
not apply to designated health services furnished outside the United
States or to entities which the Secretary determines provide services
for which payment may be made under this title very infrequently.
`(3) PUBLICATION OF INFORMATION- The Secretary shall
publish, and periodically update, the information submitted by
hospitals under paragraph (2)(A) on the public Internet website of the
Centers for Medicare & Medicaid Services.';
(4) by amending subsection (g)(5) to read as follows:
`(5) FAILURE TO REPORT OR DISCLOSE INFORMATION-
`(A) REPORTING- Any person who is required, but
fails, to meet a reporting requirement of paragraphs (1) and (2)(A) of
subsection (f) is subject to a civil money penalty of not more than
$10,000 for each day for which reporting is required to have been made.
`(B) DISCLOSURE- Any physician who is required, but
fails, to meet a disclosure requirement of subsection (f)(2)(B) or a
hospital that is required, but fails, to meet a disclosure requirement
of subsection (f)(2)(C) is subject to a civil money penalty of not more
than $10,000 for each case in which disclosure is required to have been
made.
`(C) APPLICATION- The provisions of section 1128A
(other than the first sentence of subsection (a) and other than
subsection (b)) shall apply to a civil money penalty under
subparagraphs (A) and (B) in the same manner as such provisions apply
to a penalty or proceeding under section 1128A(a).'; and
(5) by adding at the end the following new subsection:
`(i) Requirements To Qualify for Rural Provider and Hospital Ownership Exceptions to Self-referral Prohibition-
`(1) REQUIREMENTS DESCRIBED- For purposes of subsection
(d)(3)(D), the requirements described in this paragraph are as follows:
`(A) PROVIDER AGREEMENT- The hospital had--
`(i) physician ownership or investment on January 1, 2009; and
`(ii) a provider agreement under section 1866 in effect on such date.
`(B) PROHIBITION ON PHYSICIAN OWNERSHIP OR
INVESTMENT- The percentage of the total value of the ownership or
investment interests held in the hospital, or in an entity whose assets
include the hospital, by physician owners or investors in the aggregate
does not exceed such percentage as of the date of enactment of this
subsection.
`(C) PROHIBITION ON EXPANSION OF FACILITY CAPACITY-
Except as provided in paragraph (2), the number of operating rooms,
procedure rooms, or beds of the hospital at any time on or after the
date of the enactment of this subsection are no greater than the number
of operating rooms, procedure rooms, or beds, respectively, as of such
date.
`(D) ENSURING BONA FIDE OWNERSHIP AND INVESTMENT-
`(i) Any ownership or investment interests that
the hospital offers to a physician are not offered on more favorable
terms than the terms offered to a person who is not in a position to
refer patients or otherwise generate business for the hospital.
`(ii) The hospital (or any investors in the
hospital) does not directly or indirectly provide loans or financing
for any physician owner or investor in the hospital.
`(iii) The hospital (or any investors in the
hospital) does not directly or indirectly guarantee a loan, make a
payment toward a loan, or otherwise subsidize a loan, for any physician
owner or investor or group of physician owners or investors that is
related to acquiring any ownership or investment interest in the
hospital.
`(iv) Ownership or investment returns are
distributed to each owner or investor in the hospital in an amount that
is directly proportional to the ownership or investment interest of
such owner or investor in the hospital.
`(v) The investment interest of the owner or
investor is directly proportional to the owner's or investor's capital
contributions made at the time the ownership or investment interest is
obtained.
`(vi) Physician owners and investors do not
receive, directly or indirectly, any guaranteed receipt of or right to
purchase other business interests related to the hospital, including
the purchase or lease of any property under the control of other owners
or investors in the hospital or located near the premises of the
hospital.
`(vii) The hospital does not offer a physician
owner or investor the opportunity to purchase or lease any property
under the control of the hospital or any other owner or investor in the
hospital on more favorable terms than the terms offered to a person
that is not a physician owner or investor.
`(viii) The hospital does not condition any
physician ownership or investment interests either directly or
indirectly on the physician owner or investor making or influencing
referrals to the hospital or otherwise generating business for the
hospital.
`(E) PATIENT SAFETY- In the case of a hospital that does not offer emergency services, the hospital has the capacity to--
`(i) provide assessment and initial treatment for medical emergencies; and
`(ii) if the hospital lacks additional
capabilities required to treat the emergency involved, refer and
transfer the patient with the medical emergency to a hospital with the
required capability.
`(F) LIMITATION ON APPLICATION TO CERTAIN CONVERTED
FACILITIES- The hospital was not converted from an ambulatory surgical
center to a hospital on or after the date of enactment of this
subsection.
`(2) EXCEPTION TO PROHIBITION ON EXPANSION OF FACILITY CAPACITY-
`(i) ESTABLISHMENT- The Secretary shall
establish and implement a process under which a hospital may apply for
an exception from the requirement under paragraph (1)(C).
`(ii) OPPORTUNITY FOR COMMUNITY INPUT- The
process under clause (i) shall provide persons and entities in the
community in which the hospital applying for an exception is located
with the opportunity to provide input with respect to the application.
`(iii) TIMING FOR IMPLEMENTATION- The Secretary
shall implement the process under clause (i) on the date that is one
month after the promulgation of regulations described in clause (iv).
`(iv) REGULATIONS- Not later than the first day
of the month beginning 18 months after the date of the enactment of
this subsection, the Secretary shall promulgate regulations to carry
out the process under clause (i). The Secretary may issue such
regulations as interim final regulations.
`(B) FREQUENCY- The process described in
subparagraph (A) shall permit a hospital to apply for an exception up
to once every 2 years.
`(i) IN GENERAL- Subject to clause (ii) and
subparagraph (D), a hospital granted an exception under the process
described in subparagraph (A) may increase the number of operating
rooms, procedure rooms, or beds of the hospital above the baseline
number of operating rooms, procedure rooms, or beds, respectively, of
the hospital (or, if the hospital has been granted a previous exception
under this paragraph, above the number of operating rooms, procedure
rooms, or beds, respectively, of the hospital after the application of
the most recent increase under such an exception).
`(ii) 100 PERCENT INCREASE LIMITATION- The
Secretary shall not permit an increase in the number of operating
rooms, procedure rooms, or beds of a hospital under clause (i) to the
extent such increase would result in the number of operating rooms,
procedure rooms, or beds of the hospital exceeding 200 percent of the
baseline number of operating rooms, procedure rooms, or beds of the
hospital.
`(iii) BASELINE NUMBER OF OPERATING ROOMS,
PROCEDURE ROOMS, OR BEDS- In this paragraph, the term `baseline number
of operating rooms, procedure rooms, or beds' means the number of
operating rooms, procedure rooms, or beds of a hospital as of the date
of enactment of this subsection.
`(D) INCREASE LIMITED TO FACILITIES ON THE MAIN
CAMPUS OF THE HOSPITAL- Any increase in the number of operating rooms,
procedure rooms, or beds of a hospital pursuant to this paragraph may
only occur in facilities on the main campus of the hospital.
`(E) CONDITIONS FOR APPROVAL OF AN INCREASE IN
FACILITY CAPACITY- The Secretary may grant an exception under the
process described in subparagraph (A) only to a hospital--
`(i) that is located in a county in which the
percentage increase in the population during the most recent 5-year
period for which data are available is estimated to be at least 150
percent of the percentage increase in the population growth of the
State in which the hospital is located during that period, as estimated
by Bureau of the Census and available to the Secretary;
`(ii) whose annual percent of total inpatient
admissions that represent inpatient admissions under the program under
title XIX is estimated to be equal to or greater than the average
percent with respect to such admissions for all hospitals located in
the county in which the hospital is located;
`(iii) that does not discriminate against
beneficiaries of Federal health care programs and does not permit
physicians practicing at the hospital to discriminate against such
beneficiaries;
`(iv) that is located in a State in which the
average bed capacity in the State is estimated to be less than the
national average bed capacity;
`(v) that has an average bed occupancy rate
that is estimated to be greater than the average bed occupancy rate in
the State in which the hospital is located; and
`(vi) that meets other conditions as determined by the Secretary.
`(F) PROCEDURE ROOMS- In this subsection, the term
`procedure rooms' includes rooms in which catheterizations,
angiographies, angiograms, and endoscopies are furnished, but such term
shall not include emergency rooms or departments (except for rooms in
which catheterizations, angiographies, angiograms, and endoscopies are
furnished).
`(G) PUBLICATION OF FINAL DECISIONS- Not later than
120 days after receiving a complete application under this paragraph,
the Secretary shall publish on the public Internet website of the
Centers for Medicare & Medicaid Services the final decision with
respect to such application.
`(H) LIMITATION ON REVIEW- There shall be no
administrative or judicial review under section 1869, section 1878, or
otherwise of the exception process under this paragraph, including the
establishment of such process, and any determination made under such
process.
`(3) PHYSICIAN OWNER OR INVESTOR DEFINED- For purposes
of this subsection and subsection (f)(2), the term `physician owner or
investor' means a physician (or an immediate family member of such
physician) with a direct or an indirect ownership or investment
interest in the hospital.
`(4) PATIENT SAFETY REQUIREMENT- In the case of a
hospital to which the requirements of paragraph (1) apply, insofar as
the hospital admits a patient and does not have any physician available
on the premises 24 hours per day, 7 days per week, before admitting the
patient--
`(A) the hospital shall disclose such fact to the patient; and
`(B) following such disclosure, the hospital shall
receive from the patient a signed acknowledgment that the patient
understands such fact.
`(5) CLARIFICATION- Nothing in this subsection shall be
construed as preventing the Secretary from terminating a hospital's
provider agreement if the hospital is not in compliance with
regulations pursuant to section 1866.'.
(b) Verifying Compliance- The Secretary of Health and Human
Services shall establish policies and procedures to verify compliance
with the requirements described in subsections (i)(1) and (i)(4) of
section 1877 of the Social Security Act, as added by subsection (a)(5).
The Secretary may use unannounced site reviews of hospitals and audits
to verify compliance with such requirements.
(1) FUNDING- For purposes of carrying out the
amendments made by subsection (a) and the provisions of subsection (b),
in addition to funds otherwise available, out of any funds in the
Treasury not otherwise appropriated there are appropriated to the
Secretary of Health and Human Services for the Centers for Medicare
& Medicaid Services Program Management Account $5,000,000 for each
fiscal year beginning with fiscal year 2010. Amounts appropriated under
this paragraph for a fiscal year shall be available until expended.
(2) ADMINISTRATION- Chapter 35 of title 44, United
States Code, shall not apply to the amendments made by subsection (a)
and the provisions of subsection (b).
SEC. 1157. INSTITUTE OF MEDICINE STUDY OF GEOGRAPHIC ADJUSTMENT FACTORS UNDER MEDICARE.
(a) In General- The Secretary of Health and Human Services
shall enter into a contract with the Institute of Medicine of the
National Academy of Science to conduct a comprehensive empirical study,
and provide recommendations as appropriate, on the accuracy of the
geographic adjustment factors established under sections 1848(e) and
1886(d)(3)(E) of the Social Security Act (42 U.S.C. 1395w-4(e),
11395ww(d)(3)).
(b) Matters Included- Such study shall include an
evaluation and assessment of the following with respect to such
adjustment factors:
(1) Empirical validity of the adjustment factors.
(2) Methodology used to determine the adjustment factors.
(3) Measures used for the adjustment factors, taking into account--
(A) timeliness of data and frequency of revisions to such data;
(B) sources of data and the degree to which such data are representative of costs; and
(C) operational costs of providers who participate in Medicare.
(c) Evaluation- Such study shall, within the context of the
United States health care marketplace, evaluate and consider the
following:
(1) The effect of the adjustment factors on the level and distribution of the health care workforce and resources, including--
(A) recruitment and retention that takes into account workforce mobility between urban and rural areas;
(B) ability of hospitals and other facilities to maintain an adequate and skilled workforce; and
(C) patient access to providers and needed medical technologies.
(2) The effect of the adjustment factors on population health and quality of care.
(3) The effect of the adjustment factors on the ability of providers to furnish efficient, high value care.
(d) Report- The contract under subsection (a) shall provide
for the Institute of Medicine to submit, not later than one year after
the date of the enactment of this Act, to the Secretary and the
Congress a report containing results and recommendations of the study
conducted under this section.
(e) Funding- There are authorized to be appropriated to carry out this section such sums as may be necessary.
SEC. 1158. REVISION OF MEDICARE PAYMENT SYSTEMS TO ADDRESS GEOGRAPHIC INEQUITIES.
(a) In General- The Secretary of Health and Human Services,
taking into account the recommendations made in the report under
section 1157(d), shall include in the proposed rules published to
implement changes to payment systems for physicians and hospitals under
sections 1848(e) and 1886(d)(3)(E), respectively, of the Social
Security Act, proposals to revise geographic adjustment factors for
such payment systems for services furnished under the Medicare program.
Such proposed rules shall be published in the rulemaking period
immediately following submission of the report under section 1157(d).
(1) FUNDING FOR IMPROVEMENTS- In making any changes to
the geographic adjustment factors in accordance with subsection (a),
the Secretary shall use funds made available for such purposes under
subsection (c).
(2) ENSURING FAIRNESS- In carrying out this subsection,
the Secretary shall not change payment rates to be less than they would
have been had this section not been enacted.
(c) Funding- Amounts in the Medicare Improvement Fund under
section 1898 of the Social Security Act (42 U.S.C. 1395iii), as amended
by section 1146, shall be available to the Secretary to make changes to
the geographic adjustments factors established under sections 1848(e)
and 1886(d)(3)(E) of the Social Security Act. For such purpose, such
funds shall be available for expenditure for services furnished before
January 1, 2014, and shall not exceed the total amounts available under
such Fund for such period. No more than one-half of such amounts shall
be available for expenditure for services furnished in any one payment
year.
Subtitle D--Medicare Advantage Reforms
PART 1--PAYMENT AND ADMINISTRATION
SEC. 1161. PHASE-IN OF PAYMENT BASED ON FEE-FOR-SERVICE COSTS.
Section 1853 of the Social Security Act (42 U.S.C. 1395w-23) is amended--
(1) in subsection (j)(1)(A)--
(A) by striking `beginning with 2007' and inserting `for 2007, 2008, 2009, and 2010'; and
(B) by inserting after `(k)(1)' the following: `,
or, beginning with 2011, 1/12 of the blended benchmark amount
determined under subsection (n)(1)'; and
(2) by adding at the end the following new subsection:
`(n) Determination of Blended Benchmark Amount-
`(1) IN GENERAL- For purposes of subsection (j),
subject to paragraphs (3) and (4), the term `blended benchmark amount'
means for an area--
`(A) for 2011 the sum of--
`(i) 2/3 of the applicable amount (as defined in subsection (k)) for the area and year; and
`(ii) 1/3 of the amount specified in paragraph (2) for the area and year;
`(B) for 2012 the sum of--
`(i) 1/3 of the applicable amount for the area and year; and
`(ii) 2/3 of the amount specified in paragraph (2) for the area and year; and
`(C) for a subsequent year the amount specified in paragraph (2) for the area and year.
`(2) SPECIFIED AMOUNT- The amount specified in this
paragraph for an area and year is the amount specified in subsection
(c)(1)(D)(i) for the area and year adjusted (in a manner specified by
the Secretary) to take into account the phase-out in the indirect costs
of medical education from capitation rates described in subsection
(k)(4).
`(3) FEE-FOR-SERVICE PAYMENT FLOOR- In no case shall
the blended benchmark amount for an area and year be less than the
amount specified in paragraph (2).
`(4) EXCEPTION FOR PACE PLANS- This subsection shall not apply to payments to a PACE program under section 1894.'.
SEC. 1162. QUALITY BONUS PAYMENTS.
(a) In General- Section 1853 of the Social Security Act (42 U.S.C. 1395w-23), as amended by section 1161, is amended--
(1) in subsection (j), by inserting `subject to subsection (o),' after `For purposes of this part'; and
(2) by adding at the end the following new subsection:
`(o) Quality Based Payment Adjustment-
`(1) HIGH QUALITY PLAN ADJUSTMENT- For years beginning
with 2011, in the case of a Medicare Advantage plan that is identified
(under paragraph (3)(E)(ii)) as a high quality MA plan with respect to
the year, the blended benchmark amount under subsection (n)(1) shall be
increased--
`(A) for 2011, by 1.0 percent;
`(B) for 2012, by 2.0 percent; and
`(C) for a subsequent year, by 3.0 percent.
`(2) IMPROVED QUALITY PLAN ADJUSTMENT- For years
beginning with 2011, in the case of a Medicare Advantage plan that is
identified (under paragraph (3)(E)(iii)) as an improved quality MA plan
with respect to the year, blended benchmark amount under subsection
(n)(1) shall be increased--
`(A) for 2011, by 0.33 percent;
`(B) for 2012, by 0.66 percent; and
`(C) for a subsequent year, by 1.0 percent.
`(3) DETERMINATIONS OF QUALITY-
`(A) QUALITY PERFORMANCE- The Secretary shall
provide for the computation of a quality performance score for each
Medicare Advantage plan to be applied for each year beginning with 2010.
`(B) COMPUTATION OF SCORE-
`(i) FOR YEARS BEFORE 2014- For years before
2014, the quality performance score for a Medicare Advantage plan shall
be computed based on a blend (as designated by the Secretary) of the
plan's performance on--
`(I) HEDIS effectiveness of care quality measures;
`(II) CAHPS quality measures; and
`(III) such other measures of clinical quality as the Secretary may specify.
Such measures shall be risk-adjusted as the Secretary deems appropriate.
`(ii) ESTABLISHMENT OF OUTCOME-BASED MEASURES-
By not later than for 2013 the Secretary shall implement reporting
requirements for quality under this section on measures selected under
clause (iii) that reflect the outcomes of care experienced by
individuals enrolled in Medicare Advantage plans (in addition to
measures described in clause (i)). Such measures may include--
`(I) measures of rates of admission and readmission to a hospital;
`(II) measures of prevention quality, such
as those established by the Agency for Healthcare Research and Quality
(that include hospital admission rates for specified conditions);
`(III) measures of patient mortality and morbidity following surgery;
`(IV) measures of health functioning (such
as limitations on activities of daily living) and survival for patients
with chronic diseases;
`(V) measures of patient safety; and
`(VI) other measure of outcomes and patient quality of life as determined by the Secretary.
Such measures shall be risk-adjusted as the
Secretary deems appropriate. In determining the quality measures to be
used under this clause, the Secretary shall take into consideration the
recommendations of the Medicare Payment Advisory Commission in its
report to Congress under section 168 of the Medicare Improvements for
Patients and Providers Act of 2008 (Public Law 110-275) and shall
provide preference to measures collected on and comparable to measures
used in measuring quality under parts A and B.
`(iii) RULES FOR SELECTION OF MEASURES- The
Secretary shall select measures for purposes of clause (ii) consistent
with the following:
`(I) The Secretary shall provide preference
to clinical quality measures that have been endorsed by the entity with
a contract with the Secretary under section 1890(a).
`(II) Prior to any measure being selected
under this clause, the Secretary shall publish in the Federal Register
such measure and provide for a period of public comment on such measure.
`(iv) TRANSITIONAL USE OF BLEND- For payments
for 2014 and 2015, the Secretary may compute the quality performance
score for a Medicare Advantage plan based on a blend of the measures
specified in clause (i) and the measures described in clause (ii) and
selected under clause (iii).
`(v) USE OF QUALITY OUTCOMES MEASURES- For
payments beginning with 2016, the preponderance of measures used under
this paragraph shall be quality outcomes measures described in clause
(ii) and selected under clause (iii).
`(C) DATA USED IN COMPUTING SCORE- Such score for application for--
`(i) payments in 2011 shall be based on quality performance data for plans for 2009; and
`(ii) payments in 2012 and a subsequent year
shall be based on quality performance data for plans for the second
preceding year.
`(D) REPORTING OF DATA- Each Medicare Advantage
organization shall provide for the reporting to the Secretary of
quality performance data described in subparagraph (B) (in order to
determine a quality performance score under this paragraph) in such
time and manner as the Secretary shall specify.
`(i) INITIAL RANKING- Based on the quality
performance score described in subparagraph (B) achieved with respect
to a year, the Secretary shall rank plan performance--
`(I) from highest to lowest based on absolute scores; and
`(II) from highest to lowest based on percentage improvement in the score for the plan from the previous year.
A plan which does not report quality performance
data under subparagraph (D) shall be counted, for purposes of such
ranking, as having the lowest plan performance and lowest percentage
improvement.
`(ii) IDENTIFICATION OF HIGH QUALITY PLANS IN
TOP QUINTILE BASED ON PROJECTED ENROLLMENT- The Secretary shall, based
on the scores for each plan under clause (i)(I) and the Secretary's
projected enrollment for each plan and subject to clause (iv), identify
those Medicare Advantage plans with the highest score that, based upon
projected enrollment, are projected to include in the aggregate 20
percent of the total projected enrollment for the year. For purposes of
this subsection, a plan so identified shall be referred to in this
subsection as a `high quality MA plan'.
`(iii) IDENTIFICATION OF IMPROVED QUALITY PLANS
IN TOP QUINTILE BASED ON PROJECTED ENROLLMENT- The Secretary shall,
based on the percentage improvement score for each plan under clause
(i)(II) and the Secretary's projected enrollment for each plan and
subject to clause (iv), identify those Medicare Advantage plans with
the greatest percentage improvement score that, based upon projected
enrollment, are projected to include in the aggregate 20 percent of the
total projected enrollment for the year. For purposes of this
subsection, a plan so identified that is not a high quality plan for
the year shall be referred to in this subsection as an `improved
quality MA plan'.
`(iv) AUTHORITY TO DISQUALIFY CERTAIN PLANS- In
applying clauses (ii) and (iii), the Secretary may determine not to
identify a Medicare Advantage plan if the Secretary has identified
deficiencies in the plan's compliance with rules for such plans under
this part.
`(F) NOTIFICATION- The Secretary, in the annual
announcement required under subsection (b)(1)(B) in 2011 and each
succeeding year, shall notify the Medicare Advantage organization that
is offering a high quality plan or an improved quality plan of such
identification for the year and the quality performance payment
adjustment for such plan for the year. The Secretary shall provide for
publication on the website for the Medicare program of the information
described in the previous sentence.'.
SEC. 1163. EXTENSION OF SECRETARIAL CODING INTENSITY ADJUSTMENT AUTHORITY.
Section 1853(a)(1)(C)(ii) of the Social Security Act (42 U.S.C. 1395w-23(a)(1)(C)(ii)) is amended--
(1) in the matter before subclause (I), by striking `through 2010' and inserting `and each subsequent year'; and
(A) by inserting `periodically' before `conduct an analysis';
(B) by inserting `on a timely basis' after `are incorporated'; and
(C) by striking `only for 2008, 2009, and 2010' and inserting `for 2008 and subsequent years'.
SEC. 1164. SIMPLIFICATION OF ANNUAL BENEFICIARY ELECTION PERIODS.
(a) 2 Week Processing Period for Annual Enrollment Period
(AEP)- Paragraph (3)(B) of section 1851(e) of the Social Security Act
(42 U.S.C. 1395w-21(e)) is amended--
(1) by striking `and' at the end of clause (iii);
(A) by striking `and succeeding years' and inserting `, 2008, 2009, and 2010'; and
(B) by striking the period at the end and inserting `; and'; and
(3) by adding at the end the following new clause:
`(v) with respect to 2011 and succeeding years,
the period beginning on November 1 and ending on December 15 of the
year before such year.'.
(b) Elimination of 3-month Additional Open Enrollment
Period (OEP)- Effective for plan years beginning with 2011, paragraph
(2) of such section is amended by striking subparagraph (C).
SEC. 1165. EXTENSION OF REASONABLE COST CONTRACTS.
Section 1876(h)(5)(C) of the Social Security Act (42 U.S.C. 1395mm(h)(5)(C)) is amended--
(1) in clause (ii), by striking `January 1, 2010' and inserting `January 1, 2012'; and
(2) in clause (iii), by striking `the service area for
the year' and inserting `the portion of the plan's service area for the
year that is within the service area of a reasonable cost reimbursement
contract'.
SEC. 1166. LIMITATION OF WAIVER AUTHORITY FOR EMPLOYER GROUP PLANS.
(a) In General- The first sentence of paragraph (2) of
section 1857(i) of the Social Security Act (42 U.S.C. 1395w-27(i)) is
amended by inserting before the period at the end the following: `, but
only if 90 percent of the Medicare Advantage eligible individuals
enrolled under such plan reside in a county in which the MA
organization offers an MA local plan'.
(b) Effective Date- The amendment made by subsection (a)
shall apply for plan years beginning on or after January 1, 2011, and
shall not apply to plans which were in effect as of December 31, 2010.
SEC. 1167. IMPROVING RISK ADJUSTMENT FOR PAYMENTS.
(a) Report to Congress- Not later than 1 year after the
date of the enactment of this Act, the Secretary of Health and Human
Services shall submit to Congress a report that evaluates the adequacy
of the risk adjustment system under section 1853(a)(1)(C) of the Social
Security Act (42 U.S.C. 1395-23(a)(1)(C)) in predicting costs for
beneficiaries with chronic or co-morbid conditions, beneficiaries
dually-eligible for Medicare and Medicaid, and non-Medicaid eligible
low-income beneficiaries; and the need and feasibility of including
further gradations of diseases or conditions and multiple years of
beneficiary data.
(b) Improvements to Risk Adjustment- Not later than January
1, 2012, the Secretary shall implement necessary improvements to the
risk adjustment system under section 1853(a)(1)(C) of the Social
Security Act (42 U.S.C. 1395-23(a)(1)(C)), taking into account the
evaluation under subsection (a).
SEC. 1168. ELIMINATION OF MA REGIONAL PLAN STABILIZATION FUND.
(a) In General- Section 1858 of the Social Security Act (42 U.S.C. 1395w-27a) is amended by striking subsection (e).
(b) Transition- Any amount contained in the MA Regional
Plan Stabilization Fund as of the date of the enactment of this Act
shall be transferred to the Federal Supplementary Medical Insurance
Trust Fund.
PART 2--BENEFICIARY PROTECTIONS AND ANTI-FRAUD
SEC. 1171. LIMITATION ON COST-SHARING FOR INDIVIDUAL HEALTH SERVICES.
(a) In General- Section 1852(a)(1) of the Social Security Act (42 U.S.C. 1395w-22(a)(1)) is amended--
(1) in subparagraph (A), by inserting before the period
at the end the following: `with cost-sharing that is no greater (and
may be less) than the cost-sharing that would otherwise be imposed
under such program option';
(2) in subparagraph (B)(i), by striking `or an actuarially equivalent level of cost-sharing as determined in this part'; and
(3) by amending clause (ii) of subparagraph (B) to read as follows:
`(ii) PERMITTING USE OF FLAT COPAYMENT OR PER
DIEM RATE- Nothing in clause (i) shall be construed as prohibiting a
Medicare Advantage plan from using a flat copayment or per diem rate,
in lieu of the cost-sharing that would be imposed under part A or B, so
long as the amount of the cost-sharing imposed does not exceed the
amount of the cost-sharing that would be imposed under the respective
part if the individual were not enrolled in a plan under this part.'.
(b) Limitation for Dual Eligibles and Qualified Medicare
Beneficiaries- Section 1852(a) of such Act is amended by adding at the
end the following new paragraph:
`(7) LIMITATION ON COST-SHARING FOR DUAL ELIGIBLES AND
QUALIFIED MEDICARE BENEFICIARIES- In the case of a individual who is a
full-benefit dual eligible individual (as defined in section
1935(c)(6)) or a qualified medicare beneficiary (as defined in section
1905(p)(1)) who is enrolled in a Medicare Advantage plan, the plan may
not impose cost-sharing that exceeds the amount of cost-sharing that
would be permitted with respect to the individual under this title and
title XIX if the individual were not enrolled with such plan.'.
(1) The amendments made by subsection (a) shall apply to plan years beginning on or after January 1, 2011.
(2) The amendments made by subsection (b) shall apply to plan years beginning on or after January 1, 2011.
SEC. 1172. CONTINUOUS OPEN ENROLLMENT FOR ENROLLEES IN PLANS WITH ENROLLMENT SUSPENSION.
Section 1851(e)(4) of the Social Security Act (42 U.S.C. 1395w(e)(4)) is amended--
(1) in subparagraph (C), by striking at the end `or';
(2) in subparagraph (D)--
(A) by inserting `, taking into account the health or well-being of the individual' before the period; and
(B) by redesignating such subparagraph as subparagraph (E); and
(3) by inserting after subparagraph (C) the following new subparagraph:
`(D) the individual is enrolled in an MA plan and
enrollment in the plan is suspended under paragraph (2)(B) or (3)(C) of
section 1857(g) because of a failure of the plan to meet applicable
requirements; or'.
SEC. 1173. INFORMATION FOR BENEFICIARIES ON MA PLAN ADMINISTRATIVE COSTS.
(a) Disclosure of Medical Loss Ratios and Other Expense
Data- Section 1851 of the Social Security Act (42 U.S.C. 1395w-21), as
previously amended by this subtitle, is amended by adding at the end
the following new subsection:
`(p) Publication of Medical Loss Ratios and Other Cost-related Information-
`(1) IN GENERAL- The Secretary shall publish, not later
than November 1 of each year (beginning with 2011), for each MA plan
contract, the medical loss ratio of the plan in the previous year.
`(A) IN GENERAL- Each MA organization shall submit
to the Secretary, in a form and manner specified by the Secretary, data
necessary for the Secretary to publish the medical loss ratio on a
timely basis.
`(B) DATA FOR 2010 AND 2011- The data submitted
under subparagraph (A) for 2010 and for 2011 shall be consistent in
content with the data reported as part of the MA plan bid in June 2009
for 2010.
`(C) USE OF STANDARDIZED ELEMENTS AND DEFINITIONS-
The data to be submitted under subparagraph (A) relating to medical
loss ratio for a year, beginning with 2012, shall be submitted based on
the standardized elements and definitions developed under paragraph (3).
`(3) DEVELOPMENT OF DATA REPORTING STANDARDS-
`(A) IN GENERAL- The Secretary shall develop and
implement standardized data elements and definitions for reporting
under this subsection, for contract years beginning with 2012, of data
necessary for the calculation of the medical loss ratio for MA plans.
Not later than December 31, 2010, the Secretary shall publish a report
describing the elements and definitions so developed.
`(B) CONSULTATION- The Secretary shall consult with
the Health Choices Commissioner, representatives of MA organizations,
experts on health plan accounting systems, and representatives of the
National Association of Insurance Commissioners, in the development of
such data elements and definitions.
`(4) MEDICAL LOSS RATIO TO BE DEFINED- For purposes of
this part, the term `medical loss ratio' has the meaning given such
term by the Secretary, taking into account the meaning given such term
by the Health Choices Commissioner under section 116 of the America's
Affordable Health Choices Act of 2009.'.
(b) Minimum Medical Loss Ratio- Section 1857(e) of the
Social Security Act (42 U.S.C. 1395w-27(e)) is amended by adding at the
end the following new paragraph:
`(4) REQUIREMENT FOR MINIMUM MEDICAL LOSS RATIO- If the
Secretary determines for a contract year (beginning with 2014) that an
MA plan has failed to have a medical loss ratio (as defined in section
1851(p)(4)) of at least .85--
`(A) the Secretary shall require the Medicare
Advantage organization offering the plan to give enrollees a rebate (in
the second succeeding contract year) of premiums under this part (or
part B or part D, if applicable) by such amount as would provide for a
benefits ratio of at least .85;
`(B) for 3 consecutive contract years, the
Secretary shall not permit the enrollment of new enrollees under the
plan for coverage during the second succeeding contract year; and
`(C) the Secretary shall terminate the plan
contract if the plan fails to have such a medical loss ratio for 5
consecutive contract years.'.
SEC. 1174. STRENGTHENING AUDIT AUTHORITY.
(a) For Part C Payments Risk Adjustment- Section 1857(d)(1)
of the Social Security Act (42 U.S.C. 1395w-27(d)(1)) is amended by
inserting after `section 1858(c))' the following: `, and data submitted
with respect to risk adjustment under section 1853(a)(3)'.
(b) Enforcement of Audits and Deficiencies-
(1) IN GENERAL- Section 1857(e) of such Act, as amended
by section 1173, is amended by adding at the end the following new
paragraph:
`(5) ENFORCEMENT OF AUDITS AND DEFICIENCIES-
`(A) INFORMATION IN CONTRACT- The Secretary shall
require that each contract with an MA organization under this section
shall include terms that inform the organization of the provisions in
subsection (d).
`(B) ENFORCEMENT AUTHORITY- The Secretary is
authorized, in connection with conducting audits and other activities
under subsection (d), to take such actions, including pursuit of
financial recoveries, necessary to address deficiencies identified in
such audits or other activities.'.
(2) APPLICATION UNDER PART D- For provision applying
the amendment made by paragraph (1) to prescription drug plans under
part D, see section 1860D-12(b)(3)(D) of the Social Security Act.
(c) Effective Date- The amendments made by this section
shall take effect on the date of the enactment of this Act and shall
apply to audits and activities conducted for contract years beginning
on or after January 1, 2011.
SEC. 1175. AUTHORITY TO DENY PLAN BIDS.
(a) In General- Section 1854(a)(5) of the Social Security
Act (42 U.S.C. 1395w-24(a)(5)) is amended by adding at the end the
following new subparagraph:
`(C) REJECTION OF BIDS- Nothing in this section
shall be construed as requiring the Secretary to accept any or every
bid by an MA organization under this subsection.'.
(b) Application Under Part D- Section 1860D-11(d) of such
Act (42 U.S.C. 1395w-111(d)) is amended by adding at the end the
following new paragraph:
`(3) REJECTION OF BIDS- Paragraph (5)(C) of section
1854(a) shall apply with respect to bids under this section in the same
manner as it applies to bids by an MA organization under such section.'.
(c) Effective Date- The amendments made by this section
shall apply to bids for contract years beginning on or after January 1,
2011.
PART 3--TREATMENT OF SPECIAL NEEDS PLANS
SEC. 1176. LIMITATION ON ENROLLMENT OUTSIDE OPEN ENROLLMENT
PERIOD OF INDIVIDUALS INTO CHRONIC CARE SPECIALIZED MA PLANS FOR
SPECIAL NEEDS INDIVIDUALS.
Section 1859(f)(4) of the Social Security Act (42 U.S.C.
1395w-28(f)(4)) is amended by adding at the end the following new
subparagraph:
`(C) The plan does not enroll an individual on or
after January 1, 2011, other than during an annual, coordinated open
enrollment period or when at the time of the diagnosis of the disease
or condition that qualifies the individual as an individual described
in subsection (b)(6)(B)(iii).'.
SEC. 1177. EXTENSION OF AUTHORITY OF SPECIAL NEEDS PLANS TO RESTRICT ENROLLMENT.
(a) In General- Section 1859(f)(1) of the Social Security
Act (42 U.S.C. 1395w-28(f)(1)) is amended by striking `January 1, 2011'
and inserting `January 1, 2013 (or January 1, 2016, in the case of a
plan described in section 1177(b)(1) of the America's Affordable Health
Choices Act of 2009)'.
(b) Grandfathering of Certain Plans-
(1) PLANS DESCRIBED- For purposes of section 1859(f)(1)
of the Social Security Act (42 U.S.C. 1395w-28(f)(1)), a plan described
in this paragraph is a plan that had a contract with a State that had a
State program to operate an integrated Medicaid-Medicare program that
had been approved by the Centers for Medicare & Medicaid Services
as of January 1, 2004.
(2) ANALYSIS; REPORT- The Secretary of Health and Human
Services shall provide, through a contract with an independent health
services evaluation organization, for an analysis of the plans
described in paragraph (1) with regard to the impact of such plans on
cost, quality of care, patient satisfaction, and other subjects as
specified by the Secretary. Not later than December 31, 2011, the
Secretary shall submit to Congress a report on such analysis and shall
include in such report such recommendations with regard to the
treatment of such plans as the Secretary deems appropriate.
Subtitle E--Improvements to Medicare Part D
SEC. 1181. ELIMINATION OF COVERAGE GAP.
(a) In General- Section 1860D-2(b) of such Act (42 U.S.C. 1395w-102(b)) is amended--
(1) in paragraph (3)(A), by striking `paragraph (4)' and inserting `paragraphs (4) and (7)';
(2) in paragraph (4)(B)(i), by inserting `subject to paragraph (7)' after `purposes of this part'; and
(3) by adding at the end the following new paragraph:
`(7) PHASED-IN ELIMINATION OF COVERAGE GAP-
`(A) IN GENERAL- For each year beginning with 2011,
the Secretary shall consistent with this paragraph progressively
increase the initial coverage limit (described in subsection (b)(3))
and decrease the annual out-of-pocket threshold from the amounts
otherwise computed until there is a continuation of coverage from the
initial coverage limit for expenditures incurred through the total
amount of expenditures at which benefits are available under paragraph
(4).
`(B) INCREASE IN INITIAL COVERAGE LIMIT- For a year
beginning with 2011, the initial coverage limit otherwise computed
without regard to this paragraph shall be increased by 1/2 of the
cumulative phase-in percentage (as defined in subparagraph (D)(ii) for
the year) times the out-of-pocket gap amount (as defined in
subparagraph (E)) for the year.
`(C) DECREASE IN ANNUAL OUT-OF-POCKET THRESHOLD-
For a year beginning with 2011, the annual out-of-pocket threshold
otherwise computed without regard to this paragraph shall be decreased
by 1/2 of the cumulative phase-in percentage of the out-of-pocket gap
amount for the year multiplied by 1.75.
`(D) PHASE-IN- For purposes of this paragraph:
`(i) ANNUAL PHASE-IN PERCENTAGE- The term `annual phase-in percentage' means--
`(I) for 2011, 13 percent;
`(II) for 2012, 2013, 2014, and 2015, 5 percent;
`(III) for 2016 through 2018, 7.5 percent; and
`(IV) for 2019 and each subsequent year, 10 percent.
`(ii) CUMULATIVE PHASE-IN PERCENTAGE- The term
`cumulative phase-in percentage' means for a year the sum of the annual
phase-in percentage for the year and the annual phase-in percentages
for each previous year beginning with 2011, but in no case more than
100 percent.
`(E) OUT-OF-POCKET GAP AMOUNT- For purposes of this
paragraph, the term `out-of-pocket gap amount' means for a year the
amount by which--
`(i) the annual out-of-pocket threshold
specified in paragraph (4)(B) for the year (as determined as if this
paragraph did not apply), exceeds
`(I) the annual deductible under paragraph (1) for the year; and
`(II) 1/4 of the amount by which the
initial coverage limit under paragraph (3) for the year (as determined
as if this paragraph did not apply) exceeds such annual deductible.'.
(b) Requiring Drug Manufacturers To Provide Drug Rebates for Full-Benefit Dual Eligibles-
(1) IN GENERAL- Section 1860D-2 of the Social Security Act (42 U.S.C. 1396r-8) is amended--
(A) in subsection (e)(1), in the matter before
subparagraph (A), by inserting `and subsection (f)' after `this
subsection'; and
(B) by adding at the end the following new subsection:
`(f) Prescription Drug Rebate Agreement for Full-Benefit Dual Eligible Individuals-
`(1) IN GENERAL- In this part, the term `covered part D
drug' does not include any drug or biologic that is manufactured by a
manufacturer that has not entered into and have in effect a rebate
agreement described in paragraph (2).
`(2) REBATE AGREEMENT- A rebate agreement under this
subsection shall require the manufacturer to provide to the Secretary a
rebate for each rebate period (as defined in paragraph (6)(B)) ending
after December 31, 2010, in the amount specified in paragraph (3) for
any covered part D drug of the manufacturer dispensed after December
31, 2010, to any full-benefit dual eligible individual (as defined in
paragraph (6)(A)) for which payment was made by a PDP sponsor under
part D or a MA organization under part C for such period. Such rebate
shall be paid by the manufacturer to the Secretary not later than 30
days after the date of receipt of the information described in section
1860D-12(b)(7), including as such section is applied under section
1857(f)(3).
`(3) REBATE FOR FULL-BENEFIT DUAL ELIGIBLE MEDICARE DRUG PLAN ENROLLEES-
`(A) IN GENERAL- The amount of the rebate specified
under this paragraph for a manufacturer for a rebate period, with
respect to each dosage form and strength of any covered part D drug
provided by such manufacturer and dispensed to a full-benefit dual
eligible individual, shall be equal to the product of--
`(i) the total number of units of such dosage
form and strength of the drug so provided and dispensed for which
payment was made by a PDP sponsor under part D or a MA organization
under part C for the rebate period (as reported under section
1860D-12(b)(7), including as such section is applied under section
1857(f)(3)); and
`(ii) the amount (if any) by which--
`(I) the Medicaid rebate amount (as defined in subparagraph (B)) for such form, strength, and period, exceeds
`(II) the average Medicare drug program
full-benefit dual eligible rebate amount (as defined in subparagraph
(C)) for such form, strength, and period.
`(B) MEDICAID REBATE AMOUNT- For purposes of this
paragraph, the term `Medicaid rebate amount' means, with respect to
each dosage form and strength of a covered part D drug provided by the
manufacturer for a rebate period--
`(i) in the case of a single source drug or an
innovator multiple source drug, the amount specified in paragraph
(1)(A)(ii) of section 1927(b) plus the amount, if any, specified in
paragraph (2)(A)(ii) of such section, for such form, strength, and
period; or
`(ii) in the case of any other covered
outpatient drug, the amount specified in paragraph (3)(A)(i) of such
section for such form, strength, and period.
`(C) AVERAGE MEDICARE DRUG PROGRAM FULL-BENEFIT
DUAL ELIGIBLE REBATE AMOUNT- For purposes of this subsection, the term
`average Medicare drug program full-benefit dual eligible rebate
amount' means, with respect to each dosage form and strength of a
covered part D drug provided by a manufacturer for a rebate period, the
sum, for all PDP sponsors under part D and MA organizations
administering a MA-PD plan under part C, of--
`(i) the product, for each such sponsor or organization, of--
`(I) the sum of all rebates, discounts, or
other price concessions (not taking into account any rebate provided
under paragraph (2) for such dosage form and strength of the drug
dispensed, calculated on a per-unit basis, but only to the extent that
any such rebate, discount, or other price concession applies equally to
drugs dispensed to full-benefit dual eligible Medicare drug plan
enrollees and drugs dispensed to PDP and MA-PD enrollees who are not
full-benefit dual eligible individuals; and
`(II) the number of the units of such
dosage and strength of the drug dispensed during the rebate period to
full-benefit dual eligible individuals enrolled in the prescription
drug plans administered by the PDP sponsor or the MA-PD plans
administered by the MA-PD organization; divided by
`(ii) the total number of units of such dosage
and strength of the drug dispensed during the rebate period to
full-benefit dual eligible individuals enrolled in all prescription
drug plans administered by PDP sponsors and all MA-PD plans
administered by MA-PD organizations.
`(4) LENGTH OF AGREEMENT- The provisions of paragraph
(4) of section 1927(b) (other than clauses (iv) and (v) of subparagraph
(B)) shall apply to rebate agreements under this subsection in the same
manner as such paragraph applies to a rebate agreement under such
section.
`(5) OTHER TERMS AND CONDITIONS- The Secretary shall
establish other terms and conditions of the rebate agreement under this
subsection, including terms and conditions related to compliance, that
are consistent with this subsection.
`(6) DEFINITIONS- In this subsection and section 1860D-12(b)(7):
`(A) FULL-BENEFIT DUAL ELIGIBLE INDIVIDUAL- The
term `full-benefit dual eligible individual' has the meaning given such
term in section 1935(c)(6).
`(B) REBATE PERIOD- The term `rebate period' has the meaning given such term in section 1927(k)(8).'.
(2) REPORTING REQUIREMENT FOR THE DETERMINATION AND
PAYMENT OF REBATES BY MANUFACTURES RELATED TO REBATE FOR FULL-BENEFIT
DUAL ELIGIBLE MEDICARE DRUG PLAN ENROLLEES-
(A) REQUIREMENTS FOR PDP SPONSORS- Section
1860D-12(b) of the Social Security Act (42 U.S.C. 1395w-112(b)) is
amended by adding at the end the following new paragraph:
`(7) REPORTING REQUIREMENT FOR THE DETERMINATION AND
PAYMENT OF REBATES BY MANUFACTURERS RELATED TO REBATE FOR FULL-BENEFIT
DUAL ELIGIBLE MEDICARE DRUG PLAN ENROLLEES-
`(A) IN GENERAL- For purposes of the rebate under
section 1860D-2(f) for contract years beginning on or after January 1,
2011, each contract entered into with a PDP sponsor under this part
with respect to a prescription drug plan shall require that the sponsor
comply with subparagraphs (B) and (C).
`(B) REPORT FORM AND CONTENTS- Not later than 60
days after the end of each rebate period (as defined in section
1860D-2(f)(6)(B)) within such a contract year to which such section
applies, a PDP sponsor of a prescription drug plan under this part
shall report to each manufacturer--
`(i) information (by National Drug Code number)
on the total number of units of each dosage, form, and strength of each
drug of such manufacturer dispensed to full-benefit dual eligible
Medicare drug plan enrollees under any prescription drug plan operated
by the PDP sponsor during the rebate period;
`(ii) information on the price discounts, price concessions, and rebates for such drugs for such form, strength, and period;
`(iii) information on the extent to which such
price discounts, price concessions, and rebates apply equally to
full-benefit dual eligible Medicare drug plan enrollees and PDP
enrollees who are not full-benefit dual eligible Medicare drug plan
enrollees; and
`(iv) any additional information that the
Secretary determines is necessary to enable the Secretary to calculate
the average Medicare drug program full-benefit dual eligible rebate
amount (as defined in paragraph (3)(C) of such section), and to
determine the amount of the rebate required under this section, for
such form, strength, and period.
Such report shall be in a form consistent with a standard reporting format established by the Secretary.
`(C) SUBMISSION TO SECRETARY- Each PDP sponsor
shall promptly transmit a copy of the information reported under
subparagraph (B) to the Secretary for the purpose of audit oversight
and evaluation.
`(D) CONFIDENTIALITY OF INFORMATION- The provisions
of subparagraph (D) of section 1927(b)(3), relating to confidentiality
of information, shall apply to information reported by PDP sponsors
under this paragraph in the same manner that such provisions apply to
information disclosed by manufacturers or wholesalers under such
section, except--
`(i) that any reference to `this section' in
clause (i) of such subparagraph shall be treated as being a reference
to this section;
`(ii) the reference to the Director of the
Congressional Budget Office in clause (iii) of such subparagraph shall
be treated as including a reference to the Medicare Payment Advisory
Commission; and
`(iii) clause (iv) of such subparagraph shall not apply.
`(E) OVERSIGHT- Information reported under this
paragraph may be used by the Inspector General of the Department of
Health and Human Services for the statutorily authorized purposes of
audit, investigation, and evaluations.
`(F) PENALTIES FOR FAILURE TO PROVIDE TIMELY INFORMATION AND PROVISION OF FALSE INFORMATION- In the case of a PDP sponsor--
`(i) that fails to provide information required
under subparagraph (B) on a timely basis, the sponsor is subject to a
civil money penalty in the amount of $10,000 for each day in which such
information has not been provided; or
`(ii) that knowingly (as defined in section
1128A(i)) provides false information under such subparagraph, the
sponsor is subject to a civil money penalty in an amount not to exceed
$100,000 for each item of false information.
Such civil money penalties are in addition to other
penalties as may be prescribed by law. The provisions of section 1128A
(other than subsections (a) and (b)) shall apply to a civil money
penalty under this subparagraph in the same manner as such provisions
apply to a penalty or proceeding under section 1128A(a).'.
(B) APPLICATION TO MA ORGANIZATIONS- Section
1857(f)(3) of the Social Security Act (42 U.S.C. 1395w-27(f)(3)) is
amended by adding at the end the following:
`(D) REPORTING REQUIREMENT RELATED TO REBATE FOR
FULL-BENEFIT DUAL ELIGIBLE MEDICARE DRUG PLAN ENROLLEES- Section
1860D-12(b)(7).'.
(3) DEPOSIT OF REBATES INTO MEDICARE PRESCRIPTION DRUG
ACCOUNT- Section 1860D-16(c) of such Act (42 U.S.C. 1395w-116(c)) is
amended by adding at the end the following new paragraph:
`(6) REBATE FOR FULL-BENEFIT DUAL ELIGIBLE MEDICARE
DRUG PLAN ENROLLEES- Amounts paid under a rebate agreement under
section 1860D-2(f) shall be deposited into the Account and shall be
used to pay for all or part of the gradual elimination of the coverage
gap under section 1860D-2(b)(7).'.
SEC. 1182. DISCOUNTS FOR CERTAIN PART D DRUGS IN ORIGINAL COVERAGE GAP.
Section 1860D-2 of the Social Security Act (42 U.S.C. 1395w-102), as amended by section 1181(a), is amended--
(1) in subsection (b)(4)(C)(ii), by inserting `subject to subsection (g)(2)(C),' after `(ii)';
(2) in subsection (e)(1), in the matter before
subparagraph (A), by striking `subsection (f)' and inserting
`subsections (f) and (g)' after `this subsection'; and
(3) by adding at the end the following new subsection:
`(g) Requirement for Manufacturer Discount Agreement for Certain Qualifying Drugs-
`(1) IN GENERAL- In this part, the term `covered part D
drug' does not include any drug or biologic that is manufactured by a
manufacturer that has not entered into and have in effect for all
qualifying drugs (as defined in paragraph (5)(A)) a discount agreement
described in paragraph (2).
`(A) PERIODIC DISCOUNTS- A discount agreement under
this paragraph shall require the manufacturer involved to provide, to
each PDP sponsor with respect to a prescription drug plan or each MA
organization with respect to each MA-PD plan, a discount in an amount
specified in paragraph (3) for qualifying drugs (as defined in
paragraph (5)(A)) of the manufacturer dispensed to a qualifying
enrollee after December 31, 2010, insofar as the individual is in the
original gap in coverage (as defined in paragraph (5)(E)).
`(B) DISCOUNT AGREEMENT- Insofar as not
inconsistent with this subsection, the Secretary shall establish terms
and conditions of such agreement, including terms and conditions
relating to compliance, similar to the terms and conditions for rebate
agreements under paragraphs (2), (3), and (4) of section 1927(b),
except that--
`(i) discounts shall be applied under this
subsection to prescription drug plans and MA-PD plans instead of State
plans under title XIX;
`(ii) PDP sponsors and MA organizations shall
be responsible, instead of States, for provision of necessary
utilization information to drug manufacturers; and
`(iii) sponsors and MA organizations shall be
responsible for reporting information on drug-component negotiated
price, instead of other manufacturer prices.
`(C) COUNTING DISCOUNT TOWARD TRUE OUT-OF-POCKET
COSTS- Under the discount agreement, in applying subsection (b)(4),
with regard to subparagraph (C)(i) of such subsection, if a qualified
enrollee purchases the qualified drug insofar as the enrollee is in an
actual gap of coverage (as defined in paragraph (5)(D)), the amount of
the discount under the agreement shall be treated and counted as costs
incurred by the plan enrollee.
`(3) DISCOUNT AMOUNT- The amount of the discount
specified in this paragraph for a discount period for a plan is equal
to 50 percent of the amount of the drug-component negotiated price (as
defined in paragraph (5)(C)) for qualifying drugs for the period
involved.
`(4) ADDITIONAL TERMS- In the case of a discount
provided under this subsection with respect to a prescription drug plan
offered by a PDP sponsor or an MA-PD plan offered by an MA
organization, if a qualified enrollee purchases the qualified drug--
`(A) insofar as the enrollee is in an actual gap of
coverage (as defined in paragraph (5)(D)), the sponsor or plan shall
provide the discount to the enrollee at the time the enrollee pays for
the drug; and
`(B) insofar as the enrollee is in the portion of
the original gap in coverage (as defined in paragraph (5)(E)) that is
not in the actual gap in coverage, the discount shall not be applied
against the negotiated price (as defined in subsection (d)(1)(B)) for
the purpose of calculating the beneficiary payment.
`(5) DEFINITIONS- In this subsection:
`(A) QUALIFYING DRUG- The term `qualifying drug'
means, with respect to a prescription drug plan or MA-PD plan, a drug
or biological product that--
`(i)(I) is a drug produced or distributed under
an original new drug application approved by the Food and Drug
Administration, including a drug product marketed by any cross-licensed
producers or distributors operating under the new drug application;
`(II) is a drug that was originally marketed
under an original new drug application approved by the Food and Drug
Administration; or
`(III) is a biological product as approved under Section 351(a) of the Public Health Services Act;
`(ii) is covered under the formulary of the plan; and
`(iii) is dispensed to an individual who is in the original gap in coverage.
`(B) QUALIFYING ENROLLEE- The term `qualifying
enrollee' means an individual enrolled in a prescription drug plan or
MA-PD plan other than such an individual who is a subsidy-eligible
individual (as defined in section 1860D-14(a)(3)).
`(C) DRUG-COMPONENT NEGOTIATED PRICE- The term
`drug-component negotiated price' means, with respect to a qualifying
drug, the negotiated price (as defined in subsection (d)(1)(B)), as
determined without regard to any dispensing fee, of the drug under the
prescription drug plan or MA-PD plan involved.
`(D) ACTUAL GAP IN COVERAGE- The term `actual gap
in coverage' means the gap in prescription drug coverage that occurs
between the initial coverage limit (as modified under subparagraph (B)
of subsection (b)(7)) and the annual out-of-pocket threshold (as
modified under subparagraph (C) of such subsection).
`(E) ORIGINAL GAP IN COVERAGE- The term `original
in gap coverage' means the gap in prescription drug coverage that would
occur between the initial coverage limit (described in subsection
(b)(3)) and the out-of-pocket threshold (as defined in subsection
(b)(4))(B) if subsection (b)(7) did not apply.'.
SEC. 1183. REPEAL OF PROVISION RELATING TO SUBMISSION OF
CLAIMS BY PHARMACIES LOCATED IN OR CONTRACTING WITH LONG-TERM CARE
FACILITIES.
(a) Part D Submission- Section 1860D-12(b) of the Social
Security Act (42 U.S.C. 1395w-112(b)), as amended by section 172(a)(1)
of Public Law 110-275, is amended by striking paragraph (5) and
redesignating paragraph (6) and paragraph (7), as added by section
1181(b)(2), as paragraph (5) and paragraph (6), respectively.
(b) Submission to MA-PD Plans- Section 1857(f)(3) of the
Social Security Act (42 U.S.C. 1395w-27(f)(3)), as added by section
171(b) of Public Law 110-275 and amended by section 172(a)(2) of such
Public Law, is amended by striking subparagraph (B) and redesignating
subparagraph (C) as subparagraph (B).
(c) Effective Date- The amendments made by this section shall apply for contract years beginning with 2010.
SEC. 1184. INCLUDING COSTS INCURRED BY AIDS DRUG ASSISTANCE
PROGRAMS AND INDIAN HEALTH SERVICE IN PROVIDING PRESCRIPTION DRUGS
TOWARD THE ANNUAL OUT-OF-POCKET THRESHOLD UNDER PART D.
(a) In General- Section 1860D-2(b)(4)(C) of the Social Security Act (42 U.S.C. 1395w-102(b)(4)(C)) is amended--
(1) in clause (i), by striking `and' at the end;
(A) by striking `such costs shall be treated as
incurred only if' and inserting `subject to clause (iii), such costs
shall be treated as incurred only if';
(B) by striking `, under section 1860D-14, or under a State Pharmaceutical Assistance Program'; and
(C) by striking the period at the end and inserting `; and'; and
(3) by inserting after clause (ii) the following new clause:
`(iii) such costs shall be treated as incurred
and shall not be considered to be reimbursed under clause (ii) if such
costs are borne or paid--
`(I) under section 1860D-14;
`(II) under a State Pharmaceutical Assistance Program;
`(III) by the Indian Health Service, an
Indian tribe or tribal organization, or an urban Indian organization
(as defined in section 4 of the Indian Health Care Improvement Act); or
`(IV) under an AIDS Drug Assistance Program under part B of title XXVI of the Public Health Service Act.'.
(b) Effective Date- The amendments made by subsection (a) shall apply to costs incurred on or after January 1, 2011.
SEC. 1185. PERMITTING MID-YEAR CHANGES IN ENROLLMENT FOR FORMULARY CHANGES THAT ADVERSELY IMPACT AN ENROLLEE.
(a) In General- Section 1860D-1(b)(3) of the Social
Security Act (42 U.S.C. 1395w-101(b)(3)) is amended by adding at the
end the following new subparagraph:
`(F) CHANGE IN FORMULARY RESULTING IN INCREASE IN COST-SHARING-
`(i) IN GENERAL- Except as provided in clause
(ii), in the case of an individual enrolled in a prescription drug plan
(or MA-PD plan) who has been prescribed and is using a covered part D
drug while so enrolled, if the formulary of the plan is materially
changed (other than at the end of a contract year) so to reduce the
coverage (or increase the cost-sharing) of the drug under the plan.
`(ii) EXCEPTION- Clause (i) shall not apply in
the case that a drug is removed from the formulary of a plan because of
a recall or withdrawal of the drug issued by the Food and Drug
Administration, because the drug is replaced with a generic drug that
is a therapeutic equivalent, or because of utilization management
applied to--
`(I) a drug whose labeling includes a boxed
warning required by the Food and Drug Administration under section
210.57(c)(1) of title 21, Code of Federal Regulations (or a successor
regulation); or
`(II) a drug required under subsection
(c)(2) of section 505-1 of the Federal Food, Drug, and Cosmetic Act to
have a Risk Evaluation and Management Strategy that includes elements
under subsection (f) of such section.'.
(b) Effective Date- The amendment made by subsection (a) shall apply to contract years beginning on or after January 1, 2011.
Subtitle F--Medicare Rural Access Protections
SEC. 1191. TELEHEALTH EXPANSION AND ENHANCEMENTS.
(a) Additional Telehealth Site-
(1) IN GENERAL- Paragraph (4)(C)(ii) of section 1834(m)
of the Social Security Act (42 U.S.C. 1395m(m)) is amended by adding at
the end the following new subclause:
`(IX) A renal dialysis facility.'
(2) EFFECTIVE DATE- The amendment made by paragraph (1) shall apply to services furnished on or after January 1, 2011.
(b) Telehealth Advisory Committee-
(1) ESTABLISHMENT- Section 1868 of the Social Security Act (42 U.S.C. 1395ee) is amended--
(A) in the heading, by adding at the end the following: `TELEHEALTH ADVISORY COMMITTEE'; and
(B) by adding at the end the following new subsection:
`(c) Telehealth Advisory Committee-
`(1) IN GENERAL- The Secretary shall appoint a
Telehealth Advisory Committee (in this subsection referred to as the
`Advisory Committee') to make recommendations to the Secretary on
policies of the Centers for Medicare & Medicaid Services regarding
telehealth services as established under section 1834(m), including the
appropriate addition or deletion of services (and HCPCS codes) to those
specified in paragraphs (4)(F)(i) and (4)(F)(ii) of such section and
for authorized payment under paragraph (1) of such section.
`(i) IN GENERAL- The Advisory Committee shall be composed of 9 members, to be appointed by the Secretary, of whom--
`(I) 5 shall be practicing physicians;
`(II) 2 shall be practicing non-physician health care practitioners; and
`(III) 2 shall be administrators of telehealth programs.
`(ii) REQUIREMENTS FOR APPOINTING MEMBERS- In appointing members of the Advisory Committee, the Secretary shall--
`(I) ensure that each member has prior experience with the practice of telemedicine or telehealth;
`(II) give preference to individuals who
are currently providing telemedicine or telehealth services or who are
involved in telemedicine or telehealth programs;
`(III) ensure that the membership of the Advisory Committee represents a balance of specialties and geographic regions; and
`(IV) take into account the recommendations of stakeholders.
`(B) TERMS- The members of the Advisory Committee shall serve for such term as the Secretary may specify.
`(C) CONFLICTS OF INTEREST- An advisory committee
member may not participate with respect to a particular matter
considered in an advisory committee meeting if such member (or an
immediate family member of such member) has a financial interest that
could be affected by the advice given to the Secretary with respect to
such matter.
`(3) MEETINGS- The Advisory Committee shall meet twice
each calendar year and at such other times as the Secretary may provide.
`(4) PERMANENT COMMITTEE- Section 14 of the Federal
Advisory Committee Act (5 U.S.C. App.) shall not apply to the Advisory
Committee.'
(2) FOLLOWING RECOMMENDATIONS- Section 1834(m)(4)(F) of
such Act (42 U.S.C. 1395m(m)(4)(F)) is amended by adding at the end the
following new clause:
`(iii) RECOMMENDATIONS OF THE TELEHEALTH
ADVISORY COMMITTEE- In making determinations under clauses (i) and
(ii), the Secretary shall take into account the recommendations of the
Telehealth Advisory Committee (established under section 1868(c)) when
adding or deleting services (and HCPCS codes) and in establishing
policies of the Centers for Medicare & Medicaid Services regarding
the delivery of telehealth services. If the Secretary does not
implement such a recommendation, the Secretary shall publish in the
Federal Register a statement regarding the reason such recommendation
was not implemented.'
(3) WAIVER OF ADMINISTRATIVE LIMITATION- The Secretary
of Health and Human Services shall establish the Telehealth Advisory
Committee under the amendment made by paragraph (1) notwithstanding any
limitation that may apply to the number of advisory committees that may
be established (within the Department of Health and Human Services or
otherwise).
SEC. 1192. EXTENSION OF OUTPATIENT HOLD HARMLESS PROVISION.
Section 1833(t)(7)(D)(i) of the Social Security Act (42 U.S.C. 1395l(t)(7)(D)(i)) is amended--
(A) in the first sentence, by striking
131`2010'and inserting `2012'; and
(B) in the second sentence, by striking `or 2009' and inserting `, 2009, 2010, or 2011'; and
(2) in subclause (III), by striking `January 1, 2010' and inserting `January 1, 2012'.
SEC. 1193. EXTENSION OF SECTION 508 HOSPITAL RECLASSIFICATIONS.
Subsection (a) of section 106 of division B of the Tax
Relief and Health Care Act of 2006 (42 U.S.C. 1395 note), as amended by
section 117 of the Medicare, Medicaid, and SCHIP Extension Act of 2007
(Public Law 110-173) and section 124 of the Medicare Improvements for
Patients and Providers Act of 2008 (Public Law 110-275), is amended by
striking `September 30, 2009' and inserting `September 30, 2011'.
SEC. 1194. EXTENSION OF GEOGRAPHIC FLOOR FOR WORK.
Section 1848(e)(1)(E) of the Social Security Act (42 U.S.C.
1395w-4(e)(1)(E)) is amended by striking `before January 1, 2010' and
inserting `before January 1, 2012'.
SEC. 1195. EXTENSION OF PAYMENT FOR TECHNICAL COMPONENT OF CERTAIN PHYSICIAN PATHOLOGY SERVICES.
Section 542(c) of the Medicare, Medicaid, and SCHIP
Benefits Improvement and Protection Act of 2000 (as enacted into law by
section 1(a)(6) of Public Law 106-554), as amended by section 732 of
the Medicare Prescription Drug, Improvement, and Modernization Act of
2003 (42 U.S.C. 1395w-4 note), section 104 of division B of the Tax
Relief and Health Care Act of 2006 (42 U.S.C. 1395w-4 note), section
104 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public
Law 110-173), and section 136 of the Medicare Improvements for Patients
and Providers Act of 1008 (Public Law 110-275), is amended by striking
`and 2009' and inserting `2009, 2010, and 2011'.
SEC. 1196. EXTENSION OF AMBULANCE ADD-ONS.
(a) In General- Section 1834(l)(13) of the Social Security Act (42 U.S.C. 1395m(l)(13)) is amended--
(1) in subparagraph (A)--
(A) in the matter preceding clause (i), by striking `before January 1, 2010' and inserting `before January 1, 2012'; and
(B) in each of clauses (i) and (ii), by striking `before January 1, 2010' and inserting `before January 1, 2012'.
(b) Air Ambulance Improvements- Section 146(b)(1) of the
Medicare Improvements for Patients and Providers Act of 2008 (Public
Law 110-275) is amended by striking `ending on December 31, 2009' and
inserting `ending on December 31, 2011'.
TITLE II--MEDICARE BENEFICIARY IMPROVEMENTS
Subtitle A--Improving and Simplifying Financial Assistance for Low Income Medicare Beneficiaries
SEC. 1201. IMPROVING ASSETS TESTS FOR MEDICARE SAVINGS PROGRAM AND LOW-INCOME SUBSIDY PROGRAM.
(a) Application of Highest Level Permitted Under LIS to All Subsidy Eligible Individuals-
(1) IN GENERAL- Section 1860D-14(a)(1) of the Social
Security Act (42 U.S.C. 1395w-114(a)(1)) is amended in the matter
before subparagraph (A), by inserting `(or, beginning with 2012,
paragraph (3)(E))' after `paragraph (3)(D)'.
(2) ANNUAL INCREASE IN LIS RESOURCE TEST- Section
1860D-14(a)(3)(E)(i) of such Act (42 U.S.C. 1395w-114(a)(3)(E)(i)) is
amended--
(A) by striking `and' at the end of subclause (I);
(B) in subclause (II), by inserting `(before 2012)' after `subsequent year';
(C) by striking the period at the end of subclause (II) and inserting a semicolon;
(D) by inserting after subclause (II) the following new subclauses:
`(III) for 2012, $17,000 (or $34,000 in the
case of the combined value of the individual's assets or resources and
the assets or resources of the individual's spouse); and
`(IV) for a subsequent year, the dollar
amounts specified in this subclause (or subclause (III)) for the
previous year increased by the annual percentage increase in the
consumer price index (all items; U.S. city average) as of September of
such previous year.'; and
(E) in the last sentence, by inserting `or (IV)' after `subclause (II)'.
(3) APPLICATION OF LIS TEST UNDER MEDICARE SAVINGS
PROGRAM- Section 1905(p)(1)(C) of such Act (42 U.S.C. 1396d(p)(1)(C))
is amended--
(A) by striking `effective beginning with January
1, 2010' and inserting `effective for the period beginning with January
1, 2010, and ending with December 31, 2011'; and
(B) by inserting before the period at the end the
following: `or, effective beginning with January 1, 2012, whose
resources (as so determined) do not exceed the maximum resource level
applied for the year under subparagraph (E) of section 1860D-14(a)(3)
(determined without regard to the life insurance policy exclusion
provided under subparagraph (G) of such section) applicable to an
individual or to the individual and the individual's spouse (as the
case may be)'.
(b) Effective Date- The amendments made by subsection (a)
shall apply to eligibility determinations for income-related subsidies
and medicare cost-sharing furnished for periods beginning on or after
January 1, 2012.
SEC. 1202. ELIMINATION OF PART D COST-SHARING FOR CERTAIN NON-INSTITUTIONALIZED FULL-BENEFIT DUAL ELIGIBLE INDIVIDUALS.
(a) In General- Section 1860D-14(a)(1)(D)(i) of the Social Security Act (42 U.S.C. 1395w-114(a)(1)(D)(i)) is amended--
(1) by striking `INSTITUTIONALIZED INDIVIDUALS- In' and
inserting `ELIMINATION OF COST-SHARING FOR CERTAIN FULL-BENEFIT DUAL
ELIGIBLE INDIVIDUALS-
`(I) INSTITUTIONALIZED INDIVIDUALS- In'; and
(2) by adding at the end the following new subclause:
`(II) CERTAIN OTHER INDIVIDUALS- In the
case of an individual who is a full-benefit dual eligible individual
and with respect to whom there has been a determination that but for
the provision of home and community based care (whether under section
1915, 1932, or under a waiver under section 1115) the individual would
require the level of care provided in a hospital or a nursing facility
or intermediate care facility for the mentally retarded the cost of
which could be reimbursed under the State plan under title XIX, the
elimination of any beneficiary coinsurance described in section
1860D-2(b)(2) (for all amounts through the total amount of expenditures
at which benefits are available under section 1860D-2(b)(4)).'.
(b) Effective Date- The amendments made by subsection (a) shall apply to drugs dispensed on or after January 1, 2011.
SEC. 1203. ELIMINATING BARRIERS TO ENROLLMENT.
(a) Administrative Verification of Income and Resources Under the Low-income Subsidy Program-
(1) IN GENERAL- Clause (iii) of section
1860D-14(a)(3)(E) of the Social Security Act (42 U.S.C.
1395w-114(a)(3)(E)) is amended to read as follows:
`(iii) CERTIFICATION OF INCOME AND RESOURCES- For purposes of applying this section--
`(I) an individual shall be permitted to apply on the basis of self-certification of income and resources; and
`(II) matters attested to in the
application shall be subject to appropriate methods of verification
without the need of the individual to provide additional documentation,
except in extraordinary situations as determined by the Commissioner.'.
(2) EFFECTIVE DATE- The amendment made by paragraph (1) shall apply beginning January 1, 2010.
(b) Disclosures To Facilitate Identification of Individuals
Likely To Be Ineligible for the Low-income Assistance Under the
Medicare Prescription Drug Program To Assist Social Security
Administration's Outreach to Eligible Individuals- For provision
authorizing disclosure of return information to facilitate
identification of individuals likely to be ineligible for low-income
subsidies under Medicare prescription drug program, see section 1801.
SEC. 1204. ENHANCED OVERSIGHT RELATING TO REIMBURSEMENTS FOR RETROACTIVE LOW INCOME SUBSIDY ENROLLMENT.
(a) In General- In the case of a retroactive LIS enrollment
beneficiary who is enrolled under a prescription drug plan under part D
of title XVIII of the Social Security Act (or an MA-PD plan under part
C of such title), the beneficiary (or any eligible third party) is
entitled to reimbursement by the plan for covered drug costs incurred
by the beneficiary during the retroactive coverage period of the
beneficiary in accordance with subsection (b) and in the case of such a
beneficiary described in subsection (c)(4)(A)(i), such reimbursement
shall be made automatically by the plan upon receipt of appropriate
notice the beneficiary is eligible for assistance described in such
subsection (c)(4)(A)(i) without further information required to be
filed with the plan by the beneficiary.
(b) Administrative Requirements Relating to Reimbursements-
(1) LINE-ITEM DESCRIPTION- Each reimbursement made by a
prescription drug plan or MA-PD plan under subsection (a) shall include
a line-item description of the items for which the reimbursement is
made.
(2) TIMING OF REIMBURSEMENTS- A prescription drug plan
or MA-PD plan must make a reimbursement under subsection (a) to a
retroactive LIS enrollment beneficiary, with respect to a claim, not
later than 45 days after--
(A) in the case of a beneficiary described in
subsection (c)(4)(A)(i), the date on which the plan receives notice
from the Secretary that the beneficiary is eligible for assistance
described in such subsection; or
(B) in the case of a beneficiary described in
subsection (c)(4)(A)(ii), the date on which the beneficiary files the
claim with the plan.
(3) REPORTING REQUIREMENT- For each month beginning
with January 2011, each prescription drug plan and each MA-PD plan
shall report to the Secretary the following:
(A) The number of claims the plan has readjudicated
during the month due to a beneficiary becoming retroactively eligible
for subsidies available under section 1860D-14 of the Social Security
Act.
(B) The total value of the readjudicated claim amount for the month.
(C) The Medicare Health Insurance Claims Number of beneficiaries for whom claims were readjudicated.
(D) For the claims described in subparagraphs (A)
and (B), an attestation to the Administrator of the Centers for
Medicare & Medicaid Services of the total amount of reimbursement
the plan has provided to beneficiaries for premiums and cost-sharing
that the beneficiary overpaid for which the plan received payment from
the Centers for Medicare & Medicaid Services.
(c) Definitions- For purposes of this section:
(1) COVERED DRUG COSTS- The term `covered drug costs'
means, with respect to a retroactive LIS enrollment beneficiary
enrolled under a prescription drug plan under part D of title XVIII of
the Social Security Act (or an MA-PD plan under part C of such title),
the amount by which--
(A) the costs incurred by such beneficiary during
the retroactive coverage period of the beneficiary for covered part D
drugs, premiums, and cost-sharing under such title; exceeds
(B) such costs that would have been incurred by
such beneficiary during such period if the beneficiary had been both
enrolled in the plan and recognized by such plan as qualified during
such period for the low income subsidy under section 1860D-14 of the
Social Security Act to which the individual is entitled.
(2) ELIGIBLE THIRD PARTY- The term `eligible third
party' means, with respect to a retroactive LIS enrollment beneficiary,
an organization or other third party that is owed payment on behalf of
such beneficiary for covered drug costs incurred by such beneficiary
during the retroactive coverage period of such beneficiary.
(3) RETROACTIVE COVERAGE PERIOD- The term `retroactive coverage period' means--
(A) with respect to a retroactive LIS enrollment beneficiary described in paragraph (4)(A)(i), the period--
(i) beginning on the effective date of the assistance described in such paragraph for which the individual is eligible; and
(ii) ending on the date the plan effectuates the status of such individual as so eligible; and
(B) with respect to a retroactive LIS enrollment beneficiary described in paragraph (4)(A)(ii), the period--
(i) beginning on the date the individual is
both entitled to benefits under part A, or enrolled under part B, of
title XVIII of the Social Security Act and eligible for medical
assistance under a State plan under title XIX of such Act; and
(ii) ending on the date the plan effectuates
the status of such individual as a full-benefit dual eligible
individual (as defined in section 1935(c)(6) of such Act).
(4) RETROACTIVE LIS ENROLLMENT BENEFICIARY-
(A) IN GENERAL- The term `retroactive LIS enrollment beneficiary' means an individual who--
(i) is enrolled in a prescription drug plan
under part D of title XVIII of the Social Security Act (or an MA-PD
plan under part C of such title) and subsequently becomes eligible as a
full-benefit dual eligible individual (as defined in section 1935(c)(6)
of such Act), an individual receiving a low-income subsidy under
section 1860D-14 of such Act, an individual receiving assistance under
the Medicare Savings Program implemented under clauses (i), (iii), and
(iv) of section 1902(a)(10)(E) of such Act, or an individual receiving
assistance under the supplemental security income program under section
1611 of such Act; or
(ii) subject to subparagraph (B)(i), is a
full-benefit dual eligible individual (as defined in section 1935(c)(6)
of such Act) who is automatically enrolled in such a plan under section
1860D-1(b)(1)(C) of such Act.
(B) EXCEPTION FOR BENEFICIARIES ENROLLED IN RFP PLAN-
(i) IN GENERAL- In no case shall an individual
described in subparagraph (A)(ii) include an individual who is
enrolled, pursuant to a RFP contract described in clause (ii), in a
prescription drug plan offered by the sponsor of such plan awarded such
contract.
(ii) RFP CONTRACT DESCRIBED- The RFP contract
described in this section is a contract entered into between the
Secretary and a sponsor of a prescription drug plan pursuant to the
Centers for Medicare & Medicaid Services' request for proposals
issued on February 17, 2009, relating to Medicare part D retroactive
coverage for certain low income beneficiaries, or a similar subsequent
request for proposals.
SEC. 1205. INTELLIGENT ASSIGNMENT IN ENROLLMENT.
(a) In General- Section 1860D-1(b)(1)(C) of the Social
Security Act (42 U.S.C. 1395w-101(b)(1)(C)) is amended by adding after
`PDP region' the following: `or through use of an intelligent
assignment process that is designed to maximize the access of such
individual to necessary prescription drugs while minimizing costs to
such individual and to the program under this part to the greatest
extent possible. In the case the Secretary enrolls such individuals
through use of an intelligent assignment process, such process shall
take into account the extent to which prescription drugs necessary for
the individual are covered in the case of a PDP sponsor of a
prescription drug plan that uses a formulary, the use of prior
authorization or other restrictions on access to coverage of such
prescription drugs by such a sponsor, and the overall quality of a
prescription drug plan as measured by quality ratings established by
the Secretary.'
(b) Effective Date- The amendment made by subsection (a) shall take effect for contract years beginning with 2012.
SEC. 1206. SPECIAL ENROLLMENT PERIOD AND AUTOMATIC ENROLLMENT PROCESS FOR CERTAIN SUBSIDY ELIGIBLE INDIVIDUALS.
(a) Special Enrollment Period- Section 1860D-1(b)(3)(D) of
the Social Security Act (42 U.S.C. 1395w-101(b)(3)(D)) is amended to
read as follows:
`(D) SUBSIDY ELIGIBLE INDIVIDUALS- In the case of
an individual (as determined by the Secretary) who is determined under
subparagraph (B) of section 1860D-14(a)(3) to be a subsidy eligible
individual.'.
(b) Automatic Enrollment- Section 1860D-1(b)(1) of the
Social Security Act (42 U.S.C. 1395w-101(b)(1)) is amended by adding at
the end the following new subparagraph:
`(D) SPECIAL RULE FOR SUBSIDY ELIGIBLE INDIVIDUALS-
The process established under subparagraph (A) shall include, in the
case of an individual described in section 1860D-1(b)(3)(D) who fails
to enroll in a prescription drug plan or an MA-PD plan during the
special enrollment established under such section applicable to such
individual, the application of the assignment process described in
subparagraph (C) to such individual in the same manner as such
assignment process applies to a part D eligible individual described in
such subparagraph (C). Nothing in the previous sentence shall prevent
an individual described in such sentence from declining enrollment in a
plan determined appropriate by the Secretary (or in the program under
this part) or from changing such enrollment.'.
(c) Effective Date- The amendments made by this section
shall apply to subsidy determinations made for months beginning with
January 2011.
SEC. 1207. APPLICATION OF MA PREMIUMS PRIOR TO REBATE IN CALCULATION OF LOW INCOME SUBSIDY BENCHMARK.
(a) In General- Section 1860D-14(b)(2)(B)(iii) of the
Social Security Act (42 U.S.C. 1395w-114(b)(2)(B)(iii)) is amended by
inserting before the period the following: `before the application of
the monthly rebate computed under section 1854(b)(1)(C)(i) for that
plan and year involved'.
(b) Effective Date- The amendment made by subsection (a)
shall apply to subsidy determinations made for months beginning with
January 2011.
Subtitle B--Reducing Health Disparities
SEC. 1221. ENSURING EFFECTIVE COMMUNICATION IN MEDICARE.
(a) Ensuring Effective Communication by the Centers for Medicare & Medicaid Services-
(1) STUDY ON MEDICARE PAYMENTS FOR LANGUAGE SERVICES-
The Secretary of Health and Human Services shall conduct a study that
examines the extent to which Medicare service providers utilize, offer,
or make available language services for beneficiaries who are limited
English proficient and ways that Medicare should develop payment
systems for language services.
(2) ANALYSES- The study shall include an analysis of each of the following:
(A) How to develop and structure appropriate payment systems for language services for all Medicare service providers.
(B) The feasibility of adopting a payment
methodology for on-site interpreters, including interpreters who work
as independent contractors and interpreters who work for agencies that
provide on-site interpretation, pursuant to which such interpreters
could directly bill Medicare for services provided in support of
physician office services for an LEP Medicare patient.
(C) The feasibility of Medicare contracting
directly with agencies that provide off-site interpretation including
telephonic and video interpretation pursuant to which such contractors
could directly bill Medicare for the services provided in support of
physician office services for an LEP Medicare patient.
(D) The feasibility of modifying the existing
Medicare resource-based relative value scale (RBRVS) by using
adjustments (such as multipliers or add-ons) when a patient is LEP.
(E) How each of options described in a previous
paragraph would be funded and how such funding would affect physician
payments, a physician's practice, and beneficiary cost-sharing.
(F) The extent to which providers under parts A and
B of title XVIII of the Social Security Act, MA organizations offering
Medicare Advantage plans under part C of such title and PDP sponsors of
a prescription drug plan under part D of such title utilize, offer, or
make available language services for beneficiaries with limited English
proficiency.
(G) The nature and type of language services
provided by States under title XIX of the Social Security Act and the
extent to which such services could be utilized by beneficiaries and
providers under title XVIII of such Act.
(3) VARIATION IN PAYMENT SYSTEM DESCRIBED- The payment
systems described in paragraph (2)(A) may allow variations based upon
types of service providers, available delivery methods, and costs for
providing language services including such factors as--
(A) the type of language services provided (such as
provision of health care or health care related services directly in a
non-English language by a bilingual provider or use of an interpreter);
(B) type of interpretation services provided (such as in-person, telephonic, video interpretation);
(C) the methods and costs of providing language
services (including the costs of providing language services with
internal staff or through contract with external independent
contractors or agencies, or both);
(D) providing services for languages not frequently encountered in the United States; and
(E) providing services in rural areas.
(4) REPORT- The Secretary shall submit a report on the
study conducted under subsection (a) to appropriate committees of
Congress not later than 12 months after the date of the enactment of
this Act.
(5) EXEMPTION FROM PAPERWORK REDUCTION ACT- Chapter 35
of title 44, United States Code (commonly known as the `Paperwork
Reduction Act'), shall not apply for purposes of carrying out this
subsection.
(6) AUTHORIZATION OF APPROPRIATIONS- There is
authorized to be appropriated to carry out this subsection such sums as
are necessary.
(b) Health Plans- Section 1857(g)(1) of the Social Security Act (42 U.S.C. 1395w-27(g)(1)) is amended--
(1) by striking `or' at the end of subparagraph (F);
(2) by adding `or' at the end of subparagraph (G); and
(3) by inserting after subparagraph (G) the following new subparagraph:
`(H) fails substantially to provide language
services to limited English proficient beneficiaries enrolled in the
plan that are required under law;'.
SEC. 1222. DEMONSTRATION TO PROMOTE ACCESS FOR MEDICARE
BENEFICIARIES WITH LIMITED ENGLISH PROFICIENCY BY PROVIDING
REIMBURSEMENT FOR CULTURALLY AND LINGUISTICALLY APPROPRIATE SERVICES.
(a) In General- Not later than 6 months after the date of
the completion of the study described in section 1221(a), the
Secretary, acting through the Centers for Medicare & Medicaid
Services, shall carry out a demonstration program under which the
Secretary shall award not fewer than 24 3-year grants to eligible
Medicare service providers (as described in subsection (b)(1)) to
improve effective communication between such providers and Medicare
beneficiaries who are living in communities where racial and ethnic
minorities, including populations that face language barriers, are
underserved with respect to such services. In designing and carrying
out the demonstration the Secretary shall take into consideration the
results of the study conducted under section 1221(a) and adjust, as
appropriate, the distribution of grants so as to better target Medicare
beneficiaries who are in the greatest need of language services. The
Secretary shall not authorize a grant larger than $500,000 over three
years for any grantee.
(b) Eligibility; Priority-
(1) ELIGIBILITY- To be eligible to receive a grant under subsection (a) an entity shall--
(i) a provider of services under part A of title XVIII of the Social Security Act;
(ii) a service provider under part B of such title;
(iii) a part C organization offering a Medicare part C plan under part C of such title; or
(iv) a PDP sponsor of a prescription drug plan under part D of such title; and
(B) prepare and submit to the Secretary an
application, at such time, in such manner, and accompanied by such
additional information as the Secretary may require.
(A) DISTRIBUTION- To the extent feasible, in awarding grants under this section, the Secretary shall award--
(i) at least 6 grants to providers of services described in paragraph (1)(A)(i);
(ii) at least 6 grants to service providers described in paragraph (1)(A)(ii);
(iii) at least 6 grants to organizations described in paragraph (1)(A)(iii); and
(iv) at least 6 grants to sponsors described in paragraph (1)(A)(iv).
(B) FOR COMMUNITY ORGANIZATIONS- The Secretary
shall give priority to applicants that have developed partnerships with
community organizations or with agencies with experience in language
access.
(C) VARIATION IN GRANTEES- The Secretary shall also
ensure that the grantees under this section represent, among other
factors, variations in--
(i) different types of language services
provided and of service providers and organizations under parts A
through D of title XVIII of the Social Security Act;
(ii) languages needed and their frequency of use;
(iii) urban and rural settings;
(iv) at least two geographic regions, as defined by the Secretary; and
(v) at least two large metropolitan statistical areas with diverse populations.
(1) IN GENERAL- A grantee shall use grant funds
received under this section to pay for the provision of competent
language services to Medicare beneficiaries who are limited English
proficient. Competent interpreter services may be provided through
on-site interpretation, telephonic interpretation, or video
interpretation or direct provision of health care or health care
related services by a bilingual health care provider. A grantee may use
bilingual providers, staff, or contract interpreters. A grantee may use
grant funds to pay for competent translation services. A grantee may
use up to 10 percent of the grant funds to pay for administrative costs
associated with the provision of competent language services and for
reporting required under subsection (e).
(2) ORGANIZATIONS- Grantees that are part C
organizations or PDP sponsors must ensure that their network providers
receive at least 50 percent of the grant funds to pay for the provision
of competent language services to Medicare beneficiaries who are
limited English proficient, including physicians and pharmacies.
(3) DETERMINATION OF PAYMENTS FOR LANGUAGE SERVICES-
Payments to grantees shall be calculated based on the estimated numbers
of limited English proficient Medicare beneficiaries in a grantee's
service area utilizing--
(A) data on the numbers of limited English
proficient individuals who speak English less than `very well' from the
most recently available data from the Bureau of the Census or other
State-based study the Secretary determines likely to yield accurate
data regarding the number of such individuals served by the grantee; or
(B) the grantee's own data if the grantee routinely
collects data on Medicare beneficiaries' primary language in a manner
determined by the Secretary to yield accurate data and such data shows
greater numbers of limited English proficient individuals than the data
listed in subparagraph (A).
(A) REPORTING- Payments shall only be provided
under this section to grantees that report their costs of providing
language services as required under subsection (e) and may be modified
annually at the discretion of the Secretary. If a grantee fails to
provide the reports under such section for the first year of a grant,
the Secretary may terminate the grant and solicit applications from new
grantees to participate in the subsequent two years of the
demonstration program.
(i) IN GENERAL- Subject to clause (ii),
payments shall be provided under this section only to grantees that
utilize competent bilingual staff or competent interpreter or
translation services which--
(I) if the grantee operates in a State that
has statewide health care interpreter standards, meet the State
standards currently in effect; or
(II) if the grantee operates in a State
that does not have statewide health care interpreter standards,
utilizes competent interpreters who follow the National Council on
Interpreting in Health Care's Code of Ethics and Standards of Practice.
(ii) EXEMPTIONS- The requirements of clause (i) shall not apply--
(I) in the case of a Medicare beneficiary
who is limited English proficient (who has been informed in the
beneficiary's primary language of the availability of free interpreter
and translation services) and who requests the use of family, friends,
or other persons untrained in interpretation or translation and the
grantee documents the request in the beneficiary's record; and
(II) in the case of a medical emergency
where the delay directly associated with obtaining a competent
interpreter or translation services would jeopardize the health of the
patient.
Nothing in clause (ii)(II) shall be construed to
exempt emergency rooms or similar entities that regularly provide
health care services in medical emergencies from having in place
systems to provide competent interpreter and translation services
without undue delay.
(d) Assurances- Grantees under this section shall--
(1) ensure that appropriate clinical and support staff
receive ongoing education and training in linguistically appropriate
service delivery;
(2) ensure the linguistic competence of bilingual providers;
(3) offer and provide appropriate language services at
no additional charge to each patient with limited English proficiency
at all points of contact, in a timely manner during all hours of
operation;
(4) notify Medicare beneficiaries of their right to receive language services in their primary language;
(5) post signage in the languages of the commonly
encountered group or groups present in the service area of the
organization; and
(A) primary language data are collected for recipients of language services; and
(B) consistent with the privacy protections
provided under the regulations promulgated pursuant to section 264(c)
of the Health Insurance Portability and Accountability Act of 1996 (42
U.S.C. 1320d-2 note), if the recipient of language services is a minor
or is incapacitated, the primary language of the parent or legal
guardian is collected and utilized.
(e) Reporting Requirements- Grantees under this section
shall provide the Secretary with reports at the conclusion of the each
year of a grant under this section. Each report shall include at least
the following information:
(1) The number of Medicare beneficiaries to whom language services are provided.
(2) The languages of those Medicare beneficiaries.
(3) The types of language services provided (such as
provision of services directly in non-English language by a bilingual
health care provider or use of an interpreter).
(4) Type of interpretation (such as in-person, telephonic, or video interpretation).
(5) The methods of providing language services (such as staff or contract with external independent contractors or agencies).
(6) The length of time for each interpretation encounter.
(7) The costs of providing language services (which may be actual or estimated, as determined by the Secretary).
(f) No Cost Sharing- Limited English proficient Medicare
beneficiaries shall not have to pay cost-sharing or co-pays for
language services provided through this demonstration program.
(g) Evaluation and Report- The Secretary shall conduct an
evaluation of the demonstration program under this section and shall
submit to the appropriate committees of Congress a report not later
than 1 year after the completion of the program. The report shall
include the following:
(1) An analysis of the patient outcomes and costs of
furnishing care to the limited English proficient Medicare
beneficiaries participating in the project as compared to such outcomes
and costs for limited English proficient Medicare beneficiaries not
participating.
(2) The effect of delivering culturally and
linguistically appropriate services on beneficiary access to care,
utilization of services, efficiency and cost-effectiveness of health
care delivery, patient satisfaction, and select health outcomes.
(3) Recommendations, if any, regarding the extension of such project to the entire Medicare program.
(h) General Provisions- Nothing in this section shall be
construed to limit otherwise existing obligations of recipients of
Federal financial assistance under title VI of the Civil Rights Act of
1964 (42 U.S.C. 2000(d) et seq.) or any other statute.
(i) Authorization of Appropriations- There are authorized
to be appropriated to carry out this section $16,000,000 for each
fiscal year of the demonstration program.
SEC. 1223. IOM REPORT ON IMPACT OF LANGUAGE ACCESS SERVICES.
(a) In General- The Secretary of Health and Human Services
shall enter into an arrangement with the Institute of Medicine under
which the Institute will prepare and publish, not later than 3 years
after the date of the enactment of this Act, a report on the impact of
language access services on the health and health care of limited
English proficient populations.
(b) Contents- Such report shall include--
(1) recommendations on the development and
implementation of policies and practices by health care organizations
and providers for limited English proficient patient populations;
(2) a description of the effect of providing language
access services on quality of health care and access to care and
reduced medical error; and
(3) a description of the costs associated with or savings related to provision of language access services.
SEC. 1224. DEFINITIONS.
(1) BILINGUAL- The term `bilingual' with respect to an
individual means a person who has sufficient degree of proficiency in
two languages and can ensure effective communication can occur in both
languages.
(2) COMPETENT INTERPRETER SERVICES- The term `competent
interpreter services' means a trans-language rendition of a spoken
message in which the interpreter comprehends the source language and
can speak comprehensively in the target language to convey the meaning
intended in the source language. The interpreter knows health and
health-related terminology and provides accurate interpretations by
choosing equivalent expressions that convey the best matching and
meaning to the source language and captures, to the greatest possible
extent, all nuances intended in the source message.
(3) COMPETENT TRANSLATION SERVICES- The term `competent
translation services' means a trans-language rendition of a written
document in which the translator comprehends the source language and
can write comprehensively in the target language to convey the meaning
intended in the source language. The translator knows health and
health-related terminology and provides accurate translations by
choosing equivalent expressions that convey the best matching and
meaning to the source language and captures, to the greatest possible
extent, all nuances intended in the source document.
(4) EFFECTIVE COMMUNICATION- The term `effective
communication' means an exchange of information between the provider of
health care or health care-related services and the limited English
proficient recipient of such services that enables limited English
proficient individuals to access, understand, and benefit from health
care or health care-related services.
(5) INTERPRETING/INTERPRETATION- The terms
`interpreting' and `interpretation' mean the transmission of a spoken
message from one language into another, faithfully, accurately, and
objectively.
(6) HEALTH CARE SERVICES- The term `health care
services' means services that address physical as well as mental health
conditions in all care settings.
(7) HEALTH CARE-RELATED SERVICES- The term `health
care-related services' means human or social services programs or
activities that provide access, referrals or links to health care.
(8) LANGUAGE ACCESS- The term `language access' means
the provision of language services to an LEP individual designed to
enhance that individual's access to, understanding of or benefit from
health care or health care-related services.
(9) LANGUAGE SERVICES- The term `language services'
means provision of health care services directly in a non-English
language, interpretation, translation, and non-English signage.
(10) LIMITED ENGLISH PROFICIENT- The term `limited
English proficient' or `LEP' with respect to an individual means an
individual who speaks a primary language other than English and who
cannot speak, read, write or understand the English language at a level
that permits the individual to effectively communicate with clinical or
nonclinical staff at an entity providing health care or health care
related services.
(11) MEDICARE BENEFICIARY- The term `Medicare
beneficiary' means an individual entitled to benefits under part A of
title XVIII of the Social Security Act or enrolled under part B of such
title.
(12) MEDICARE PROGRAM- The term `Medicare program'
means the programs under parts A through D of title XVIII of the Social
Security Act.
(13) SERVICE PROVIDER- The term `service provider'
includes all suppliers, providers of services, or entities under
contract to provide coverage, items or services under any part of title
XVIII of the Social Security Act.
Subtitle C--Miscellaneous Improvements
SEC. 1231. EXTENSION OF THERAPY CAPS EXCEPTIONS PROCESS.
Section 1833(g)(5) of the Social Security Act (42 U.S.C.
1395l(g)(5)), as amended by section 141 of the Medicare Improvements
for Patients and Providers Act of 2008 (Public Law 110-275), is amended
by striking `December 31, 2009' and inserting `December 31, 2011'.
SEC. 1232. EXTENDED MONTHS OF COVERAGE OF IMMUNOSUPPRESSIVE
DRUGS FOR KIDNEY TRANSPLANT PATIENTS AND OTHER RENAL DIALYSIS
PROVISIONS.
(a) Provision of Appropriate Coverage of Immunosuppressive Drugs Under the Medicare Program for Kidney Transplant Recipients-
(1) CONTINUED ENTITLEMENT TO IMMUNOSUPPRESSIVE DRUGS-
(A) KIDNEY TRANSPLANT RECIPIENTS- Section
226A(b)(2) of the Social Security Act (42 U.S.C. 426-1(b)(2)) is
amended by inserting `(except for coverage of immunosuppressive drugs
under section 1861(s)(2)(J))' before `, with the thirty-sixth month'.
(B) APPLICATION- Section 1836 of such Act (42 U.S.C. 1395o) is amended--
(i) by striking `Every individual who' and inserting `(a) IN GENERAL- Every individual who'; and
(ii) by adding at the end the following new subsection:
`(b) Special Rules Applicable to Individuals Only Eligible for Coverage of Immunosuppressive Drugs-
`(1) IN GENERAL- In the case of an individual whose
eligibility for benefits under this title has ended on or after January
1, 2012, except for the coverage of immunosuppressive drugs by reason
of section 226A(b)(2), the following rules shall apply:
`(A) The individual shall be deemed to be enrolled under this part for purposes of receiving coverage of such drugs.
`(B) The individual shall be responsible for
providing for payment of the portion of the premium under section 1839
which is not covered under the Medicare savings program (as defined in
section 1144(c)(7)) in order to receive such coverage.
`(C) The provision of such drugs shall be subject to the application of--
`(i) the deductible under section 1833(b); and
`(ii) the coinsurance amount applicable for such drugs (as determined under this part).
`(D) If the individual is an inpatient of a
hospital or other entity, the individual is entitled to receive
coverage of such drugs under this part.
`(2) ESTABLISHMENT OF PROCEDURES IN ORDER TO IMPLEMENT COVERAGE- The Secretary shall establish procedures for--
`(A) identifying individuals that are entitled to coverage of immunosuppressive drugs by reason of section 226A(b)(2); and
`(B) distinguishing such individuals from
individuals that are enrolled under this part for the complete package
of benefits under this part.'.
(C) TECHNICAL AMENDMENT TO CORRECT DUPLICATE
SUBSECTION DESIGNATION- Subsection (d) of section 226A of such Act (42
U.S.C. 426-1), as added by section 201(a)(3)(D)(ii) of the Social
Security Independence and Program Improvements Act of 1994 (Public Law
103-296; 108 Stat. 1497), is redesignated as subsection (d).
(2) EXTENSION OF SECONDARY PAYER REQUIREMENTS FOR ESRD
BENEFICIARIES- Section 1862(b)(1)(C) of such Act (42 U.S.C.
1395y(b)(1)(C)) is amended by adding at the end the following new
sentence: `With regard to immunosuppressive drugs furnished on or after
the date of the enactment of the America's Affordable Health Choices
Act of 2009, this subparagraph shall be applied without regard to any
time limitation.'.
(b) Medicare Coverage for ESRD Patients- Section 1881 of such Act is further amended--
(1) in subsection (b)(14)(B)(iii), by inserting `,
including oral drugs that are not the oral equivalent of an intravenous
drug (such as oral phosphate binders and calcimimetics),' after `other
drugs and biologicals';
(2) in subsection (b)(14)(E)(ii)--
(A) in the first sentence--
(i) by striking `a one-time election to be
excluded from the phase-in' and inserting `an election, with respect to
2011, 2012, or 2013, to be excluded from the phase-in (or the remainder
of the phase-in)'; and
(ii) by adding at the end the following: `for
such year and for each subsequent year during the phase-in described in
clause (i)'; and
(B) in the second sentence--
(i) by striking `January 1, 2011' and inserting `the first date of such year'; and