S.Amdt. 3166

TEXT OF AMENDMENTS

SA 3164. Mr. CASEY submitted an amendment intended to be proposed to
amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr.
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal
Revenue Code of 1986 to modify the first-time homebuyers credit in the
case of members of the Armed Forces and certain other Federal
employees, and for other purposes; which was ordered to lie on the
table; as follows:

On page 330, strike lines 7 through 11 and inserting the
following:
``individual is--
``(i) a member of a recognized religious sect or division
thereof which is described in section 1402(g)(1), and
``(ii) an adherent of established tenets or teachings of
such sect or division as described in such section.
______

SA 3165. Mr. BINGAMAN submitted an amendment intended to be proposed
to amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr.
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal
Revenue Code of 1986 to modify the first-time homebuyers credit in the
case of members of the Armed Forces and certain other Federal
employees, and for other purposes; which was ordered to lie on the
table; as follows:

On page 1395, strike line 11 and all that follows through
``SEC. 778.'' on line 15 and insert the following:

SEC. 5314. FELLOWSHIP TRAINING IN PUBLIC HEALTH.

Part B of title III of the Public Health Service Act (42
U.S.C. 243 et seq.) is amended by inserting after section 311
the following:

``SEC. 311A.

[[Page S13040]]

SA 3166. Mr. BINGAMAN submitted an amendment intended to be proposed
to amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr.
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal
Revenue Code of 1986 to modify the first-time homebuyers credit in the
case of members of the Armed Forces and certain other Federal
employees, and for other purposes; which was ordered to lie on the
table; as follows:

On page 816, after line 20, insert the following:

SEC. 3115. GAO STUDY AND REPORT ON MEDICARE BENEFICIARY
ACCESS.

(a) Study.--The Comptroller General of the United States
(in this section referred to as the ``Comptroller General'')
shall conduct a study on the ability of Medicare
beneficiaries to fully access available health care services
during the 5-year period following enactment of this Act.
Such study shall include the following:
(1) A detailed analysis regarding levels of access to
health care services for different groups or populations of
Medicare beneficiaries, including a breakdown--
(A) by location, including rural areas (as defined in
section 1886(d)(2)(D) of the Social Security Act), health
professional shortage areas (as designated under section 332
of the Public Health Service Act), medically underserved
communities (as defined in section 799B(6) of such Act), and
medically underserved populations (as defined in section
330(b)(3) of such Act);
(B) by type of health care service, including physician
services and primary care services; and
(C) by any other measure determined appropriate by the
Comptroller General.
(2) A summary that identifies--
(A) any groups or populations of Medicare beneficiaries
that lack adequate access to health care services; and
(B) any types of health care services that are not fully
accessible to Medicare beneficiaries.
(b) Report.--
(1) Interim report.--Not later than 30 months after the
date of enactment of this Act, the Comptroller General shall
prepare and submit an interim report to Congress that
contains the preliminary results of the study conducted under
subsection (a), together with recommendations for such
legislation and administrative action as the Comptroller
General determines appropriate.
(2) Final report.--Not later than 60 months after the date
of enactment of this Act, the Comptroller General shall
prepare and submit a final report to Congress that contains
the results of the study conducted under subsection (a),
together with recommendations for such legislation and
administrative action as the Comptroller General determines
appropriate.
(c) Medicare Beneficiary.--In this section, the term
``Medicare beneficiary'' means an individual entitled to
benefits under part A of title XVIII of the Social Security
Act, enrolled under part B of such title, or both.
(d) Authorization of Appropriations.--There are authorized
to be appropriated such sums as are necessary to carry out
this section.
______

SA 3167. Mr. BINGAMAN submitted an amendment intended to be proposed
to amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr.
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal
Revenue Code of 1986 to modify the first-time homebuyers credit in the
case of members of the Armed Forces and certain other Federal
employees, and for other purposes; which was ordered to lie on the
table; as follows:

Strike section 1413 and insert the following:

SEC. 1413. STREAMLINING OF PROCEDURES FOR ENROLLMENT THROUGH
AN EXCHANGE AND STATE MEDICAID, CHIP, AND
HEALTH SUBSIDY PROGRAMS.

(a) In General.--The Secretary shall establish a system
meeting the requirements of this section under which
residents of each State may apply for enrollment in, receive
a determination of eligibility for participation in, and
continue participation in, applicable State health subsidy
programs. Such system shall ensure that if an individual
applying to an Exchange, to a State Medicaid program under
title XIX of the Social Security Act, or to a State
children's health insurance program (CHIP) under title XXI of
such Act, is found to be ineligible for the program to which
the individual applied, the individual shall be screened for
eligibility for all other potentially applicable such
programs and shall be enrolled in the program for which the
individual qualifies.
(b) Requirements Relating to Forms and Notice.--
(1) Requirements relating to forms.--
(A) In general.--The Secretary shall develop and provide to
each State a single, streamlined form that--
(i) may be used to apply for all applicable State health
subsidy programs within the State;
(ii) may be filed online, in person, by mail, or by
telephone;
(iii) may be filed with an Exchange or with State officials
operating one of the other applicable State health subsidy
programs; and
(iv) is structured to maximize an applicant's ability to
complete the form satisfactorily, taking into account the
characteristics of individuals who qualify for applicable
State health subsidy programs.
(B) State authority to establish form.--A State may develop
and use its own single, streamlined form as an alternative to
the form developed under subparagraph (A) if the alternative
form is consistent with standards promulgated by the
Secretary under this section.
(C) Supplemental eligibility forms.--The Secretary may
allow a State to use a supplemental or alternative form in
the case of individuals who apply for eligibility that is not
determined on the basis of the household income (as defined
in section 36B of the Internal Revenue Code of 1986).
(D) Relevance.--The forms described in subparagraphs (A)
and (B) shall not require the applicant to answer any
questions that are irrelevant to establishing eligibility for
applicable State health subsidy programs. The Secretary shall
establish procedures that avoid any need for such
requirements, which shall include determining the amounts
expended for medical assistance that are described in
subsection (y)(1) of section 1905 of the Social Security Act
(as added by section 2001(a)(3) of this Act) through the use
of the post-enrollment procedures described in section
1903(u)(1)(C) of the Social Security Act.
(2) Notice.--The Secretary shall provide that an applicant
filing a form under paragraph (1) shall receive notice of
eligibility for an applicable State health subsidy program
without any need to provide additional information or
paperwork unless such information or paperwork is
specifically required by law when information provided on the
form is inconsistent with data used for the electronic
verification under paragraph (3) or is otherwise insufficient
to determine eligibility.
(c) Requirements Relating to Eligibility Based on Data
Exchanges.--
(1) Development of secure interfaces.--Each State shall
develop for all applicable State health subsidy programs a
secure, electronic interface allowing an exchange of data
(including information contained in the application forms
described in subsection (b)) that allows a determination of
eligibility for all such programs based on a single
application. Such interface shall be compatible with the
method established for data verification under section
1411(c)(4).
(2) Data matching program.--Each applicable State health
subsidy program shall participate in a data matching
arrangement for determining eligibility for participation in
the program under paragraph (3) that--
(A) provides access to data described in paragraph (3);
(B) applies only to individuals who--
(i) receive assistance from an applicable State health
subsidy program; or
(ii) apply for such assistance--

(I) by filing a form described in subsection (b); or
(II) notwithstanding section 1411(b), by requesting a
determination of eligibility and authorizing disclosure of
the information described in paragraph (3) to applicable
State health coverage subsidy programs for purposes of
determining and establishing eligibility; and

(C) is consistent with standards promulgated by the
Secretary, including the privacy and data security safeguards
described in section 1942 of the Social Security Act or that
are otherwise applicable to such programs.
(3) Determination of eligibility.--
(A) In general.--Each applicable State health subsidy
program shall, to the maximum extent practicable--
(i) establish, verify, and update eligibility for
participation in the program using the data matching
arrangement under paragraph (2); and
(ii) determine such eligibility on the basis of reliable,
third party data, including information described in sections
1137, 453(i), and 1942(a) of the Social Security Act,
obtained through such arrangement, provided that if such data
do not establish an individual's eligibility for medical
assistance under title XIX of the Social Security Act, the
rules described in section 1902(e)(14)(H) of such Act shall
apply to such individual.
(B) Exception.--This paragraph shall not apply in
circumstances with respect to which the Secretary determines
that the administrative and other costs of use of the data
matching arrangement under paragraph (2) outweigh its
expected gains in accuracy, efficiency, and program
participation.
(4) Secretarial standards.--The Secretary shall, after
consultation with persons in possession of the data to be
matched and representatives of applicable State health
subsidy programs, promulgate standards governing the timing,
contents, and procedures for data matching described in this
subsection. Such standards shall take into account
administrative and other costs and the value of data matching
to the establishment, verification, and updating of
eligibility for applicable State health subsidy programs.
(d) Administrative Authority.--
(1) Agreements.--Subject to section 1411 and section
6103(l)(21) of the Internal Revenue Code of 1986 and any
other requirement providing safeguards of privacy and data
integrity, the Secretary may establish model

[[Page S13041]]

agreements, and enter into agreements, for the sharing of
data under this section.
(2) Authority of exchange to contract out.--Nothing in this
section shall be construed to--
(A) prohibit contractual arrangements through which a State
medicaid agency determines eligibility for all applicable
State health subsidy programs, but only if such agency
complies with the Secretary's requirements ensuring reduced
administrative costs, eligibility errors, and disruptions in
coverage; or
(B) change any requirement under title XIX that eligibility
for participation in a State's medicaid program must be
determined by a public agency.
(e) Applicable State Health Subsidy Program.--In this
section, the term ``applicable State health subsidy program''
means--
(1) the program under this title for the determination of
eligibility for premium tax credits under section 36B of the
Internal Revenue Code of 1986 and cost-sharing reductions
under section 1402;
(2) a State medicaid program under title XIX of the Social
Security Act;
(3) a State children's health insurance program (CHIP)
under title XXI of such Act; and
(4) a State program under section 1331 establishing
qualified basic health plans.
______

SA 3168. Mr. CASEY (for himself and Mrs. Gillibrand) submitted an
amendment intended to be proposed to amendment SA 2786 proposed by Mr.
Reid (for himself, Mr. Baucus, Mr. Dodd, and Mr. Harkin) to the bill
H.R. 3590, to amend the Internal Revenue Code of 1986 to modify the
first-time homebuyers credit in the case of members of the Armed Forces
and certain other Federal employees, and for other purposes; which was
ordered to lie on the table; as follows:

On page 466, between lines 5 and 6, insert the following:

SEC. 2305. OPTIONAL COVERAGE OF NURSE HOME VISITATION
SERVICES.

(a) In General.--Section 1905 of the Social Security Act
(42 U.S.C. 1396d), as amended by sections 2001(a)(3), 2006,
and 2301(a)(1), is amended--
(1) in subsection (a)--
(A) in paragraph (28), by striking ``and'' at the end;
(B) by redesignating paragraph (29) as paragraph (30); and
(C) by inserting after paragraph (28) the following new
paragraph:
``(29) nurse home visitation services (as defined in
subsection (z)); and''; and
(2) by inserting after subsection (y) the following new
subsection:
``(z) The term `nurse home visitation services' means
voluntary home visits that are provided by trained nurses to
a family with a first-time pregnant woman, or a child (under
2 years of age), who is eligible for medical assistance under
this title, but only, to the extent determined by the
Secretary based upon evidence, that such services are
effective in achieving 1 or more of the following:
``(1) Improving maternal or child health and pregnancy
outcomes or increasing birth intervals between pregnancies.
``(2) Reducing the incidence of child abuse, neglect, and
injury, improving family stability (including reduction in
the incidence of intimate partner violence), or reducing
maternal and child involvement in the criminal justice
system.
``(3) Increasing economic self-sufficiency, employment
advancement, school-readiness, and educational achievement,
or reducing dependence on public assistance.''.
(b) Effective Date.--The amendments made by this section
shall apply to services furnished on or after January 1,
2010.
(c) Construction.--Nothing in the amendments made by this
section shall be construed as affecting the ability of a
State under title XIX or XXI of the Social Security Act to
provide nurse home visitation services as part of another
class of items and services falling within the definition of
medical assistance or child health assistance under the
respective title, or as an administrative expenditure for
which payment is made under section 1903(a) or 2105(a) of
such Act, respectively, on or after the date of the enactment
of this Act.
______

SA 3169. Mr. CORNYN (for himself and Mr. Coburn) submitted an
amendment intended to be proposed to amendment SA 2786 proposed by Mr.
Reid (for himself, Mr. Baucus, Mr. Dodd, and Mr. Harkin) to the bill
H.R. 3590, to amend the Internal Revenue Code of 1986 to modify the
first-time homebuyers credit in the case of members of the Armed Forces
and certain other Federal employees, and for other purposes; which was
ordered to lie on the table; as follows:

Strike section 6001.
______

SA 3170. Mr. PRYOR (for himself and Mr. Bayh) submitted an amendment
intended to be proposed to amendment SA 2786 proposed by Mr. Reid (for
himself, Mr. Baucus, Mr. Dodd, and Mr. Harkin) to the bill H.R. 3590,
to amend the Internal Revenue Code of 1986 to modify the first-time
homebuyers credit in the case of members of the Armed Forces and
certain other Federal employees, and for other purposes; which was
ordered to lie on the table; as follows:

On page 828, between lines 3 and 4, insert the following:

SEC. 3130. RESTORING STATE AUTHORITY TO WAIVE THE 35-MILE
RULE FOR MEDICARE CRITICAL ACCESS HOSPITAL
DESIGNATIONS.

Section 1820(c)(2)(B)(i)(II) of the Social Security Act (42
U.S.C. 1395i-4(c)(2)(B)(i)(II)) is amended by inserting ``or
on or after the date of enactment of the Patient Protection
and Affordable Care Act'' after ``January 1, 2006,''.
______

SA 3171. Mr. PRYOR submitted an amendment intended to be proposed to
amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr.
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal
Revenue Code of 1986 to modify the first-time homebuyers credit in the
case of members of the Armed Forces and certain other Federal
employees, and for other purposes; which was ordered to lie on the
table; as follows:

On page 1999, between lines 20 and 21, insert the
following:

SEC. 9005A. ANNUAL ROLLOVER OF HEALTH FSA BALANCES.

(a) In General.--Subsection (i) of section 125 of the
Internal Revenue Code of 1986, as added by section
9005(a)(2), is amended--
(1) by striking all matter before ``if a benefit'' and
inserting the following:
``(i) Special Rules Applicable to Health Flexible Spending
Arrangements.--
``(1) Limitation on contributions to health flexible
spending arrangements.--For purposes of this section,'', and
(2) by adding at the end the following new paragraph:
``(2) Allowance of carryover of unused amounts in health
flexible spending arrangements.--
``(A) In general.--For purposes of this title, a plan or
other arrangement shall not fail to be treated as a cafeteria
plan solely because under the plan or arrangement a
participant is permitted access to any unused amounts
attributable to salary reduction contributions under such
plan or arrangement in the manner provided under subparagraph
(B).
``(B) Carryover of unused amounts.--A plan or arrangement
may permit a participant in a health flexible spending
arrangement to elect to carry over so much of the unused
amounts attributable to salary reduction contributions under
such plan or arrangement as of the close of any calendar year
as does not exceed $1,000 to the immediately succeeding
calendar year.
``(C) Amounts not deferred compensation.--No amount shall
be treated as deferred compensation for purposes of this
title by reason of any carryover under this paragraph.
``(D) Coordination with contribution limit.--The maximum
amount which may be contributed to a health flexible spending
arrangement under paragraph (1) for any calendar year to
which an unused amount is carried over under this paragraph
shall be reduced by such amount.''.
(b) Effective Date.--The amendments made by this section
shall apply to calendar years beginning after December 31,
2010.
______

SA 3172. Mr. BROWN submitted an amendment intended to be proposed to
amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr.
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal
Revenue Code of 1986 to modify the first-time homebuyers credit in the
case of members of the Armed Forces and certain other Federal
employees, and for other purposes; which was ordered to lie on the
table; as follows:

On page 18, between lines 15 and 16, insert the following:

``SEC. 2713A. COVERAGE OF CERTAIN CARE.

``A group health plan and a health insurance issuer
offering group or individual health insurance coverage shall
provide coverage for wound-care supplies that are medically
necessary for the treatment of epidermolysis bullosa and are
administered under the direction of a physician.''.
______

SA 3173. Mr. MERKLEY (for himself and Mr. Franken) submitted an
amendment intended to be proposed to amendment SA 2786 proposed by Mr.
Reid (for himself, Mr. Baucus, Mr. Dodd, and Mr. Harkin) to the bill
H.R. 3590, to amend the Internal Revenue Code of 1986 to modify the
first-time homebuyers credit in the case of members of the Armed Forces
and certain other Federal employees, and for other purposes; which was
ordered to lie on the table; as follows:

On page 354, between lines 2 and 3, insert the following:
(D) Application to construction industry employers.--In the
case of any employer the substantial annual gross receipts of
which are attributable to the construction industry--

[[Page S13042]]

(i) subparagraph (A) shall be applied by substituting ``who
employed an average of at least 5 full-time employees on
business days during the preceeding calendar year or whose
annual payroll expenses exceed $250,000 for such preceeding
calendar year'' for ``who employed an average of at least 50
full-time employees on business days during the preceeding
calendar year'', and
(ii) subparagraph (B) shall be applied by substituting
``5'' for ``50''.
______

SA 3174. Ms. SNOWE submitted an amendment intended to be proposed to
amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr.
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal
Revenue Code of 1986 to modify the first-time homebuyers credit in the
case of members of the Armed Forces and certain other Federal
employees, and for other purposes; which was ordered to lie on the
table; as follows:

At after title IX, insert the following:

TITLE X--HEALTH CARE REFORM OVERSIGHT COMMITTEE

SEC. 10001. HEALTH CARE REFORM OVERSIGHT COMMITTEE.

(a) Establishment.--There is established a committee to be
known as the Health Care Reform Oversight Committee (referred
to in this section as the ``Committee''), for the purpose of
maintaining close oversight of the implementation of the
requirements of this Act (including the amendments made by
this Act), including with regard to the affordability
criteria set forth in this Act, the impact of this Act on
small businesses, and pricing trends resulting from
implementation of this Act.
(b) Membership.--The Committee shall be composed of 12
members, selected by the President pro tempore of the Senate
and the Speaker of the House of Representatives, in
consultation with the majority and minority leaders of the
Senate and of the House of Representatives, from among
members of the public experienced in health care
administration, tax policy, small business, actuarial
science, health insurance plan design or sales, or a
profession that would lend credibility to the work of the
Committee. Not more than 3 members of the Committee may be
Federal employees.
(c) Chairperson.--The Committee shall select a Chairperson
from among its members.
(d) Meetings.--The Committee shall meet at the call of the
chairperson, or as voted by 7 members, as is necessary to
maintain close oversight of the implementation of the
requirements of this Act (including the amendments made by
this Act), to address specific problems raised by such
implementation, or to address constituent concerns.
(e) Quorum.--A quorum shall consist of a total of 7 members
of the Committee, except that a total of 5 members shall be
present to conduct hearings, unless such requirement that 5
members be present to conduct hearings is waived by a
majority of the Committee.
(f) Duties of the Committee.--The Committee shall provide
close oversight of all aspects of the requirements of this
Act, including the amendments made by this Act.
(g) Powers of the Committee.--
(1) Hearings.--The Committee may, for the purpose of
carrying out this section--
(A) hold such hearings, sit and act at such times and
places, take such testimony, receive such evidence,
administer such oaths; and
(B) require, by subpoena or otherwise, the attendance and
testimony of such witnesses and the production of such books,
records, correspondence, memoranda, papers, documents, tapes,
and materials as the Committee considers advisable.
(2) Reports and recommendations.--The Committee may issues
reports and findings as it deems appropriate, including
offering suggestions for legislation to improve the
requirements and activities under this Act (including the
amendments made by this Act).
(3) Issuance and enforcement of subpoenas.--
(A) Issuance.--Subpoenas issued under paragraph (1) shall
bear the signature of the Chairperson of the Committee and
shall be served by any person or class of persons designated
by the Chairperson for that purpose.
(B) Enforcement.--In the case of contumacy or failure to
obey a subpoena issued under paragraph (1), the United States
district court for the judicial district in which the
subpoenaed person resides, is served, or may be found may
issue an order requiring such person to appear at any
designated place to testify or to produce documentary or
other evidence. Any failure to obey the order of the court
may be punished by the court as a contempt that court.
(4) Witness allowances and fees.--Section 1821 of title 28,
United States Code, shall apply to witnesses requested or
subpoenaed to appear at any hearing of the Committee. The per
diem and mileage allowances for witnesses shall be paid from
funds available to pay the expenses of the Committee.
(5) Information from federal agencies.--The Committee may
secure directly from any Federal department or agency such
information as the Committee considers necessary to carry out
this Act. Upon request of the Chairperson of the Committee,
or of another member of the Committee representing a majority
vote, the head of such department or agency shall furnish
such information to the Committee.
(6) Postal services.--The Committee may use the United
States mails in the same manner and under the same conditions
as other departments and agencies of the Federal Government.
(7) Gifts.--The Committee may accept, use, and dispose of
gifts or donations of services or property.
(h) Compensation of Members.--
(1) In general.--Each member of the Committee who is not an
officer or employee of the Federal Government shall be
compensated at a rate equal to the daily equivalent of the
annual rate of basic pay prescribed for level IV of the
Executive Schedule under section 5315 of title 5, United
States Code, for each day (including travel time) during
which such member is engaged in the performance of the duties
of the Committee. All members of the Committee who are
officers or employees of the United States shall serve
without compensation in addition to that received for their
services as officers or employees of the United States.
(2) Travel expenses.--The members of the Committee shall be
allowed travel expenses, including per diem in lieu of
subsistence, at rates authorized for employees of agencies
under subchapter I of chapter 57 of title 5, United States
Code, while away from their homes or regular places of
business in the performance of services for the Committee.
(i) Termination of the Committee.--The Committee shall
terminate 5 years after the date of enactment of this Act.
(j) Authorization of Appropriations.--There is authorized
to be appropriated such sums as may be necessary to carry out
this section.
______

SA 3175. Mr. SPECTER (for himself, Mr. Brown, and Mr. Casey)
submitted an amendment intended to be proposed to amendment SA 2786
proposed by Mr. Reid (for himself, Mr. Baucus, Mr. Dodd, and Mr.
Harkin) to the bill H.R. 3590, to amend the Internal Revenue Code of
1986 to modify the first-time homebuyers credit in the case of members
of the Armed Forces and certain other Federal employees, and for other
purposes; which was ordered to lie on the table; as follows:

On page 816, after line 20, insert the following:

SEC. 3115. EXCLUSION OF CUSTOMARY PROMPT PAY DISCOUNTS
EXTENDED TO WHOLESALERS FROM MANUFACTURER'S
AVERAGE SALES PRICE FOR PAYMENTS FOR DRUGS AND
BIOLOGICALS UNDER MEDICARE PART B.

Section 1847A(c)(3) of the Social Security Act (42 U.S.C.
1395w-3a(c)(3)) is amended--
(1) in the first sentence, by inserting after ``prompt pay
discounts'' the following: ``(other than, for drugs and
biologicals that are sold on or after January 1, 2011, and
before January 1, 2016, customary prompt pay discounts
extended to wholesalers, but only to the extent such
discounts do not exceed 2 percent of the wholesale
acquisition cost)''; and
(2) in the second sentence, by inserting after ``other
price concessions'' the following: ``(other than, for drugs
and biologicals that are sold on or after January 1, 2011,
and before January 1, 2016, customary prompt pay discounts
extended to wholesalers, but only to the extent such
discounts do not exceed 2 percent of the wholesale
acquisition cost)''.
______

SA 3176. Mr. GRASSLEY submitted an amendment intended to be proposed
to amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr.
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal
Revenue Code of 1986 to modify the first-time homebuyers credit in the
case of members of the Armed Forces and certain other Federal
employees, and for other purposes; which was ordered to lie on the
table; as follows:

On page 334, between lines 18 and 19, insert the following:
``(E) Special rule for individuals between the ages of 55
and 64.--
``(i) In general.--In the case of an applicable individual
who has attained the age of 55 but has not attained the age
of 65 before the beginning of a calendar year, this paragraph
shall be applied to such individual for months during such
calendar year by substituting `5 percent' for `8 percent' in
subparagraphs (A) and (D).
``(ii) Use of increased federal funds.--

``(I) In general.--The amount available for any calendar
year for expenditure under the early retiree reinsurance
program under section 1102 of the Patient Protection and
Affordable Care Act shall be increased by the amount the
Secretary of Health and Human Services estimates under
subclause (II) for the calendar year. Notwithstanding section
1102(a)(1) of such Act, amounts made available under this
subclause for any calendar year after 2014 may be used to
make payments under such reinsurance program.
``(II) Estimates.--The Secretary of Health and Human
Services, in consultation with the Secretary, shall estimate
for each calendar year after 2013 the net increase (if any)
in Federal revenues, and the net decrease (if any) in Federal
outlays, by reason of the application of clause (i). The sum
of such amounts (expressed as a positive number)

[[Page S13043]]

shall be the amount taken into account under subclause (I).
The Secretary shall adjust the estimate for any calendar year
to correct any errors in an estimate for any preceding
calendar year.

______

SA 3177. Mr. GRASSLEY submitted an amendment intended to be proposed
to amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr.
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal
Revenue Code of 1986 to modify the first-time homebuyers credit in the
case of members of the Armed Forces and certain other Federal
employees, and for other purposes; which was ordered to lie on the
table; as follows:

On page 336, between lines 16 and 17, insert the following:
``(6) College students.--
``(A) In general.--Any applicable individual for any month
which occurs within an academic period during which the
individual is a student (whether full-time or part-time) who
meets the requirements of section 484(a)(1) of the Higher
Education Act of 1965 (20 U.S.C. 1091(a)(1)) at an
institution of higher education (including a community
college or trade school) described in such section. For
purposes of the preceding sentence, any month between 2
consecutive academic periods shall be treated as occurring
during an academic period.
``(B) Use of increased federal funds.--
``(i) In general.--The amount available for any calendar
year for expenditure under the reinsurance program under
section 1341 of the Patient Protection and Affordable Care
Act shall be increased by the amount the Secretary of Health
and Human Services estimates under clause (11) for the
calendar year. Notwithstanding section 1341(b)(4) of such
Act, amounts made available under this subclause for any
calendar year after 2018 may be used to make payments under
any reinsurance program of a State in the individual market
in effect during such calendar year.
``(ii) Estimates.--The Secretary of Health and Human
Services, in consultation with the Secretary, shall estimate
for each calendar year after 2013 the net increase (if any)
in Federal revenues, and the net decrease (if any) in Federal
outlays, by reason of the application of subparagraph (A).
The sum of such amounts (expressed as a positive number)
shall be the amount taken into account under clause (i). The
Secretary shall adjust the estimate for any calendar year to
correct any errors in an estimate for any preceding calendar
year.
______

SA 3178. Mr. GRASSLEY submitted an amendment intended to be proposed
to amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr.
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal
Revenue Code of 1986 to modify the first-time homebuyers credit in the
case of members of the Armed Forces and certain other Federal
employees, and for other purposes; which was ordered to lie on the
table; as follows:

On page 156, beginning with line 4, strike all through page
157, line 7, and insert the following:
(D) President, vice president, members of congress,
political appointees, and congressional staff in the
exchange.--
(i) In general.--Notwithstanding chapter 89 of title 5,
United States Code, or any provision of this title--

(I) the President, Vice President, each Member of Congress,
each political appointee, and each Congressional employee
shall be treated as a qualified individual entitled to the
right under this paragraph to enroll in a qualified health
plan in the individual market offered through an Exchange in
the State in which the individual resides; and
(II) any employer contribution under such chapter on behalf
of the President, Vice President, any Member of Congress, any
political appointee, and any Congressional employee may be
paid only to the issuer of a qualified health plan in which
the individual enrolled in through such Exchange and not to
the issuer of a plan offered through the Federal employees
health benefit program under such chapter.

(ii) Payments by federal government.--The Secretary, in
consultation with the Director of the Office of Personnel
Management, shall establish procedures under which--

(I) the employer contributions under such chapter on behalf
of the President, Vice President, and each political
appointee are determined and actuarially adjusted for age;
and
(II) the employer contributions may be made directly to an
Exchange for payment to an issuer.

(iii) Political appointee.--In this subparagraph, the term
``political appointee'' means any individual who--

(I) is employed in a position described under sections 5312
through 5316 of title 5, United States Code, (relating to the
Executive Schedule);
(II) is a limited term appointee, limited emergency
appointee, or noncareer appointee in the Senior Executive
Service, as defined under paragraphs (5), (6), and (7),
respectively, of section 3132(a) of title 5, United States
Code; or
(III) is employed in a position in the executive branch of
the Government of a confidential or policy-determining
character under schedule C of subpart C of part 213 of title
5 of the Code of Federal Regulations.

(iv) Congressional employee.--In this subparagraph, the
term ``Congressional employee'' means an employee whose pay
is disbursed by the Secretary of the Senate or the Clerk of
the House of Representatives.
______

SA 3179. Mr. GRASSLEY submitted an amendment intended to be proposed
to amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr.
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal
Revenue Code of 1986 to modify the first-time homebuyers credit in the
case of members of the Armed Forces and certain other Federal
employees, and for other purposes; which was ordered to lie on the
table; as follows:

On page 334, between lines 18 and 19, insert the following:
``(E) Special rule for individuals under age 30.--
``(i) In general.--In the case of an applicable individual
who has not attained age 30 before the beginning of a
calendar year, this paragraph shall be applied to such
individual for months during such calendar year by
substituting `5 percent' for `8 percent' in subparagraphs (A)
and (D).
``(ii) Use of increased federal funds.--

``(I) In general.--The amount available for any calendar
year for expenditure under the reinsurance program under
section 1341 of the Patient Protection and Affordable Care
Act shall be increased by the amount the Secretary of Health
and Human Services estimates under subclause (II) for the
calendar year. Notwithstanding section 1341(b)(4) of such
Act, amounts made available under this subclause for any
calendar year after 2018 may be used to make payments under
any reinsurance program of a State in the individual market
in effect during such calendar year.
``(II) Estimates.--The Secretary of Health and Human
Services, in consultation with the Secretary, shall estimate
for each calendar year after 2013 the net increase (if any)
in Federal revenues, and the net decrease (if any) in Federal
outlays, by reason of the application of clause (i). The sum
of such amounts (expressed as a positive number) shall be the
amount taken into account under subclause (I). The Secretary
shall adjust the estimate for any calendar year to correct
any errors in an estimate for any preceding calendar year.

______

SA 3180. Mr. GRASSLEY (for himself and Mr. Roberts) submitted an
amendment intended to be proposed to amendment SA 2786 proposed by Mr.
Reid (for himself, Mr. Baucus, Mr. Dodd, and Mr. Harkin) to the bill
H.R. 3590, to amend the Internal Revenue Code of 1986 to modify the
first-time homebuyers credit in the case of members of the Armed Forces
and certain other Federal employees, and for other purposes; which was
ordered to lie on the table; as follows:

On page 1053, between lines 2 and 3, insert the following:

SEC. 3403A. PROTECTING SENIORS FROM HIGHER PREMIUMS, REDUCED
BENEFITS, AND RATIONING OF LIFE-SAVING CARE
UNDER MEDICARE PARTS C AND D.

Section 1899A(c)(2)(A) of the Social Security Act, as added
by section 3403, is amended--
(1) in clause (ii), by striking ``under section 1818,
1818A, or 1839''; and
(2) by striking clause (iv).
______

SA 3181. Mr. GRASSLEY submitted an amendment intended to be proposed
to amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr.
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal
Revenue Code of 1986 to modify the first-time homebuyers credit in the
case of members of the Armed Forces and certain other Federal
employees, and for other purposes; which was ordered to lie on the
table; as follows:

Beginning on page 909, strike line 21 and all that follows
through page 910, line 19.

______

SA 3182. Mr. GRASSLEY submitted an amendment intended to be proposed
to amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr.
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal
Revenue Code of 1986 to modify the first-time homebuyers credit in the
case of members of the Armed Forces and certain other Federal
employees, and for other purposes; which was ordered to lie on the
table; as follows:

At the end, add the following:

[[Page S13044]]

TITLE X--ENSURING THAT SAVINGS FROM MEDICAL CARE ACCESS PROTECTION ARE
USED TO REDUCE THE COVERAGE GAP UNDER MEDICARE PART D

Subtitle A--Reducing the Coverage Gap Under Medicare Part D

SEC. 10001. REDUCING THE COVERAGE GAP.

Section 1860D-2(b) of the Social Security Act (42 U.S.C.
1395w-102(b)), as amended by section 3315, is further
amended--
(1) in paragraph (3)(A), by striking ``and (7)'' and
inserting ``, (7), and (8)'';
(2) in paragraph (7), by striking subparagraph (C); and
(3) by adding at the end the following new paragraph:
``(8) Increase in initial coverage limit in subsequent
years.--
``(A) In general.--For plan years beginning on or after
January 1, 2011, the initial coverage limit described in
paragraph (3)(B) otherwise applicable shall be increased by
an amount which the Chief Actuary of the Centers for Medicare
& Medicaid Services determines is equal to the estimated
amount of savings during the plan year as a result of the
provisions of the Medical Care Access Protection Act of 2009.
``(B) Considerations.--In determining the amount of the
increase under subparagraph (A) for a plan year, the
Secretary shall take into account--
``(i) any increase under such paragraph during the
preceding year or years; and
``(ii) any estimated increase in utilization as a result of
the application of this paragraph.
``(C) Application.--The provisions of subparagraph (B) of
paragraph (7) shall apply to the application of subparagraph
(A) of this subparagraph in the same manner as such
provisions apply to the application of subparagraph (A) of
paragraph (7).''.

Subtitle B--Medical Care Access Protection

SEC. 10101. SHORT TITLE.

This subtitle may be cited as the ``Medical Care Access
Protection Act of 2009'' or the ``MCAP Act''.

SEC. 10102. FINDINGS AND PURPOSE.

(a) Findings.--
(1) Effect on health care access and costs.--Congress finds
that our current civil justice system is adversely affecting
patient access to health care services, better patient care,
and cost-efficient health care, in that the health care
liability system is a costly and ineffective mechanism for
resolving claims of health care liability and compensating
injured patients, and is a deterrent to the sharing of
information among health care professionals which impedes
efforts to improve patient safety and quality of care.
(2) Effect on interstate commerce.--Congress finds that the
health care and insurance industries are industries affecting
interstate commerce and the health care liability litigation
systems existing throughout the United States are activities
that affect interstate commerce by contributing to the high
costs of health care and premiums for health care liability
insurance purchased by health care system providers.
(3) Effect on federal spending.--Congress finds that the
health care liability litigation systems existing throughout
the United States have a significant effect on the amount,
distribution, and use of Federal funds because of--
(A) the large number of individuals who receive health care
benefits under programs operated or financed by the Federal
Government;
(B) the large number of individuals who benefit because of
the exclusion from Federal taxes of the amounts spent to
provide them with health insurance benefits; and
(C) the large number of health care providers who provide
items or services for which the Federal Government makes
payments.
(b) Purpose.--It is the purpose of this subtitle to
implement reasonable, comprehensive, and effective health
care liability reforms designed to--
(1) improve the availability of health care services in
cases in which health care liability actions have been shown
to be a factor in the decreased availability of services;
(2) reduce the incidence of ``defensive medicine'' and
lower the cost of health care liability insurance, all of
which contribute to the escalation of health care costs;
(3) ensure that persons with meritorious health care injury
claims receive fair and adequate compensation, including
reasonable noneconomic damages;
(4) improve the fairness and cost-effectiveness of our
current health care liability system to resolve disputes
over, and provide compensation for, health care liability by
reducing uncertainty in the amount of compensation provided
to injured individuals; and
(5) provide an increased sharing of information in the
health care system which will reduce unintended injury and
improve patient care.

SEC. 10103. DEFINITIONS.

In this subtitle:
(1) Alternative dispute resolution system; adr.--The term
``alternative dispute resolution system'' or ``ADR'' means a
system that provides for the resolution of health care
lawsuits in a manner other than through a civil action
brought in a State or Federal court.
(2) Claimant.--The term ``claimant'' means any person who
brings a health care lawsuit, including a person who asserts
or claims a right to legal or equitable contribution,
indemnity or subrogation, arising out of a health care
liability claim or action, and any person on whose behalf
such a claim is asserted or such an action is brought,
whether deceased, incompetent, or a minor.
(3) Collateral source benefits.--The term ``collateral
source benefits'' means any amount paid or reasonably likely
to be paid in the future to or on behalf of the claimant, or
any service, product or other benefit provided or reasonably
likely to be provided in the future to or on behalf of the
claimant, as a result of the injury or wrongful death,
pursuant to--
(A) any State or Federal health, sickness, income-
disability, accident, or workers' compensation law;
(B) any health, sickness, income-disability, or accident
insurance that provides health benefits or income-disability
coverage;
(C) any contract or agreement of any group, organization,
partnership, or corporation to provide, pay for, or reimburse
the cost of medical, hospital, dental, or income disability
benefits; and
(D) any other publicly or privately funded program.
(4) Compensatory damages.--The term ``compensatory
damages'' means objectively verifiable monetary losses
incurred as a result of the provision of, use of, or payment
for (or failure to provide, use, or pay for) health care
services or medical products, such as past and future medical
expenses, loss of past and future earnings, cost of obtaining
domestic services, loss of employment, and loss of business
or employment opportunities, damages for physical and
emotional pain, suffering, inconvenience, physical
impairment, mental anguish, disfigurement, loss of enjoyment
of life, loss of society and companionship, loss of
consortium (other than loss of domestic service), hedonic
damages, injury to reputation, and all other nonpecuniary
losses of any kind or nature. Such term includes economic
damages and noneconomic damages, as such terms are defined in
this section.
(5) Contingent fee.--The term ``contingent fee'' includes
all compensation to any person or persons which is payable
only if a recovery is effected on behalf of one or more
claimants.
(6) Economic damages.--The term ``economic damages'' means
objectively verifiable monetary losses incurred as a result
of the provision of, use of, or payment for (or failure to
provide, use, or pay for) health care services or medical
products, such as past and future medical expenses, loss of
past and future earnings, cost of obtaining domestic
services, loss of employment, and loss of business or
employment opportunities.
(7) Health care goods or services.--The term ``health care
goods or services'' means any goods or services provided by a
health care institution, provider, or by any individual
working under the supervision of a health care provider, that
relates to the diagnosis, prevention, care, or treatment of
any human disease or impairment, or the assessment of the
health of human beings.
(8) Health care institution.--The term ``health care
institution'' means any entity licensed under Federal or
State law to provide health care services (including but not
limited to ambulatory surgical centers, assisted living
facilities, emergency medical services providers, hospices,
hospitals and hospital systems, nursing homes, or other
entities licensed to provide such services).
(9) Health care lawsuit.--The term ``health care lawsuit''
means any health care liability claim concerning the
provision of health care goods or services affecting
interstate commerce, or any health care liability action
concerning the provision of (or the failure to provide)
health care goods or services affecting interstate commerce,
brought in a State or Federal court or pursuant to an
alternative dispute resolution system, against a health care
provider or a health care institution regardless of the
theory of liability on which the claim is based, or the
number of claimants, plaintiffs, defendants, or other
parties, or the number of claims or causes of action, in
which the claimant alleges a health care liability claim.
(10) Health care liability action.--The term ``health care
liability action'' means a civil action brought in a State or
Federal Court or pursuant to an alternative dispute
resolution system, against a health care provider or a health
care institution regardless of the theory of liability on
which the claim is based, or the number of plaintiffs,
defendants, or other parties, or the number of causes of
action, in which the claimant alleges a health care liability
claim.
(11) Health care liability claim.--The term ``health care
liability claim'' means a demand by any person, whether or
not pursuant to ADR, against a health care provider or health
care institution, including third-party claims, cross-claims,
counter-claims, or contribution claims, which are based upon
the provision of, use of, or payment for (or the failure to
provide, use, or pay for) health care services, regardless of
the theory of liability on which the claim is based, or the
number of plaintiffs, defendants, or other parties, or the
number of causes of action.
(12) Health care provider.--
(A) In general.--The term ``health care provider'' means
any person (including but not limited to a physician (as
defined by section 1861(r) of the Social Security Act (42
U.S.C. 1395x(r)), registered nurse, dentist, podiatrist,
pharmacist, chiropractor, or optometrist) required by State
or Federal law to be

[[Page S13045]]

licensed, registered, or certified to provide health care
services, and being either so licensed, registered, or
certified, or exempted from such requirement by other statute
or regulation.
(B) Treatment of certain professional associations.--For
purposes of this subtitle, a professional association that is
organized under State law by an individual physician or group
of physicians, a partnership or limited liability partnership
formed by a group of physicians, a nonprofit health
corporation certified under State law, or a company formed by
a group of physicians under State law shall be treated as a
health care provider under subparagraph (A).
(13) Malicious intent to injure.--The term ``malicious
intent to injure'' means intentionally causing or attempting
to cause physical injury other than providing health care
goods or services.
(14) Noneconomic damages.--The term ``noneconomic damages''
means damages for physical and emotional pain, suffering,
inconvenience, physical impairment, mental anguish,
disfigurement, loss of enjoyment of life, loss of society and
companionship, loss of consortium (other than loss of
domestic service), hedonic damages, injury to reputation, and
all other nonpecuniary losses of any kind or nature.
(15) Punitive damages.--The term ``punitive damages'' means
damages awarded, for the purpose of punishment or deterrence,
and not solely for compensatory purposes, against a health
care provider or health care institution. Punitive damages
are neither economic nor noneconomic damages.
(16) Recovery.--The term ``recovery'' means the net sum
recovered after deducting any disbursements or costs incurred
in connection with prosecution or settlement of the claim,
including all costs paid or advanced by any person. Costs of
health care incurred by the plaintiff and the attorneys'
office overhead costs or charges for legal services are not
deductible disbursements or costs for such purpose.
(17) State.--The term ``State'' means each of the several
States, the District of Columbia, the Commonwealth of Puerto
Rico, the Virgin Islands, Guam, American Samoa, the Northern
Mariana Islands, the Trust Territory of the Pacific Islands,
and any other territory or possession of the United States,
or any political subdivision thereof.

SEC. 10104. ENCOURAGING SPEEDY RESOLUTION OF CLAIMS.

(a) In General.--Except as otherwise provided for in this
section, the time for the commencement of a health care
lawsuit shall be 3 years after the date of manifestation of
injury or 1 year after the claimant discovers, or through the
use of reasonable diligence should have discovered, the
injury, whichever occurs first.
(b) General Exception.--The time for the commencement of a
health care lawsuit shall not exceed 3 years after the date
of manifestation of injury unless the tolling of time was
delayed as a result of--
(1) fraud;
(2) intentional concealment; or
(3) the presence of a foreign body, which has no
therapeutic or diagnostic purpose or effect, in the person of
the injured person.
(c) Minors.--An action by a minor shall be commenced within
3 years from the date of the alleged manifestation of injury
except that if such minor is under the full age of 6 years,
such action shall be commenced within 3 years of the
manifestation of injury, or prior to the eighth birthday of
the minor, whichever provides a longer period. Such time
limitation shall be tolled for minors for any period during
which a parent or guardian and a health care provider or
health care institution have committed fraud or collusion in
the failure to bring an action on behalf of the injured
minor.
(d) Rule 11 Sanctions.--Whenever a Federal or State court
determines (whether by motion of the parties or whether on
the motion of the court) that there has been a violation of
Rule 11 of the Federal Rules of Civil Procedure (or a similar
violation of applicable State court rules) in a health care
liability action to which this subtitle applies, the court
shall impose upon the attorneys, law firms, or pro se
litigants that have violated Rule 11 or are responsible for
the violation, an appropriate sanction, which shall include
an order to pay the other party or parties for the reasonable
expenses incurred as a direct result of the filing of the
pleading, motion, or other paper that is the subject of the
violation, including a reasonable attorneys' fee. Such
sanction shall be sufficient to deter repetition of such
conduct or comparable conduct by others similarly situated,
and to compensate the party or parties injured by such
conduct.

SEC. 10105. COMPENSATING PATIENT INJURY.

(a) Unlimited Amount of Damages for Actual Economic Losses
in Health Care Lawsuits.--In any health care lawsuit, nothing
in this subtitle shall limit the recovery by a claimant of
the full amount of the available economic damages,
notwithstanding the limitation contained in subsection (b).
(b) Additional Noneconomic Damages.--
(1) Health care providers.--In any health care lawsuit
where final judgment is rendered against a health care
provider, the amount of noneconomic damages recovered from
the provider, if otherwise available under applicable Federal
or State law, may be as much as $250,000, regardless of the
number of parties other than a health care institution
against whom the action is brought or the number of separate
claims or actions brought with respect to the same
occurrence.
(2) Health care institutions.--
(A) Single institution.--In any health care lawsuit where
final judgment is rendered against a single health care
institution, the amount of noneconomic damages recovered from
the institution, if otherwise available under applicable
Federal or State law, may be as much as $250,000, regardless
of the number of parties against whom the action is brought
or the number of separate claims or actions brought with
respect to the same occurrence.
(B) Multiple institutions.--In any health care lawsuit
where final judgment is rendered against more than one health
care institution, the amount of noneconomic damages recovered
from each institution, if otherwise available under
applicable Federal or State law, may be as much as $250,000,
regardless of the number of parties against whom the action
is brought or the number of separate claims or actions
brought with respect to the same occurrence, except that the
total amount recovered from all such institutions in such
lawsuit shall not exceed $500,000.
(c) No Discount of Award for Noneconomic Damages.--In any
health care lawsuit--
(1) an award for future noneconomic damages shall not be
discounted to present value;
(2) the jury shall not be informed about the maximum award
for noneconomic damages under subsection (b);
(3) an award for noneconomic damages in excess of the
limitations provided for in subsection (b) shall be reduced
either before the entry of judgment, or by amendment of the
judgment after entry of judgment, and such reduction shall be
made before accounting for any other reduction in damages
required by law; and
(4) if separate awards are rendered for past and future
noneconomic damages and the combined awards exceed the
limitations described in subsection (b), the future
noneconomic damages shall be reduced first.
(d) Fair Share Rule.--In any health care lawsuit, each
party shall be liable for that party's several share of any
damages only and not for the share of any other person. Each
party shall be liable only for the amount of damages
allocated to such party in direct proportion to such party's
percentage of responsibility. A separate judgment shall be
rendered against each such party for the amount allocated to
such party. For purposes of this section, the trier of fact
shall determine the proportion of responsibility of each
party for the claimant's harm.

SEC. 10106. MAXIMIZING PATIENT RECOVERY.

(a) Court Supervision of Share of Damages Actually Paid to
Claimants.--
(1) In general.--In any health care lawsuit, the court
shall supervise the arrangements for payment of damages to
protect against conflicts of interest that may have the
effect of reducing the amount of damages awarded that are
actually paid to claimants.
(2) Contingency fees.--
(A) In general.--In any health care lawsuit in which the
attorney for a party claims a financial stake in the outcome
by virtue of a contingent fee, the court shall have the power
to restrict the payment of a claimant's damage recovery to
such attorney, and to redirect such damages to the claimant
based upon the interests of justice and principles of equity.
(B) Limitation.--The total of all contingent fees for
representing all claimants in a health care lawsuit shall not
exceed the following limits:
(i) 40 percent of the first $50,000 recovered by the
claimant(s).
(ii) 33\1/3\ percent of the next $50,000 recovered by the
claimant(s).
(iii) 25 percent of the next $500,000 recovered by the
claimant(s).
(iv) 15 percent of any amount by which the recovery by the
claimant(s) is in excess of $600,000.
(b) Applicability.--
(1) In general.--The limitations in subsection (a) shall
apply whether the recovery is by judgment, settlement,
mediation, arbitration, or any other form of alternative
dispute resolution.
(2) Minors.--In a health care lawsuit involving a minor or
incompetent person, a court retains the authority to
authorize or approve a fee that is less than the maximum
permitted under this section.
(c) Expert Witnesses.--
(1) Requirement.--No individual shall be qualified to
testify as an expert witness concerning issues of negligence
in any health care lawsuit against a defendant unless such
individual--
(A) except as required under paragraph (2), is a health
care professional who--
(i) is appropriately credentialed or licensed in 1 or more
States to deliver health care services; and
(ii) typically treats the diagnosis or condition or
provides the type of treatment under review; and
(B) can demonstrate by competent evidence that, as a result
of training, education, knowledge, and experience in the
evaluation, diagnosis, and treatment of the disease or injury
which is the subject matter of the lawsuit against the
defendant, the individual was substantially familiar with
applicable standards of care and practice as they relate to
the act or omission which is the subject of the lawsuit on
the date of the incident.
(2) Physician review.--In a health care lawsuit, if the
claim of the plaintiff involved

[[Page S13046]]

treatment that is recommended or provided by a physician
(allopathic or osteopathic), an individual shall not be
qualified to be an expert witness under this subsection with
respect to issues of negligence concerning such treatment
unless such individual is a physician.
(3) Specialties and subspecialties.--With respect to a
lawsuit described in paragraph (1), a court shall not permit
an expert in one medical specialty or subspecialty to testify
against a defendant in another medical specialty or
subspecialty unless, in addition to a showing of substantial
familiarity in accordance with paragraph (1)(B), there is a
showing that the standards of care and practice in the two
specialty or subspecialty fields are similar.
(4) Limitation.--The limitations in this subsection shall
not apply to expert witnesses testifying as to the degree or
permanency of medical or physical impairment.

SEC. 10107. ADDITIONAL HEALTH BENEFITS.

(a) In General.--The amount of any damages received by a
claimant in any health care lawsuit shall be reduced by the
court by the amount of any collateral source benefits to
which the claimant is entitled, less any insurance premiums
or other payments made by the claimant (or by the spouse,
parent, child, or legal guardian of the claimant) to obtain
or secure such benefits.
(b) Preservation of Current Law.--Where a payor of
collateral source benefits has a right of recovery by
reimbursement or subrogation and such right is permitted
under Federal or State law, subsection (a) shall not apply.
(c) Application of Provision.--This section shall apply to
any health care lawsuit that is settled or resolved by a fact
finder.

SEC. 10108. PUNITIVE DAMAGES.

(a) Punitive Damages Permitted.--
(1) In general.--Punitive damages may, if otherwise
available under applicable State or Federal law, be awarded
against any person in a health care lawsuit only if it is
proven by clear and convincing evidence that such person
acted with malicious intent to injure the claimant, or that
such person deliberately failed to avoid unnecessary injury
that such person knew the claimant was substantially certain
to suffer.
(2) Filing of lawsuit.--No demand for punitive damages
shall be included in a health care lawsuit as initially
filed. A court may allow a claimant to file an amended
pleading for punitive damages only upon a motion by the
claimant and after a finding by the court, upon review of
supporting and opposing affidavits or after a hearing, after
weighing the evidence, that the claimant has established by a
substantial probability that the claimant will prevail on the
claim for punitive damages.
(3) Separate proceeding.--At the request of any party in a
health care lawsuit, the trier of fact shall consider in a
separate proceeding--
(A) whether punitive damages are to be awarded and the
amount of such award; and
(B) the amount of punitive damages following a
determination of punitive liability.

If a separate proceeding is requested, evidence relevant only
to the claim for punitive damages, as determined by
applicable State law, shall be inadmissible in any proceeding
to determine whether compensatory damages are to be awarded.
(4) Limitation where no compensatory damages are awarded.--
In any health care lawsuit where no judgment for compensatory
damages is rendered against a person, no punitive damages may
be awarded with respect to the claim in such lawsuit against
such person.
(b) Determining Amount of Punitive Damages.--
(1) Factors considered.--In determining the amount of
punitive damages under this section, the trier of fact shall
consider only the following:
(A) the severity of the harm caused by the conduct of such
party;
(B) the duration of the conduct or any concealment of it by
such party;
(C) the profitability of the conduct to such party;
(D) the number of products sold or medical procedures
rendered for compensation, as the case may be, by such party,
of the kind causing the harm complained of by the claimant;
(E) any criminal penalties imposed on such party, as a
result of the conduct complained of by the claimant; and
(F) the amount of any civil fines assessed against such
party as a result of the conduct complained of by the
claimant.
(2) Maximum award.--The amount of punitive damages awarded
in a health care lawsuit may not exceed an amount equal to
two times the amount of economic damages awarded in the
lawsuit or $250,000, whichever is greater. The jury shall not
be informed of the limitation under the preceding sentence.
(c) Liability of Health Care Providers.--
(1) In general.--A health care provider who prescribes, or
who dispenses pursuant to a prescription, a drug, biological
product, or medical device approved by the Food and Drug
Administration, for an approved indication of the drug,
biological product, or medical device, shall not be named as
a party to a product liability lawsuit invoking such drug,
biological product, or medical device and shall not be liable
to a claimant in a class action lawsuit against the
manufacturer, distributor, or product seller of such drug,
biological product, or medical device.
(2) Medical product.--The term ``medical product'' means a
drug or device intended for humans. The terms ``drug'' and
``device'' have the meanings given such terms in sections
201(g)(1) and 201(h) of the Federal Food, Drug and Cosmetic
Act (21 U.S.C. 321), respectively, including any component or
raw material used therein, but excluding health care
services.

SEC. 10109. AUTHORIZATION OF PAYMENT OF FUTURE DAMAGES TO
CLAIMANTS IN HEALTH CARE LAWSUITS.

(a) In General.--In any health care lawsuit, if an award of
future damages, without reduction to present value, equaling
or exceeding $50,000 is made against a party with sufficient
insurance or other assets to fund a periodic payment of such
a judgment, the court shall, at the request of any party,
enter a judgment ordering that the future damages be paid by
periodic payments in accordance with the Uniform Periodic
Payment of Judgments Act promulgated by the National
Conference of Commissioners on Uniform State Laws.
(b) Applicability.--This section applies to all actions
which have not been first set for trial or retrial before the
effective date of this subtitle.

SEC. 10110. EFFECT ON OTHER LAWS.

(a) General Vaccine Injury.--
(1) In general.--To the extent that title XXI of the Public
Health Service Act establishes a Federal rule of law
applicable to a civil action brought for a vaccine-related
injury or death--
(A) this subtitle shall not affect the application of the
rule of law to such an action; and
(B) any rule of law prescribed by this subtitle in conflict
with a rule of law of such title XXI shall not apply to such
action.
(2) Exception.--If there is an aspect of a civil action
brought for a vaccine-related injury or death to which a
Federal rule of law under title XXI of the Public Health
Service Act does not apply, then this subtitle or otherwise
applicable law (as determined under this subtitle) will apply
to such aspect of such action.
(b) Smallpox Vaccine Injury.--
(1) In general.--To the extent that part C of title II of
the Public Health Service Act establishes a Federal rule of
law applicable to a civil action brought for a smallpox
vaccine-related injury or death--
(A) this subtitle shall not affect the application of the
rule of law to such an action; and
(B) any rule of law prescribed by this subtitle in conflict
with a rule of law of such part C shall not apply to such
action.
(2) Exception.--If there is an aspect of a civil action
brought for a smallpox vaccine-related injury or death to
which a Federal rule of law under part C of title II of the
Public Health Service Act does not apply, then this subtitle
or otherwise applicable law (as determined under this
subtitle) will apply to such aspect of such action.
(c) Other Federal Law.--Except as provided in this section,
nothing in this subtitle shall be deemed to affect any
defense available, or any limitation on liability that
applies to, a defendant in a health care lawsuit or action
under any other provision of Federal law.

SEC. 10111. STATE FLEXIBILITY AND PROTECTION OF STATES'
RIGHTS.

(a) Health Care Lawsuits.--The provisions governing health
care lawsuits set forth in this subtitle shall preempt,
subject to subsections (b) and (c), State law to the extent
that State law prevents the application of any provisions of
law established by or under this subtitle. The provisions
governing health care lawsuits set forth in this subtitle
supersede chapter 171 of title 28, United States Code, to the
extent that such chapter--
(1) provides for a greater amount of damages or contingent
fees, a longer period in which a health care lawsuit may be
commenced, or a reduced applicability or scope of periodic
payment of future damages, than provided in this subtitle; or
(2) prohibits the introduction of evidence regarding
collateral source benefits.
(b) Preemption of Certain State Laws.--No provision of this
subtitle shall be construed to preempt any State law (whether
effective before, on, or after the date of the enactment of
this Act) that specifies a particular monetary amount of
compensatory or punitive damages (or the total amount of
damages) that may be awarded in a health care lawsuit,
regardless of whether such monetary amount is greater or
lesser than is provided for under this subtitle,
notwithstanding section 10105(a).
(c) Protection of State's Rights and Other Laws.--
(1) In general.--Any issue that is not governed by a
provision of law established by or under this subtitle
(including the State standards of negligence) shall be
governed by otherwise applicable Federal or State law.
(2) Rule of construction.--Nothing in this subtitle shall
be construed to--
(A) preempt or supersede any Federal or State law that
imposes greater procedural or substantive protections (such
as a shorter statute of limitations) for a health care
provider or health care institution from liability, loss, or
damages than those provided by this subtitle;
(B) preempt or supercede any State law that permits and
provides for the enforcement of any arbitration agreement
related to a health care liability claim whether enacted
prior to or after the date of enactment of this Act;
(C) create a cause of action that is not otherwise
available under Federal or State law; or

[[Page S13047]]

(D) affect the scope of preemption of any other Federal
law.

SEC. 10112. APPLICABILITY; EFFECTIVE DATE.

This subtitle shall apply to any health care lawsuit
brought in a Federal or State court, or subject to an
alternative dispute resolution system, that is initiated on
or after the date of the enactment of this Act, except that
any health care lawsuit arising from an injury occurring
prior to the date of enactment of this Act shall be governed
by the applicable statute of limitations provisions in effect
at the time the injury occurred.
______

SA 3183. Mr. BAUCUS submitted an amendment intended to be proposed by
him to the bill H.R. 3590, to amend the Internal Revenue Code of 1986
to modify the first-time homebuyers credit in the case of members of
the Armed Forces and certain other Federal employees, and for other
purposes; which was ordered to lie on the table; as follows:

At the appropriate place, insert the following:

SEC. __. PROTECTING MIDDLE CLASS FAMILIES FROM TAX INCREASES.

It is the sense of the Senate that the Senate should reject
any procedural maneuver that would raise taxes on middle
class families, such as a motion to commit the pending
legislation to the Committee on Finance, which is designed to
kill legislation that provides tax cuts for American workers
and families, including the affordability tax credit and the
small business tax credit.
______

SA 3184. Mr. CASEY submitted an amendment intended to be proposed to
amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr.
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal
Revenue Code of 1986 to modify the first-time homebuyers credit in the
case of members of the Armed Forces and certain other Federal
employees, and for other purposes; which was ordered to lie on the
table; as follows:

At the appropriate place in title IX, insert the following:

Subtitle--Expansion of Adoption Credit and Adoption Assistance Programs

SEC. _01. EXPANSION OF ADOPTION CREDIT AND ADOPTION
ASSISTANCE PROGRAMS.

(a) Increase in Dollar Limitation.--
(1) Adoption credit.--
(A) In general.--Paragraph (1) of section 23(b) of the
Internal Revenue Code of 1986 (relating to dollar limitation)
is amended by striking ``$10,000'' and inserting ``$15,000''.
(B) Child with special needs.--Paragraph (3) of section
23(a) of such Code (relating to $10,000 credit for adoption
of child with special needs regardless of expenses) is
amended--
(i) in the text by striking ``$10,000'' and inserting
``$15,000'', and
(ii) in the heading by striking ``$10,000'' and inserting
``$15,000''.
(C) Conforming amendment to inflation adjustment.--
Subsection (h) of section 23 of such Code (relating to
adjustments for inflation) is amended to read as follows:
``(h) Adjustments for Inflation.--
``(1) Dollar limitations.--In the case of a taxable year
beginning after December 31, 2009, each of the dollar amounts
in subsections (a)(3) and (b)(1) shall be increased by an
amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined under
section 1(f)(3) for the calendar year in which the taxable
year begins, determined by substituting `calendar year 2008'
for `calendar year 1992' in subparagraph (B) thereof.

If any amount as increased under the preceding sentence is
not a multiple of $10, such amount shall be rounded to the
nearest multiple of $10.
``(2) Income limitation.--In the case of a taxable year
beginning after December 31, 2002, the dollar amount in
subsection (b)(2)(A)(i) shall be increased by an amount equal
to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined under
section 1(f)(3) for the calendar year in which the taxable
year begins, determined by substituting `calendar year 2001'
for `calendar year 1992' in subparagraph (B) thereof.

If any amount as increased under the preceding sentence is
not a multiple of $10, such amount shall be rounded to the
nearest multiple of $10.''.
(2) Adoption assistance programs.--
(A) In general.--Paragraph (1) of section 137(b) of the
Internal Revenue Code of 1986 (relating to dollar limitation)
is amended by striking ``$10,000'' and inserting ``$15,000''.
(B) Child with special needs.--Paragraph (2) of section
137(a) of such Code (relating to $10,000 exclusion for
adoption of child with special needs regardless of expenses)
is amended--
(i) in the text by striking ``$10,000'' and inserting
``$15,000'', and
(ii) in the heading by striking ``$10,000'' and inserting
``$15,000''.
(C) Conforming amendment to inflation adjustment.--
Subsection (f) of section 137 of such Code (relating to
adjustments for inflation) is amended to read as follows:
``(f) Adjustments for Inflation.--
``(1) Dollar limitations.--In the case of a taxable year
beginning after December 31, 2009, each of the dollar amounts
in subsections (a)(2) and (b)(1) shall be increased by an
amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined under
section 1(f)(3) for the calendar year in which the taxable
year begins, determined by substituting `calendar year 2008'
for `calendar year 1992' in subparagraph (B) thereof.

If any amount as increased under the preceding sentence is
not a multiple of $10, such amount shall be rounded to the
nearest multiple of $10.
``(2) Income limitation.--In the case of a taxable year
beginning after December 31, 2002, the dollar amount in
subsection (b)(2)(A) shall be increased by an amount equal
to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined under
section 1(f)(3) for the calendar year in which the taxable
year begins, determined by substituting `calendar year 2001'
for `calendar year 1992' in subparagraph thereof.

If any amount as increased under the preceding sentence is
not a multiple of $10, such amount shall be rounded to the
nearest multiple of $10.''.
(b) Credit Made Refundable.--
(1) Credit moved to subpart relating to refundable
credits.--The Internal Revenue Code of 1986 is amended--
(A) by redesignating section 23, as amended by subsection
(a), as section 36B, and
(B) by moving section 36B (as so redesignated) from subpart
A of part IV of subchapter A of chapter 1 to the location
immediately before section 37 in subpart C of part IV of
subchapter A of chapter 1.
(2) Conforming amendments.--
(A) Section 24(b)(3)(B) of such Code is amended by striking
``23,''.
(B) Section 25(e)(1)(C) of such Code is amended by striking
``23,'' both places it appears.
(C) Section 25A(i)(5)(B) of such Code is amended by
striking ``23, 25D,'' and inserting ``25D''.
(D) Section 25B(g)(2) of such Code is amended by striking
``23,''.
(E) Section 26(a)(1) of such Code is amended by striking
``23,''.
(F) Section 30(c)(2)(B)(ii) of such Code is amended by
striking ``23, 25D,'' and inserting ``25D''.
(G) Section 30B(g)(2)(B)(ii) of such Code is amended by
striking ``23,''.
(H) Section 30D(c)(2)(B)(ii) of such Code is amended by
striking ``sections 23 and'' and inserting ``section''.
(I) Section 36B of such Code, as so redesignated, is
amended--
(i) by striking paragraph (4) of subsection (b), and
(ii) by striking subsection (c).
(J) Section 137 of such Code is amended--
(i) by striking ``section 23(d)'' in subsection (d) and
inserting ``section 36B(d)'', and
(ii) by striking ``section 23'' in subsection (e) and
inserting ``section 36B''.
(K) Section 904(i) of such Code is amended by striking
``23,''.
(L) Section 1016(a)(26) is amended by striking ``23(g)''
and inserting ``36B(g)''.
(M) Section 1400C(d) of such Code is amended by striking
``23,''.
(N) The table of sections for subpart A of part IV of
subchapter A of chapter 1 of such Code of 1986 is amended by
striking the item relating to section 23.
(O) Paragraph (2) of section 1324(b) of title 31, United
States Code, is amended by inserting ``36B,'' after ``36A,''.
(P) The table of sections for subpart C of part IV of
subchapter A of chapter 1 of the Internal Revenue Code of
1986 is amended by inserting after the item relating to
section 36A the following new item:

``Sec. 36B. Adoption expenses.''.

(c) Extension of Credit and Adoption Assistance Programs.--
(1) In general.--Section 36B of the Internal Revenue Code
of 1986, as redesignated by subsection (b), is amended by
adding at the end the following new subsection:
``(i) Termination.--This section shall not apply to
expenses paid or incurred in taxable years beginning after
December 31, 2014.''.
(2) In general.--Section 137 of the Internal Revenue Code
of 1986 is amended by adding at the end the following new
subsection:
``(g) Termination.--This section shall not apply to
expenses paid or incurred in taxable years beginning after
December 31, 2014.''.
(3) Sunset for modifications made by egtrra to adoption
credit removed.--Title IX of the Economic Growth and Tax
Relief Reconciliation Act of 2001 shall not apply to the
amendments made by section 202 of such Act.
(d) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2009.
______

SA 3185. Mr. BROWN submitted an amendment intended to be proposed by
Mr. Reid (for himself, Mr. Baucus, Mr. Dodd, and Mr. Harkin) to the
bill H.R. 3590, to amend the Internal Revenue Code of 1986 to modify
the first-time homebuyers credit in the case of members of the Armed
Forces and certain other Federal employees, and for other purposes;
which was ordered to lie on the table; as follows:

On page 553, between lines 14 and 15, insert the following:

[[Page S13048]]

SEC. 2721. INCREASED PAYMENTS FOR PEDIATRIC CARE UNDER
MEDICAID.

(a) In General.--
(1) Fee-for-service payments.--Section 1902 of the Social
Security Act (42 U.S.C. 1396b), as amended by section
2001(b)(2), is amended--
(A) in subsection (a)(13)--
(i) by striking ``and'' at the end of subparagraph (A);
(ii) by adding ``and'' at the end of subparagraph (B); and
(iii) by adding at the end the following new subparagraph:
``(C) payment for pediatric care services (as defined in
subsection (hh)(1)) furnished by physicians (as defined in
section 1861(r)) (or for services furnished by other health
care professionals that would be pediatric care services
under such subsection if furnished by a physician) at a rate
not less than 80 percent of the payment rate that would be
applicable if the adjustment described in subsection (hh)(2)
were to apply to such services under part B of title XVIII
(or, if there is no payment rate for such services under part
B of title XVIII, the payment rate for the most comparable
services, as determined by the Secretary in consultation with
the Medicaid and CHIP Payment and Access Commission
established under section 1900 and adjusted as appropriate
for a pediatric population) for services furnished in 2010,
90 percent of such adjusted payment rate for such services
furnished in 2011, and 100 percent of such adjusted payment
rate for such services furnished in 2012 and each subsequent
year;''; and
(B) by adding at the end the following new subsection:
``(hh) Increased Payment for Pediatric Care.--For purposes
of subsection (a)(13)(C):
``(1) Pediatric care services defined.--The term `pediatric
care services' means evaluation and management services,
without regard to the specialty of the physician or hospital
furnishing the services, that are procedure codes (for
services covered under title XVIII) for services in the
category designated Evaluation and Management in the
Healthcare Common Procedure Coding System (established by the
Secretary under section 1848(c)(5) as of December 31, 2009,
and as subsequently modified by the Secretary) and that are
furnished to an individual who is enrolled in the State plan
under this title who has not attained age 19. Such term
includes procedure codes established by the Secretary, in
consultation with the Medicaid and CHIP Payment and Access
Commission established under section 1900, for services
furnished under State plans under this title to individuals
who have not attained age 19 and for which there is not an a
procedure code (or a procedure code that the Secretary, in
consultation with such Commission, determines is comparable)
established under the Healthcare Common Procedure Coding
System.
``(2) Adjustment.--The adjustment described in this
paragraph is the substitution of 1.25 percent for the update
otherwise provided under section 1848(d)(4) for each year
beginning with 2010.''.
(2) Under medicaid managed care plans.--Section 1932(f) of
such Act (42 U.S.C. 1396u-2(f)) is amended--
(A) in the heading, by adding at the end the following: ``;
Adequacy of Payment for Pediatric Care Services''; and
(B) by inserting before the period at the end the
following: ``and, in the case of pediatric care services
described in section 1902(a)(13)(C), consistent with the
minimum payment rates specified in such section (regardless
of the manner in which such payments are made, including in
the form of capitation or partial capitation)''.
(b) Increased FMAP.--Section 1905 of such Act (42 U.S.C.
1396d), as amended by sections 2006 and 4107(a)(2), is
amended
(1) in the first sentence of subsection (b), by striking
``and'' before ``(4)'' and by inserting before the period at
the end the following: ``, and (5) 100 percent (for periods
beginning with 2010) with respect to amounts described in
subsection (cc)''; and
(2) by adding at the end the following new subsection:
``(cc) For purposes of section 1905(b)(5), the amounts
described in this subsection are the following:
``(1)(A) The portion of the amounts expended for medical
assistance for services described in section 1902(a)(13)(C)
furnished on or after January 1, 2010, that is attributable
to the amount by which the minimum payment rate required
under such section (or, by application, section 1932(f))
exceeds the payment rate applicable to such services under
the State plan as of the date of enactment of the Patient
Protection and Affordable Care Act.
``(B) Subparagraph (A) shall not be construed as preventing
the payment of Federal financial participation based on the
Federal medical assistance percentage for amounts in excess
of those specified under such subparagraph.''.
(c) Effective Date.--The amendments made by this section
shall apply to services furnished on or after January 1,
2010.
______

SA 3186. Mr. BROWN submitted an amendment intended to be proposed to
amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr.
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal
Revenue Code of 1986 to modify the first-time homebuyers credit in the
case of members of the Armed Forces and certain other Federal
employees, and for other purposes; which was ordered to lie on the
table; as follows:

Beginning on page 729, strike line 21 and all that follows
through line 13 on page 730, and insert the following:
``(xv) Promoting--

``(I) improved quality and reduced cost by developing a
collaborative of high-quality, low-cost health care
institutions that is responsible for--

``(aa) developing, documenting, and disseminating best
practices and proven care methods;
``(bb) implementing such best practices and proven care
methods within such institutions to demonstrate further
improvements in quality and efficiency; and
``(cc) providing assistance to other health care
institutions on how best to employ such best practices and
proven care methods to improve health care quality and lower
costs.

``(II) improved quality and reduced cost by developing a
similarly focused collaborative of pediatric providers and
institutions through the Medicaid and CHIP programs.''.

______

SA 3187. Mr. WYDEN (for himself and Mr. Crapo) submitted an amendment
intended to be proposed to amendment SA 2786 proposed by Mr. Reid (for
himself, Mr. Baucus, Mr. Dodd, and Mr. Harkin) to the bill H.R. 3590,
to amend the Internal Revenue Code of 1986 to modify the first-time
homebuyers credit in the case of members of the Armed Forces and
certain other Federal employees, and for other purposes; which was
ordered to lie on the table; as follows:

On page 828, between lines 3 and 4, insert the following:

SEC. 3130. MEDICARE CRITICAL ACCESS HOSPITAL PROVISIONS.

(a) Flexibility in the Manner in Which Beds Are Counted for
Purposes of Determining Whether a Hospital May Be Designated
as a Critical Access Hospital Under the Medicare Program.--
(1) In general.--Section 1820(c)(2)(B) of the Social
Security Act (42 U.S.C. 1395i-4(c)(2)(B)) is amended--
(A) in clause (iii), by inserting ``(or 20, as determined
on an annual, average basis)'' after ``25''; and
(B) by adding at the end the following flush sentence:

``In determining the number of beds for purposes of clause
(iii), only beds that are occupied shall be counted.''.
(2) Effective date.--The amendments made by this subsection
take effect on January 1, 2010.
(b) Critical Access Hospital Inpatient Bed Limitation
Exemption for Beds Provided to Certain Veterans.--
(1) In general.--Section 1820(c) of the Social Security Act
(42 U.S.C. 1395i-4(c)) is amended by adding at the end the
following new paragraph:
``(3) Exemption from bed limitation.--For purposes of this
section, no acute care inpatient bed shall be counted against
any numerical limitation specified under this section for
such a bed (or for inpatient bed days with respect to such a
bed) if the bed is provided for an individual who is a
veteran and the Department of Veterans Affairs referred the
individual for care in the hospital or is coordinating such
care with other care being provided by such Department.''.
(2) Effective date.--The amendment made by paragraph (1)
shall apply to cost reporting periods beginning on or after
the date of the enactment of this Act
______

SA 3188. Ms. CANTWELL submitted an amendment intended to be proposed
to amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr.
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal
Revenue Code of 1986 to modify the first-time homebuyers credit in the
case of members of the Armed Forces and certain other Federal
employees, and for other purposes; which was ordered to lie on the
table; as follows:

On page 2074, after line 25, add the following:

SEC. ___. TREATMENT OF HRAS.

For purposes of the provisions of, and amendments made by,
this Act, and the provisions of any other law, funds from a
health reimbursement arrangement used in whole or in part by
an individual to purchase an individual or family health
benefits plan shall not be considered or construed as an
employer contribution and such individual or family plan
shall not be considered or construed as a group health
benefits plan.
______

SA 3189. Mr. ENZI submitted an amendment intended to be proposed to
amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr.
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal
Revenue Code of 1986 to modify the first-time homebuyers credit in the
case of members of the Armed Forces and certain other Federal
employees, and for other purposes; which was ordered to lie on the
table; as follows:

[[Page S13049]]

On page 1053, between lines 2 and 3, insert the following:

SEC. 3404. AUTHORITY TO VARY THE AMOUNT OF THE MEDICARE PART
B PREMIUM FOR NEW BENEFICIARIES THAT SMOKE AND
BENEFICIARIES THAT MAKE HEALTHY CHOICES.

Section 1839 of the Social Security Act (42 U.S.C. 1395r)
is amended--
(1) in subsection (a)(2), by striking ``and (i)'' and
inserting ``(i), and (j)''; and
(2) by adding at the end the following new subsection:
``(j) Authority to Vary the Amount of the Premium for
Beneficiaries That Smoke and Beneficiaries That Make Healthy
Choices.--With respect to the monthly premium amount for
individuals who enroll under this part after the date of the
enactment of the Patient Protection and Affordable Care Act,
the Secretary shall vary the amount of such premium for such
an individual if the individual smokes or makes healthy
choices to improve health outcomes (as defined by the
Secretary).''.
______

SA 3190. Mr. ENZI submitted an amendment intended to be proposed to
amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr.
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal
Revenue Code of 1986 to modify the first-time homebuyers credit in the
case of members of the Armed Forces and certain other Federal
employees, and for other purposes; which was ordered to lie on the
table; as follows:

On page 245, between lines 14 and 15, and insert the
following:
(B) Special rule for certain individuals eligible for
medicaid.--If a taxpayer is an individual described in
section 1902(k)(3) of the Social Security Act who elects, in
accordance with procedures established by a State under that
section, to enroll in a qualified health plan and whose
household income does not exceed 100 percent of an amount
equal to the poverty line for a family of the size involved,
the taxpayer shall--
(i) for purposes of the credit under this section, be
treated as an applicable taxpayer and the applicable
percentage with respect to such taxpayer shall be 2.0
percent; and
(ii) for purposes of reduced cost-sharing under section
1402 of the Patient Protection and Affordable Care Act, shall
be treated as having household income of more than 100
percent but less than 150 percent of the poverty line (as so
defined) applicable to a family of the size involved.
On page 404, between lines 13 and 14, insert the following:
``(3) The State shall establish procedures to ensure that
any individual eligible for medical assistance under the
State plan or under a waiver of the plan (under any subclause
of subsection (a)(10)(A) or otherwise) who is not elderly or
disabled may elect to enroll in a qualified health plan
through an Exchange established by the State under section
1311 of the Patient Protection and Affordable Care Act
instead of enrolling in the State plan under this title or a
waiver of the plan. An individual making such an election
shall waive being provided with medical assistance under the
State plan or waiver while enrolled in the qualified health
plan. In the case of an individual who is a child, the
child's parent may make such an election on behalf of the
child.
______

SA 3191. Mr. ENZI submitted an amendment intended to be proposed to
amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr.
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal
Revenue Code of 1986 to modify the first-time homebuyers credit in the
case of members of the Armed Forces and certain other Federal
employees, and for other purposes; which was ordered to lie on the
table; as follows:

On page 1266, between lines 17 and 18, insert the
following:

SEC. 4403. TERMINATION OF PROGRAMS.

Notwithstanding any other provision of this Act (or an
amendment made by this Act), the Secretary of Health and
Human Services shall terminate a program established under
this title if the Secretary of Health and Human Services
determines that such program has not reduced health care
costs for the Federal government and beneficiaries under such
program.
______

SA 3192. Mr. ENZI submitted an amendment intended to be proposed to
amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr.
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal
Revenue Code of 1986 to modify the first-time homebuyers credit in the
case of members of the Armed Forces and certain other Federal
employees, and for other purposes; which was ordered to lie on the
table; as follows:

On page 356, between lines 19 and 20, insert the following:
``(f) Limitation.--If in any calendar year the national
unemployment rate (as determined by the Bureau of Labor
Statistics) exceeds 6 percent, then, notwithstanding any
other provision of law, this section shall not apply for the
remainder of such calendar year.''.
______

SA 3193. Mr. ENZI submitted an amendment intended to be proposed to
amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr.
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal
Revenue Code of 1986 to modify the first-time homebuyers credit in the
case of members of the Armed Forces and certain other Federal
employees, and for other purposes; which was ordered to lie on the
table; as follows:

On page 1142, strike lines 8 through 16 and insert the
following:
(c) Use of Fund.--Notwithstanding any other provision of
this Act (or an amendment made by this Act), the Secretary
shall allocate amounts in the Fund to the high risk pool
program under section 1101 and the reinsurance program for
individual and small group markets in each State under
section 1341, in order to lower health care premiums for
Americans.
______

SA 3194. Mr. ENZI submitted an amendment intended to be proposed to
amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr.
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal
Revenue Code of 1986 to modify the first-time homebuyers credit in the
case of members of the Armed Forces and certain other Federal
employees, and for other purposes; which was ordered to lie on the
table; as follows:

At the end of subtitle E of title IV, insert the following:

SEC. 4403. PROHIBITION ON THE USE OF FUNDS FOR THE
CONSTRUCTION OF SIDEWALKS, PLAYGROUNDS, OR
JUNGLE GYMS.

Notwithstanding any other provision of this Act (or an
amendment made by this Act), no funds appropriated under this
Act (or an amendment made by this Act) shall be allocated to
pay for the construction of sidewalks, playgrounds, or jungle
gyms.
______

SA 3195. Mr. ENZI submitted an amendment intended to be proposed to
amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr.
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal
Revenue Code of 1986 to modify the first-time homebuyers credit in the
case of members of the Armed Forces and certain other Federal
employees, and for other purposes; which was ordered to lie on the
table; as follows:

On page 101, between lines 19 and 20, insert the following:
(3) Inclusion of high deductible health plans.--If a health
plan is a high deductible health plan (as defined in section
223(c)(2) of the Internal Revenue Code of 1986) that meets
all requirements under such section to be offered in
connection with a health savings account--
(A) such plan shall be treated as a qualified health plan
under this section, and as minimum essential coverage under
section 5000A of such Code, for purposes of this Act and the
amendments made by this Act;
(B) no requirement imposed by any provision of, or any
amendment made by, this Act shall apply with respect to the
plan or issuer thereof.
______

SA 3196. Mr. ENZI submitted an amendment intended to be proposed to
amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr.
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal
Revenue Code of 1986 to modify the first-time homebuyers credit in the
case of members of the Armed Forces and certain other Federal
employees, and for other purposes; which was ordered to lie on the
table; as follows:

On page 54, between lines 19 and 20, insert the following:
(g) Use of Fund.--Notwithstanding any other provision of
this Act (or an amendment made by this Act), the Secretary
shall allocate amounts appropriated under subsection (e) to
the high risk pool program under section 1101 and the
reinsurance program for individual and small group markets in
each State under section 1341, in order to lower health care
premiums for Americans.
______

SA 3197. Mr. ENZI submitted an amendment intended to be proposed to
amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr.
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal
Revenue Code of 1986 to modify the first-time homebuyers credit in the
case of members of the Armed Forces and certain other Federal
employees, and for other purposes; which was ordered to lie on the
table; as follows:

Strike the matter proposed to be inserted and insert the
following:

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Small Business Health Plans
Act of 2009''.

[[Page S13050]]

TITLE I--ENHANCED MARKETPLACE POOLS

SEC. 101. RULES GOVERNING ENHANCED MARKETPLACE POOLS.

(a) In General.--Subtitle B of title I of the Employee
Retirement Income Security Act of 1974 is amended by adding
after part 7 the following new part:

``PART 8--RULES GOVERNING ENHANCED MARKETPLACE POOLS

``SEC. 801. SMALL BUSINESS HEALTH PLANS.

``(a) In General.--For purposes of this part, the term
`small business health plan' means a fully insured group
health plan whose sponsor is (or is deemed under this part to
be) described in subsection (b).
``(b) Sponsorship.--The sponsor of a group health plan is
described in this subsection if such sponsor--
``(1) is organized and maintained in good faith, with a
constitution and bylaws specifically stating its purpose and
providing for periodic meetings on at least an annual basis,
as a bona fide trade association, a bona fide industry
association (including a rural electric cooperative
association or a rural telephone cooperative association), a
bona fide professional association, or a bona fide chamber of
commerce (or similar bona fide business association,
including a corporation or similar organization that operates
on a cooperative basis (within the meaning of section 1381 of
the Internal Revenue Code of 1986)), for substantial purposes
other than that of obtaining medical care;
``(2) is established as a permanent entity which receives
the active support of its members and requires for membership
payment on a periodic basis of dues or payments necessary to
maintain eligibility for membership;
``(3) does not condition membership, such dues or payments,
or coverage under the plan on the basis of health status-
related factors with respect to the employees of its members
(or affiliated members), or the dependents of such employees,
and does not condition such dues or payments on the basis of
group health plan participation; and
``(4) does not condition membership on the basis of a
minimum group size.

Any sponsor consisting of an association of entities which
meet the requirements of paragraphs (1), (2), (3), and (4)
shall be deemed to be a sponsor described in this subsection.

``SEC. 802. ALTERNATIVE MARKET POOLING ORGANIZATIONS.

``(a) In General.--The Secretary, not later than 1 year
after the date of enactment of this part, shall promulgate
regulations that apply the rules and standards of this part,
as necessary, to circumstances in which a pooling entity
other (hereinafter `Alternative Market Pooling
Organizations') is not made up principally of employers and
their employees, or not a professional organization or such
small business health plan entity identified in section 801.
``(b) Adaption of Standards.--In developing and
promulgating regulations pursuant to subsection (a), the
Secretary, in consultation with the Secretary of Health and
Human Services, small business health plans, small and large
employers, large and small insurance issuers, consumer
representatives, and state insurance commissioners, shall--
``(1) adapt the standards of this part, to the maximum
degree practicable, to assure balanced and comparable
oversight standards for both small business health plans and
alternative market pooling organizations;
``(2) permit the participation as alternative market
pooling organizations unions, churches and other faith-based
organizations, or other organizations composed of individuals
and groups which may have little or no association with
employment, provided however, that such alternative market
pooling organizations meet, and continue meeting on an
ongoing basis, to satisfy standards, rules, and requirements
materially equivalent to those set forth in this part with
respect to small business health plans;
``(3) conduct periodic verification of such compliance by
alternative market pooling organizations, in consultation
with the Secretary of Health and Human Services and the
National Association of Insurance Commissioners, except that
such periodic verification shall not materially impede market
entry or participation as pooling entities comparable to that
of small business health plans;
``(4) assure that consistent, clear, and regularly
monitored standards are applied with respect to alternative
market pooling organizations to avert material risk-selection
within or among the composition of such organizations;
``(5) the expedited and deemed certification procedures
provided in section 805(d) shall not apply to alternative
market pooling organizations until sooner of the promulgation
of regulations under this subsection or the expiration of one
year following enactment of this Act; and
``(6) make such other appropriate adjustments to the
requirements of this part as the Secretary may reasonably
deem appropriate to fit the circumstances of an individual
alternative market pooling organization or category of such
organization, including but not limited to the application of
the membership payment requirements of section 801(b)(2) to
alternative market pooling organizations composed primarily
of church- or faith-based membership.

``SEC. 803. CERTIFICATION OF SMALL BUSINESS HEALTH PLANS.

``(a) In General.--Not later than 6 months after the date
of enactment of this part, the applicable authority shall
prescribe by interim final rule a procedure under which the
applicable authority shall certify small business health
plans which apply for certification as meeting the
requirements of this part.
``(b) Requirements Applicable to Certified Plans.--A small
business health plan with respect to which certification
under this part is in effect shall meet the applicable
requirements of this part, effective on the date of
certification (or, if later, on the date on which the plan is
to commence operations).
``(c) Requirements for Continued Certification.--The
applicable authority may provide by regulation for continued
certification of small business health plans under this part.
Such regulation shall provide for the revocation of a
certification if the applicable authority finds that the
small business health plan involved is failing to comply with
the requirements of this part.
``(d) Expedited and Deemed Certification.--
``(1) In general.--If the Secretary fails to act on an
application for certification under this section within 90
days of receipt of such application, the applying small
business health plan shall be deemed certified until such
time as the Secretary may deny for cause the application for
certification.
``(2) Civil penalty.--The Secretary may assess a civil
penalty against the board of trustees and plan sponsor
(jointly and severally) of a small business health plan that
is deemed certified under paragraph (1) of up to $500,000 in
the event the Secretary determines that the application for
certification of such small business health plan was
willfully or with gross negligence incomplete or inaccurate.

``SEC. 804. REQUIREMENTS RELATING TO SPONSORS AND BOARDS OF
TRUSTEES.

``(a) Sponsor.--The requirements of this subsection are met
with respect to a small business health plan if the sponsor
has met (or is deemed under this part to have met) the
requirements of section 801(b) for a continuous period of not
less than 3 years ending with the date of the application for
certification under this part.
``(b) Board of Trustees.--The requirements of this
subsection are met with respect to a small business health
plan if the following requirements are met:
``(1) Fiscal control.--The plan is operated, pursuant to a
plan document, by a board of trustees which pursuant to a
trust agreement has complete fiscal control over the plan and
which is responsible for all operations of the plan.
``(2) Rules of operation and financial controls.--The board
of trustees has in effect rules of operation and financial
controls, based on a 3-year plan of operation, adequate to
carry out the terms of the plan and to meet all requirements
of this title applicable to the plan.
``(3) Rules governing relationship to participating
employers and to contractors.--
``(A) Board membership.--
``(i) In general.--Except as provided in clauses (ii) and
(iii), the members of the board of trustees are individuals
selected from individuals who are the owners, officers,
directors, or employees of the participating employers or who
are partners in the participating employers and actively
participate in the business.
``(ii) Limitation.--

``(I) General rule.--Except as provided in subclauses (II)
and (III), no such member is an owner, officer, director, or
employee of, or partner in, a contract administrator or other
service provider to the plan.
``(II) Limited exception for providers of services solely
on behalf of the sponsor.--Officers or employees of a sponsor
which is a service provider (other than a contract
administrator) to the plan may be members of the board if
they constitute not more than 25 percent of the membership of
the board and they do not provide services to the plan other
than on behalf of the sponsor.
``(III) Treatment of providers of medical care.--In the
case of a sponsor which is an association whose membership
consists primarily of providers of medical care, subclause
(I) shall not apply in the case of any service provider
described in subclause (I) who is a provider of medical care
under the plan.

``(iii) Certain plans excluded.--Clause (i) shall not apply
to a small business health plan which is in existence on the
date of the enactment of the Small Business Health Plans Act
of 2009.
``(B) Sole authority.--The board has sole authority under
the plan to approve applications for participation in the
plan and to contract with insurers.
``(c) Treatment of Franchises.--In the case of a group
health plan which is established and maintained by a
franchiser for a franchisor or for its franchisees--
``(1) the requirements of subsection (a) and section 801(a)
shall be deemed met if such requirements would otherwise be
met if the franchisor were deemed to be the sponsor referred
to in section 801(b) and each franchisee were deemed to be a
member (of the sponsor) referred to in section 801(b); and
``(2) the requirements of section 804(a)(1) shall be deemed
met.

For purposes of this subsection the terms `franchisor' and
`franchisee' shall have the

[[Page S13051]]

meanings given such terms for purposes of sections 436.2(a)
through 436.2(c) of title 16, Code of Federal Regulations
(including any such amendments to such regulation after the
date of enactment of this part).

``SEC. 805. PARTICIPATION AND COVERAGE REQUIREMENTS.

``(a) Covered Employers and Individuals.--The requirements
of this subsection are met with respect to a small business
health plan if, under the terms of the plan--
``(1) each participating employer must be--
``(A) a member of the sponsor;
``(B) the sponsor; or
``(C) an affiliated member of the sponsor, except that, in
the case of a sponsor which is a professional association or
other individual-based association, if at least one of the
officers, directors, or employees of an employer, or at least
one of the individuals who are partners in an employer and
who actively participates in the business, is a member or
such an affiliated member of the sponsor, participating
employers may also include such employer; and
``(2) all individuals commencing coverage under the plan
after certification under this part must be--
``(A) active or retired owners (including self-employed
individuals), officers, directors, or employees of, or
partners in, participating employers; or
``(B) the dependents of individuals described in
subparagraph (A).
``(b) Individual Market Unaffected.--The requirements of
this subsection are met with respect to a small business
health plan if, under the terms of the plan, no participating
employer may provide health insurance coverage in the
individual market for any employee not covered under the plan
which is similar to the coverage contemporaneously provided
to employees of the employer under the plan, if such
exclusion of the employee from coverage under the plan is
based on a health status-related factor with respect to the
employee and such employee would, but for such exclusion on
such basis, be eligible for coverage under the plan.
``(c) Prohibition of Discrimination Against Employers and
Employees Eligible To Participate.--The requirements of this
subsection are met with respect to a small business health
plan if--
``(1) under the terms of the plan, all employers meeting
the preceding requirements of this section are eligible to
qualify as participating employers for all geographically
available coverage options, unless, in the case of any such
employer, participation or contribution requirements of the
type referred to in section 2711 of the Public Health Service
Act are not met;
``(2) information regarding all coverage options available
under the plan is made readily available to any employer
eligible to participate; and
``(3) the applicable requirements of sections 701, 702, and
703 are met with respect to the plan.

``SEC. 806. OTHER REQUIREMENTS RELATING TO PLAN DOCUMENTS,
CONTRIBUTION RATES, AND BENEFIT OPTIONS.

``(a) In General.--The requirements of this section are met
with respect to a small business health plan if the following
requirements are met:
``(1) Contents of governing instruments.--
``(A) In general.--The instruments governing the plan
include a written instrument, meeting the requirements of an
instrument required under section 402(a)(1), which--
``(i) provides that the board of trustees serves as the
named fiduciary required for plans under section 402(a)(1)
and serves in the capacity of a plan administrator (referred
to in section 3(16)(A)); and
``(ii) provides that the sponsor of the plan is to serve as
plan sponsor (referred to in section 3(16)(B)).
``(B) Description of material provisions.--The terms of the
health insurance coverage (including the terms of any
individual certificates that may be offered to individuals in
connection with such coverage) describe the material benefit
and rating, and other provisions set forth in this section
and such material provisions are included in the summary plan
description.
``(2) Contribution rates must be nondiscriminatory.--
``(A) In general.--The contribution rates for any
participating small employer shall not vary on the basis of
any health status-related factor in relation to employees of
such employer or their beneficiaries and shall not vary on
the basis of the type of business or industry in which such
employer is engaged, subject to subparagraph (B) and the
terms of this title.
``(B) Effect of title.--Nothing in this title or any other
provision of law shall be construed to preclude a health
insurance issuer offering health insurance coverage in
connection with a small business health plan that meets the
requirements of this part, and at the request of such small
business health plan, from--
``(i) setting contribution rates for the small business
health plan based on the claims experience of the small
business health plan so long as any variation in such rates
for participating small employers complies with the
requirements of clause (ii), except that small business
health plans shall not be subject, in non-adopting states, to
subparagraphs (A)(ii) and (C) of section 2912(a)(2) of the
Public Health Service Act, and in adopting states, to any
State law that would have the effect of imposing requirements
as outlined in such subparagraphs (A)(ii) and (C); or
``(ii) varying contribution rates for participating small
employers in a small business health plan in a State to the
extent that such rates could vary using the same methodology
employed in such State for regulating small group premium
rates, subject to the terms of part I of subtitle A of title
XXIX of the Public Health Service Act (relating to rating
requirements), as added by title II of the Small Business
Health Plans Act of 2009.
``(3) Exceptions regarding self-employed and large
employers.--
``(A) Self employed.--
``(i) In general.--Small business health plans with
participating employers who are self-employed individuals
(and their dependents) shall enroll such self-employed
participating employers in accordance with rating rules that
do not violate the rating rules for self-employed individuals
in the State in which such self-employed participating
employers are located.
``(ii) Guarantee issue.--Small business health plans with
participating employers who are self-employed individuals
(and their dependents) may decline to guarantee issue to such
participating employers in States in which guarantee issue is
not otherwise required for the self-employed in that State.
``(B) Large employers.--Small business health plans with
participating employers that are larger than small employers
(as defined in section 808(a)(10)) shall enroll such large
participating employers in accordance with rating rules that
do not violate the rating rules for large employers in the
State in which such large participating employers are
located.
``(4) Regulatory requirements.--Such other requirements as
the applicable authority determines are necessary to carry
out the purposes of this part, which shall be prescribed by
the applicable authority by regulation.
``(b) Ability of Small Business Health Plans To Design
Benefit Options.--Nothing in this part or any provision of
State law (as defined in section 514(c)(1)) shall be
construed to preclude a small business health plan or a
health insurance issuer offering health insurance coverage in
connection with a small business health plan from exercising
its sole discretion in selecting the specific benefits and
services consisting of medical care to be included as
benefits under such plan or coverage, except that such
benefits and services must meet the terms and specifications
of part II of subtitle A of title XXIX of the Public Health
Service Act (relating to lower cost plans), as added by title
II of the Small Business Health Plans Act of 2009.
``(c) Domicile and Non-Domicile States.--
``(1) Domicile state.--Coverage shall be issued to a small
business health plan in the State in which the sponsor's
principal place of business is located.
``(2) Non-domicile states.--With respect to a State (other
than the domicile State) in which participating employers of
a small business health plan are located but in which the
insurer of the small business health plan in the domicile
State is not yet licensed, the following shall apply:
``(A) Temporary preemption.--If, upon the expiration of the
90-day period following the submission of a licensure
application by such insurer (that includes a certified copy
of an approved licensure application as submitted by such
insurer in the domicile State) to such State, such State has
not approved or denied such application, such State's health
insurance licensure laws shall be temporarily preempted and
the insurer shall be permitted to operate in such State,
subject to the following terms:
``(i) Application of non-domicile state law.--Except with
respect to licensure and with respect to the terms of
subtitle A of title XXIX of the Public Health Service Act
(relating to rating and benefits as added by the Small
Business Health Plans Act of 2009), the laws and authority of
the non-domicile State shall remain in full force and effect.
``(ii) Revocation of preemption.--The preemption of a non-
domicile State's health insurance licensure laws pursuant to
this subparagraph, shall be terminated upon the occurrence of
either of the following:

``(I) Approval or denial of application.--The approval of
denial of an insurer's licensure application, following the
laws and regulations of the non-domicile State with respect
to licensure.
``(II) Determination of material violation.--A
determination by a non-domicile State that an insurer
operating in a non-domicile State pursuant to the preemption
provided for in this subparagraph is in material violation of
the insurance laws (other than licensure and with respect to
the terms of subtitle A of title XXIX of the Public Health
Service Act (relating to rating and benefits added by the
Small Business Health Plans Act of 2009)) of such State.

``(B) No prohibition on promotion.--Nothing in this
paragraph shall be construed to prohibit a small business
health plan or an insurer from promoting coverage prior to
the expiration of the 90-day period provided for in
subparagraph (A), except that no enrollment or collection of
contributions shall occur before the expiration of such 90-
day period.
``(C) Licensure.--Except with respect to the application of
the temporary preemption provision of this paragraph, nothing
in this part shall be construed to limit the requirement that
insurers issuing coverage to small business health plans
shall be licensed in

[[Page S13052]]

each State in which the small business health plans operate.
``(D) Servicing by licensed insurers.--Notwithstanding
subparagraph (C), the requirements of this subsection may
also be satisfied if the participating employers of a small
business health plan are serviced by a licensed insurer in
that State, even where such insurer is not the insurer of
such small business health plan in the State in which such
small business health plan is domiciled.

``SEC. 807. REQUIREMENTS FOR APPLICATION AND RELATED
REQUIREMENTS.

``(a) Filing Fee.--Under the procedure prescribed pursuant
to section 802(a), a small business health plan shall pay to
the applicable authority at the time of filing an application
for certification under this part a filing fee in the amount
of $5,000, which shall be available in the case of the
Secretary, to the extent provided in appropriation Acts, for
the sole purpose of administering the certification
procedures applicable with respect to small business health
plans.
``(b) Information To Be Included in Application for
Certification.--An application for certification under this
part meets the requirements of this section only if it
includes, in a manner and form which shall be prescribed by
the applicable authority by regulation, at least the
following information:
``(1) Identifying information.--The names and addresses
of--
``(A) the sponsor; and
``(B) the members of the board of trustees of the plan.
``(2) States in which plan intends to do business.--The
States in which participants and beneficiaries under the plan
are to be located and the number of them expected to be
located in each such State.
``(3) Bonding requirements.--Evidence provided by the board
of trustees that the bonding requirements of section 412 will
be met as of the date of the application or (if later)
commencement of operations.
``(4) Plan documents.--A copy of the documents governing
the plan (including any bylaws and trust agreements), the
summary plan description, and other material describing the
benefits that will be provided to participants and
beneficiaries under the plan.
``(5) Agreements with service providers.--A copy of any
agreements between the plan, health insurance issuer, and
contract administrators and other service providers.
``(c) Filing Notice of Certification With States.--A
certification granted under this part to a small business
health plan shall not be effective unless written notice of
such certification is filed with the applicable State
authority of each State in which the small business health
plans operate.
``(d) Notice of Material Changes.--In the case of any small
business health plan certified under this part, descriptions
of material changes in any information which was required to
be submitted with the application for the certification under
this part shall be filed in such form and manner as shall be
prescribed by the applicable authority by regulation. The
applicable authority may require by regulation prior notice
of material changes with respect to specified matters which
might serve as the basis for suspension or revocation of the
certification.

``SEC. 808. NOTICE REQUIREMENTS FOR VOLUNTARY TERMINATION.

``A small business health plan which is or has been
certified under this part may terminate (upon or at any time
after cessation of accruals in benefit liabilities) only if
the board of trustees, not less than 60 days before the
proposed termination date--
``(1) provides to the participants and beneficiaries a
written notice of intent to terminate stating that such
termination is intended and the proposed termination date;
``(2) develops a plan for winding up the affairs of the
plan in connection with such termination in a manner which
will result in timely payment of all benefits for which the
plan is obligated; and
``(3) submits such plan in writing to the applicable
authority.

Actions required under this section shall be taken in such
form and manner as may be prescribed by the applicable
authority by regulation.

``SEC. 809. IMPLEMENTATION AND APPLICATION AUTHORITY BY
SECRETARY.

``The Secretary shall, through promulgation and
implementation of such regulations as the Secretary may
reasonably determine necessary or appropriate, and in
consultation with a balanced spectrum of effected entities
and persons, modify the implementation and application of
this part to accommodate with minimum disruption such changes
to State or Federal law provided in this part and the (and
the amendments made by such Act) or in regulations issued
thereto.

``SEC. 810. DEFINITIONS AND RULES OF CONSTRUCTION.

``(a) Definitions.--For purposes of this part--
``(1) Affiliated member.--The term `affiliated member'
means, in connection with a sponsor--
``(A) a person who is otherwise eligible to be a member of
the sponsor but who elects an affiliated status with the
sponsor, or
``(B) in the case of a sponsor with members which consist
of associations, a person who is a member or employee of any
such association and elects an affiliated status with the
sponsor.
``(2) Applicable authority.--The term `applicable
authority' means the Secretary of Labor, except that, in
connection with any exercise of the Secretary's authority
with respect to which the Secretary is required under section
506(d) to consult with a State, such term means the
Secretary, in consultation with such State.
``(3) Applicable state authority.--The term `applicable
State authority' means, with respect to a health insurance
issuer in a State, the State insurance commissioner or
official or officials designated by the State to enforce the
requirements of title XXVII of the Public Health Service Act
for the State involved with respect to such issuer.
``(4) Group health plan.--The term `group health plan' has
the meaning provided in section 733(a)(1) (after applying
subsection (b) of this section).
``(5) Health insurance coverage.--The term `health
insurance coverage' has the meaning provided in section
733(b)(1), except that such term shall not include excepted
benefits (as defined in section 733(c)).
``(6) Health insurance issuer.--The term `health insurance
issuer' has the meaning provided in section 733(b)(2).
``(7) Individual market.--
``(A) In general.--The term `individual market' means the
market for health insurance coverage offered to individuals
other than in connection with a group health plan.
``(B) Treatment of very small groups.--
``(i) In general.--Subject to clause (ii), such term
includes coverage offered in connection with a group health
plan that has fewer than 2 participants as current employees
or participants described in section 732(d)(3) on the first
day of the plan year.
``(ii) State exception.--Clause (i) shall not apply in the
case of health insurance coverage offered in a State if such
State regulates the coverage described in such clause in the
same manner and to the same extent as coverage in the small
group market (as defined in section 2791(e)(5) of the Public
Health Service Act) is regulated by such State.
``(8) Medical care.--The term `medical care' has the
meaning provided in section 733(a)(2).
``(9) Participating employer.--The term `participating
employer' means, in connection with a small business health
plan, any employer, if any individual who is an employee of
such employer, a partner in such employer, or a self-employed
individual who is such employer (or any dependent, as defined
under the terms of the plan, of such individual) is or was
covered under such plan in connection with the status of such
individual as such an employee, partner, or self-employed
individual in relation to the plan.
``(10) Small employer.--The term `small employer' means, in
connection with a group health plan with respect to a plan
year, a small employer as defined in section 2791(e)(4).
``(11) Trade association and professional association.--The
terms `trade association' and `professional association' mean
an entity that meets the requirements of section 1.501(c)(6)-
1 of title 26, Code of Federal Regulations (as in effect on
the date of enactment of this Act).
``(b) Rule of Construction.--For purposes of determining
whether a plan, fund, or program is an employee welfare
benefit plan which is a small business health plan, and for
purposes of applying this title in connection with such plan,
fund, or program so determined to be such an employee welfare
benefit plan--
``(1) in the case of a partnership, the term `employer' (as
defined in section 3(5)) includes the partnership in relation
to the partners, and the term `employee' (as defined in
section 3(6)) includes any partner in relation to the
partnership; and
``(2) in the case of a self-employed individual, the term
`employer' (as defined in section 3(5)) and the term
`employee' (as defined in section 3(6)) shall include such
individual.
``(c) Renewal.--Notwithstanding any provision of law to the
contrary, a participating employer in a small business health
plan shall not be deemed to be a plan sponsor in applying
requirements relating to coverage renewal.
``(d) Health Savings Accounts.--Nothing in this part shall
be construed to create any mandates for coverage of benefits
for HSA-qualified health plans that would require
reimbursements in violation of section 223(c)(2) of the
Internal Revenue Code of 1986.''.
(b) Conforming Amendments to Preemption Rules.--
(1) Section 514(b)(6) of such Act (29 U.S.C. 1144(b)(6)) is
amended by adding at the end the following new subparagraph:
``(E) The preceding subparagraphs of this paragraph do not
apply with respect to any State law in the case of a small
business health plan which is certified under part 8.''.
(2) Section 514 of such Act (29 U.S.C. 1144) is amended--
(A) in subsection (b)(4), by striking ``Subsection (a)''
and inserting ``Subsections (a) and (d)'';
(B) in subsection (b)(5), by striking ``subsection (a)'' in
subparagraph (A) and inserting ``subsection (a) of this
section and subsections (a)(2)(B) and (b) of section 805'',
and by striking ``subsection (a)'' in subparagraph (B) and
inserting ``subsection (a) of this section or subsection
(a)(2)(B) or (b) of section 805'';
(C) by redesignating subsection (d) as subsection (e); and
(D) by inserting after subsection (c) the following new
subsection:

[[Page S13053]]

``(d)(1) Except as provided in subsection (b)(4), the
provisions of this title shall supersede any and all State
laws insofar as they may now or hereafter preclude a health
insurance issuer from offering health insurance coverage in
connection with a small business health plan which is
certified under part 8.
``(2) In any case in which health insurance coverage of any
policy type is offered under a small business health plan
certified under part 8 to a participating employer operating
in such State, the provisions of this title shall supersede
any and all laws of such State insofar as they may establish
rating and benefit requirements that would otherwise apply to
such coverage, provided the requirements of subtitle A of
title XXIX of the Public Health Service Act (as added by
title II of the Health Insurance Marketplace Modernization
and Affordability Act of 2007) (concerning health plan rating
and benefits) are met.''.
(c) Plan Sponsor.--Section 3(16)(B) of such Act (29 U.S.C.
102(16)(B)) is amended by adding at the end the following new
sentence: ``Such term also includes a person serving as the
sponsor of a small business health plan under part 8.''.
(d) Savings Clause.--Section 731(c) of such Act is amended
by inserting ``or part 8'' after ``this part''.
(e) Clerical Amendment.--The table of contents in section 1
of the Employee Retirement Income Security Act of 1974 is
amended by inserting after the item relating to section 734
the following new items:

``Part 8--Rules Governing Small Business Health Plans

``801. Small business health plans.
``802. Alternative market pooling organizations.
``803. Certification of small business health plans.
``804. Requirements relating to sponsors and boards of trustees.
``805. Participation and coverage requirements.
``806. Other requirements relating to plan documents, contribution
rates, and benefit options.
``807. Requirements for application and related requirements.
``808. Notice requirements for voluntary termination.
``809. Implementation and application authority by Secretary.
``810. Definitions and rules of construction.''.

SEC. 102. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.

Section 506 of the Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1136) is amended by adding at the end the
following new subsection:
``(d) Consultation With States With Respect to Small
Business Health Plans.--
``(1) Agreements with states.--The Secretary shall consult
with the State recognized under paragraph (2) with respect to
a small business health plan regarding the exercise of--
``(A) the Secretary's authority under sections 502 and 504
to enforce the requirements for certification under part 8;
and
``(B) the Secretary's authority to certify small business
health plans under part 8 in accordance with regulations of
the Secretary applicable to certification under part 8.
``(2) Recognition of domicile state.--In carrying out
paragraph (1), the Secretary shall ensure that only one State
will be recognized, with respect to any particular small
business health plan, as the State with which consultation is
required. In carrying out this paragraph such State shall be
the domicile State, as defined in section 805(c).''.

SEC. 103. EFFECTIVE DATE AND TRANSITIONAL AND OTHER RULES.

(a) Effective Date.--The amendments made by this title
shall take effect 12 months after the date of the enactment
of this Act. The Secretary of Labor shall first issue all
regulations necessary to carry out the amendments made by
this title within 6 months after the date of the enactment of
this Act.
(b) Treatment of Certain Existing Health Benefits
Programs.--
(1) In general.--In any case in which, as of the date of
the enactment of this Act, an arrangement is maintained in a
State for the purpose of providing benefits consisting of
medical care for the employees and beneficiaries of its
participating employers, at least 200 participating employers
make contributions to such arrangement, such arrangement has
been in existence for at least 10 years, and such arrangement
is licensed under the laws of one or more States to provide
such benefits to its participating employers, upon the filing
with the applicable authority (as defined in section
808(a)(2) of the Employee Retirement Income Security Act of
1974 (as amended by this subtitle)) by the arrangement of an
application for certification of the arrangement under part 8
of subtitle B of title I of such Act--
(A) such arrangement shall be deemed to be a group health
plan for purposes of title I of such Act;
(B) the requirements of sections 801(a) and 803(a) of the
Employee Retirement Income Security Act of 1974 shall be
deemed met with respect to such arrangement;
(C) the requirements of section 803(b) of such Act shall be
deemed met, if the arrangement is operated by a board of
trustees which has control over the arrangement;
(D) the requirements of section 804(a) of such Act shall be
deemed met with respect to such arrangement; and
(E) the arrangement may be certified by any applicable
authority with respect to its operations in any State only if
it operates in such State on the date of certification.

The provisions of this subsection shall cease to apply with
respect to any such arrangement at such time after the date
of the enactment of this Act as the applicable requirements
of this subsection are not met with respect to such
arrangement or at such time that the arrangement provides
coverage to participants and beneficiaries in any State other
than the States in which coverage is provided on such date of
enactment.
(2) Definitions.--For purposes of this subsection, the
terms ``group health plan'', ``medical care'', and
``participating employer'' shall have the meanings provided
in section 808 of the Employee Retirement Income Security Act
of 1974, except that the reference in paragraph (7) of such
section to an ``small business health plan'' shall be deemed
a reference to an arrangement referred to in this subsection.

TITLE II--MARKET RELIEF

SEC. 301. MARKET RELIEF.

The Public Health Service Act (42 U.S.C. 201 et seq.) is
amended by adding at the end the following:

``TITLE XXIX--HEALTH CARE INSURANCE MARKETPLACE MODERNIZATION

``SEC. 2901. GENERAL INSURANCE DEFINITIONS.

``In this title, the terms `health insurance coverage',
`health insurance issuer', `group health plan', and
`individual health insurance' shall have the meanings given
such terms in section 2791.

``SEC. 2902. IMPLEMENTATION AND APPLICATION AUTHORITY BY
SECRETARY.

``The Secretary shall, through promulgation and
implementation of such regulations as the Secretary may
reasonably determine necessary or appropriate, and in
consultation with a balanced spectrum of effected entities
and persons, modify the implementation and application of
this title to accommodate with minimum disruption such
changes to State or Federal law provided in this title and
the (and the amendments made by such Act) or in regulations
issued thereto.

``Subtitle A--Market Relief

``PART I--RATING REQUIREMENTS

``SEC. 2911. DEFINITIONS.

``In this part:
``(1) Adopting state.--The term `adopting State' means a
State that, with respect to the small group market, has
enacted small group rating rules that meet the minimum
standards set forth in section 2912(a)(1) or, as applicable,
transitional small group rating rules set forth in section
2912(b).
``(2) Applicable state authority.--The term `applicable
State authority' means, with respect to a health insurance
issuer in a State, the State insurance commissioner or
official or officials designated by the State to enforce the
insurance laws of such State.
``(3) Base premium rate.--The term `base premium rate'
means, for each class of business with respect to a rating
period, the lowest premium rate charged or that could have
been charged under a rating system for that class of business
by the small employer carrier to small employers with similar
case characteristics for health benefit plans with the same
or similar coverage.
``(4) Eligible insurer.--The term `eligible insurer' means
a health insurance issuer that is licensed in a State and
that--
``(A) notifies the Secretary, not later than 30 days prior
to the offering of coverage described in this subparagraph,
that the issuer intends to offer health insurance coverage
consistent with the Model Small Group Rating Rules or, as
applicable, transitional small group rating rules in a State;
``(B) notifies the insurance department of a nonadopting
State (or other State agency), not later than 30 days prior
to the offering of coverage described in this subparagraph,
that the issuer intends to offer small group health insurance
coverage in that State consistent with the Model Small Group
Rating Rules, and provides with such notice a copy of any
insurance policy that it intends to offer in the State, its
most recent annual and quarterly financial reports, and any
other information required to be filed with the insurance
department of the State (or other State agency); and
``(C) includes in the terms of the health insurance
coverage offered in nonadopting States (including in the
terms of any individual certificates that may be offered to
individuals in connection with such group health coverage)
and filed with the State pursuant to subparagraph (B), a
description in the insurer's contract of the Model Small
Group Rating Rules and an affirmation that such Rules are
included in the terms of such contract.
``(5) Health insurance coverage.--The term `health
insurance coverage' means any coverage issued in the small
group health insurance market, except that such term shall
not include excepted benefits (as defined in section
2791(c)).
``(6) Index rate.--The term `index rate' means for each
class of business with respect to the rating period for small
employers with similar case characteristics, the arithmetic
average of the applicable base premium rate and the
corresponding highest premium rate.
``(7)  Model small group rating rules.--The term `Model
Small Group Rating Rules' means the rules set forth in
section 2912(a)(2).

[[Page S13054]]

``(8) Nonadopting state.--The term `nonadopting State'
means a State that is not an adopting State.
``(9) Small group insurance market.--The term `small group
insurance market' shall have the meaning given the term
`small group market' in section 2791(e)(5).
``(10) State law.--The term `State law' means all laws,
decisions, rules, regulations, or other State actions
(including actions by a State agency) having the effect of
law, of any State.
``(11) Variation limits.--
``(A) Composite variation limit.--
``(i) In general.--The term `composite variation limit'
means the total variation in premium rates charged by a
health insurance issuer in the small group market as
permitted under applicable State law based on the following
factors or case characteristics:

``(I) Age.
``(II) Duration of coverage.
``(III) Claims experience.
``(IV) Health status.

``(ii) Use of factors.--With respect to the use of the
factors described in clause (i) in setting premium rates, a
health insurance issuer shall use one or both of the factors
described in subclauses (I) or (IV) of such clause and may
use the factors described in subclauses (II) or (III) of such
clause.
``(B) Total variation limit.--The term `total variation
limit' means the total variation in premium rates charged by
a health insurance issuer in the small group market as
permitted under applicable State law based on all factors and
case characteristics (as described in section 2912(a)(1)).

``SEC. 2912. RATING RULES.

``(a) Establishment of Minimum Standards for Premium
Variations and Model Small Group Rating Rules.--Not later
than 6 months after the date of enactment of this title, the
Secretary shall promulgate regulations establishing the
following Minimum Standards and Model Small Group Rating
Rules:
``(1) Minimum standards for premium variations.--
``(A) Composite variation limit.--The composite variation
limit shall not be less than 3:1.
``(B) Total variation limit.--The total variation limit
shall not be less than 5:1.
``(C) Prohibition on use of certain case characteristics.--
For purposes of this paragraph, in calculating the total
variation limit, the State shall not use case characteristics
other than those used in calculating the composite variation
limit and industry, geographic area, group size,
participation rate, class of business, and participation in
wellness programs.
``(2) Model small group rating rules.--The following apply
to an eligible insurer in a non-adopting State:
``(A) Premium rates.--Premium rates for small group health
benefit plans to which this title applies shall comply with
the following provisions relating to premiums, except as
provided for under subsection (b):
``(i) Variation in premium rates.--The plan may not vary
premium rates by more than the minimum standards provided for
under paragraph (1).
``(ii) Index rate.--The index rate for a rating period for
any class of business shall not exceed the index rate for any
other class of business by more than 20 percent, excluding
those classes of business related to association groups under
this title.
``(iii) Class of businesses.--With respect to a class of
business, the premium rates charged during a rating period to
small employers with similar case characteristics for the
same or similar coverage or the rates that could be charged
to such employers under the rating system for that class of
business, shall not vary from the index rate by more than 25
percent of the index rate under clause (ii).
``(iv) Increases for new rating periods.--The percentage
increase in the premium rate charged to a small employer for
a new rating period may not exceed the sum of the following:

``(I) The percentage change in the new business premium
rate measured from the first day of the prior rating period
to the first day of the new rating period. In the case of a
health benefit plan into which the small employer carrier is
no longer enrolling new small employers, the small employer
carrier shall use the percentage change in the base premium
rate, except that such change shall not exceed, on a
percentage basis, the change in the new business premium rate
for the most similar health benefit plan into which the small
employer carrier is actively enrolling new small employers.
``(II) Any adjustment, not to exceed 15 percent annually
and adjusted pro rata for rating periods of less then 1 year,
due to the claim experience, health status or duration of
coverage of the employees or dependents of the small employer
as determined from the small employer carrier's rate manual
for the class of business involved.
``(III) Any adjustment due to change in coverage or change
in the case characteristics of the small employer as
determined from the small employer carrier's rate manual for
the class of business.

``(v) Uniform application of adjustments.--Adjustments in
premium rates for claim experience, health status, or
duration of coverage shall not be charged to individual
employees or dependents. Any such adjustment shall be applied
uniformly to the rates charged for all employees and
dependents of the small employer.
``(vi) Prohibition on use of certain case characteristic.--
A small employer carrier shall not utilize case
characteristics, other than those permitted under paragraph
(1)(C), without the prior approval of the applicable State
authority.
``(vii) Consistent application of factors.--Small employer
carriers shall apply rating factors, including case
characteristics, consistently with respect to all small
employers in a class of business. Rating factors shall
produce premiums for identical groups which differ only by
the amounts attributable to plan design and do not reflect
differences due to the nature of the groups assumed to select
particular health benefit plans.
``(viii) Treatment of plans as having same rating period.--
A small employer carrier shall treat all health benefit plans
issued or renewed in the same calendar month as having the
same rating period.
``(ix) Require compliance.--Premium rates for small
business health benefit plans shall comply with the
requirements of this subsection notwithstanding any
assessments paid or payable by a small employer carrier as
required by a State's small employer carrier reinsurance
program.
``(B) Establishment of separate class of business.--Subject
to subparagraph (C), a small employer carrier may establish a
separate class of business only to reflect substantial
differences in expected claims experience or administrative
costs related to the following:
``(i) The small employer carrier uses more than one type of
system for the marketing and sale of health benefit plans to
small employers.
``(ii) The small employer carrier has acquired a class of
business from another small employer carrier.
``(iii) The small employer carrier provides coverage to one
or more association groups that meet the requirements of this
title.
``(C) Limitation.--A small employer carrier may establish
up to 9 separate classes of business under subparagraph (B),
excluding those classes of business related to association
groups under this title.
``(D) Limitation on transfers.--A small employer carrier
shall not transfer a small employer involuntarily into or out
of a class of business. A small employer carrier shall not
offer to transfer a small employer into or out of a class of
business unless such offer is made to transfer all small
employers in the class of business without regard to case
characteristics, claim experience, health status or duration
of coverage since issue.
``(b) Transitional Model Small Group Rating Rules.--
``(1) In general.--Not later than 6 months after the date
of enactment of this title and to the extent necessary to
provide for a graduated transition to the minimum standards
for premium variation as provided for in subsection (a)(1),
the Secretary, in consultation with the National Association
of Insurance Commissioners (NAIC), shall promulgate State-
specific transitional small group rating rules in accordance
with this subsection, which shall be applicable with respect
to non-adopting States and eligible insurers operating in
such States for a period of not to exceed 3 years from the
date of the promulgation of the minimum standards for premium
variation pursuant to subsection (a).
``(2) Compliance with transitional model small group rating
rules.--During the transition period described in paragraph
(1), a State that, on the date of enactment of this title,
has in effect a small group rating rules methodology that
allows for a variation that is less than the variation
provided for under subsection (a)(1) (concerning minimum
standards for premium variation), shall be deemed to be an
adopting State if the State complies with the transitional
small group rating rules as promulgated by the Secretary
pursuant to paragraph (1).
``(3) Transitioning of old business.--
``(A) In general.--In developing the transitional small
group rating rules under paragraph (1), the Secretary shall,
after consultation with the National Association of Insurance
Commissioners and representatives of insurers operating in
the small group health insurance market in non-adopting
States, promulgate special transition standards with respect
to independent rating classes for old and new business, to
the extent reasonably necessary to protect health insurance
consumers and to ensure a stable and fair transition for old
and new market entrants.
``(B) Period for operation of independent rating classes.--
In developing the special transition standards pursuant to
subparagraph (A), the Secretary shall permit a carrier in a
non-adopting State, at its option, to maintain independent
rating classes for old and new business for a period of up to
5 years, with the commencement of such 5-year period to begin
at such time, but not later than the date that is 3 years
after the date of enactment of this title, as the carrier
offers a book of business meeting the minimum standards for
premium variation provided for in subsection (a)(1) or the
transitional small group rating rules under paragraph (1).
``(4) Other transitional authority.--In developing the
transitional small group rating rules under paragraph (1),
the Secretary shall provide for the application of the
transitional small group rating rules in transition States as
the Secretary may determine necessary for a an effective
transition.
``(c) Market Re-Entry.--

[[Page S13055]]

``(1) In general.--Notwithstanding any other provision of
law, a health insurance issuer that has voluntarily withdrawn
from providing coverage in the small group market prior to
the date of enactment of the Small Business Health Plans Act
of 2009 shall not be excluded from re-entering such market on
a date that is more than 180 days after such date of
enactment.
``(2) Termination.--The provision of this subsection shall
terminate on the date that is 24 months after the date of
enactment of the Small Business Health Plans Act of 2009.

``SEC. 2913. APPLICATION AND PREEMPTION.

``(a) Superseding of State Law.--
``(1) In general.--This part shall supersede any and all
State laws of a non-adopting State insofar as such State laws
(whether enacted prior to or after the date of enactment of
this subtitle) relate to rating in the small group insurance
market as applied to an eligible insurer, or small group
health insurance coverage issued by an eligible insurer,
including with respect to coverage issued to a small employer
through a small business health plan, in a State.
``(2) Nonadopting states.--This part shall supersede any
and all State laws of a nonadopting State insofar as such
State laws (whether enacted prior to or after the date of
enactment of this subtitle)--
``(A) prohibit an eligible insurer from offering,
marketing, or implementing small group health insurance
coverage consistent with the Model Small Group Rating Rules
or transitional model small group rating rules; or
``(B) have the effect of retaliating against or otherwise
punishing in any respect an eligible insurer for offering,
marketing, or implementing small group health insurance
coverage consistent with the Model Small Group Rating Rules
or transitional model small group rating rules.
``(b) Savings Clause and Construction.--
``(1) Nonapplication to adopting states.--Subsection (a)
shall not apply with respect to adopting states.
``(2) Nonapplication to certain insurers.--Subsection (a)
shall not apply with respect to insurers that do not qualify
as eligible insurers that offer small group health insurance
coverage in a nonadopting State.
``(3) Nonapplication where obtaining relief under state
law.--Subsection (a)(1) shall not supercede any State law in
a nonadopting State to the extent necessary to permit
individuals or the insurance department of the State (or
other State agency) to obtain relief under State law to
require an eligible insurer to comply with the Model Small
Group Rating Rules or transitional model small group rating
rules.
``(4) No effect on preemption.--In no case shall this part
be construed to limit or affect in any manner the preemptive
scope of sections 502 and 514 of the Employee Retirement
Income Security Act of 1974. In no case shall this part be
construed to create any cause of action under Federal or
State law or enlarge or affect any remedy available under the
Employee Retirement Income Security Act of 1974.
``(5) Preemption limited to rating.--Subsection (a) shall
not preempt any State law that does not have a reference to
or a connection with State rating rules that would otherwise
apply to eligible insurers.
``(c) Effective Date.--This section shall apply, at the
election of the eligible insurer, beginning in the first plan
year or the first calendar year following the issuance of the
final rules by the Secretary under the Model Small Group
Rating Rules or, as applicable, the Transitional Model Small
Group Rating Rules, but in no event earlier than the date
that is 12 months after the date of enactment of this title.

``SEC. 2914. CIVIL ACTIONS AND JURISDICTION.

``(a) In General.--The courts of the United States shall
have exclusive jurisdiction over civil actions involving the
interpretation of this part.
``(b) Actions.--An eligible insurer may bring an action in
the district courts of the United States for injunctive or
other equitable relief against any officials or agents of a
nonadopting State in connection with any conduct or action,
or proposed conduct or action, by such officials or agents
which violates, or which would if undertaken violate, section
2913.
``(c) Direct Filing in Court of Appeals.--At the election
of the eligible insurer, an action may be brought under
subsection (b) directly in the United States Court of Appeals
for the circuit in which the nonadopting State is located by
the filing of a petition for review in such Court.
``(d) Expedited Review.--
``(1) District court.--In the case of an action brought in
a district court of the United States under subsection (b),
such court shall complete such action, including the issuance
of a judgment, prior to the end of the 120-day period
beginning on the date on which such action is filed, unless
all parties to such proceeding agree to an extension of such
period.
``(2) Court of appeals.--In the case of an action brought
directly in a United States Court of Appeal under subsection
(c), or in the case of an appeal of an action brought in a
district court under subsection (b), such Court shall
complete all action on the petition, including the issuance
of a judgment, prior to the end of the 60-day period
beginning on the date on which such petition is filed with
the Court, unless all parties to such proceeding agree to an
extension of such period.
``(e) Standard of Review.--A court in an action filed under
this section, shall render a judgment based on a review of
the merits of all questions presented in such action and
shall not defer to any conduct or action, or proposed conduct
or action, of a nonadopting State.

``SEC. 2915. ONGOING REVIEW.

``Not later than 5 years after the date on which the Model
Small Group Rating Rules are issued under this part, and
every 5 years thereafter, the Secretary, in consultation with
the National Association of Insurance Commissioners, shall
prepare and submit to the appropriate committees of Congress
a report that assesses the effect of the Model Small Group
Rating Rules on access, cost, and market functioning in the
small group market. Such report may, if the Secretary, in
consultation with the National Association of Insurance
Commissioners, determines such is appropriate for improving
access, costs, and market functioning, contain legislative
proposals for recommended modification to such Model Small
Group Rating Rules.

``PART II--AFFORDABLE PLANS

``SEC. 2921. DEFINITIONS.

``In this part:
``(1) Adopting state.--The term `adopting State' means a
State that has enacted a law providing that small group,
individual, and large group health insurers in such State may
offer and sell products in accordance with the List of
Required Benefits and the Terms of Application as provided
for in section 2922(b).
``(2) Eligible insurer.--The term `eligible insurer' means
a health insurance issuer that is licensed in a nonadopting
State and that--
``(A) notifies the Secretary, not later than 30 days prior
to the offering of coverage described in this subparagraph,
that the issuer intends to offer health insurance coverage
consistent with the List of Required Benefits and Terms of
Application in a nonadopting State;
``(B) notifies the insurance department of a nonadopting
State (or other applicable State agency), not later than 30
days prior to the offering of coverage described in this
subparagraph, that the issuer intends to offer health
insurance coverage in that State consistent with the List of
Required Benefits and Terms of Application, and provides with
such notice a copy of any insurance policy that it intends to
offer in the State, its most recent annual and quarterly
financial reports, and any other information required to be
filed with the insurance department of the State (or other
State agency) by the Secretary in regulations; and
``(C) includes in the terms of the health insurance
coverage offered in nonadopting States (including in the
terms of any individual certificates that may be offered to
individuals in connection with such group health coverage)
and filed with the State pursuant to subparagraph (B), a
description in the insurer's contract of the List of Required
Benefits and a description of the Terms of Application,
including a description of the benefits to be provided, and
that adherence to such standards is included as a term of
such contract.
``(3) Health insurance coverage.--The term `health
insurance coverage' means any coverage issued in the small
group, individual, or large group health insurance markets,
including with respect to small business health plans, except
that such term shall not include excepted benefits (as
defined in section 2791(c)).
``(4) List of required benefits.--The term `List of
Required Benefits' means the List issued under section
2922(a).
``(5) Nonadopting state.--The term `nonadopting State'
means a State that is not an adopting State.
``(6) State law.--The term `State law' means all laws,
decisions, rules, regulations, or other State actions
(including actions by a State agency) having the effect of
law, of any State.
``(7) State provider freedom of choice law.--The term
`State Provider Freedom of Choice Law' means a State law
requiring that a health insurance issuer, with respect to
health insurance coverage, not discriminate with respect to
participation, reimbursement, or indemnification as to any
provider who is acting within the scope of the provider's
license or certification under applicable State law.
``(8) Terms of application.--The term `Terms of
Application' means terms provided under section 2922(a).

``SEC. 2922. OFFERING AFFORDABLE PLANS.

``(a) List of Required Benefits.--Not later than 3 months
after the date of enactment of this title, the Secretary, in
consultation with the National Association of Insurance
Commissioners, shall issue by interim final rule a list (to
be known as the `List of Required Benefits') of covered
benefits, services, or categories of providers that are
required to be provided by health insurance issuers, in each
of the small group, individual, and large group markets, in
at least 26 States as a result of the application of State
covered benefit, service, and category of provider mandate
laws. With respect to plans sold to or through small business
health plans, the List of Required Benefits applicable to the
small group market shall apply.
``(b) Terms of Application.--
``(1) State with mandates.--With respect to a State that
has a covered benefit, service, or category of provider
mandate in effect that is covered under the List of Required

[[Page S13056]]

Benefits under subsection (a), such State mandate shall,
subject to paragraph (3) (concerning uniform application),
apply to a coverage plan or plan in, as applicable, the small
group, individual, or large group market or through a small
business health plan in such State.
``(2) States without mandates.--With respect to a State
that does not have a covered benefit, service, or category of
provider mandate in effect that is covered under the List of
Required Benefits under subsection (a), such mandate shall
not apply, as applicable, to a coverage plan or plan in the
small group, individual, or large group market or through a
small business health plan in such State.
``(3) Uniform application of laws.--
``(A) In general.--With respect to a State described in
paragraph (1), in applying a covered benefit, service, or
category of provider mandate that is on the List of Required
Benefits under subsection (a) the State shall permit a
coverage plan or plan offered in the small group, individual,
or large group market or through a small business health plan
in such State to apply such benefit, service, or category of
provider coverage in a manner consistent with the manner in
which such coverage is applied under one of the three most
heavily subscribed national health plans offered under the
Federal Employee Health Benefits Program under chapter 89 of
title 5, United States Code (as determined by the Secretary
in consultation with the Director of the Office of Personnel
Management), and consistent with the Publication of Benefit
Applications under subsection (c). In the event a covered
benefit, service, or category of provider appearing in the
List of Required Benefits is not offered in one of the three
most heavily subscribed national health plans offered under
the Federal Employees Health Benefits Program, such covered
benefit, service, or category of provider requirement shall
be applied in a manner consistent with the manner in which
such coverage is offered in the remaining most heavily
subscribed plan of the remaining Federal Employees Health
Benefits Program plans, as determined by the Secretary, in
consultation with the Director of the Office of Personnel
Management.
``(B) Exception regarding state provider freedom of choice
laws.--Notwithstanding subparagraph (A), in the event a
category of provider mandate is included in the List of
Covered Benefits, any State Provider Freedom of Choice Law
(as defined in section 2921(7)) that is in effect in any
State in which such category of provider mandate is in effect
shall not be preempted, with respect to that category of
provider, by this part.
``(c) Publication of Benefit Applications.--Not later than
3 months after the date of enactment of this title, and on
the first day of every calendar year thereafter, the
Secretary, in consultation with the Director of the Office of
Personnel Management, shall publish in the Federal Register a
description of such covered benefits, services, and
categories of providers covered in that calendar year by each
of the three most heavily subscribed nationally available
Federal Employee Health Benefits Plan options which are also
included on the List of Required Benefits.
``(d) Effective Dates.--
``(1) Small business health plans.--With respect to health
insurance provided to participating employers of small
business health plans, the requirements of this part
(concerning lower cost plans) shall apply beginning on the
date that is 12 months after the date of enactment of this
title.
``(2) Non-association coverage.--With respect to health
insurance provided to groups or individuals other than
participating employers of small business health plans, the
requirements of this part shall apply beginning on the date
that is 15 months after the date of enactment of this title.
``(e) Updating of List of Required Benefits.--Not later
than 2 years after the date on which the list of required
benefits is issued under subsection (a), and every 2 years
thereafter, the Secretary, in consultation with the National
Association of Insurance Commissioners, shall update the list
based on changes in the laws and regulations of the States.
The Secretary shall issue the updated list by regulation, and
such updated list shall be effective upon the first plan year
following the issuance of such regulation.

``SEC. 2923. APPLICATION AND PREEMPTION.

``(a) Superseding of State Law.--
``(1) In general.--This part shall supersede any and all
State laws insofar as such laws relate to mandates relating
to covered benefits, services, or categories of provider in
the health insurance market as applied to an eligible
insurer, or health insurance coverage issued by an eligible
insurer, including with respect to coverage issued to a small
business health plan, in a nonadopting State.
``(2) Nonadopting states.--This part shall supersede any
and all State laws of a nonadopting State (whether enacted
prior to or after the date of enactment of this title)
insofar as such laws--
``(A) prohibit an eligible insurer from offering,
marketing, or implementing health insurance coverage
consistent with the Benefit Choice Standards, as provided for
in section 2922(a); or
``(B) have the effect of retaliating against or otherwise
punishing in any respect an eligible insurer for offering,
marketing, or implementing health insurance coverage
consistent with the Benefit Choice Standards.
``(b) Savings Clause and Construction.--
``(1) Nonapplication to adopting states.--Subsection (a)
shall not apply with respect to adopting States.
``(2) Nonapplication to certain insurers.--Subsection (a)
shall not apply with respect to insurers that do not qualify
as eligible insurers who offer health insurance coverage in a
nonadopting State.
``(3) Nonapplication where obtaining relief under state
law.--Subsection (a)(1) shall not supersede any State law of
a nonadopting State to the extent necessary to permit
individuals or the insurance department of the State (or
other State agency) to obtain relief under State law to
require an eligible insurer to comply with the Benefit Choice
Standards.
``(4) No effect on preemption.--In no case shall this part
be construed to limit or affect in any manner the preemptive
scope of sections 502 and 514 of the Employee Retirement
Income Security Act of 1974. In no case shall this part be
construed to create any cause of action under Federal or
State law or enlarge or affect any remedy available under the
Employee Retirement Income Security Act of 1974.
``(5) Preemption limited to benefits.--Subsection (a) shall
not preempt any State law that does not have a reference to
or a connection with State mandates regarding covered
benefits, services, or categories of providers that would
otherwise apply to eligible insurers.

``SEC. 2924. CIVIL ACTIONS AND JURISDICTION.

``(a) In General.--The courts of the United States shall
have exclusive jurisdiction over civil actions involving the
interpretation of this part.
``(b) Actions.--An eligible insurer may bring an action in
the district courts of the United States for injunctive or
other equitable relief against any officials or agents of a
nonadopting State in connection with any conduct or action,
or proposed conduct or action, by such officials or agents
which violates, or which would if undertaken violate, section
2923.
``(c) Direct Filing in Court of Appeals.--At the election
of the eligible insurer, an action may be brought under
subsection (b) directly in the United States Court of Appeals
for the circuit in which the nonadopting State is located by
the filing of a petition for review in such Court.
``(d) Expedited Review.--
``(1) District court.--In the case of an action brought in
a district court of the United States under subsection (b),
such court shall complete such action, including the issuance
of a judgment, prior to the end of the 120-day period
beginning on the date on which such action is filed, unless
all parties to such proceeding agree to an extension of such
period.
``(2) Court of appeals.--In the case of an action brought
directly in a United States Court of Appeal under subsection
(c), or in the case of an appeal of an action brought in a
district court under subsection (b), such Court shall
complete all action on the petition, including the issuance
of a judgment, prior to the end of the 60-day period
beginning on the date on which such petition is filed with
the Court, unless all parties to such proceeding agree to an
extension of such period.
``(e) Standard of Review.--A court in an action filed under
this section, shall render a judgment based on a review of
the merits of all questions presented in such action and
shall not defer to any conduct or action, or proposed conduct
or action, of a nonadopting State.

``SEC. 2925. RULES OF CONSTRUCTION.

``(a) In General.--Notwithstanding any other provision of
Federal or State law, a health insurance issuer in an
adopting State or an eligible insurer in a non-adopting State
may amend its existing policies to be consistent with the
terms of this subtitle (concerning rating and benefits).
``(b) Health Savings Accounts.--Nothing in this subtitle
shall be construed to create any mandates for coverage of
benefits for HSA-qualified health plans that would require
reimbursements in violation of section 223(c)(2) of the
Internal Revenue Code of 1986.''.

TITLE III--HARMONIZATION OF HEALTH INSURANCE STANDARDS

SEC. 301. HEALTH INSURANCE STANDARDS HARMONIZATION.

Title XXIX of the Public Health Service Act (as added by
section 201) is amended by adding at the end the following:

``Subtitle B--Standards Harmonization

``SEC. 2931. DEFINITIONS.

``In this subtitle:
``(1) Adopting state.--The term `adopting State' means a
State that has enacted the harmonized standards adopted under
this subtitle in their entirety and as the exclusive laws of
the State that relate to the harmonized standards.
``(2) Eligible insurer.--The term `eligible insurer' means
a health insurance issuer that is licensed in a nonadopting
State and that--
``(A) notifies the Secretary, not later than 30 days prior
to the offering of coverage described in this subparagraph,
that the issuer intends to offer health insurance coverage
consistent with the harmonized standards in a nonadopting
State;
``(B) notifies the insurance department of a nonadopting
State (or other State agency), not later than 30 days prior
to the offering of coverage described in this subparagraph,
that the issuer intends to offer health insurance coverage in
that State consistent with

[[Page S13057]]

the harmonized standards published pursuant to section
2933(d), and provides with such notice a copy of any
insurance policy that it intends to offer in the State, its
most recent annual and quarterly financial reports, and any
other information required to be filed with the insurance
department of the State (or other State agency) by the
Secretary in regulations; and
``(C) includes in the terms of the health insurance
coverage offered in nonadopting States (including in the
terms of any individual certificates that may be offered to
individuals in connection with such health coverage) and
filed with the State pursuant to subparagraph (B), a
description of the harmonized standards published pursuant to
section 2933(g)(2) and an affirmation that such standards are
a term of the contract.
``(3) Harmonized standards.--The term `harmonized
standards' means the standards certified by the Secretary
under section 2933(d).
``(4) Health insurance coverage.--The term `health
insurance coverage' means any coverage issued in the health
insurance market, except that such term shall not include
excepted benefits (as defined in section 2791(c).
``(5) Nonadopting state.--The term `nonadopting State'
means a State that fails to enact, within 18 months of the
date on which the Secretary certifies the harmonized
standards under this subtitle, the harmonized standards in
their entirety and as the exclusive laws of the State that
relate to the harmonized standards.
``(6) State law.--The term `State law' means all laws,
decisions, rules, regulations, or other State actions
(including actions by a State agency) having the effect of
law, of any State.

``SEC. 2932. HARMONIZED STANDARDS.

``(a) Board.--
``(1) Establishment.--Not later than 3 months after the
date of enactment of this title, the Secretary, in
consultation with the NAIC, shall establish the Health
Insurance Consensus Standards Board (referred to in this
subtitle as the `Board') to develop recommendations that
harmonize inconsistent State health insurance laws in
accordance with the procedures described in subsection (b).
``(2) Composition.--
``(A) In general.--The Board shall be composed of the
following voting members to be appointed by the Secretary
after considering the recommendations of professional
organizations representing the entities and constituencies
described in this paragraph:
``(i) Four State insurance commissioners as recommended by
the National Association of Insurance Commissioners, of which
2 shall be Democrats and 2 shall be Republicans, and of which
one shall be designated as the chairperson and one shall be
designated as the vice chairperson.
``(ii) Four representatives of State government, two of
which shall be governors of States and two of which shall be
State legislators, and two of which shall be Democrats and
two of which shall be Republicans.
``(iii) Four representatives of health insurers, of which
one shall represent insurers that offer coverage in the small
group market, one shall represent insurers that offer
coverage in the large group market, one shall represent
insurers that offer coverage in the individual market, and
one shall represent carriers operating in a regional market.
``(iv) Two representatives of insurance agents and brokers.
``(v) Two independent representatives of the American
Academy of Actuaries who have familiarity with the actuarial
methods applicable to health insurance.
``(B) Ex officio member.--A representative of the Secretary
shall serve as an ex officio member of the Board.
``(3) Advisory panel.--The Secretary shall establish an
advisory panel to provide advice to the Board, and shall
appoint its members after considering the recommendations of
professional organizations representing the entities and
constituencies identified in this paragraph:
``(A) Two representatives of small business health plans.
``(B) Two representatives of employers, of which one shall
represent small employers and one shall represent large
employers.
``(C) Two representatives of consumer organizations.
``(D) Two representatives of health care providers.
``(4) Qualifications.--The membership of the Board shall
include individuals with national recognition for their
expertise in health finance and economics, actuarial science,
health plans, providers of health services, and other related
fields, who provide a mix of different professionals, broad
geographic representation, and a balance between urban and
rural representatives.
``(5) Ethical disclosure.--The Secretary shall establish a
system for public disclosure by members of the Board of
financial and other potential conflicts of interest relating
to such members. Members of the Board shall be treated as
employees of Congress for purposes of applying title I of the
Ethics in Government Act of 1978 (Public Law 95-521).
``(6) Director and staff.--Subject to such review as the
Secretary deems necessary to assure the efficient
administration of the Board, the chair and vice-chair of the
Board may--
``(A) employ and fix the compensation of an Executive
Director (subject to the approval of the Comptroller General)
and such other personnel as may be necessary to carry out its
duties (without regard to the provisions of title 5, United
States Code, governing appointments in the competitive
service);
``(B) seek such assistance and support as may be required
in the performance of its duties from appropriate Federal
departments and agencies;
``(C) enter into contracts or make other arrangements, as
may be necessary for the conduct of the work of the Board
(without regard to section 3709 of the Revised Statutes (41
U.S.C. 5));
``(D) make advance, progress, and other payments which
relate to the work of the Board;
``(E) provide transportation and subsistence for persons
serving without compensation; and
``(F) prescribe such rules as it deems necessary with
respect to the internal organization and operation of the
Board.
``(7) Terms.--The members of the Board shall serve for the
duration of the Board. Vacancies in the Board shall be filled
as needed in a manner consistent with the composition
described in paragraph (2).
``(b) Development of Harmonized Standards.--
``(1) In general.--In accordance with the process described
in subsection (c), the Board shall identify and recommend
nationally harmonized standards for each of the following
process categories:
``(A) Form filing and rate filing.--Form and rate filing
standards shall be established which promote speed to market
and include the following defined areas for States that
require such filings:
``(i) Procedures for form and rate filing pursuant to a
streamlined administrative filing process.
``(ii) Timeframes for filings to be reviewed by a State if
review is required before they are deemed approved.
``(iii) Timeframes for an eligible insurer to respond to
State requests following its review.
``(iv) A process for an eligible insurer to self-certify.
``(v) State development of form and rate filing templates
that include only non-preempted State law and Federal law
requirements for eligible insurers with timely updates.
``(vi) Procedures for the resubmission of forms and rates.
``(vii) Disapproval rationale of a form or rate filing
based on material omissions or violations of non-preempted
State law or Federal law with violations cited and explained.
``(viii) For States that may require a hearing, a rationale
for hearings based on violations of non-preempted State law
or insurer requests.
``(B) Market conduct review.--Market conduct review
standards shall be developed which provide for the following:
``(i) Mandatory participation in national databases.
``(ii) The confidentiality of examination materials.
``(iii) The identification of the State agency with primary
responsibility for examinations.
``(iv) Consultation and verification of complaint data with
the eligible insurer prior to State actions.
``(v) Consistency of reporting requirements with the
recordkeeping and administrative practices of the eligible
insurer.
``(vi) Examinations that seek to correct material errors
and harmful business practices rather than infrequent errors.
``(vii) Transparency and publishing of the State's
examination standards.
``(viii) Coordination of market conduct analysis.
``(ix) Coordination and nonduplication between State
examinations of the same eligible insurer.
``(x) Rationale and protocols to be met before a full
examination is conducted.
``(xi) Requirements on examiners prior to beginning
examinations such as budget planning and work plans.
``(xii) Consideration of methods to limit examiners' fees
such as caps, competitive bidding, or other alternatives.
``(xiii) Reasonable fines and penalties for material errors
and harmful business practices.
``(C) Prompt payment of claims.--The Board shall establish
prompt payment standards for eligible insurers based on
standards similar to those applicable to the Social Security
Act as set forth in section 1842(c)(2) of such Act (42 U.S.C.
1395u(c)(2)). Such prompt payment standards shall be
consistent with the timing and notice requirements of the
claims procedure rules to be specified under subparagraph
(D), and shall include appropriate exceptions such as for
fraud, nonpayment of premiums, or late submission of claims.
``(D) Internal review.--The Board shall establish standards
for claims procedures for eligible insurers that are
consistent with the requirements relating to initial claims
for benefits and appeals of claims for benefits under the
Employee Retirement Income Security Act of 1974 as set forth
in section 503 of such Act (29 U.S.C. 1133) and the
regulations thereunder.
``(2) Recommendations.--The Board shall recommend
harmonized standards for each element of the categories
described in subparagraph (A) through (D) of paragraph (1)
within each such market. Notwithstanding

[[Page S13058]]

the previous sentence, the Board shall not recommend any
harmonized standards that disrupt, expand, or duplicate the
benefit, service, or provider mandate standards provided in
the Benefit Choice Standards pursuant to section 2922(a).
``(c) Process for Identifying Harmonized Standards.--
``(1) In general.--The Board shall develop recommendations
to harmonize inconsistent State insurance laws with respect
to each of the process categories described in subparagraphs
(A) through (D) of subsection (b)(1).
``(2) Requirements.--In adopting standards under this
section, the Board shall consider the following:
``(A) Any model acts or regulations of the National
Association of Insurance Commissioners in each of the process
categories described in subparagraphs (A) through (D) of
subsection (b)(1).
``(B) Substantially similar standards followed by a
plurality of States, as reflected in existing State laws,
relating to the specific process categories described in
subparagraphs (A) through (D) of subsection (b)(1).
``(C) Any Federal law requirement related to specific
process categories described in subparagraphs (A) through (D)
of subsection (b)(1).
``(D) In the case of the adoption of any standard that
differs substantially from those referred to in subparagraphs
(A), (B), or (C), the Board shall provide evidence to the
Secretary that such standard is necessary to protect health
insurance consumers or promote speed to market or
administrative efficiency.
``(E) The criteria specified in clauses (i) through (iii)
of subsection (d)(2)(B).
``(d) Recommendations and Certification by Secretary.--
``(1) Recommendations.--Not later than 18 months after the
date on which all members of the Board are selected under
subsection (a), the Board shall recommend to the Secretary
the certification of the harmonized standards identified
pursuant to subsection (c).
``(2) Certification.--
``(A) In general.--Not later than 120 days after receipt of
the Board's recommendations under paragraph (1), the
Secretary shall certify the recommended harmonized standards
as provided for in subparagraph (B), and issue such standards
in the form of an interim final regulation.
``(B) Certification process.--The Secretary shall establish
a process for certifying the recommended harmonized standard,
by category, as recommended by the Board under this section.
Such process shall--
``(i) ensure that the certified standards for a particular
process area achieve regulatory harmonization with respect to
health plans on a national basis;
``(ii) ensure that the approved standards are the minimum
necessary, with regard to substance and quantity of
requirements, to protect health insurance consumers and
maintain a competitive regulatory environment; and
``(iii) ensure that the approved standards will not limit
the range of group health plan designs and insurance
products, such as catastrophic coverage only plans, health
savings accounts, and health maintenance organizations, that
might otherwise be available to consumers.
``(3) Application and effective date.--The standards
certified by the Secretary under paragraph (2) shall apply
and become effective on the date that is 18 months after the
date on which the Secretary certifies the harmonized
standards.
``(e) Termination.--The Board shall terminate and be
dissolved after making the recommendations to the Secretary
pursuant to subsection (d)(1).
``(f) Ongoing Review.--Not earlier than 3 years after the
termination of the Board under subsection (e), and not
earlier than every 3 years thereafter, the Secretary, in
consultation with the National Association of Insurance
Commissioners and the entities and constituencies represented
on the Board and the Advisory Panel, shall prepare and submit
to the appropriate committees of Congress a report that
assesses the effect of the harmonized standards applied under
this section on access, cost, and health insurance market
functioning. The Secretary may, based on such report and
applying the process established for certification under
subsection (d)(2)(B), in consultation with the National
Association of Insurance Commissioners and the entities and
constituencies represented on the Board and the Advisory
Panel, update the harmonized standards through notice and
comment rulemaking.
``(g) Publication.--
``(1) Listing.--The Secretary shall maintain an up to date
listing of all harmonized standards certified under this
section on the Internet website of the Department of Health
and Human Services.
``(2) Sample contract language.--The Secretary shall
publish on the Internet website of the Department of Health
and Human Services sample contract language that incorporates
the harmonized standards certified under this section, which
may be used by insurers seeking to qualify as an eligible
insurer. The types of harmonized standards that shall be
included in sample contract language are the standards that
are relevant to the contractual bargain between the insurer
and insured.
``(h) State Adoption and Enforcement.--Not later than 18
months after the certification by the Secretary of harmonized
standards under this section, the States may adopt such
harmonized standards (and become an adopting State) and, in
which case, shall enforce the harmonized standards pursuant
to State law.

``SEC. 2933. APPLICATION AND PREEMPTION.

``(a) Superseding of State Law.--
``(1) In general.--The harmonized standards certified under
this subtitle and applied as provided for in section
2933(d)(3), shall supersede any and all State laws of a non-
adopting State insofar as such State laws relate to the areas
of harmonized standards as applied to an eligible insurer, or
health insurance coverage issued by a eligible insurer,
including with respect to coverage issued to a small business
health plan, in a nonadopting State.
``(2) Nonadopting states.--This subtitle shall supersede
any and all State laws of a nonadopting State (whether
enacted prior to or after the date of enactment of this
title) insofar as they may--
``(A) prohibit an eligible insurer from offering,
marketing, or implementing health insurance coverage
consistent with the harmonized standards; or
``(B) have the effect of retaliating against or otherwise
punishing in any respect an eligible insurer for offering,
marketing, or implementing health insurance coverage
consistent with the harmonized standards under this subtitle.
``(b) Savings Clause and Construction.--
``(1) Nonapplication to adopting states.--Subsection (a)
shall not apply with respect to adopting States.
``(2) Nonapplication to certain insurers.--Subsection (a)
shall not apply with respect to insurers that do not qualify
as eligible insurers who offer health insurance coverage in a
nonadopting State.
``(3) Nonapplication where obtaining relief under state
law.--Subsection (a)(1) shall not supersede any State law of
a nonadopting State to the extent necessary to permit
individuals or the insurance department of the State (or
other State agency) to obtain relief under State law to
require an eligible insurer to comply with the harmonized
standards under this subtitle.
``(4) No effect on preemption.--In no case shall this
subtitle be construed to limit or affect in any manner the
preemptive scope of sections 502 and 514 of the Employee
Retirement Income Security Act of 1974. In no case shall this
subtitle be construed to create any cause of action under
Federal or State law or enlarge or affect any remedy
available under the Employee Retirement Income Security Act
of 1974.
``(c) Effective Date.--This section shall apply beginning
on the date that is 18 months after the date on harmonized
standards are certified by the Secretary under this subtitle.

``SEC. 2934. CIVIL ACTIONS AND JURISDICTION.

``(a) In General.--The district courts of the United States
shall have exclusive jurisdiction over civil actions
involving the interpretation of this subtitle.
``(b) Actions.--An eligible insurer may bring an action in
the district courts of the United States for injunctive or
other equitable relief against any officials or agents of a
nonadopting State in connection with any conduct or action,
or proposed conduct or action, by such officials or agents
which violates, or which would if undertaken violate, section
2933.
``(c) Direct Filing in Court of Appeals.--At the election
of the eligible insurer, an action may be brought under
subsection (b) directly in the United States Court of Appeals
for the circuit in which the nonadopting State is located by
the filing of a petition for review in such Court.
``(d) Expedited Review.--
``(1) District court.--In the case of an action brought in
a district court of the United States under subsection (b),
such court shall complete such action, including the issuance
of a judgment, prior to the end of the 120-day period
beginning on the date on which such action is filed, unless
all parties to such proceeding agree to an extension of such
period.
``(2) Court of appeals.--In the case of an action brought
directly in a United States Court of Appeal under subsection
(c), or in the case of an appeal of an action brought in a
district court under subsection (b), such Court shall
complete all action on the petition, including the issuance
of a judgment, prior to the end of the 60-day period
beginning on the date on which such petition is filed with
the Court, unless all parties to such proceeding agree to an
extension of such period.
``(e) Standard of Review.--A court in an action filed under
this section, shall render a judgment based on a review of
the merits of all questions presented in such action and
shall not defer to any conduct or action, or proposed conduct
or action, of a nonadopting State.

``SEC. 2935. AUTHORIZATION OF APPROPRIATIONS; RULE OF
CONSTRUCTION.

``(a) Authorization of Appropriations.--There are
authorized to be appropriated such sums as may be necessary
to carry out this subtitle.
``(b) Health Savings Accounts.--Nothing in this subtitle
shall be construed to create any mandates for coverage of any
benefits below the deductible levels set for any health
savings account-qualified health plan pursuant to section 223
of the Internal Revenue Code of 1986.''.
______

SA 3198. Mr. CORNYN (for himself and Mr. LeMieux) submitted an
amendment intended to be proposed to

[[Page S13059]]

amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr.
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal
Revenue Code of 1986 to modify the first-time homebuyers credit in the
case of members of the Armed Forces and certain other Federal
employees, and for other purposes; which was ordered to lie on the
table; as follows:

Strike all after the first word and insert the following:

1. SHORT TITLE.

This Act may be cited as the ``Seniors and Taxpayers
Obligation Protection Act of 2009''.

SEC. 2. REQUIRING THE SECRETARY OF HEALTH AND HUMAN SERVICES
TO CHANGE THE MEDICARE BENEFICIARY IDENTIFIER
USED TO IDENTIFY MEDICARE BENEFICIARIES UNDER
THE MEDICARE PROGRAM.

(a) Procedures.--
(1) In general.--Not later than 1 year after the date of
enactment of this Act, in order to protect beneficiaries from
identity theft, the Secretary of Health and Human Services
(in this section referred to as the ``Secretary'') shall
establish and implement procedures to change the Medicare
beneficiary identifier used to identify individuals entitled
to benefits under part A of title XVIII of the Social
Security Act or enrolled under part B of such title so that
such an individual's social security account number is not
used.
(2) Maintaining existing hicn structure.--In order to
minimize the impact of the change under paragraph (1) on
systems that communicate with Medicare beneficiary
eligibility systems, the procedures under paragraph (1) shall
provide that the new Medicare beneficiary identifier maintain
the existing Health Insurance Claim Number structure.
(3) Protection against fraud.--The procedures under
paragraph (1) shall provide for a process for changing the
Medicare beneficiary identifier for an individual to a
different identifier in the case of the discovery of fraud,
including identity theft.
(4) Phase-in authority.--
(A) In general.--Subject to subparagraphs (B) and (C), the
Secretary may phase in the change under paragraph (1) in such
manner as the Secretary determines appropriate.
(B) Limit.--The phase-in period under subparagraph (A)
shall not exceed 10 years.
(C) Newly entitled and enrolled individuals.--The Secretary
shall ensure that the change under paragraph (1) is
implemented not later than January 1, 2010, with respect to
any individual who first becomes entitled to benefits under
part A of title XVIII of the Social Security Act or enrolled
under part B of such title on or after such date.
(b) Education and Outreach.--The Secretary shall establish
a program of education and outreach for individuals entitled
to, or enrolled for, benefits under part A of title XVIII of
the Social Security Act or enrolled under part B of such
title, providers of services (as defined in subsection (u) of
section 1861 of such Act (42 U.S.C. 1395x)), and suppliers
(as defined in subsection (d) of such section) on the change
under paragraph (1).
(c) Data Matching.--
(1) Access to certain information.--Section 205(r) of the
Social Security Act (42 U.S.C. 405(r)) is amended by adding
at the end the following new paragraph:
``(9)(A) The Commissioner of Social Security shall, upon
the request of the Secretary--
``(i) enter into an agreement with the Secretary for the
purpose of matching data in the system of records of the
Commissioner with data in the system of records of the
Secretary, so long as the requirements of subparagraphs (A)
and (B) of paragraph (3) are met, in order to determine--
``(I) whether a beneficiary under the program under title
XVIII, XIX, or XXI is dead, imprisoned, or otherwise not
eligible for benefits under such program; and
``(II) whether a provider of services or a supplier under
the program under title XVIII, XIX, or XXI is dead,
imprisoned, or otherwise not eligible to furnish or receive
payment for furnishing items and services under such program;
and
``(ii) include in such agreement safeguards to assure the
maintenance of the confidentiality of any information
disclosed and procedures to permit the Secretary to use such
information for the purpose described in clause (i).
``(B) Information provided pursuant to an agreement under
this paragraph shall be provided at such time, in such place,
and in such manner as the Commissioner determines
appropriate.
``(C) Information provided pursuant to an agreement under
this paragraph shall include information regarding whether--
``(i) the name (including the first name and any family
name or surname), the date of birth (including the month,
day, and year), and social security number of an individual
provided to the Commissioner match the information contained
in the Commissioner's records, and
``(ii) such individual is shown on the records of the
Commissioner as being deceased.''.
(2) Investigation based on certain information.--Title XI
of the Social Security Act (42 U.S.C. 1301 et seq.) is
amended by inserting after section 1128F the following new
section:

``SEC. 1128G. ACCESS TO CERTAIN DATA AND INVESTIGATION OF
CLAIMS INVOLVING INDIVIDUALS WHO ARE NOT
ELIGIBLE FOR BENEFITS OR ARE NOT ELIGIBLE
PROVIDERS OF SERVICES OR SUPPLIERS.

``(a) Data Agreement.--The Secretary shall enter into an
agreement with the Commissioner of Social Security pursuant
to section 205(r)(9).
``(b) Investigation of Claims Involving Certain Individuals
Who Are Not Eligible for Benefits or Are Not Eligible
Providers of Services or Suppliers.--
``(1) In general.--The Secretary shall, in the case where a
provider of services or a supplier under the program under
title XVIII, XIX, or XXI submits a claim for payment for
items or services furnished to an individual who the
Secretary determines, as a result of information provided
pursuant to such agreement, is not eligible for benefits
under such program, or where the Secretary determines, as a
result of such information, that such provider of services or
supplier is not eligible to furnish or receive payment for
furnishing such items or services, conduct an investigation
with respect to the provider of services or supplier. If the
Secretary determines further action is appropriate, the
Secretary shall refer the investigation to the Inspector
General of the Department of Health and Human Services.
``(2) Assessment of implementation and effectiveness by the
oig.--The Inspector General of the Department of Health and
Human Services shall test the implementation of the
provisions of this section (including the implementation of
the agreement under section 205(r)(9)) and conduct such
period assessments of such implementation as the Inspector
General determines necessary to determine the effectiveness
of such implementation.''.
(d) Authorization of Appropriations.--There are authorized
to be appropriated such sums as may be necessary to carry out
this section.

SEC. 3. MONTHLY VERIFICATION OF ACCURACY OF CLAIMS FOR
PAYMENT FOR PHYSICIANS' SERVICES.

(a) In General.--Section 1893 of the Social Security Act
(42 U.S.C. 1395ddd) is amended--
(1) in subsection (b), by adding at the end the following
new paragraph:
``(7) The monthly verification of the accuracy of claims
for payment for physicians' services under the system under
subsection (i).''; and
(2) by adding at the end the following new subsection:
``(i) Monthly Verification of Accuracy of Claims for
Payment for Physicians' Services.--
``(1) System.--
``(A) In general.--Not later than 1 year after the date of
the enactment of this subsection, the Secretary shall
establish and implement a system to verify (electronically or
otherwise, taking into consideration the administrative
burden of such verification on physicians and group
practices) on a monthly basis that the claims for payment
under part B for physicians' services furnished in high risk
areas are--
``(i) for physicians' services actually furnished by the
physician or the physician's group practice; and
``(ii) otherwise accurate.
``(B) No determination of medical necessity.--In no case
shall any verification conducted under the system established
under subparagraph (A) include a determination of the medical
necessity of the physicians' service.
``(2) Verification.--Under the system, the Secretary, at
the end of each month, shall provide the physician or the
group practice with a detailed list of such claims for
payment that were submitted during the month in order for the
physician or the group practice to review and verify the
list. In providing the detailed list, the Secretary shall use
the provider number of the physician or the group practice.
``(3) Audits.--The Secretary shall conduct audits of the
review and verification by physicians and group practices of
the detailed list provided under paragraph (2). Such audits
shall assess whether the physician or group practice
conducted such review and verification in a fraudulent
manner. In the case where the Secretary determines such
review and verification was conducted in a fraudulent manner,
the Secretary shall recoup any payments resulting from the
fraudulent review and verification and impose a civil money
penalty in an amount determined appropriate by the Secretary
on the physician or group practice who conducted the
fraudulent review and verification. The provisions of section
1128A (other than subsections (a) and (b)) shall apply to a
civil money penalty under the previous sentence in the same
manner as such provisions apply to a penalty or proceeding
under section 1128A(a).
``(4) High risk areas defined.--In this subsection, the
term `high risk area' means a county designated as a high
risk area under subsection (j)(1).
``(5) Report by the secretary.--Not later than 1 year after
implementation of the system established under paragraph (1),
the Secretary shall submit a report to Congress on the
progress of such implementation. Such report shall include
recommendations--
``(A) on how to improve such implementation, including
whether the system should be expanded to include verification
of claims for payment under part B for physicians' services
furnished in additional areas; and

[[Page S13060]]

``(B) for such legislation and administrative action as the
Secretary determines appropriate.''.
(b) Authorization of Appropriations.--To carry out the
amendments made by this section, there are authorized to be
appropriated such sums as may be necessary for each of fiscal
years 2010 through 2014.

SEC. 4. DETECTION OF MEDICARE FRAUD AND ABUSE.

(a) In General.--Section 1893 of the Social Security Act
(42 U.S.C. 1395ddd), as amended by section 3, is amended--
(1) in subsection (b), by adding at the end the following
new paragraph:
``(8) Implementation of fraud and abuse detection methods
under subsection (j).'';
(2) in subsection (c), by adding at the end of the flush
matter following paragraph (4), the following new sentence
``In the case of an activity described in subsection (b)(8),
an entity shall only be eligible to enter into a contract
under the Program to carry out the activity if the entity is
selected through a competitive bidding process in accordance
with subsection (j)(3).''; and
(3) by adding at the end the following new subsection:
``(j) Detection of Medicare Fraud and Abuse.--
``(1) Establishment of system to identify counties most
vulnerable to fraud.--Not later than 6 months after the date
of enactment of this subsection, the Secretary shall
establish a system to identify the 50 counties most
vulnerable to fraud with respect to items and services
furnished by providers of services (other than hospitals and
critical access hospitals) and suppliers based on the degree
of county-specific reimbursement and analysis of payment
trends under this title. The Secretary shall designate the
counties identified under the preceding sentence as `high
risk areas'.
``(2) Fraud and abuse detection.--
``(A) Initial implementation.--The Secretary shall
establish procedures for the implementation of fraud and
abuse detection methods under this title with respect to
items and services furnished by such providers of services
and suppliers in high risk areas designated under paragraph
(1) (and, beginning not later than 18 months after the date
of enactment of this subsection, with respect to items and
services furnished by such providers of services and
suppliers in areas not so designated) including the
following:
``(i) In the case of a new applicant to be a supplier, a
background check, a pre-enrollment site visit, and random
unannounced site visits after enrollment.
``(ii) Not less than 5 years after the date of enactment of
this subsection, in the case of a supplier who is not a new
applicant, re-enrollment under this title, including a
background check and a site-visit as part of the application
process for such re-enrollment, and random unannounced site
visits after such re-enrollment.
``(iii) Data analysis to establish prepayment claim edits
designed to target the claims for payment under this title
for such items and services that are most likely to be
fraudulent.
``(iv) Prepayment benefit integrity reviews for claims for
payment under this title for such items and services that are
suspended as a result of such edits.
``(B) Requirement for participation.--In no case may a
provider of services or supplier who does not meet the
requirements under subparagraph (A) (including, in the case
of a supplier, the requirement of a background check)
participate in the program under this title.
``(C) Background checks.--The Secretary shall determine the
extent of the background check conducted under subparagraph
(A), including whether--
``(i) a fingerprint check is necessary;
``(ii) a background check shall be conducted with respect
to additional employees, board members, contractors or other
interested parties of the supplier; and
``(iii) any additional national background checks regarding
exclusion from participation in Federal programs (such as the
program under this title, title XIX, or title XXI), adverse
actions taken by State licensing boards, bankruptcies,
outstanding taxes, or other indications identified by the
Inspector General of the Department of Health and Human
Services are necessary.
``(D) Expanded implementation.--Not later than 24 months
after the date of enactment of this subsection, the Secretary
shall establish procedures for the implementation of such
fraud and abuse detection methods under this title with
respect to items and services furnished by all providers of
services and suppliers, including those not in high risk
areas designated under paragraph (1).
``(3) Competitive bidding.--In selecting entities to carry
out this subsection, the Secretary shall use a competitive
bidding process.
``(4) Report to congress.--The Secretary shall submit to
Congress an annual report on the effectiveness of activities
conducted under this subsection, including a description of
any savings to the program under this title as a result of
such activities and the overall administrative cost of such
activities and a determination as to the amount of funding
needed to carry out this subsection for subsequent fiscal
years, together with recommendations for such legislation and
administrative action as the Secretary determines
appropriate.''.
(b) Authorization of Appropriations.--To carry out the
amendments made by this section, there are authorized to be
appropriated--
(1) such sums as may be necessary, not to exceed
$50,000,000, for each of fiscal years 2010 through 2014; and
(2) such sums as may be necessary, not to exceed an amount
the Secretary determines appropriate in the most recent
report submitted to Congress under section 1893(j)(4) of the
Social Security Act, as added by subsection (a), for each
subsequent fiscal year.

SEC. 5. USE OF TECHNOLOGY FOR REAL-TIME DATA REVIEW.

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

``SEC. 1899. USE OF TECHNOLOGY FOR REAL-TIME DATA REVIEW.

``(a) In General.--The Secretary of Health and Human
Services shall establish procedures for the use of technology
(similar to that used with respect to the analysis of credit
card charging patterns) to provide real-time data analysis of
claims for payment under the Medicare program under title
XVIII of the Social Security Act to identify and investigate
unusual billing or order practices under the Medicare program
that could indicate fraud or abuse.
``(b) Competitive Bidding.--The procedures established
under subsection (a) shall ensure that the implementation of
such technology is conducted through a competitive bidding
process.''.

SEC. 6. EDITS ON 855S MEDICARE ENROLLMENT APPLICATION.

Section 1834(a) of the Social Security Act (42 U.S.C.
1395m(a)) is amended by adding at the end the following new
paragraph:
``(22) Confirmation with national supplier clearinghouse
prior to payment.--
``(A) In general.--Not later than 1 year after the date of
enactment of this paragraph, the Secretary shall establish
procedures to require carriers, prior to paying a claim for
payment for durable medical equipment, prosthetics,
orthotics, and supplies under this title, to confirm with the
National Supplier Clearinghouse--
``(i) that the National Provider Identifier of the
physician or practitioner prescribing or ordering the item or
service is valid and active;
``(ii) that the Medicare identification number of the
supplier is valid and active; and
``(iii) that the item or service for which the claim for
payment is submitted was properly identified on the CMS-855S
Medicare enrollment application.
``(B) Online database for implementation.--Not later than
18 months after the date of enactment of this paragraph, the
Secretary shall establish an online database similar to that
used for the National Provider Identifier to enable providers
of services, accreditors, carriers, and the National Supplier
Clearinghouse to view information on specialties and the
types of items and services each supplier has indicated on
the CMS-855S Medicare enrollment application submitted by the
supplier.
``(C) Notification of claim denial and resubmission.--In
the case where a claim for payment for durable medical
equipment, prosthetics, orthotics, and supplies under this
title is denied because the item or service furnished does
not correctly match up with the information on file with the
National Supplier Clearinghouse--
``(i) the National Supplier Clearinghouse shall--

``(I) provide the supplier written notification of the
reason for such denial; and
``(II) allow the supplier 60 days to provide the National
Supplier Clearinghouse with appropriate certification,
licensing, or accreditation; and

``(ii) the Secretary shall waive applicable requirements
relating to the time frame for the submission of claims for
payment under this title in order to permit the resubmission
of such claim if payment of such claim would otherwise be
allowed under this title.''.

SEC. 7. STRATEGIC PLAN FOR THE DEVELOPMENT OF A SERIAL NUMBER
TRACKING SYSTEM FOR DURABLE MEDICAL EQUIPMENT.

Section 1834(a) of the Social Security Act (42 U.S.C.
1395m(a)), as amended by section 6(a), is amended by adding
at the end the following new paragraph:
``(23) Strategic plan for the development of a serial
number tracking system for durable medical equipment.--
``(A) In general.--Not later than 1 year after the date of
enactment of this paragraph, the Secretary shall develop a
strategic plan for the development and implementation of a
serial number tracking system for durable medical equipment.
``(B) Serial number tracking system for durable medical
equipment.--The plan developed under subparagraph (A) shall
include mechanisms to ensure that an item of durable medical
equipment which has not been issued a unique identifier under
the unique device identification system established under
section 519(f) of the Federal Food, Drug, and Cosmetic Act
bears a unique identifier, unless the Secretary already
requires an alternative placement or provides an exception
for a particular item or type of durable medical equipment
under such section 519(f).
``(C) Provision of unique identifier to the secretary.--The
plan developed under subparagraph (A) shall include
appropriate mechanisms for manufacturers of items of durable
medical equipment to submit to the Secretary unique
identifiers issued under subparagraph (B) or such section
519(f) with

[[Page S13061]]

respect to such items. The plan shall include mechanisms for
the Secretary to provide for the storage of such unique
identifier in accordance with subparagraph (F)(i).
``(D) Requirements for manufacturers and wholesalers.--The
plan developed under subparagraph (A) shall include
mechanisms for manufacturers of items of durable medical
equipment, or, in the case where a wholesaler provides an
item of durable medical equipment to suppliers, wholesalers,
to--
``(i) upon issuing an item to a supplier, develop a product
description for the item which includes--

``(I) the unique identifier of the item;
``(II) the specific Healthcare Common Procedure Coding
System (HCPCS) code for the item;
``(III) the name of the supplier the item was shipped to;
and
``(IV) the supplier's Medicare identification number; and

``(ii) submit the product description developed under
clause (i) to the Secretary for storage in the unique
identifier database in accordance with subparagraph (F)(i).
``(E) Requirements for suppliers.--The plan developed under
subparagraph (A) shall include mechanisms to ensure that
suppliers of items of durable medical equipment--
``(i) upon issuing the item to a beneficiary, note the
unique identifier of such item on--

``(I) the claim form submitted for such item; and
``(II) when appropriate or otherwise required, the detailed
product description of the item;

``(ii) in the case where the item is issued to a
beneficiary on a rental basis, designate the unique
identifier with an `R' after the number to indicate that the
item was rented, and not purchased, by the beneficiary; and
``(iii) upon return of the item to the supplier, notify the
Secretary--

``(I) before reissuing that item and resubmitting that
number on such a claim form; or
``(II) upon resubmitting that number on such a claim form.

``(F) Responsibilities for the secretary.--
``(i) Maintenance of database of serial numbers.--The plan
developed under subparagraph (A) shall include the
responsibility of the Secretary to establish and maintain a
database containing the unique identifiers submitted by
manufacturers of items of durable medical equipment under
subparagraph (C).
``(ii) Payment.--

``(I) Limitation.--Subject to subclause (II), the plan
developed under subparagraph (A) shall include mechanisms to
ensure that payment may only be made for an item of durable
medical equipment if the unique identifier on the claim form
submitted for such item matches the unique identifier
submitted by the manufacturer of such item under subparagraph
(C).
``(II) Exception to limitation after verification of
receipt.--The plan developed under subparagraph (A) shall
include mechanisms to ensure that in the case where the
unique identifier is not on the claim form submitted for such
item or does not match the unique identifier submitted by the
manufacturer of such item under subparagraph (C), no payment
shall be made under this part for the item of durable medical
equipment until the Secretary has verified that the
beneficiary has received such item in accordance with
subclause (IV).
``(III) Duplicative unique identifiers.--The plan developed
under subparagraph (A) shall include mechanisms to ensure
that in the case where a unique identifier is submitted on
more than 1 claim form submitted for such an item and there
is no indication from the supplier that the item of durable
medical equipment has been returned by 1 beneficiary and is
now being used by another beneficiary, no payment shall be
made under this part for such item of durable medical
equipment unless the Secretary has verified that the
beneficiary has received such item in accordance with
subclause (IV).
``(IV) Verification.--The plan developed under subparagraph
(A) shall include provisions for the Secretary to conduct any
verification required under subclause (II) or (III) within 30
days after receipt by the Secretary of the relevant claim
form. In the case where such verification is not completed
within such time period, the Secretary shall pay such claim,
complete the verification, and, in the case where the
Secretary has entered into a contract with an entity for the
conduct of such verification, recover any payments that would
not have been made if the verification had been completed
within such time period from such entity.

``(iii) Quality control audits.--The plan developed under
subparagraph (A) shall include a requirement that the
Secretary conduct quality control audits to identify unusual
billing patterns with respect to items of durable medical
equipment for which payment is made under this part and may
provide that the Secretary conduct unannounced site visits or
commission other agencies to conduct such site visits as part
of such quality control audits.
``(iv) No use as a precertification mechanism.--The plan
developed under subparagraph (A) shall include mechanisms to
ensure that in no case shall a unique identifier issued under
subparagraph (B) or section 519(f) of the Federal Food, Drug,
and Cosmetic Act be used as a precertification mechanism for
the supply of an item of durable medical equipment or the
payment of a claim for such an item under this part.''.

SEC. 8. GAO STUDY AND REPORT ON EFFECTIVENESS OF SURETY BOND
REQUIREMENTS FOR SUPPLIERS OF DURABLE MEDICAL
EQUIPMENT IN COMBATING FRAUD.

(a) Study.--The Comptroller General of the United States
shall conduct a study on the effectiveness of the surety bond
requirement under section 1834(a)(16) of the Social Security
Act (42 U.S.C. 1395m(a)(16)) in combating fraud.
(b) Report.--Not later than 18 months after the date of
enactment of this Act, the Comptroller General shall submit
to Congress a report containing the results of the study
conducted under subsection (a), together with recommendations
for such legislation and administrative action as the
Comptroller General determines appropriate.

____________________