[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8588 Introduced in House (IH)]
<DOC>
117th CONGRESS
2d Session
H. R. 8588
To address the high costs of health care services, prescription drugs,
and health insurance coverage in the United States, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 28, 2022
Mr. Westerman (for himself and Mr. Gonzalez of Ohio) introduced the
following bill; which was referred to the Committee on Energy and
Commerce, and in addition to the Committees on Ways and Means,
Education and Labor, the Judiciary, Oversight and Reform, Rules, the
Budget, Armed Services, and House Administration, for a period to be
subsequently determined by the Speaker, in each case for consideration
of such provisions as fall within the jurisdiction of the committee
concerned
_______________________________________________________________________
A BILL
To address the high costs of health care services, prescription drugs,
and health insurance coverage in the United States, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Fair Care Act of
2022''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--MODERNIZATION OF HEALTH SAVINGS ACCOUNTS
Subtitle A--Modernization of Health Savings Accounts and Contributions
Sec. 101. Modernization of health savings accounts.
Sec. 102. Unused premium tax credits may be deposited in health savings
accounts.
Sec. 103. Health Reimbursement Arrangements and Other Account-Based
Group Health Plans.
Sec. 104. Cost-sharing reduction payments as eligible contributions.
Sec. 105. Direct primary care.
Subtitle B--Assistance to Health Savings Accounts
Sec. 111. One-time application of saver's credit to contributions to
health savings accounts.
Sec. 112. Grants for health savings account assistance and outreach.
Sec. 113. New corporations required to use health savings accounts.
Sec. 114. Federal employee health benefits and health savings accounts.
TITLE II--IMPROVING PRIVATE HEALTH INSURANCE
Subtitle A--Maintaining Protections for Patients With Preexisting
Conditions
Sec. 201. Guaranteed availability of coverage; prohibiting
discrimination.
Subtitle B--Expanding Coverage Options
Sec. 211. Definition of ``employer'' under ERISA with respect to group
health plans.
Sec. 212. Short-term limited duration insurance.
Subtitle C--Improving Commercial Health Insurance
Sec. 221. Invisible Guaranteed Coverage Pool Reinsurance Program; tax
on exchange plans.
Sec. 222. Employer health insurance mandate repeal.
Sec. 223. Refundable credits for coverage under a qualified health plan
for individuals offered employer-sponsored
insurance.
Sec. 224. Inclusion in income of certain costs of employer-provided
coverage under health plans.
Sec. 225. Change in permissible age variation in health insurance
premium rates.
Sec. 226. Premium assistance adjustment to reflect age.
Sec. 227. Premium assistance.
Sec. 228. Adding copper plans to Exchanges.
Sec. 229. Copper and bronze plans.
Sec. 230. Waivers for State innovation.
Sec. 231. Enrollment periods.
Sec. 232. State-operated Exchanges flexibility for open enrollment
periods.
Sec. 233. Promoting health plans that cover individuals in more than
one State.
TITLE III--COMPETITION, TRANSPARENCY AND ACCOUNTABILITY
Subtitle A--Provider and Insurer Competition
Sec. 301. Hospital consolidation.
Sec. 302. Authority of Federal Trade Commission over certain tax-exempt
organizations.
Sec. 303. Leveling the playing field between payers and providers.
Sec. 304. Banning anticompetitive terms in facility and insurance
contracts that limit access to higher
quality, lower cost care.
Sec. 305. Repealing eligibility of certain ACOs.
Sec. 306. Repeal of health care reform provisions limiting Medicare
exception to the prohibition on certain
physician referrals for hospitals.
Sec. 307. Alternative payment model for certain shoppable procedures.
Subtitle B--Price Transparency
Sec. 321. Price transparency requirements.
Sec. 322. Ensuring enrollee access to cost-sharing information.
Sec. 323. Access of individuals to protected health information.
Sec. 324. Timely bills for patients.
Sec. 325. Advisory group on reducing burden of hospital administrative
requirements.
Sec. 326. Data reporting to improve the transparency regarding how 340B
hospital covered entities provide care for
patients.
Sec. 327. Requiring 340B drug discount program reports by DSH hospital
covered entities on low-income utilization
rate of outpatient hospital services.
Sec. 328. Employer benefits reports.
Sec. 329. Government Accountability Office study on profit- and
revenue-sharing in health care.
Subtitle C--Prescription Drug Competition and Innovation
Sec. 341. Expedited development and priority review for generic complex
drug products.
Sec. 342. Preventing blocking of generic drugs.
Sec. 343. Ensuring timely access to generics.
Sec. 344. Preemption of State barriers to the substitution of
biosimilar products.
Sec. 345. Increasing pharmaceutical options to treat an unmet medical
need.
Sec. 346. Provisional approval of new human drugs.
Sec. 347. Consolidating exclusivity periods for drugs treating rare
diseases and conditions.
Sec. 348. Exclusivity period for brand name biological products.
Sec. 349. Regulation of manufacturer-sponsored copay contributions.
Sec. 350. Antitrust exemption for private health insurer issuers to
negotiate wholesale acquisition prices of
prescription drugs purchased from drug
manufacturers.
Sec. 351. Biological product innovation.
Sec. 352. Prompt approval of drugs related to safety information.
Sec. 353. Congressional review of the Food and Drug Administration
rulemaking.
Sec. 354. Government Accountability Office study of rules.
Subtitle D--Prescription Drug and Pharmacy Benefit Manager Transparency
Sec. 361. Patent disclosure requirements.
Sec. 362. Requirements with respect to prescription drug benefits.
Sec. 363. PBM transparency and elimination of DIR fees.
Sec. 364. Health plan oversight of pharmacy benefit manager services.
Sec. 365. Study by Comptroller General of United States.
Subtitle E--Medicare and Medicaid Prescription Drug Reforms
Sec. 371. Medicare part D modernization redesign.
Sec. 372. Maximum monthly cap on cost-sharing payments under
prescription drug plans and MA-PD plans.
Sec. 373. Medicare part B rebate by manufacturers for drugs or
biologicals with prices increasing faster
than inflation.
Sec. 374. Market based part B pricing index.
Sec. 375. Innovation model testing of Medicare drug payments.
Sec. 376. Modification of maximum rebate amount under Medicaid drug
rebate program.
Subtitle F--Medical Malpractice Reform
Sec. 381. Definitions.
Sec. 382. Encouraging speedy resolution of claims.
Sec. 383. Compensating patient injury.
Sec. 384. Maximizing patient recovery.
Sec. 385. Authorization of payment of future damages to claimants in
health care lawsuits.
Sec. 386. Product liability for health care providers.
Sec. 387. Effect on other laws.
Sec. 388. Limitation on expert witness testimony.
Sec. 389. Expert witness qualifications.
Sec. 390. Communications following unanticipated outcome.
Sec. 391. Affidavit of merit.
Sec. 392. Notice of intent to commence lawsuit.
Sec. 393. Limitation on liability for volunteer health care
professionals.
Sec. 394. Rules of construction.
Sec. 395. Effective date.
TITLE IV--MEDICARE AND MEDICAID REFORMS
Subtitle A--Medicaid Reforms
Sec. 401. Medicaid payment reform.
Sec. 402. Income limitations for refundable credits for coverage under
a qualified health plan.
Sec. 403. Medicaid eligibility determinations.
Sec. 404. Lowering safe harbor threshold with respect to State taxes on
health care providers.
Sec. 405. Providing for State approval and implementation of specified
waivers under the Medicaid program.
Sec. 406. Deduction for qualified charity care.
Subtitle B--Medicare Reforms
Sec. 411. Off-campus provider-based department Medicare site neutral
payment.
Sec. 412. Eliminating FEHBP eligibility for annuitants.
Sec. 413. Elimination of Medicare eligibility for certain individuals.
Sec. 414. Medicare part D tax deduction.
Sec. 415. Repeal of net investment income tax.
Sec. 416. Medicare coverage of bad debt.
Subtitle C--Medicare Choice and Competition
Sec. 421. Competitive bidding and premiums under unified Medicare.
Sec. 422. New unified eligibility and enrollment rules.
Sec. 423. New benefit structure under unified Medicare.
Sec. 424. Late enrollment penalty not to apply for months of any health
coverage.
Sec. 425. Medigap reform.
Sec. 426. ACO revision.
Sec. 427. Primary care options.
Sec. 428. General provisions; effective date.
Subtitle D--Telehealth Improvements and Expansion
Sec. 431. Expansion of coverage of telehealth services.
Sec. 432. Expanding the use of telehealth through the waiver of certain
requirements.
Sec. 433. Expanding the use of telehealth for mental health services.
Sec. 434. Use of telehealth in emergency medical care.
Sec. 435. Improvements to the process for adding telehealth services.
Sec. 436. Rural health clinics and Federally qualified health centers.
Sec. 437. Native American health facilities.
Sec. 438. Waiver of telehealth restrictions during national
emergencies.
Sec. 439. Use of telehealth in recertification for hospice care.
Sec. 440. Clarification for fraud and abuse laws regarding technologies
provided to beneficiaries.
Sec. 441. Study and report on increasing access to telehealth services
in the home.
Sec. 442. Analysis of telehealth waivers in alternative payment models.
Sec. 443. Model to allow additional health professionals to furnish
telehealth services.
Sec. 444. Testing of models to examine the use of telehealth under the
Medicare program.
TITLE I--MODERNIZATION OF HEALTH SAVINGS ACCOUNTS
Subtitle A--Modernization of Health Savings Accounts and Contributions
SEC. 101. MODERNIZATION OF HEALTH SAVINGS ACCOUNTS.
(a) In General.--Section 223 of the Internal Revenue Code of 1986
is amended to read as follows:
``SEC. 223. HEALTH SAVINGS ACCOUNTS.
``(a) Deduction Allowed.--In the case of an individual who is an
eligible individual for any month during the taxable year, there shall
be allowed as a deduction for the taxable year an amount equal to the
aggregate amount paid in cash during such taxable year by or on behalf
of such individual to a health savings account of such individual.
``(b) Limitations.--
``(1) In general.--The amount allowable as a deduction
under subsection (a) with respect to any month is \1/12\ of the
dollar amount in effect under subsection (d)(2)(A) for the
taxable year which included such month.
``(2) Denial of deduction to dependents.--No deduction
shall be allowed under this section to any individual with
respect to whom a deduction under section 151 is allowable to
another taxpayer for a taxable year beginning in the calendar
year in which such individual's taxable year begins.
``(3) Increase in limit for individuals becoming eligible
individuals after the beginning of the year.--
``(A) In general.--For purposes of computing the
limitation under paragraph (1) for any taxable year, an
individual who is an eligible individual during the
last month of such taxable year shall be treated--
``(i) as having been an eligible individual
during each of the months in such taxable year,
and
``(ii) as having been enrolled, during each
of the months such individual is treated as an
eligible individual solely by reason of clause
(i), in the same qualified plan in which the
individual was enrolled for the last month of
such taxable year.
``(B) Failure to maintain qualified plan
coverage.--
``(i) In general.--If, at any time during
the testing period, the individual is not an
eligible individual, then--
``(I) gross income of the
individual for the taxable year in
which occurs the first month in the
testing period for which such
individual is not an eligible
individual is increased by the
aggregate amount of all contributions
to the health savings account of the
individual which could not have been
made but for subparagraph (A), and
``(II) the tax imposed by this
chapter for any taxable year on the
individual shall be increased by 10
percent of the amount of such increase.
``(ii) Exception for disability or death.--
Subclauses (I) and (II) of clause (i) shall not
apply if the individual ceased to be an
eligible individual by reason of the death of
the individual or the individual becoming
disabled (within the meaning of section
72(m)(7)).
``(iii) Testing period.--The term `testing
period' means the period beginning with the
last month of the taxable year referred to in
subparagraph (A) and ending on the last day of
the 12th month following such month.
``(c) Definitions and Special Rules.--For purposes of this
section--
``(1) Eligible individual.--The term `eligible individual'
means, with respect to any month, any individual if such
individual is covered under a qualified plan as of the 1st day
of such month
``(2) Qualified plan.--
``(A) In general.--The term `qualified health plan'
means any health plan, including employer plans,
individual plans, short term plans, Medicare, Medicaid,
VA health care, TRICARE, Indian health service, health
care sharing ministries, and association health plans.
``(B) Exclusion of certain plans.--Such term does
not include a health plan if substantially all of its
coverage is--
``(i) coverage for any benefit provided by
permitted insurance, or
``(ii) coverage (whether through insurance
or otherwise) for accidents, disability, dental
care, vision care, or long-term care.
``(3) Permitted insurance.--The term `permitted insurance'
means--
``(A) insurance if substantially all of the
coverage provided under such insurance relates to--
``(i) liabilities incurred under workers'
compensation laws,
``(ii) tort liabilities,
``(iii) liabilities relating to ownership
or use of property, or
``(iv) such other similar liabilities as
the Secretary may specify by regulations,
``(B) insurance for a specified disease or illness,
and
``(C) insurance paying a fixed amount per day (or
other period) of hospitalization.
``(4) Family coverage.--The term `family coverage' means
any coverage other than self-only coverage.
``(d) Health Savings Account.--For purposes of this section--
``(1) In general.--The term `health savings account' means
a trust created or organized in the United States as a health
savings account exclusively for the purpose of paying the
qualified medical expenses of the account beneficiary, but only
if the written governing instrument creating the trust meets
the following requirements:
``(A) Except in the case of a rollover contribution
described in subsection (f)(5) or section 220(f)(5), no
contribution will be accepted--
``(i) unless it is in cash, or
``(ii) to the extent such contribution,
when added to previous contributions to the
trust for the calendar year, exceeds the
limitation amount specified in paragraph
(2)(A), or
``(iii) to the extent such contribution,
when added to the balance of the account,
exceeds the limitation amount specified in
paragraph (2)(B).
``(B) The trustee is a bank (as defined in section
408(n)), an insurance company (as defined in section
816), or another person who demonstrates to the
satisfaction of the Secretary that the manner in which
such person will administer the trust will be
consistent with the requirements of this section.
``(C) No part of the trust assets will be invested
in life insurance contracts.
``(D) The assets of the trust will not be
commingled with other property except in a common trust
fund or common investment fund.
``(E) The interest of an individual in the balance
in his account is nonforfeitable.
``(2) Limitations.--
``(A) Annual limitation.--
``(i) In general.--The limitation amount
specified in this subparagraph is--
``(I) $5,000 in the case of a
qualified health plan with an actuarial
value of less than 40 percent,
``(II) $4,300 in the case of a
qualified health plan with an actuarial
value that is 40 percent or more and
less than 75 percent, and
``(III) $3,600 in the case of a
qualified health plan with an actuarial
value that is 75 percent or more.
``(ii) Actuarial value of qualified health
plan.--For purposes of clause (i), the
actuarial value of a qualified health plan is
the percentage of the total average costs of
covered benefits under the health plan.
``(B) Account accumulation limitation.--The
limitation amount specified in this paragraph is
$50,000.
``(C) Indexing.--
``(i) In general.--In the case of any
taxable year beginning in a calendar year after
2023, each dollar amount contained in
subparagraphs (A)(i) and (B) shall be increased
by the medical care cost adjustment of such
amount for such calendar year.
``(ii) Medical care cost adjustment.--For
purposes of clause (i), the medical care cost
adjustment for any calendar year is the
percentage (if any) by which--
``(I) the medical care component of
the C-CPI-U (as defined in section
1(f)(6)) for August of the preceding
calendar year, exceeds
``(II) such component of the C-CPI-
U (as so defined) for August of 2022.
``(iii) Rounding.--
``(I) Annual limitation.--If any
increase in a dollar amount contained
in subparagraph (A)(i) determined under
clause (i) is not a multiple of $100,
such increase shall be rounded to the
nearest multiple of $100.
``(II) Account limitation.--If any
increase in the dollar amount contained
in subparagraph (B) determined under
clause (i) is not a multiple of $1,000,
such increase shall be rounded to the
nearest multiple of $1,000.
``(D) Coordination with other contributions.--The
limitation which would (but for this paragraph) apply
under subparagraphs (A) and (B) to an individual for
any taxable year shall be reduced (but not below zero)
by the sum of--
``(i) the aggregate amount contributed to
health savings accounts of such individual
which is excludable from the taxpayer's gross
income for such taxable year under section
106(d) (and such amount shall not be allowed as
a deduction under subsection (a)), and
``(ii) the aggregate amount contributed to
health savings accounts of such individual for
such taxable year under section 408(d)(9) (and
such amount shall not be allowed as a deduction
under subsection (a)).
``(3) Qualified medical expenses.--
``(A) In general.--The term `qualified medical
expenses' means, with respect to an account
beneficiary, amounts paid by such beneficiary for
medical care (as defined in section 213(d)) for such
individual, the spouse of such individual, and any
dependent (as defined in section 152, determined
without regard to subsections (b)(1), (b)(2), and
(d)(1)(B) thereof) of such individual, but only to the
extent such amounts are not compensated for by
insurance or otherwise. For purposes of this
subparagraph, amounts paid for menstrual care products
shall be treated as paid for medical care.
``(B) Health insurance may not be purchased from
account.--
``(i) In general.--Subparagraph (A) shall
not apply to any payment for insurance.
``(ii) Exceptions.--Clause (i) shall not
apply to any expense for coverage under--
``(I) a health plan during any
period of continuation coverage
required under any Federal law,
``(II) a qualified long-term care
insurance contract (as defined in
section 7702B(b)),
``(III) a health plan during a
period in which the individual is
receiving unemployment compensation
under any Federal or State law, or
``(IV) in the case of an account
beneficiary who has attained the age
specified in section 1811 of the Social
Security Act, any health insurance
other than a medicare supplemental
policy (as defined in section 1882 of
the Social Security Act).
``(iii) Exception for integrated health
plans.--Clause (i) shall not apply to any
expense for coverage under an integration
eligible health plan which is integrated with
the health savings account within the meaning
of section 106(d).
``(iv) Exception for direct primary care
service arrangements.--
``(I) In general.--A direct primary
care service arrangement shall not be
treated as insurance for purposes of
clause (i).
``(II) Direct primary care service
arrangement defined.--For purposes of
this clause, the term `direct primary
care service arrangement' means an
arrangement under which an individual
is provided medical care (as defined in
section 213(d)(1), determined without
regard to subparagraph (E) thereof)
consisting solely of primary care
services provided by primary care
practitioners (as defined in section
1833(x)(2)(A) of the Social Security
Act, determined without regard to
clause (ii) thereof), if the sole
compensation for such care is a fixed
periodic fee.
``(C) Menstrual care product.--For purposes of this
paragraph, the term `menstrual care product' means a
tampon, pad, liner, cup, sponge, or similar product
used by individuals with respect to menstruation or
other genital-tract secretions.
``(4) Account beneficiary.--The term `account beneficiary'
means the individual on whose behalf the health savings account
was established.
``(5) Certain rules to apply.--Rules similar to the
following rules shall apply for purposes of this section:
``(A) Section 219(d)(2) (relating to no deduction
for rollovers).
``(B) Section 219(f)(3) (relating to time when
contributions deemed made).
``(C) Except as provided in section 106(d), section
219(f)(5) (relating to employer payments).
``(D) Section 408(g) (relating to community
property laws).
``(E) Section 408(h) (relating to custodial
accounts).
``(e) Tax Treatment of Accounts.--
``(1) In general.--A health savings account is exempt from
taxation under this subtitle unless such account has ceased to
be a health savings account. Notwithstanding the preceding
sentence, any such account is subject to the taxes imposed by
section 511 (relating to imposition of tax on unrelated
business income of charitable, etc. organizations).
``(2) Account terminations.--Rules similar to the rules of
paragraphs (2) and (4) of section 408(e) shall apply to health
savings accounts, and any amount treated as distributed under
such rules shall be treated as not used to pay qualified
medical expenses.
``(f) Tax Treatment of Distributions.--
``(1) Amounts used for qualified medical expenses.--Any
amount paid or distributed out of a health savings account
which is used exclusively to pay qualified medical expenses of
any account beneficiary shall not be includible in gross
income.
``(2) Inclusion of amounts not used for qualified medical
expenses.--Any amount paid or distributed out of a health
savings account which is not used exclusively to pay the
qualified medical expenses of the account beneficiary shall be
included in the gross income of such beneficiary.
``(3) Excess contributions returned before due date of
return.--
``(A) In general.--If any excess contribution is
contributed for a taxable year to any health savings
account of an individual, paragraph (2) shall not apply
to distributions from the health savings accounts of
such individual (to the extent such distributions do
not exceed the aggregate excess contributions to all
such accounts of such individual for such year) if--
``(i) such distribution is received by the
individual on or before the last day prescribed
by law (including extensions of time) for
filing such individual's return for such
taxable year, and
``(ii) such distribution is accompanied by
the amount of net income attributable to such
excess contribution.
Any net income described in clause (ii) shall be
included in the gross income of the individual for the
taxable year in which it is received.
``(B) Excess contribution.--For purposes of
subparagraph (A), the term `excess contribution' means
any contribution (other than a rollover contribution
described in paragraph (5) or section 220(f)(5)) which
is neither excludable from gross income under section
106(d) nor deductible under this section.
``(4) Additional tax on distributions not used for
qualified medical expenses.--
``(A) In general.--The tax imposed by this chapter
on the account beneficiary for any taxable year in
which there is a payment or distribution from a health
savings account of such beneficiary which is includible
in gross income under paragraph (2) shall be increased
by 20 percent of the amount which is so includible.
``(B) Exception for disability or death.--
Subparagraph (A) shall not apply if the payment or
distribution is made after the account beneficiary
becomes disabled within the meaning of section 72(m)(7)
or dies.
``(C) Exception for distributions after medicare
eligibility.--Subparagraph (A) shall not apply to any
payment or distribution after the date on which the
account beneficiary attains the age specified in
section 1811 of the Social Security Act.
``(5) Rollover contribution.--An amount is described in
this paragraph as a rollover contribution if it meets the
requirements of subparagraphs (A) and (B).
``(A) In general.--Paragraph (2) shall not apply to
any amount paid or distributed from a health savings
account to the account beneficiary to the extent the
amount received is paid into a health savings account
for the benefit of such beneficiary not later than the
60th day after the day on which the beneficiary
receives the payment or distribution.
``(B) Limitation.--This paragraph shall not apply
to any amount described in subparagraph (A) received by
an individual from a health savings account if, at any
time during the 1-year period ending on the day of such
receipt, such individual received any other amount
described in subparagraph (A) from a health savings
account which was not includible in the individual's
gross income because of the application of this
paragraph.
``(C) Rollover from fsa, archer msa, and hra.--An
amount is described in this subparagraph for a calendar
year as a rollover contribution if the amount is the
remaining balance in a health flexible spending
account, Archer MSA, or health reimbursement
arrangement that is contributed to the health savings
account for a taxable year ending on or before one year
after the date of the enactment of this subparagraph.
``(6) Coordination with medical expense deduction.--For
purposes of determining the amount of the deduction under
section 213, any payment or distribution out of a health
savings account for qualified medical expenses shall not be
treated as an expense paid for medical care.
``(7) Transfer of account incident to divorce.--The
transfer of an individual's interest in a health savings
account to an individual's spouse or former spouse under a
divorce or separation instrument described in clause (i) of
section 121(d)(3)(C) shall not be considered a taxable transfer
made by such individual notwithstanding any other provision of
this subtitle, and such interest shall, after such transfer, be
treated as a health savings account with respect to which such
spouse is the account beneficiary.
``(8) Treatment after death of account beneficiary.--
``(A) Treatment if designated beneficiary is
spouse.--If the account beneficiary's surviving spouse
acquires such beneficiary's interest in a health
savings account by reason of being the designated
beneficiary of such account at the death of the account
beneficiary, such health savings account shall be
treated as if the spouse were the account beneficiary.
``(B) Other cases.--
``(i) In general.--If, by reason of the
death of the account beneficiary, any person
acquires the account beneficiary's interest in
a health savings account in a case to which
subparagraph (A) does not apply--
``(I) such account shall cease to
be a health savings account as of the
date of death, and
``(II) an amount equal to the fair
market value of the assets in such
account on such date shall be
includible if such person is not the
estate of such beneficiary, in such
person's gross income for the taxable
year which includes such date, or if
such person is the estate of such
beneficiary, in such beneficiary's
gross income for the last taxable year
of such beneficiary.
``(ii) Special rules.--
``(I) Reduction of inclusion for
predeath expenses.--The amount
includible in gross income under clause
(i) by any person (other than the
estate) shall be reduced by the amount
of qualified medical expenses which
were incurred by the decedent before
the date of the decedent's death and
paid by such person within 1 year after
such date.
``(II) Deduction for estate
taxes.--An appropriate deduction shall
be allowed under section 691(c) to any
person (other than the decedent or the
decedent's spouse) with respect to
amounts included in gross income under
clause (i) by such person.
``(g) Cost-of-Living Adjustment.--
``(1) In general.--In the case of any taxable year
beginning after December 31, 2023, each dollar amount in
paragraphs (2) and (3) of subsection (c) 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
such taxable year begins determined by substituting
`2022' for `2016' in subparagraph (A)(ii) thereof.
``(2) Rounding.--If any increase under paragraph (1) is not
a multiple of $50, such increase shall be rounded to the
nearest multiple of $50.
``(h) Reports.--The Secretary may require--
``(1) the trustee of a health savings account to make such
reports regarding such account to the Secretary and to the
account beneficiary with respect to contributions,
distributions, the return of excess contributions, and such
other matters as the Secretary determines appropriate, and
``(2) any person who provides an individual with a
qualified health plan to make such reports to the Secretary and
to the account beneficiary with respect to such plan as the
Secretary determines appropriate.''.
(b) Employer Contributions to Health Savings Accounts.--
(1) In general.--Section 106(d) is amended to read as
follows:
``(d) Contributions to Health Savings Accounts.--
``(1) In general.--In the case of an employee who is an
eligible individual, amounts contributed by such employee's
employer to any health savings account of such employee shall
be treated as employer-provided coverage for medical expenses
under an accident or health plan to the extent--
``(A) such amounts do not exceed twice the
limitation in effect under section 223(b)(2)
(determined without regard to this subsection) which is
applicable to such employee for such taxable year,
``(B) such amounts are contributed to an account
which is integrated with an integration eligible health
plan,
``(C) such employer does not offer such employee
coverage under any other accident or health plan,
``(D) such employer offers such amounts only to
members of a qualified class of employees and offers
such amounts to all members of any such qualified
class,
``(E) such employer offers employees an opportunity
to elect not to receive such amounts at least once per
year and upon termination from employment, and
``(F) such employee is not covered under any health
insurance offered by an employer of such employee's
spouse.
``(2) Integration eligible health plan.--For purposes of
this subsection, the term `integration eligible health plan'
means--
``(A) any bronze, silver, or gold plan offered
through an Exchange established under the Patient
Protection and Affordable Care Act,
``(B) entitlement to benefits under part A of title
XVIII of the Social Security Act and enrollment under
part B of such title, including enrollment under a
Medicare Advantage plan under part C of such title,
``(C) in the case of any individual who has not
attained age 30 or is determined by the Secretary
(after consultation with the Secretary of Health and
Human Services) to have a hardship, coverage under a
catastrophic plan, and
``(D) in the case of any student, coverage under a
health plan which is conditioned on maintaining status
as being such a student.
``(3) Integration of plans and accounts.--For purposes of
this subsection, an account shall be treated as integrated with
an integration eligible health plan (and such plan shall be
treated as integrated with such account) for any month if--
``(A) the employee is the account beneficiary of
such account and such employee is covered under an
integration eligible health plan for such month,
``(B) the employer verifies that the employee is so
covered by requiring the submission of documentation to
such employer, and
``(C) the employer makes contributions to such
account for such month which are not less than the
excess (if any) of--
``(i) the adjusted monthly premiums for the
applicable second lowest cost silver plan with
respect to the taxpayer, over
``(ii) \1/12\ of 9.5 percent of the
taxpayer's household income (within the meaning
of section 36B).
``(4) Qualified class.--For purposes of this subsection--
``(A) In general.--The term `qualified class' means
only the following: All employees; Full-time employees;
Part-time employees; Seasonal employees; Employees
covered under a collective bargaining agreement;
Employees in a waiting period; Foreign employees who
work abroad; Employees working in the same geographic
location (same insurance rating area, State, or multi-
State region); Salaried workers; Non-Salaried workers
(such as hourly workers); Temporary employees of
staffing firms.
``(B) Rules related to class size.--
``(i) Minimum class size.--A class shall
not be treated as a qualified class unless in
consisting of at least the following number of
employees:
``(I) In the case of an employer
with fewer than 100 employees, the
lesser of 10 employees or all employees
of the employer.
``(II) In the case of an employer
with at least 100 and not more than 200
employees, 10 percent of the number of
such employees (if not a whole number,
rounded down to the next lowest whole
number).
``(III) In the case of an employer
with more than 200 employees, 20
employees.
``(ii) Combination of classes.--Two or more
qualified classes described in subparagraph (A)
may be combined if each such class separately
would not satisfy the requirement of clause
(i).
``(C) Permitted variation within qualified
classes.--An employer shall not fail to meet the
requirements of paragraph (1)(D) solely because the
amounts offered to members of a qualified class vary on
the basis of--
``(i) number of dependents,
``(ii) age, if such variation based on age
does not exceed a ratio of 3:1, and
``(iii) chronic health condition, if such
variation based on chronic health condition
does not exceed a ratio of 1.2:1.
``(5) Coordination with aca provisions.--In the case of an
integration eligible health plan which is integrated with a
health savings account--
``(A) such plan shall be treated as an eligible
employer-sponsored plan described in section
5000A(f)(1)(B),
``(B) if an individual receives contributions to
such account which are excludible from the gross income
of such individual under this section during any
taxable year, no credit shall be allowed under section
36B with respect to such individual for such taxable
year, and
``(C) for purposes of section 36B(c)(2)(C)(i)(II),
the employee's required contribution with respect to
such plan shall be treated as being equal to the excess
(if any) of--
``(i) the adjusted monthly premiums for the
applicable second lowest cost silver plan with
respect to the taxpayer, over
``(ii) the contributions made the employer
to such health savings account which are
excludible from the gross income of the
employee under this section.
``(6) No constructive receipt.--No amount shall be included
in the gross income of any employee solely because the employee
may choose between the contributions referred to in paragraph
(1) and employer contributions to another health plan of the
employer.
``(7) Special rule for deduction of employer
contributions.--Any employer contribution to a health savings
account, if otherwise allowable as a deduction under this
chapter, shall be allowed only for the taxable year in which
paid.
``(8) Employer health savings account contributions
required to be shown on return.--Every individual required to
file a return under section 6012 for the taxable year shall
include on such return the aggregate amount contributed by
employers to the health savings accounts of such individual or
such individual's spouse for such taxable year.
``(9) Health savings account contributions not part of
cobra coverage.--Paragraph (1) shall not apply for purposes of
section 4980B.
``(10) Definitions.--Terms used in this subsection which
are also used in section 223 shall have the same respective
meanings as when used in such section.
``(11) Regulations.--The Secretaries of Treasury, Labor,
and Health and Human Services shall each issue such regulations
or other guidance as may be necessary or appropriate to carry
out the purposes of this subsection, including regulations or
other guidance to--
``(A) prevent employers from offering plans
integrated with health savings accounts selectively to
sicker workers, and
``(B) establish a safe harbor that helps employers
determine whether contributions to health savings
accounts with respect to which there is an integrated
health plan comply with affordability requirements
under the Patient Protection and Affordable Care Act
and the amendments made by such Act.
``(12) Cross reference.--For penalty on failure by employer
to make comparable contributions to the health savings accounts
of comparable employees, see section 4980G.''.
(2) Nonapplication of erisa.--Contributions by an employer
to a health savings account (as defined in section 223 of the
Internal Revenue Code of 1986), and an integration eligible
health plan which is integrated with such account (within the
meaning of such section), shall not be treated as a plan for
purposes of the Employee Retirement Income Security Act of 1974
if--
(A) receipt of such contributions by the employee
is voluntary,
(B) the employer does not select or endorse the
integration eligible health plan which is integrated
with such account,
(C) no premiums, other than premiums for the
integration eligible health plan which is integrated
with such account, are paid from the account,
(D) the employer receives no consideration (money
or other benefit) in connection with the employee
selecting or renewing a plan, and
(E) each participant is notified annually that such
contributions and such plan are not subject to the
requirements of such Act.
(c) Termination of Certain Other Health Care Related Tax
Benefits.--
(1) Exclusion limited to self-funded major medical plan of
employers.--Section 105(b) of such Code is amended by striking
``paid,'' and inserting ``paid under a self-funded major
medical plan of the employer''.
(2) Exclusion not applicable to health reimbursement
arrangements.--Section 105(h) of such Code is amended to read
as follows:
``(h) Exclusion Not Applicable to Health Reimbursement
Arrangements.--Subsection (b) shall not apply to health reimbursement
arrangements.''.
(3) Repeal of exclusions from income for archer msas and
fsas.--Section 106 of such Code is amended by striking
subsections (b), (e), and (g).
(4) Termination of deduction for contributions to archer
msas.--Section 220(a) of such Code is amended by adding at the
end the following: ``No amount shall be allowed as a deduction
under the preceding sentence for any taxable year beginning
after one year after the date of the enactment of this
sentence.''.
(d) Bankruptcy Protections.--Section 522 of title 11, United States
Code, is amended by adding at the end the following new subsection:
``(r) For purposes of this section, any health savings account (as
described in section 223 of the Internal Revenue Code of 1986) shall be
treated in the same manner as an individual retirement account
described in section 408 of such Code.''.
(e) Rollover of FSA, Archer MSA, HRA to Health Savings Account.--
Notwithstanding any other provision of law, if the remaining balance in
a health flexible spending arrangement, Archer MSA, or health
reimbursement arrangement is transferred to a health savings account
before the end of any taxable year ending on or before one year after
the date of the enactment of this Act, such transfer shall be treated
as a rollover to the health savings account under section 223(f)(5) of
the Internal Revenue Code of 1986 and the distribution from the health
flexible spending arrangement, Archer MSA, or health reimbursement
arrangement shall not be includible in gross income.
(f) Effective Dates.--
(1) In general.--The amendments made by subsections (a) and
(b) shall apply to taxable years beginning after the date of
the enactment of this Act.
(2) Termination of certain other health care related tax
benefits.--The amendments made by subsection (c) shall apply to
taxable years beginning after the date which is 1 year after
the date of the enactment of this Act.
(3) Bankruptcy protections.--The amendment made by
subsection (d) shall apply to cases commencing under title 11,
United States Code, after the date of the enactment of this
Act.
SEC. 102. UNUSED PREMIUM TAX CREDITS MAY BE DEPOSITED IN HEALTH SAVINGS
ACCOUNTS.
(a) In General.--Section 36B is amended by redesignating subsection
(h) as subsection (i) and by inserting after subsection (g) the
following new subsection:
``(h) Excess Credit May Be Deposited Into a Health Savings
Account.--
``(1) In general.--If the amount described in subparagraph
(B) of subsection (b)(2) exceeds the amount described in
subparagraph (A) of such subsection with respect to any
coverage month and an election under paragraph (2) is in effect
with respect to the applicable taxpayer, the Secretary shall
deposit such excess into a health savings account of such
taxpayer.
``(2) Election to deposit excess credit into a health
savings account.--A taxpayer may elect (at such time and in
such manner as the Secretary may provide) to have the Secretary
deposit the excess described in paragraph (1) into a health
savings account of the taxpayer. Any such election shall only
be treated as being in effect if the taxpayer provides the
Secretary with such information as the Secretary may require to
allow the Secretary to make such deposit.
``(3) Coordination with health savings account rules.--Any
amount deposited in a health savings account by the Secretary
under this subsection shall--
``(A) be includible in the gross income of the
applicable taxpayer, and
``(B) be taken into account as an amount paid to
such account for purposes of this section.
``(4) Treatment of deposits.--For purposes of section 1324
of title 31, United States Code, any deposit made under this
subsection shall be treated as a credit allowed under this
section.''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
SEC. 103. HEALTH REIMBURSEMENT ARRANGEMENTS AND OTHER ACCOUNT-BASED
GROUP HEALTH PLANS.
The rule published by the Internal Revenue Service, the Employee
Benefits Security Administration, and the Health and Human Services
Department relating to ``Health Reimbursement Arrangements and Other
Account-Based Group Health Plans'' (June 20, 2019) shall have the force
and effect of law. Health Reimbursement Arrangements as described in
this rule are subject to all sections in this title.
SEC. 104. COST-SHARING REDUCTION PAYMENTS AS ELIGIBLE CONTRIBUTIONS.
(a) Alternative Waiver for State Innovation.--Section 1332 of the
Patient Protection and Affordable Care Act (42 U.S.C. 18052) is amended
by adding at the end the following new subsection:
``(f) Alternative Waiver for State Innovation.--
``(1) In general.--Notwithstanding any preceding provision
of this section, a State may apply to the Secretary for the
waiver of any requirement of subsection (a)(2) with respect to
health insurance coverage within that State for plan years
beginning on or after January 1, 2023, if instead of complying
with section 1402 the State provides for the distribution of
funding received under paragraph (2) to health savings accounts
of qualifying individuals with respect to such State. Such
application shall be filed at such time and in such manner as
the Secretary may require, and shall include such information
as the Secretary may require (including a 10-year budget plan
for such plan that is budget neutral for the Federal
Government).
``(2) Pass-through funding.--With respect to a State waiver
under paragraph (1), under which, due to the structure of such
waiver, individuals in the State would not qualify for cost-
sharing reductions under section 1402 for which they would
otherwise be eligible, the Secretary shall provide for an
alternative means by which an amount is transferred to the
State equal to the aggregate amount of such reductions that
would have been paid on behalf of the participants in the
Exchanges established under this title--
``(A) had the State not received such waiver;
``(B) had references to `eligible insureds' under
section 1402 referred to `qualifying insureds (as
defined in section 1332(f))';
``(C) had, after application of clause (ii), in the
case of a qualifying insured enrolled in the bronze
level of coverage--
``(i) the percentages specified in
subclauses (I), (II), and (III) of section
1402(c)(1)(B) were references to 84 percent, 77
percent, and 63 percent, respectively; and
``(ii) the references in subparagraphs (A),
(B), and (C) of section 1402(c)(2) to 94
percent, 87 percent, and 73 percent,
respectively, were references to 84 percent, 77
percent, and 63 percent, respectively; and
``(D) had, after application of clause (ii), in the
case of a qualifying insured enrolled in the copper
level of coverage--
``(i) the percentages specified in
subclauses (I), (II), and (III) of section
1402(c)(1)(B) were references to 74 percent, 67
percent, and 53 percent, respectively; and
``(ii) the references in subparagraphs (A),
(B), and (C) of section 1402(c)(2) to 94
percent, 87 percent, and 73 percent,
respectively, were references to 74 percent, 67
percent, and 53 percent, respectively.
The amount transferred pursuant to the previous sentence shall
be determined annually by the Secretary, taking into
consideration the experience of other States with respect to
participation in an Exchange and reductions provided under such
provisions to residents of the other States, and shall be paid
to the State for purposes of implementing such waiver.
``(3) Waiver consideration and transparency.--The
provisions of paragraph (4) of subsection (a) shall apply to an
application for a waiver under paragraph (1) in the same manner
as such provisions apply with respect to an application for a
waiver under subsection (a)(1), except that, for purposes of
this paragraph, the provisions of subsection (a)(4)(B)(ii)
shall not apply.
``(4) Determinations; term of waiver.--The provisions of
subsections (d) and (e) shall apply with respect to a
determination with respect to an application under paragraph
(1), and with respect to the term of a waiver under such
paragraph, in the same manner as such provisions apply with
respect to a determination with respect to an application under
subsection (a)(1), and with respect to the term of a waiver
under such subsection.
``(5) Definitions.--For purposes of this subsection:
``(A) Health savings account.--The term `health
savings account' has the meaning given such term in
section 223 of the Internal Revenue Code of 1986.
``(B) Qualifying insured.--The term `qualifying
insured' means, with respect to a State and a year, an
individual--
``(i) who is enrolled in a health savings
account;
``(ii) who is enrolled for such year in a
silver, bronze, or copper level coverage
offered through an Exchange; and
``(iii) whose household income is not more
than 250 percent of the Federal poverty line
for a family of the size involved.''.
(b) Additional Amendments.--Section 1402 of the Patient Protection
and Affordable Care Act (42 U.S.C. 18071) is amended by striking ``not
less than 100 percent but'' and ``exceeds 100 percent but'' and ``more
than 100 percent but'' each place such phrases appear.
(c) Conforming Amendments.--Section 1332 of the Patient Protection
and Affordable Care Act (42 U.S.C. 18052), as amended by subsection
(a), is further amended in subsection (a)(4)--
(1) in subparagraph (A) by striking the period and
inserting ``, except in the case of a waiver described in
subsection (f).''; and
(2) in subparagraph (B)(ii) by inserting after ``an
application'' the following: ``(except in the case of a waiver
described in subsection (f))''.
(d) Appropriation for Cost-Sharing Payments.--Section 1402 of the
Patient Protection and Affordable Care Act (42 U.S.C. 18071) is amended
by adding at the end the following new subsection:
``(g) Funding.--
``(1) Appropriations.--Out of any funds in the Treasury not
otherwise appropriated, there is appropriated such sums as may
be necessary to, subject to paragraph (2), provide health
benefits coverage through payment to issuers (under this
section or through advance payment by the Secretary of the
Treasury under section 1412(c)(3)) of the amounts computed
under this section for each of plan years 2023 through 2027.
``(2) Adjustments.--Notwithstanding any other provision of
law, payments and other actions for adjustments to obligations
incurred prior to December 31, 2023, may be made through
December 31, 2023.
``(3) Limitation.--Amounts appropriated under paragraph (1)
for each of plan years 2023 through 2027 are subject to the
requirements and limitations under sections 506 and 507 of
division H of Public Law 115-31 in the same manner and to the
same extent as if such amounts for each such year were
appropriated under such division.''.
SEC. 105. DIRECT PRIMARY CARE.
(a) In General.--Section 223(c)(1) of the Internal Revenue Code of
1986 is amended by adding at the end the following new subparagraph:
``(D) Treatment of direct primary care service
arrangements.--
``(i) In general.--A direct primary care
service arrangement shall not be treated as a
health plan for purposes of subparagraph
(A)(ii).
``(ii) Direct primary care service
arrangement.--For purposes of this paragraph--
``(I) In general.--The term `direct
primary care service arrangement'
means, with respect to any individual,
an arrangement under which such
individual is provided medical care (as
defined in section 213(d)) consisting
solely of primary care services
provided by primary care practitioners
(as defined in section 1833(x)(2)(A) of
the Social Security Act, determined
without regard to clause (ii) thereof),
if the sole compensation for such care
is a fixed periodic fee.
``(II) Limitation.--With respect to
any individual for any month, such term
shall not include any arrangement if
the aggregate fees for all direct
primary care service arrangements
(determined without regard to this
subclause) with respect to such
individual for such month exceed $150
(twice such dollar amount in the case
of an individual with any direct
primary care service arrangement (as so
determined) that covers more than one
individual).
``(iii) Certain services specifically
excluded from treatment as primary care
services.--For purposes of this paragraph, the
term `primary care services' shall not
include--
``(I) procedures that require the
use of general anesthesia, and
``(II) laboratory services not
typically administered in an ambulatory
primary care setting.
The Secretary, after consultation with the
Secretary of Health and Human Services, shall
issue regulations or other guidance regarding
the application of this clause.''.
(b) Direct Primary Care Service Arrangement Fees Treated as Medical
Expenses.--Section 223(d)(2)(C) is amended by striking ``or'' at the
end of clause (iii), by striking the period at the end of clause (iv)
and inserting ``, or'', and by adding at the end the following new
clause:
``(v) any direct primary care service arrangement.''.
(c) Inflation Adjustment.--Section 223(g)(1) of such Code is
amended--
(1) by inserting ``, (c)(1)(D)(ii)(II),'' after ``(b)(2),''
each place such term appears, and
(2) in subparagraph (B), by inserting ``and (iii)'' after
``clause (ii)'' in clause (i), by striking ``and'' at the end
of clause (i), by striking the period at the end of clause (ii)
and inserting ``, and'', and by inserting after clause (ii) the
following new clause:
``(iii) in the case of the dollar amount in
subsection (c)(1)(D)(ii)(II) for taxable years
beginning in calendar years after 2020,
calendar year 2019.''.
(d) Reporting of Direct Primary Care Service Arrangement Fees on W-
2.--Section 6051(a) of such Code is amended by striking ``and'' at the
end of paragraph (16), by striking the period at the end of paragraph
(17) and inserting ``, and'', and by inserting after paragraph (17) the
following new paragraph:
``(18) in the case of a direct primary care service
arrangement (as defined in section 223(c)(1)(D)(ii)) which is
provided in connection with employment, the aggregate fees for
such arrangement for such employee.''.
(e) Effective Date.--The amendments made by this section shall
apply to months beginning after December 31, 2022, in taxable years
ending after such date.
Subtitle B--Assistance to Health Savings Accounts
SEC. 111. ONE-TIME APPLICATION OF SAVER'S CREDIT TO CONTRIBUTIONS TO
HEALTH SAVINGS ACCOUNTS.
(a) In General.--In the case of an applicable taxable year,
contributions to any health savings account of the taxpayer during such
taxable year shall be treated as a qualified retirement savings
contribution for purposes of section 25B of the Internal Revenue Code
of 1986.
(b) Applicable Taxable Year.--For purposes of this section, the
term ``applicable taxable year'' means any taxable year elected by the
taxpayer (at such time and in such manner as the Secretary of the
Treasury may provide) which begins after during the 3-year period
beginning 1 year after the date of the enactment of this Act. A
taxpayer may not elect not more than 1 applicable taxable year under
this subsection.
SEC. 112. GRANTS FOR HEALTH SAVINGS ACCOUNT ASSISTANCE AND OUTREACH.
(a) In General.--The Administrator shall establish a grant program
to provide assistance to eligible entities to carry out the activities
described in subsection (c).
(b) Application.--An eligible entity shall submit an application to
the Administrator in such time and in such manner as the Administrator
may require, providing that such application requires a demonstration
of the existence of a relationship with, or the ability to establish a
relationship with, an employer, employee, self-employed individual, or
consumer eligible to enroll in a health savings account.
(c) Use of Funds.--An eligible entity receiving a grant under this
section shall use such funds to--
(1) distribute fair and impartial information to consumers
about health savings accounts, including the availability of
such accounts and how such accounts may be utilized;
(2) conduct activities to raise public awareness of health
savings accounts;
(3) facilitate enrollment in health savings accounts; and
(4) refer individuals enrolled in a health savings account
to the appropriate official, organization, or State agency for
the purpose of addressing a complaint, grievance, or other
question with respect to such health savings account.
(d) Amount.--The Administrator may distribute up to $5,000,000
annually to be divided among grant recipients under this section.
(e) Report.--Not later than one year after the date on which the
last of the grant periods awarded under this section ends, the
Administrator shall submit a report to the Congress on the
effectiveness of the grants provided under this section.
(f) Definitions.--In this section:
(1) Administrator.--The term ``Administrator'' means the
Administrator of the Centers for Medicare & Medicaid Services.
(2) Consumer.--The term ``consumer'' means an individual
enrolled in, or seeking to enroll in, a health savings account.
(3) Eligible entity.--The term ``eligible entity'' includes
the following:
(A) A State.
(B) Trade.
(C) Industry.
(D) Professional associations.
(E) Commercial fishing industry organizations.
(F) Ranching and farming organizations.
(G) Community and consumer-focused nonprofit
groups.
(H) Chambers of commerce.
(I) Unions.
(J) Small business development centers (as defined
in section 21 of the Small Business Act (15 U.S.C.
648)).
(K) Other entities capable of carrying out the
activities described under subsection (b).
(4) Health savings account.--The term ``health savings
account'' has the meaning given such term in section 223 of the
Internal Revenue Code of 1986.
(5) State.--The term ``State'' means each of the several
States, the District of Columbia, each territory and possession
of the United States, and each federally recognized Indian
Tribe.
SEC. 113. NEW CORPORATIONS REQUIRED TO USE HEALTH SAVINGS ACCOUNTS.
Notwithstanding any other provision of law, a corporation
incorporated after December 31, 2022, may not receive tax benefits for
offering employees health insurance. The previous sentence shall not
apply to health savings account contributions offered by such a
corporation.
SEC. 114. FEDERAL EMPLOYEE HEALTH BENEFITS AND HEALTH SAVINGS ACCOUNTS.
(a) In General.--Section 1312(d)(3)(D) of the Patient Protection
and Affordable Care Act (42 U.S.C. 18032(d)(3)(D)) is amended--
(1) in the subparagraph heading, by striking ``Members of
congress'' and inserting ``President, vice president, members
of congress, and federal employees'';
(2) in clause (i), in the matter preceding subclause (I)--
(A) by striking ``Members of Congress and
congressional staff'' and inserting ``the President,
Vice President, Members of Congress, and Federal
employees''; and
(B) by striking ``a Member of Congress or
congressional staff'' and inserting ``the President,
the Vice President, a Member of Congress, or a Federal
employee''; and
(3) in clause (ii), by amending subclause (II) to read as
follows:
``(II) Federal employee.--The term
`Federal employee' means--
``(aa) an `employee', as
such term is defined in section
2105 of title 5, United States
Code; and
``(bb) includes an
individual to whom subsection
(c) or (f) of such section 2105
pertains (whether or not such
individual satisfies item
(aa)).''.
(b) Conversion to Health Savings Accounts.--Each plan offered under
chapter 89 of title 5, United States Code, shall be converted into a
health savings account deposit and funded at the level of the second-
least expensive silver plan available through the Exchange where the
applicable individual resides.
TITLE II--IMPROVING PRIVATE HEALTH INSURANCE
Subtitle A--Maintaining Protections for Patients With Preexisting
Conditions
SEC. 201. GUARANTEED AVAILABILITY OF COVERAGE; PROHIBITING
DISCRIMINATION.
(a) In General.--Subtitle C of title I of the Health Insurance
Portability and Accountability Act of 1996 (Public Law 104-191) is
amended by adding at the end the following:
``SEC. 196. GUARANTEED AVAILABILITY OF COVERAGE.
``(a) Guaranteed Issuance of Coverage in the Individual and Group
Market.--Subject to subsections (b) through (d), each health insurance
issuer that offers health insurance coverage in the individual or group
market in a State must accept every employer and individual in the
State that applies for such coverage.
``(b) Enrollment.--
``(1) Restriction.--A health insurance issuer described in
subsection (a) may restrict enrollment in coverage described in
such subsection to open or special enrollment periods.
``(2) Establishment.--A health insurance issuer described
in subsection (a) shall, in accordance with the regulations
promulgated under paragraph (3), establish special enrollment
periods for qualifying events (under section 603 of the
Employee Retirement Income Security Act of 1974).
``(3) Regulations.--The Secretary shall promulgate
regulations with respect to enrollment periods under paragraphs
(1) and (2).
``(c) Special Rules for Network Plans.--
``(1) In general.--In the case of a health insurance issuer
that offers health insurance coverage in the group and
individual market through a network plan, the issuer may--
``(A) limit the employers that may apply for such
coverage to those with eligible individuals who live,
work, or reside in the service area for such network
plan; and
``(B) within the service area of such plan, deny
such coverage to such employers and individuals if the
issuer has demonstrated, if required, to the applicable
State authority that--
``(i) it will not have the capacity to
deliver services adequately to enrollees of any
additional groups or any additional individuals
because of its obligations to existing group
contract holders and enrollees; and
``(ii) it is applying this paragraph
uniformly to all employers and individuals
without regard to the claims experience of
those individuals, employers and their
employees (and their dependents), or any health
status-related factor relating to such
individuals, employees, and dependents.
``(2) 180-day suspension upon denial of coverage.--An
issuer, upon denying health insurance coverage in any service
area in accordance with paragraph (1)(B), may not offer
coverage in the group or individual market within such service
area for a period of 180 days after the date such coverage is
denied.
``(d) Application of Financial Capacity Limits.--
``(1) In general.--A health insurance issuer may deny
health insurance coverage in the group or individual market if
the issuer has demonstrated, if required, to the applicable
State authority that--
``(A) it does not have the financial reserves
necessary to underwrite additional coverage; and
``(B) it is applying this paragraph uniformly to
all employers and individuals in the group or
individual market in the State consistent with
applicable State law and without regard to the claims
experience of those individuals, employers and their
employees (and their dependents) or any health status-
related factor relating to such individuals, employees,
and dependents.
``(2) 180-day suspension upon denial of coverage.--A health
insurance issuer upon denying health insurance coverage in
connection with group health plans in accordance with paragraph
(1) in a State may not offer coverage in connection with group
health plans in the group or individual market in the State for
a period of 180 days after the date such coverage is denied or
until the issuer has demonstrated to the applicable State
authority, if required under applicable State law, that the
issuer has sufficient financial reserves to underwrite
additional coverage, whichever is later. An applicable State
authority may provide for the application of this subsection on
a service-area-specific basis.
``(e) Definitions.--In this section and in sections 197 through
199A:
``(1) The term `Secretary' means the Secretary of Health
and Human Services.
``(2) The terms `genetic information', `genetic test',
`group health plan', `group market', `health insurance
coverage', `health insurance issuer', `group health insurance
coverage', `individual health insurance coverage', `individual
market', and `underwriting purpose' have the meanings given
such terms in section 2791 of the Public Health Service Act.
``SEC. 197. FAIR HEALTH INSURANCE PREMIUMS.
``(a) Prohibiting Discriminatory Premium Rates.--
``(1) In general.--With respect to the premium rate charged
by a health insurance issuer for health insurance coverage
offered in the individual or small group market--
``(A) such rate shall vary with respect to the
particular plan or coverage involved only by--
``(i) whether such plan or coverage covers
an individual or family;
``(ii) rating area, as established in
accordance with paragraph (2);
``(iii) age, except that such rate shall
not vary by more than 5 to 1 for adults; and
``(iv) tobacco use, except that such rate
shall not vary by more than 1.5 to 1; and
``(B) such rate shall not vary with respect to the
particular plan or coverage involved by any other
factor not described in subparagraph (A).
``(2) Rating area.--
``(A) In general.--Each State shall establish 1 or
more rating areas within that State for purposes of
applying the requirements of this title.
``(B) Secretarial review.--The Secretary shall
review the rating areas established by each State under
subparagraph (A) to ensure the adequacy of such areas
for purposes of carrying out the requirements of this
title. If the Secretary determines a State's rating
areas are not adequate, or that a State does not
establish such areas, the Secretary may establish
rating areas for that State.
``(3) Permissible age bands.--The Secretary, in
consultation with the National Association of Insurance
Commissioners, shall define the permissible age bands for
rating purposes under paragraph (1)(A)(iii).
``(4) Application of variations based on age or tobacco
use.--With respect to family coverage under a group health plan
or health insurance coverage, the rating variations permitted
under clauses (iii) and (iv) of paragraph (1)(A) shall be
applied based on the portion of the premium that is
attributable to each family member covered under the plan or
coverage.
``SEC. 198. PROHIBITING DISCRIMINATION AGAINST INDIVIDUAL PARTICIPANTS
AND BENEFICIARIES BASED ON HEALTH STATUS.
``(a) In General.--A group health plan and a health insurance
issuer offering group or individual health insurance coverage may not
establish rules for eligibility (including continued eligibility) of
any individual to enroll under the terms of the plan or coverage based
on any of the following health status-related factors in relation to
the individual or a dependent of the individual:
``(1) Health status.
``(2) Medical condition (including both physical and mental
illnesses).
``(3) Claims experience.
``(4) Receipt of health care.
``(5) Medical history.
``(6) Genetic information.
``(7) Evidence of insurability (including conditions
arising out of acts of domestic violence).
``(8) Disability.
``(9) Any other health status-related factor determined
appropriate by the Secretary.
``(b) In Premium Contributions.--
``(1) In general.--A group health plan, and a health
insurance issuer offering group or individual health insurance
coverage, may not require any individual (as a condition of
enrollment or continued enrollment under the plan) to pay a
premium or contribution which is greater than such premium or
contribution for a similarly situated individual enrolled in
the plan on the basis of any health status-related factor in
relation to the individual or to an individual enrolled under
the plan as a dependent of the individual.
``(2) Construction.--Nothing in paragraph (1) shall be
construed--
``(A) to restrict the amount that an employer or
individual may be charged for coverage under a group
health plan except as provided in paragraph (3) or
individual health coverage, as the case may be; or
``(B) to prevent a group health plan, and a health
insurance issuer offering group health insurance
coverage, from establishing premium discounts or
rebates or modifying otherwise applicable copayments or
deductibles in return for adherence to programs of
health promotion and disease prevention.
``(3) No group-based discrimination on basis of genetic
information.--
``(A) In general.--For purposes of this section, a
group health plan, and health insurance issuer offering
group health insurance coverage in connection with a
group health plan, may not adjust premium or
contribution amounts for the group covered under such
plan on the basis of genetic information.
``(B) Rule of construction.--Nothing in
subparagraph (A) or in paragraphs (1) and (2) of
subsection (d) shall be construed to limit the ability
of a health insurance issuer offering group or
individual health insurance coverage to increase the
premium for an employer based on the manifestation of a
disease or disorder of an individual who is enrolled in
the plan. In such case, the manifestation of a disease
or disorder in one individual cannot also be used as
genetic information about other group members and to
further increase the premium for the employer.
``(c) Genetic Testing.--
``(1) Limitation on requesting or requiring genetic
testing.--A group health plan, and a health insurance issuer
offering health insurance coverage in connection with a group
health plan, shall not request or require an individual or a
family member of such individual to undergo a genetic test.
``(2) Rule of construction.--Paragraph (1) shall not be
construed to limit the authority of a health care professional
who is providing health care services to an individual to
request that such individual undergo a genetic test.
``(3) Rule of construction regarding payment.--
``(A) In general.--Nothing in paragraph (1) shall
be construed to preclude a group health plan, or a
health insurance issuer offering health insurance
coverage in connection with a group health plan, from
obtaining and using the results of a genetic test in
making a determination regarding payment (as such term
is defined for the purposes of applying the regulations
promulgated by the Secretary under part C of title XI
of the Social Security Act and section 264 of this Act,
as may be revised from time to time) consistent with
subsection (a).
``(B) Limitation.--For purposes of subparagraph
(A), a group health plan, or a health insurance issuer
offering health insurance coverage in connection with a
group health plan, may request only the minimum amount
of information necessary to accomplish the intended
purpose.
``(4) Research exception.--Notwithstanding paragraph (1), a
group health plan, or a health insurance issuer offering health
insurance coverage in connection with a group health plan, may
request, but not require, that a participant or beneficiary
undergo a genetic test if each of the following conditions is
met:
``(A) The request is made pursuant to research that
complies with part 46 of title 45, Code of Federal
Regulations, or equivalent Federal regulations, and any
applicable State or local law or regulations for the
protection of human subjects in research.
``(B) The plan or issuer clearly indicates to each
participant or beneficiary, or in the case of a minor
child, to the legal guardian of such beneficiary, to
whom the request is made that--
``(i) compliance with the request is
voluntary; and
``(ii) noncompliance will have no effect on
enrollment status or premium or contribution
amounts.
``(C) No genetic information collected or acquired
under this paragraph shall be used for underwriting
purposes.
``(D) The plan or issuer notifies the Secretary in
writing that the plan or issuer is conducting
activities pursuant to the exception provided for under
this paragraph, including a description of the
activities conducted.
``(E) The plan or issuer complies with such other
conditions as the Secretary may by regulation require
for activities conducted under this paragraph.
``(d) Prohibition on Collection of Genetic Information.--
``(1) In general.--A group health plan, and a health
insurance issuer offering health insurance coverage in
connection with a group health plan, shall not request,
require, or purchase genetic information for underwriting
purposes.
``(2) Prohibition on collection of genetic information
prior to enrollment.--A group health plan, and a health
insurance issuer offering health insurance coverage in
connection with a group health plan, shall not request,
require, or purchase genetic information with respect to any
individual prior to such individual's enrollment under the plan
or coverage in connection with such enrollment.
``(3) Incidental collection.--If a group health plan, or a
health insurance issuer offering health insurance coverage in
connection with a group health plan, obtains genetic
information incidental to the requesting, requiring, or
purchasing of other information concerning any individual, such
request, requirement, or purchase shall not be considered a
violation of paragraph (2) if such request, requirement, or
purchase is not in violation of paragraph (1).
``(e) Genetic Information of a Fetus or Embryo.--Any reference in
this part to genetic information concerning an individual or family
member of an individual shall--
``(1) with respect to such an individual or family member
of an individual who is a pregnant woman, include genetic
information of any fetus carried by such pregnant woman; and
``(2) with respect to an individual or family member
utilizing an assisted reproductive technology, include genetic
information of any embryo legally held by the individual or
family member.
``(f) Programs of Health Promotion or Disease Prevention.--
``(1) General provisions.--
``(A) General rule.--For purposes of subsection
(b)(2)(B), a program of health promotion or disease
prevention (referred to in this subsection as a
`wellness program') shall be a program offered by an
employer that is designed to promote health or prevent
disease that meets the applicable requirements of this
subsection.
``(B) No conditions based on health status
factor.--If none of the conditions for obtaining a
premium discount or rebate or other reward for
participation in a wellness program is based on an
individual satisfying a standard that is related to a
health status factor, such wellness program shall not
violate this section if participation in the program is
made available to all similarly situated individuals
and the requirements of paragraph (2) are complied
with.
``(C) Conditions based on health status factor.--If
any of the conditions for obtaining a premium discount
or rebate or other reward for participation in a
wellness program is based on an individual satisfying a
standard that is related to a health status factor,
such wellness program shall not violate this section if
the requirements of paragraph (3) are complied with.
``(2) Wellness programs not subject to requirements.--If
none of the conditions for obtaining a premium discount or
rebate or other reward under a wellness program as described in
paragraph (1)(B) are based on an individual satisfying a
standard that is related to a health status factor (or if such
a wellness program does not provide such a reward), the
wellness program shall not violate this section if
participation in the program is made available to all similarly
situated individuals. The following programs shall not have to
comply with the requirements of paragraph (3) if participation
in the program is made available to all similarly situated
individuals:
``(A) A program that reimburses all or part of the
cost for memberships in a fitness center.
``(B) A diagnostic testing program that provides a
reward for participation and does not base any part of
the reward on outcomes.
``(C) A program that encourages preventive care
related to a health condition through the waiver of the
copayment or deductible requirement under group health
plan for the costs of certain items or services related
to a health condition (such as prenatal care or well-
baby visits).
``(D) A program that reimburses individuals for the
costs of smoking cessation programs without regard to
whether the individual quits smoking.
``(E) A program that provides a reward to
individuals for attending a periodic health education
seminar.
``(3) Wellness programs subject to requirements.--If any of
the conditions for obtaining a premium discount, rebate, or
reward under a wellness program as described in paragraph
(1)(C) is based on an individual satisfying a standard that is
related to a health status factor, the wellness program shall
not violate this section if the following requirements are
complied with:
``(A) The reward for the wellness program, together
with the reward for other wellness programs with
respect to the plan that requires satisfaction of a
standard related to a health status factor, shall not
exceed 30 percent of the cost of employee-only coverage
under the plan. If, in addition to employees or
individuals, any class of dependents (such as spouses
or spouses and dependent children) may participate
fully in the wellness program, such reward shall not
exceed 30 percent of the cost of the coverage in which
an employee or individual and any dependents are
enrolled. For purposes of this paragraph, the cost of
coverage shall be determined based on the total amount
of employer and employee contributions for the benefit
package under which the employee is (or the employee
and any dependents are) receiving coverage. A reward
may be in the form of a discount or rebate of a premium
or contribution, a waiver of all or part of a cost-
sharing mechanism (such as deductibles, copayments, or
coinsurance), the absence of a surcharge, or the value
of a benefit that would otherwise not be provided under
the plan. The Secretaries of Labor, Health and Human
Services, and the Treasury may increase the reward
available under this subparagraph to up to 50 percent
of the cost of coverage if the Secretaries determine
that such an increase is appropriate.
``(B) The wellness program shall be reasonably
designed to promote health or prevent disease. A
program complies with the preceding sentence if the
program has a reasonable chance of improving the health
of, or preventing disease in, participating individuals
and it is not overly burdensome, is not a subterfuge
for discriminating based on a health status factor, and
is not highly suspect in the method chosen to promote
health or prevent disease.
``(C) The plan shall give individuals eligible for
the program the opportunity to qualify for the reward
under the program at least once each year.
``(D) The full reward under the wellness program
shall be made available to all similarly situated
individuals. For such purpose, among other things:
``(i) The reward is not available to all
similarly situated individuals for a period
unless the wellness program allows--
``(I) for a reasonable alternative
standard (or waiver of the otherwise
applicable standard) for obtaining the
reward for any individual for whom, for
that period, it is unreasonably
difficult due to a medical condition to
satisfy the otherwise applicable
standard; and
``(II) for a reasonable alternative
standard (or waiver of the otherwise
applicable standard) for obtaining the
reward for any individual for whom, for
that period, it is medically
inadvisable to attempt to satisfy the
otherwise applicable standard.
``(ii) If reasonable under the
circumstances, the plan or issuer may seek
verification, such as a statement from an
individual's physician, that a health status
factor makes it unreasonably difficult or
medically inadvisable for the individual to
satisfy or attempt to satisfy the otherwise
applicable standard.
``(E) The plan or issuer involved shall disclose in
all plan materials describing the terms of the wellness
program the availability of a reasonable alternative
standard (or the possibility of waiver of the otherwise
applicable standard) required under subparagraph (D).
If plan materials disclose that such a program is
available, without describing its terms, the disclosure
under this subparagraph shall not be required.
``SEC. 199. PROHIBITION OF PREEXISTING CONDITION EXCLUSIONS OR OTHER
DISCRIMINATION BASED ON HEALTH STATUS.
``(a) In General.--A group health plan and a health insurance
issuer offering group or individual health insurance coverage may not
impose any preexisting condition exclusion with respect to such plan or
coverage.
``(b) Definitions.--For purposes of this section--
``(1) Preexisting condition exclusion.--
``(A) In general.--The term `preexisting condition
exclusion' means, with respect to coverage, a
limitation or exclusion of benefits relating to a
condition based on the fact that the condition was
present before the date of enrollment for such
coverage, whether or not any medical advice, diagnosis,
care, or treatment was recommended or received before
such date.
``(B) Treatment of genetic information.--Genetic
information shall not be treated as a condition
described in subsection (a)(1) in the absence of a
diagnosis of the condition related to such information.
``(2) Enrollment date.--The term `enrollment date' means,
with respect to an individual covered under a group health plan
or health insurance coverage, the date of enrollment of the
individual in the plan or coverage or, if earlier, the first
day of the waiting period for such enrollment.
``(3) Late enrollee.--The term `late enrollee' means, with
respect to coverage under a group health plan, a participant or
beneficiary who enrolls under the plan other than during--
``(A) the first period in which the individual is
eligible to enroll under the plan; or
``(B) a special enrollment period under subsection
(f).
``(4) Waiting period.--The term `waiting period' means,
with respect to a group health plan and an individual who is a
potential participant or beneficiary in the plan, the period
that must pass with respect to the individual before the
individual is eligible to be covered for benefits under the
terms of the plan.
``(c) Rules Relating to Crediting Previous Coverage.--
``(1) Creditable coverage defined.--For purposes of this
title, the term `creditable coverage' means, with respect to an
individual, coverage of the individual under any of the
following:
``(A) A group health plan.
``(B) Health insurance coverage.
``(C) Part A or part B of title XVIII of the Social
Security Act.
``(D) Title XIX of the Social Security Act, other
than coverage consisting solely of benefits under
section 1928.
``(E) Chapter 55 of title 10, United States Code.
``(F) A medical care program of the Indian Health
Service or of a tribal organization.
``(G) A State health benefits risk pool.
``(H) A health plan offered under chapter 89 of
title 5, United States Code.
``(I) A public health plan (as defined in
regulations).
``(J) A health benefit plan under section 5(e) of
the Peace Corps Act (22 U.S.C. 2504(e)).
Such term does not include coverage consisting solely of
coverage of excepted benefits (as defined in section 2791(c)).
``(2) Not counting periods before significant breaks in
coverage.--
``(A) In general.--A period of creditable coverage
shall not be counted, with respect to enrollment of an
individual under a group or individual health plan, if,
after such period and before the enrollment date, there
was a 63-day period during all of which the individual
was not covered under any creditable coverage.
``(B) Waiting period not treated as a break in
coverage.--For purposes of subparagraph (A) and
subsection (d)(4), any period that an individual is in
a waiting period for any coverage under a group or
individual health plan (or for group health insurance
coverage) or is in an affiliation period (as defined in
subsection (g)(2)) shall not be taken into account in
determining the continuous period under subparagraph
(A).
``(C) TAA-eligible individuals.--In the case of
plan years beginning before January 1, 2014--
``(i) TAA pre-certification period rule.--
In the case of a TAA-eligible individual, the
period beginning on the date the individual has
a TAA-related loss of coverage and ending on
the date that is 7 days after the date of the
issuance by the Secretary (or by any person or
entity designated by the Secretary) of a
qualified health insurance costs credit
eligibility certificate for such individual for
purposes of section 7527 of the Internal
Revenue Code of 1986 shall not be taken into
account in determining the continuous period
under subparagraph (A).
``(ii) Definitions.--The terms `TAA-
eligible individual' and `TAA-related loss of
coverage' have the meanings given such terms in
section 2205(b)(4).
``(3) Method of crediting coverage.--
``(A) Standard method.--Except as otherwise
provided under subparagraph (B), for purposes of
applying subsection (a)(3), a group health plan, and a
health insurance issuer offering group or individual
health insurance coverage, shall count a period of
creditable coverage without regard to the specific
benefits covered during the period.
``(B) Election of alternative method.--A group
health plan, or a health insurance issuer offering
group or individual health insurance, may elect to
apply subsection (a)(3) based on coverage of benefits
within each of several classes or categories of
benefits specified in regulations rather than as
provided under subparagraph (A). Such election shall be
made on a uniform basis for all participants and
beneficiaries. Under such election a group or
individual health plan or issuer shall count a period
of creditable coverage with respect to any class or
category of benefits if any level of benefits is
covered within such class or category.
``(C) Plan notice.--In the case of an election with
respect to a group health plan under subparagraph (B)
(whether or not health insurance coverage is provided
in connection with such plan), the plan shall--
``(i) prominently state in any disclosure
statements concerning the plan, and state to
each enrollee at the time of enrollment under
the plan, that the plan has made such election;
and
``(ii) include in such statements a
description of the effect of this election.
``(D) Issuer notice.--In the case of an election
under subparagraph (B) with respect to health insurance
coverage offered by an issuer in the individual or
group market, the issuer--
``(i) shall prominently state in any
disclosure statements concerning the coverage,
and to each employer at the time of the offer
or sale of the coverage, that the issuer has
made such election; and
``(ii) shall include in such statements a
description of the effect of such election.
``(4) Establishment of period.--Periods of creditable
coverage with respect to an individual shall be established
through presentation of certifications described in subsection
(e) or in such other manner as may be specified in regulations.
``(d) Exceptions.--
``(1) Exclusion not applicable to certain newborns.--
Subject to paragraph (4), a group health plan, and a health
insurance issuer offering group or individual health insurance
coverage, may not impose any preexisting condition exclusion in
the case of an individual who, as of the last day of the 30-day
period beginning with the date of birth, is covered under
creditable coverage.
``(2) Exclusion not applicable to certain adopted
children.--Subject to paragraph (4), a group health plan, and a
health insurance issuer offering group or individual health
insurance coverage, may not impose any preexisting condition
exclusion in the case of a child who is adopted or placed for
adoption before attaining 18 years of age and who, as of the
last day of the 30-day period beginning on the date of the
adoption or placement for adoption, is covered under creditable
coverage. The previous sentence shall not apply to coverage
before the date of such adoption or placement for adoption.
``(3) Exclusion not applicable to pregnancy.--A group
health plan, and health insurance issuer offering group or
individual health insurance coverage, may not impose any
preexisting condition exclusion relating to pregnancy as a
preexisting condition.
``(4) Loss if break in coverage.--Paragraphs (1) and (2)
shall no longer apply to an individual after the end of the
first 63-day period during all of which the individual was not
covered under any creditable coverage.
``(e) Certifications and Disclosure of Coverage.--
``(1) Requirement for certification of period of creditable
coverage.--
``(A) In general.--A group health plan, and a
health insurance issuer offering group or individual
health insurance coverage, shall provide the
certification described in subparagraph (B)--
``(i) at the time an individual ceases to
be covered under the plan or otherwise becomes
covered under a COBRA continuation provision;
``(ii) in the case of an individual
becoming covered under such a provision, at the
time the individual ceases to be covered under
such provision; and
``(iii) on the request on behalf of an
individual made not later than 24 months after
the date of cessation of the coverage described
in clause (i) or (ii), whichever is later.
The certification under clause (i) may be provided, to
the extent practicable, at a time consistent with
notices required under any applicable COBRA
continuation provision.
``(B) Certification.--The certification described
in this subparagraph is a written certification of--
``(i) the period of creditable coverage of
the individual under such plan and the coverage
(if any) under such COBRA continuation
provision; and
``(ii) the waiting period (if any) (and
affiliation period, if applicable) imposed with
respect to the individual for any coverage
under such plan.
``(C) Issuer compliance.--To the extent that
medical care under a group health plan consists of
group health insurance coverage, the plan is deemed to
have satisfied the certification requirement under this
paragraph if the health insurance issuer offering the
coverage provides for such certification in accordance
with this paragraph.
``(2) Disclosure of information on previous benefits.--In
the case of an election described in subsection (c)(3)(B) by a
group health plan or health insurance issuer, if the plan or
issuer enrolls an individual for coverage under the plan and
the individual provides a certification of coverage of the
individual under paragraph (1)--
``(A) upon request of such plan or issuer, the
entity which issued the certification provided by the
individual shall promptly disclose to such requesting
plan or issuer information on coverage of classes and
categories of health benefits available under such
entity's plan or coverage; and
``(B) such entity may charge the requesting plan or
issuer for the reasonable cost of disclosing such
information.
``(3) Regulations.--The Secretary shall establish rules to
prevent an entity's failure to provide information under
paragraph (1) or (2) with respect to previous coverage of an
individual from adversely affecting any subsequent coverage of
the individual under another group health plan or health
insurance coverage.
``(f) Special Enrollment Periods.--
``(1) Individuals losing other coverage.--A group health
plan, and a health insurance issuer offering group health
insurance coverage in connection with a group health plan,
shall permit an employee who is eligible, but not enrolled, for
coverage under the terms of the plan (or a dependent of such an
employee if the dependent is eligible, but not enrolled, for
coverage under such terms) to enroll for coverage under the
terms of the plan if each of the following conditions is met:
``(A) The employee or dependent was covered under a
group health plan or had health insurance coverage at
the time coverage was previously offered to the
employee or dependent.
``(B) The employee stated in writing at such time
that coverage under a group health plan or health
insurance coverage was the reason for declining
enrollment, but only if the plan sponsor or issuer (if
applicable) required such a statement at such time and
provided the employee with notice of such requirement
(and the consequences of such requirement) at such
time.
``(C) The employee's or dependent's coverage
described in subparagraph (A)--
``(i) was under a COBRA continuation
provision and the coverage under such provision
was exhausted; or
``(ii) was not under such a provision and
either the coverage was terminated as a result
of loss of eligibility for the coverage
(including as a result of legal separation,
divorce, death, termination of employment, or
reduction in the number of hours of employment)
or employer contributions toward such coverage
were terminated.
``(D) Under the terms of the plan, the employee
requests such enrollment not later than 30 days after
the date of exhaustion of coverage described in
subparagraph (C)(i) or termination of coverage or
employer contribution described in subparagraph
(C)(ii).
``(2) For dependent beneficiaries.--
``(A) In general.--If--
``(i) a group health plan makes coverage
available with respect to a dependent of an
individual;
``(ii) the individual is a participant
under the plan (or has met any waiting period
applicable to becoming a participant under the
plan and is eligible to be enrolled under the
plan but for a failure to enroll during a
previous enrollment period); and
``(iii) a person becomes such a dependent
of the individual through marriage, birth, or
adoption or placement for adoption,
the group health plan shall provide for a dependent
special enrollment period described in subparagraph (B)
during which the person (or, if not otherwise enrolled,
the individual) may be enrolled under the plan as a
dependent of the individual, and in the case of the
birth or adoption of a child, the spouse of the
individual may be enrolled as a dependent of the
individual if such spouse is otherwise eligible for
coverage.
``(B) Dependent special enrollment period.--A
dependent special enrollment period under this
subparagraph shall be a period of not less than 30 days
and shall begin on the later of--
``(i) the date dependent coverage is made
available; or
``(ii) the date of the marriage, birth, or
adoption or placement for adoption (as the case
may be) described in subparagraph (A)(iii).
``(C) No waiting period.--If an individual seeks to
enroll a dependent during the first 30 days of such a
dependent special enrollment period, the coverage of
the dependent shall become effective--
``(i) in the case of marriage, not later
than the first day of the first month beginning
after the date the completed request for
enrollment is received;
``(ii) in the case of a dependent's birth,
as of the date of such birth; or
``(iii) in the case of a dependent's
adoption or placement for adoption, the date of
such adoption or placement for adoption.
``(3) Special rules for application in case of medicaid and
chip.--
``(A) In general.--A group health plan, and a
health insurance issuer offering group health insurance
coverage in connection with a group health plan, shall
permit an employee who is eligible, but not enrolled,
for coverage under the terms of the plan (or a
dependent of such an employee if the dependent is
eligible, but not enrolled, for coverage under such
terms) to enroll for coverage under the terms of the
plan if either of the following conditions is met:
``(i) Termination of medicaid or chip
coverage.--The employee or dependent is covered
under a Medicaid plan under title XIX of the
Social Security Act or under a State child
health plan under title XXI of such Act and
coverage of the employee or dependent under
such a plan is terminated as a result of loss
of eligibility for such coverage and the
employee requests coverage under the group
health plan (or health insurance coverage) not
later than 60 days after the date of
termination of such coverage.
``(ii) Eligibility for employment
assistance under medicaid or chip.--The
employee or dependent becomes eligible for
assistance, with respect to coverage under the
group health plan or health insurance coverage,
under such Medicaid plan or State child health
plan (including under any waiver or
demonstration project conducted under or in
relation to such a plan), if the employee
requests coverage under the group health plan
or health insurance coverage not later than 60
days after the date the employee or dependent
is determined to be eligible for such
assistance.
``(B) Coordination with medicaid and chip.--
``(i) Outreach to employees regarding
availability of medicaid and chip coverage.--
``(I) In general.--Each employer
that maintains a group health plan in a
State that provides medical assistance
under a State Medicaid plan under title
XIX of the Social Security Act, or
child health assistance under a State
child health plan under title XXI of
such Act, in the form of premium
assistance for the purchase of coverage
under a group health plan, shall
provide to each employee a written
notice informing the employee of
potential opportunities then currently
available in the State in which the
employee resides for premium assistance
under such plans for health coverage of
the employee or the employee's
dependents. For purposes of compliance
with this subclause, the employer may
use any State-specific model notice
developed in accordance with section
701(f)(3)(B)(i)(II) of the Employee
Retirement Income Security Act of 1974
(29 U.S.C. 1181(f)(3)(B)(i)(II)).
``(II) Option to provide concurrent
with provision of plan materials to
employee.--An employer may provide the
model notice applicable to the State in
which an employee resides concurrent
with the furnishing of materials
notifying the employee of health plan
eligibility, concurrent with materials
provided to the employee in connection
with an open season or election process
conducted under the plan, or concurrent
with the furnishing of the summary plan
description as provided in section
104(b) of the Employee Retirement
Income Security Act of 1974.
``(ii) Disclosure about group health plan
benefits to states for medicaid and chip
eligible individuals.--In the case of an
enrollee in a group health plan who is covered
under a Medicaid plan of a State under title
XIX of the Social Security Act or under a State
child health plan under title XXI of such Act,
the plan administrator of the group health plan
shall disclose to the State, upon request,
information about the benefits available under
the group health plan in sufficient
specificity, as determined under regulations of
the Secretary of Health and Human Services in
consultation with the Secretary that require
use of the model coverage coordination
disclosure form developed under section
311(b)(1)(C) of the Children's Health Insurance
Reauthorization Act of 2009, so as to permit
the State to make a determination (under
paragraph (2)(B), (3), or (10) of section
2105(c) of the Social Security Act or
otherwise) concerning the cost-effectiveness of
the State providing medical or child health
assistance through premium assistance for the
purchase of coverage under such group health
plan and in order for the State to provide
supplemental benefits required under paragraph
(10)(E) of such section or other authority.
``(g) Use of Affiliation Period by HMOs as Alternative to
Preexisting Condition Exclusion.--
``(1) In general.--A health maintenance organization which
offers health insurance coverage in connection with a group
health plan and which does not impose any preexisting condition
exclusion allowed under subsection (a) with respect to any
particular coverage option may impose an affiliation period for
such coverage option, but only if--
``(A) such period is applied uniformly without
regard to any health status-related factors; and
``(B) such period does not exceed 2 months (or 3
months in the case of a late enrollee).
``(2) Affiliation period.--
``(A) Defined.--For purposes of this title, the
term `affiliation period' means a period which, under
the terms of the health insurance coverage offered by
the health maintenance organization, must expire before
the health insurance coverage becomes effective. The
organization is not required to provide health care
services or benefits during such period and no premium
shall be charged to the participant or beneficiary for
any coverage during the period.
``(B) Beginning.--Such period shall begin on the
enrollment date.
``(C) Runs concurrently with waiting periods.--An
affiliation period under a plan shall run concurrently
with any waiting period under the plan.
``(3) Alternative methods.--A health maintenance
organization described in paragraph (1) may use alternative
methods, from those described in such paragraph, to address
adverse selection as approved by the State insurance
commissioner or official or officials designated by the State
to enforce the requirements of this part for the State involved
with respect to such issuer.
``SEC. 199A. EXTENSION OF DEPENDENT COVERAGE.
``(a) In General.--A group health plan and a health insurance
issuer offering group or individual health insurance coverage that
provides dependent coverage of children shall continue to make such
coverage available for an adult child (who is not married) until the
child turns 26 years of age. Nothing in this section shall require a
health plan or a health insurance issuer described in the preceding
sentence to make coverage available for a child of a child receiving
dependent coverage.
``(b) Regulations.--The Secretary shall promulgate regulations to
define the dependents to which coverage shall be made available under
subsection (a).
``(c) Rule of Construction.--Nothing in this section shall be
construed to modify the definition of `dependent' as used in the
Internal Revenue Code of 1986 with respect to the tax treatment of the
cost of coverage.
``SEC. 199B. ANNUAL LIMITATION ON COST-SHARING.
``(a) In General.--
``(1) 2014.--The cost-sharing incurred under a group health
plan or group or individual health insurance coverage with
respect to self-only coverage or coverage other than self-only
coverage for a plan year beginning in 2014 shall not exceed the
dollar amounts in effect under section 223(c)(2)(A)(ii) of the
Internal Revenue Code of 1986 for self-only and family
coverage, respectively, for taxable years beginning in 2014.
``(2) 2015 and later.--In the case of any plan year
beginning in a calendar year after 2014, the limitation under
this paragraph shall--
``(A) in the case of self-only coverage, be equal
to the dollar amount under paragraph (1) for self-only
coverage for plan years beginning in 2014, increased by
an amount equal to the product of that amount and the
premium adjustment percentage under subsection (c) for
the calendar year; and
``(B) in the case of other coverage, twice the
amount in effect under subparagraph (A).
If the amount of any increase under subparagraph (A) is not a
multiple of $50, such increase shall be rounded to the next
lowest multiple of $50.
``(b) Cost-Sharing.--In this section:
``(1) In general.--The term `cost-sharing' includes--
``(A) deductibles, coinsurance, copayments, or
similar charges; and
``(B) any other expenditure required of an insured
individual which is a qualified medical expense (within
the meaning of section 223(d)(2) of the Internal
Revenue Code of 1986) with respect to essential health
benefits covered under the plan.
``(2) Exceptions.--Such term does not include premiums,
balance billing amounts for non-network providers, or spending
for non-covered services.
``(c) Premium Adjustment Percentage.--For purposes of subsection
(a)(2)(A), the premium adjustment percentage for any calendar year is
the percentage (if any) by which the average per capita premium for
health insurance coverage in the United States for the preceding
calendar year (as estimated by the Secretary no later than October 1 of
such preceding calendar year) exceeds such average per capita premium
for 2013 (as determined by the Secretary).
``SEC. 199C. ENFORCEMENT OF CERTAIN HEALTH INSURANCE REQUIREMENTS.
``(a) State Enforcement.--
``(1) State authority.--Each State may require that health
insurance issuers that issue, sell, renew, or offer health
insurance coverage in the State in the individual or group
market meet the requirements of this part with respect to such
issuers.
``(2) Failure to implement provisions.--In the case of a
determination by the Secretary that a State has failed to
substantially enforce a provision (or provisions) of sections
196 through 199A with respect to health insurance issuers in
the State, the Secretary shall enforce such provision (or
provisions) under subsection (b) insofar as they relate to the
issuance, sale, renewal, and offering of health insurance
coverage in connection with group health plans or individual
health insurance coverage in such State.
``(b) Secretarial Enforcement Authority.--
``(1) Limitation.--The provisions of this subsection shall
apply to enforcement of a provision (or provisions) described
in subsection (a)(2) only--
``(A) as provided under such subsection; and
``(B) with respect to individual health insurance
coverage or group health plans that are non-Federal
governmental plans.
``(2) Imposition of penalties.--In the cases described in
paragraph (1)--
``(A) In general.--Subject to the succeeding
provisions of this subsection, any non-Federal
governmental plan that is a group health plan and any
health insurance issuer that fails to meet a provision
of this part applicable to such plan or issuer is
subject to a civil money penalty under this subsection.
``(B) Liability for penalty.--In the case of a
failure by--
``(i) a health insurance issuer, the issuer
is liable for such penalty; or
``(ii) a group health plan that is a non-
Federal governmental plan which is--
``(I) sponsored by 2 or more
employers, the plan is liable for such
penalty; or
``(II) not so sponsored, the
employer is liable for such penalty.
``(C) Amount of penalty.--
``(i) In general.--The maximum amount of
penalty imposed under this paragraph is $100
for each day for each individual with respect
to which such a failure occurs.
``(ii) Considerations in imposition.--In
determining the amount of any penalty to be
assessed under this paragraph, the Secretary
shall take into account the previous record of
compliance of the entity being assessed with
the applicable provisions of this part and the
gravity of the violation.
``(iii) Limitations.--
``(I) Penalty not to apply where
failure not discovered exercising
reasonable diligence.--No civil money
penalty shall be imposed under this
paragraph on any failure during any
period for which it is established to
the satisfaction of the Secretary that
none of the entities against whom the
penalty would be imposed knew, or
exercising reasonable diligence would
have known, that such failure existed.
``(II) Penalty not to apply to
failures corrected within 30 days.--No
civil money penalty shall be imposed
under this paragraph on any failure if
such failure was due to reasonable
cause and not to willful neglect, and
such failure is corrected during the
30-day period beginning on the first
day any of the entities against whom
the penalty would be imposed knew, or
exercising reasonable diligence would
have known, that such failure existed.
``(D) Administrative review.--
``(i) Opportunity for hearing.--The entity
assessed shall be afforded an opportunity for
hearing by the Secretary upon request made
within 30 days after the date of the issuance
of a notice of assessment. In such hearing the
decision shall be made on the record pursuant
to section 554 of title 5, United States Code.
If no hearing is requested, the assessment
shall constitute a final and unappealable
order.
``(ii) Hearing procedure.--If a hearing is
requested, the initial agency decision shall be
made by an administrative law judge, and such
decision shall become the final order unless
the Secretary modifies or vacates the decision.
Notice of intent to modify or vacate the
decision of the administrative law judge shall
be issued to the parties within 30 days after
the date of the decision of the judge. A final
order which takes effect under this paragraph
shall be subject to review only as provided
under subparagraph (E).
``(E) Judicial review.--
``(i) Filing of action for review.--Any
entity against whom an order imposing a civil
money penalty has been entered after an agency
hearing under this paragraph may obtain review
by the United States district court for any
district in which such entity is located or the
United States District Court for the District
of Columbia by filing a notice of appeal in
such court within 30 days from the date of such
order, and simultaneously sending a copy of
such notice by registered mail to the
Secretary.
``(ii) Certification of administrative
record.--The Secretary shall promptly certify
and file in such court the record upon which
the penalty was imposed.
``(iii) Standard for review.--The findings
of the Secretary shall be set aside only if
found to be unsupported by substantial evidence
as provided by section 706(2)(E) of title 5,
United States Code.
``(iv) Appeal.--Any final decision, order,
or judgment of the district court concerning
such review shall be subject to appeal as
provided in chapter 83 of title 28 of such
Code.
``(F) Failure to pay assessment; maintenance of
action.--
``(i) Failure to pay assessment.--If any
entity fails to pay an assessment after it has
become a final and unappealable order, or after
the court has entered final judgment in favor
of the Secretary, the Secretary shall refer the
matter to the Attorney General who shall
recover the amount assessed by action in the
appropriate United States district court.
``(ii) Nonreviewability.--In such action
the validity and appropriateness of the final
order imposing the penalty shall not be subject
to review.
``(G) Payment of penalties.--Except as otherwise
provided, penalties collected under this paragraph
shall be paid to the Secretary (or other officer)
imposing the penalty and shall be available without
appropriation and until expended for the purpose of
enforcing the provisions with respect to which the
penalty was imposed.
``(3) Enforcement authority relating to genetic
discrimination.--
``(A) General rule.--In the cases described in
paragraph (1), notwithstanding the provisions of
paragraph (2)(C), the succeeding subparagraphs of this
paragraph shall apply with respect to an action under
this subsection by the Secretary with respect to any
failure of a health insurance issuer in connection with
a group health plan, to meet the requirements of
subsection (a)(1)(F), (b)(3), (c), or (d) of section
196 or section 197 or 196(b)(1) with respect to genetic
information in connection with the plan.
``(B) Amount.--
``(i) In general.--The amount of the
penalty imposed under this paragraph shall be
$100 for each day in the noncompliance period
with respect to each participant or beneficiary
to whom such failure relates.
``(ii) Noncompliance period.--For purposes
of this paragraph, the term `noncompliance
period' means, with respect to any failure, the
period--
``(I) beginning on the date such
failure first occurs; and
``(II) ending on the date the
failure is corrected.
``(C) Minimum penalties where failure discovered.--
Notwithstanding clauses (i) and (ii) of subparagraph
(D):
``(i) In general.--In the case of 1 or more
failures with respect to an individual--
``(I) which are not corrected
before the date on which the plan
receives a notice from the Secretary of
such violation; and
``(II) which occurred or continued
during the period involved,
the amount of penalty imposed by subparagraph
(A) by reason of such failures with respect to
such individual shall not be less than $2,500.
``(ii) Higher minimum penalty where
violations are more than de minimis.--To the
extent violations for which any person is
liable under this paragraph for any year are
more than de minimis, clause (i) shall be
applied by substituting `$15,000' for `$2,500'
with respect to such person.
``(D) Limitations.--
``(i) Penalty not to apply where failure
not discovered exercising reasonable
diligence.--No penalty shall be imposed by
subparagraph (A) on any failure during any
period for which it is established to the
satisfaction of the Secretary that the person
otherwise liable for such penalty did not know,
and exercising reasonable diligence would not
have known, that such failure existed.
``(ii) Penalty not to apply to failures
corrected within certain periods.--No penalty
shall be imposed by subparagraph (A) on any
failure if--
``(I) such failure was due to
reasonable cause and not to willful
neglect; and
``(II) such failure is corrected
during the 30-day period beginning on
the first date the person otherwise
liable for such penalty knew, or
exercising reasonable diligence would
have known, that such failure existed.
``(iii) Overall limitation for
unintentional failures.--In the case of
failures which are due to reasonable cause and
not to willful neglect, the penalty imposed by
subparagraph (A) for failures shall not exceed
the amount equal to the lesser of--
``(I) 10 percent of the aggregate
amount paid or incurred by the employer
(or predecessor employer) during the
preceding taxable year for group health
plans; or
``(II) $500,000.
``(E) Waiver by secretary.--In the case of a
failure which is due to reasonable cause and not to
willful neglect, the Secretary may waive part or all of
the penalty imposed by subparagraph (A) to the extent
that the payment of such penalty would be excessive
relative to the failure involved.
``(c) Definitions.--For purposes of this section:
``(1) Governmental plan.--The term `governmental plan' has
the meaning given such term under section 3(32) of the Employee
Retirement Income Security Act of 1974 and any Federal
governmental plan.
``(2) Federal governmental plan.--The term ``Federal
governmental plan'' means a governmental plan established or
maintained for its employees by the Government of the United
States or by any agency or instrumentality of such Government.
``(3) Non-federal governmental plan.--The term `non-Federal
governmental plan' means a governmental plan that is not a
Federal governmental plan.''.
(b) Conforming Amendment.--The table of contents under section 1(b)
of the Health Insurance Portability and Accountability Act of 1996
(Public Law 104-191) is amended by inserting after the item relating to
section 195 the following:
``Sec. 196. Guaranteed availability of coverage.
``Sec. 197. Fair health insurance premiums.
``Sec. 198. Prohibiting discrimination against individual participants
and beneficiaries based on health status.
``Sec. 199. Prohibition of preexisting condition exclusions or other
discrimination based on health status.
``Sec. 199A. Extension of dependent coverage.
``Sec. 199B. Annual limitation on cost-sharing.
``Sec. 199C. Enforcement of certain health insurance requirements.''.
(c) ERISA and IRC Enforcement.--
(1) ERISA.--Subpart B of part 7 of title I of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1185 et seq.)
is amended by adding at the end the following new section:
``SEC. 716. OTHER MARKET REFORMS.
``Sections 196 and 197 of the Health Insurance Portability and
Accountability Act of 1996 shall apply to health insurance issuers
providing health insurance coverage in connection with group health
plans, and sections 198 through 199B of such Act shall apply to group
health plans and health insurance issuers providing health insurance
coverage in connection with group health plans, as if included in this
subpart, and to the extent that any provision of this part conflicts
with a provision of such section 196 or 197 with respect to health
insurance issuers providing health insurance coverage in connection
with group health plans or of such section 198, 199, 199A, or 199B with
respect to group health plans or health insurance issuers providing
health insurance coverage in connection with group health plans, the
provisions of such sections 196 through 199B shall apply.''.
(2) IRC.--Subchapter B of chapter 100 of subtitle K of
title 26 of the Internal Revenue Code of 1986 is amended by
adding at the end the following new section:
``SEC. 9816. OTHER MARKET REFORMS.
``Sections 196 and 197 of the Health Insurance Portability and
Accountability Act of 1996 shall apply to health insurance issuers
providing health insurance coverage in connection with group health
plans, and sections 198 through 199B of such Act shall apply to group
health plans and health insurance issuers providing health insurance
coverage in connection with group health plans, as if included in this
subchapter, and to the extent that any provision of this chapter
conflicts with a provision of such section 196 or 197 with respect to
health insurance issuers providing health insurance coverage in
connection with group health plans or of such section 198, 199, 199A,
or 199B with respect to group health plans or health insurance issuers
providing health insurance coverage in connection with group health
plans, the provisions of such sections 196 through 199B shall apply.''.
(d) Effective Date.--The amendments made by this section shall take
effect on the date on which the Supreme Court of the United States
issues a decision striking down the Patient Protection and Affordable
Care Act (Public Law 111-148) in its entirety.
Subtitle B--Expanding Coverage Options
SEC. 211. DEFINITION OF ``EMPLOYER'' UNDER ERISA WITH RESPECT TO GROUP
HEALTH PLANS.
(a) Definition of Employer.--Section 3(5) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1002(5)) is amended
by striking the period and inserting ``(which, with respect to a group
health plan, shall be determined in accordance with criteria that
includes the criteria under section 735).''.
(b) Group Health Plans.--Part 7 of subtitle B of title I of the
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1181 et
seq.) is amended by adding at the end the following:
``SEC. 735. DEFINITION OF `EMPLOYER' WITH RESPECT TO GROUP HEALTH
PLANS.
``(a) In General.--A group or association of employers that meets
the criteria under subsection (b) shall be considered an employer under
section 3(5) for purposes of sponsoring a group health plan.
``(b) Requirements.--The requirements under this subsection are
each of the following:
``(1) The primary purpose of the group or association may
be to offer and provide health coverage to its employer members
and their employees, if such group or association has at least
1 substantial business purpose, as described in subsection (c),
unrelated to offering and providing health coverage or other
employee benefits to its employer members and their employees.
``(2) Each employer member of the group or association
participating in the group health plan is a person acting
directly as an employer of at least 1 employee who is a
participant covered under the plan.
``(3) The group or association has--
``(A) a formal organizational structure with a
governing body; and
``(B) by-laws or other similar indications of
formality.
``(4) The functions and activities of the group or
association shall be controlled by the employer members of the
group or association, and the employer members of the group or
association that participate in the group health plan shall
control the plan. Control under this paragraph shall be in form
and substance.
``(5) The employer members shall have a commonality of
interest as described in subsection (d).
``(6)(A) The group or association shall not make health
coverage through the group health plan available other than
to--
``(i) an employee of a current employer member of
the group or association;
``(ii) a former employee of a current employer
member of the group or association who became eligible
for coverage under the group health plan when the
former employee was an employee of the employer; and
``(iii) a beneficiary of an individual described in
clause (i) or (ii), such as a spouse or dependent
child.
``(B) Notwithstanding subparagraph (A), the group or
association shall not make health coverage through the group
health plan available to any individual (or beneficiaries of
the individual) for any plan year following the plan year in
which the plan determines pursuant to reasonable monitoring
procedures described in subsection (f)(2)(C) that the
individual ceases to meet the conditions described in
subsection (f)(2) for being a working owner (unless the
individual again meets those conditions), except as may be
required by section 601.
``(7) The group or association, and any health coverage
offered by the group or association, shall comply with the
nondiscrimination provisions under subsection (e).
``(8) The group or association shall not be a health
insurance issuer, or owned or controlled by such a health
insurance issuer or by a subsidiary or affiliate of such a
health insurance issuer, other than to the extent such entities
participate in the group or association in their capacity as
employer members of the group or association.
``(c) Substantial Business Purpose.--
``(1) In general.--For purposes of subsection (b)(1), a
substantial business purpose shall exist if the group or
association would be a viable entity in the absence of
sponsoring an employee benefit plan.
``(2) Business purpose.--For purposes of subsection (b)(1)
and paragraph (1), a business purpose shall--
``(A) include promoting common business interests
of the members of the group or association or the
common economic interests in a given trade or employer
community; and
``(B) not be required to be a for-profit activity.
``(d) Commonality of Interest.--
``(1) In general.--Subject to paragraph (3), employer
members of the group or association shall be treated as having
a commonality of interest for purposes of subsection (b)(5)
if--
``(A) the employers are in the same trade,
industry, line of business, or profession; or
``(B) each employer has a principal place of
business in the same region that does not exceed the
boundaries of a single State or a metropolitan area
(even if the metropolitan area includes more than 1
State).
``(2) Same trade, industry, or line of business.--In the
case of a group or association that is sponsoring a group
health plan under this section and that is itself an employer
member of the group or association, the group or association
shall be deemed for purposes of paragraph (1)(A) to be in the
same trade, industry, line of business, or profession, as
applicable, as the other employer members of the group or
association.
``(3) Nondiscrimination.--The standards under paragraph (1)
shall not be implemented in a manner that is subterfuge for
discrimination as is prohibited under subsection (e).
``(e) Nondiscrimination.--
``(1) In general.--A group or association of employers
sponsoring a group health plan under this section, and any
health coverage sponsored by such group or association, shall
comply with each of the following:
``(A) The group or association shall not condition
employer membership in the group or association on any
health factor of any individual who is or may become
eligible to participate in the group health plan
sponsored by the group or association.
``(B) The group health plan sponsored by the group
or association shall comply with the rules under
section 2590.702(b) of title 29, Code of Federal
Regulations (as in effect on June 21, 2018), with
respect to nondiscrimination in rules for eligibility
for benefits, subject to subparagraph (D).
``(C) The group health plan sponsored by the group
or association shall comply with the rules under
section 2590.702(c) of title 29, Code of Federal
Regulations (as in effect on June 21, 2018), with
respect to nondiscrimination in premiums or
contributions required by any participant or
beneficiary for coverage under the plan, subject to
subparagraph (D).
``(D) In applying subparagraphs (B) and (C), the
group or association may not treat the employees of
different employer members of the group or association
as distinct groups of similarly-situated individuals
based on a health factor of 1 or more individuals.
``(2) Definition of health factor.--For purposes of this
subsection, the term `health factor' has the meaning given such
term in section 2590.702(a) of title 29, Code of Federal
Regulations (as in effect on June 21, 2018).
``(f) Dual Treatment of Working Owners as Employers and
Employees.--
``(1) In general.--A person determined in accordance with
paragraph (2) to be a working owner of a trade or business may
qualify as both an employer and as an employee of the trade or
business for purposes of the requirements under subsection (b),
including the requirements under paragraphs (2) and (6) of such
subsection.
``(2) Working owner.--
``(A) Eligibility.--A person shall qualify as a
`working owner' if a responsible fiduciary of the group
health plan reasonably determines that the person--
``(i) does not have any common law
employees;
``(ii) has an ownership right of any nature
in a trade or business, whether incorporated or
unincorporated, including a partner and other
self-employed individual;
``(iii) is earning wages or self-employment
income from the trade or business for providing
personal services to the trade or business; and
``(iv) either--
``(I) works on average at least 20
hours per week, or at least 80 hours
per month, providing personal services
to the person's trade or business; or
``(II) has wages or self-employment
income from such trade or business that
at least equals the person's cost of
coverage for participation by the
person, and any covered beneficiaries,
in the group health plan sponsored by
the group or association in which the
person is participating.
``(B) Determination.--The determination under
subparagraph (A) shall be made when the person first
becomes eligible for coverage under the group health
plan.
``(C) Reasonable monitoring procedures.--A
responsible fiduciary of the group health plan shall,
through reasonable monitoring procedures, periodically
confirm the continued eligibility of a person to
qualify as a working owner under subparagraph (A) for
purposes of meeting the requirements under subsection
(b) for the group health plan sponsored under this
section.
``(g) Applicability.--
``(1) Fully insured.--This section shall apply beginning on
September 1, 2018, with respect to a group or association of
employers sponsoring a group health plan that is fully insured.
``(2) Plans expanding to include broader group.--This
section shall apply beginning on January 1, 2019, with respect
to a group or association of employers sponsoring a group
health plan that--
``(A) is not fully insured;
``(B) is in existence on June 21, 2018;
``(C) meets the requirements that applied with
respect to such plan before June 21, 2018; and
``(D) chooses to be a plan sponsored under this
section (and subject to the requirements under
subsections (b) through (f)).
``(3) Other association health plans.--This section shall
apply beginning on April 1, 2019, with respect to any other
group or association of employers sponsoring a group health
plan.
``(4) Other criteria in advisory opinions.--The criteria
under this section shall not invalidate any criteria provided
in an advisory opinion, in effect on or after the date of
enactment of the Fair Care Act of 2022, that the Secretary may
use to determine if a group or association of employers is an
employer under section 3(5) for purposes of sponsoring a group
health plan.
``(h) Determination of Employer or Joint Employer Status.--
``(1) In general.--Participating in or facilitating a group
health plan sponsored by a bona fide group or association of
employers pursuant to subsection (a) shall not be construed as
establishing an employer or joint employer relationship under
any Federal or State law.
``(2) Application of provision.--Paragraph (1) shall apply
to a group health plan sponsored or facilitated by a franchisor
and any franchisee, by multiple franchisors for the benefit of
the employees of such franchisors and their franchisees, by
multiple franchisees for the benefit of the employees of such
franchisees, by a franchisor whose franchisee or franchisees
participate or participates in the plan, or by a person or
entity that contracts with any individual as an independent
contractor for whom the plan benefits.
``(i) Rule of Construction.--Nothing in this section shall be
construed as repealing or otherwise limiting the application of this
Act (including section 712 relating to mental health parity) to group
health plans and employee welfare benefit plans.''.
SEC. 212. SHORT-TERM LIMITED DURATION INSURANCE.
(a) Definition.--Section 2791(b) of the Public Health Service Act
(42 U.S.C. 300gg-91(b)) is amended by adding at the end the following:
``(6) Short-term limited duration insurance.--The term
`short-term limited duration insurance' means health insurance
coverage provided pursuant to a contract with a health
insurance issuer that has an expiration date specified in the
contract (not taking into account any extensions that may be
elected by the policyholder with or without the issuer's
consent) that is less than 12 months after the original
effective date of the contract.''.
(b) Guaranteed Renewability.--Section 2703 of the Public Health
Service Act (42 U.S.C. 300gg-2) is amended--
(1) in subsection (a), by inserting ``or offers short-term
limited duration insurance'' after ``group market''; and
(2) by adding at the end the following:
``(f) Application to Short-Term Limited Duration Insurance.--
``(1) In general.--In applying this section in the case of
short-term limited duration insurance--
``(A) a reference to `health insurance coverage'
with respect to such coverage offered in the individual
market shall be deemed to include short-term limited
duration insurance; and
``(B) a reference to `health insurance issuer' with
respect to health insurance coverage offered in the
individual market shall be deemed to include an issuer
of short-term limited duration insurance.
``(2) Special rule for short-term limited duration
insurance.--In the case of short-term limited duration
insurance, at the time of application for enrollment in such
insurance coverage, an issuer of such insurance may offer
renewability of such coverage, and an individual may decline
renewability of such coverage in accordance with this section,
and the contract between such individual and the health
insurance issuer shall specify whether the individual opted for
renewability or no renewability.''.
(c) Applicability.--The amendments made by subsections (a) and (b)
shall apply with respect to contracts for short-term limited duration
insurance that take effect on or after January 1, 2023.
Subtitle C--Improving Commercial Health Insurance
SEC. 221. INVISIBLE GUARANTEED COVERAGE POOL REINSURANCE PROGRAM; TAX
ON EXCHANGE PLANS.
(a) Establishment.--Not later than 2 years after the date of
enactment of this Act, the Secretary of Health and Human Services shall
establish the Invisible Guaranteed Coverage Pool Reinsurance Program
(in this section referred to as the ``IGCPR program'').
(b) State Grants.--Under the IGCPR program, the Secretary shall,
from amounts appropriated under subsection (f) for a fiscal year, award
grants to States for such fiscal year, in amounts determined in
accordance with the allocation methodology specified under subsection
(d). Such grants shall be used for the purpose of establishing or
maintaining a qualifying Invisible Guaranteed Coverage Pool for the
State.
(c) Federal Default.--
(1) In general.--In the case of a State that does not, by a
date and in a manner specified by the Secretary, choose to be
awarded a grant under subsection (b) for a fiscal year to
operate a qualifying Invisible Guaranteed Coverage Pool for the
State, the Secretary shall, from amounts appropriated under
subsection (f) for such fiscal year, use the allocation
determined for the State under subsection (d) for participation
of such State in the Federal default qualifying Invisible
Guaranteed Coverage Pool described in paragraph (2).
(2) Federal default qualifying invisible guaranteed
coverage pool.--The Federal default qualifying high risk pool
is, with respect to each State that chooses not to be awarded a
grant under subsection (b) with respect to a fiscal year for
which funds are appropriated under subsection (f), an Invisible
Guaranteed Coverage Pool under which health insurance issuers
participating in the Exchange of such a State, with respect to
designated individuals who are enrolled in health insurance
coverage and are expected to experience higher than average
health costs as determined by the insurer, cede risk to the
pool, without affecting the premium paid by the designated
individuals or their terms of coverage. With respect to such
pool--
(A) high-risk individuals designated for cession to
the pool shall be designated by the ceding issuer;
(B) the premium amount the ceding issuer shall pay
to the reinsurance pool shall be 90 percent of the
premium paid to the issuer for the coverage;
(C) the ceding issuer shall retain the same risk
under the ceded policies as under any other policy of
the issuer with respect to the first $10,000 of
benefits for each ceded policy involved and will not
retain any risk under ceded policies after such first
$10,000 of benefits; and
(D) after a ceding issuer, with respect to a ceded
policy, no longer retains risk under such policy
pursuant to subparagraph (C), the negotiated rate under
such policy for items and services shall be payable at
the reimbursement rate under the Medicare program under
title XVIII of the Social Security Act for such items
and services, or in the case of items and services for
which payment is available under the policy but not the
Medicare program, at a rate determined by the
Secretary.
(d) Allocation Methodology.--Not later than six months after the
establishment of the IGCPR program, the Secretary shall specify an
allocation methodology for determining the amount of funds appropriated
under subsection (f) for a fiscal year to be allocated for each State
for purposes of subsections (b) and (c). Such methodology shall be
based on the number of residents of each State and the general health
status of such residents.
(e) Qualifying Invisible Guaranteed Coverage Pool.--For purposes of
this section, the term ``qualifying Invisible Guaranteed Coverage
Pool'' means, with respect to a State, a method of designation under
which health insurance issuers identify individuals who experience
higher than average health costs as determined by the State and are
enrolled in health insurance coverage offered in the individual market,
and cede the risk of spending more than $10,000 on health care services
for a single individual to the pool without affecting the premium paid
by the designated individuals or their terms of coverage. With respect
to such pool, the State, or an entity operating the pool on behalf of
the State, shall establish--
(1) the premium amount the ceding issuer shall pay to the
reinsurance pool;
(2) the applicable attachment points or coinsurance
percentages if the ceding issuer retains any portion of the
risk under ceded policies, except that the provisions of
subparagraphs (C) and (D) of subsection (c)(2) shall apply to
such high risk pool in the same manner as such clauses apply to
the Federal default high risk pool; and
(3) the mechanism by which high-risk individuals are
designated for cession to the pool, which may include a list of
designated high-cost health conditions.
(f) Appropriations.--There is appropriated to the Secretary of
Health and Human Services $200,000,000,000 to carry out this section
for the period of the first 10 years after the establishment of the
IGCPR program.
(g) Tax on Health Insurance Plans Sold on Exchanges.--
(1) In general.--Chapter 34 of the Internal Revenue Code of
1986 is amended by adding at the end the following new
subchapter:
``Subchapter C--Additional Tax on Health Insurance Plans Sold by
Insurers Offering Plans on Exchanges
``Sec. 4401. Additional tax on health insurance plans sold by insurers
offering plans on exchanges.
``SEC. 4401. ADDITIONAL TAX ON HEALTH INSURANCE PLANS SOLD BY INSURERS
OFFERING PLANS ON EXCHANGES.
``(a) Imposition of Tax.--There is imposed a tax of $4 for each
policy month of each health insurance policy sold by insurers offering
plans through an Exchange established under the Patient Protection and
Affordable Care Act.
``(b) Liability.--The tax imposed by subsection (a) shall be paid
by the plan sponsor.''.
(2) Conforming amendment.--The table of subchapters for
chapter 34 of the Internal Revenue Code of 1986 is amended by
adding at the end the following item:
``subchapter c--additional tax on health insurance plans sold by
insurers offering plans on exchanges''.
(3) Effective date.--The amendments made by this subsection
shall apply with respect to months beginning after the date of
enactment of this Act.
(h) Report.--The Secretary of Health and Human Services, in
collaboration with the Comptroller General of the United States, shall
submit to Congress, not later than 5 years after the date of enactment
of this Act, and again 5 years thereafter, a report on the status of
reinsurance pool funding, along with any recommendations with respect
to future allocations or funding methods for such pool.
SEC. 222. EMPLOYER HEALTH INSURANCE MANDATE REPEAL.
(a) In General.--Chapter 43 of the Internal Revenue Code of 1986 is
amended by striking section 4980H.
(b) Repeal of Related Reporting Requirements.--Subpart D of part
III of subchapter A of chapter 61 of such Code is amended by striking
section 6056.
(c) Conforming Amendments.--
(1) Section 6724(d)(1)(B) of such Code is amended by
inserting ``or'' at the end of clause (xxiii), by striking
``or'' at the end of clause (xxiv), and by striking clause
(xxv).
(2) Section 6724(d)(2) of such Code is amended by inserting
``or'' at the end of subparagraph (GG) and by striking
subparagraph (HH).
(3) The table of sections for chapter 43 of such Code is
amended by striking the item relating to section 4980H.
(4) The table of sections for subpart D of part III of
subchapter A of chapter 61 of such Code is amended by striking
the item relating to section 6056.
(5) Section 1513 of the Patient Protection and Affordable
Care Act is amended by striking subsection (c).
(d) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply to
months and other periods beginning after December 31, 2023.
(2) Repeal of study and report.--The amendment made by
subsection (c)(5) shall take effect on the date of the
enactment of this Act.
SEC. 223. REFUNDABLE CREDITS FOR COVERAGE UNDER A QUALIFIED HEALTH PLAN
FOR INDIVIDUALS OFFERED EMPLOYER-SPONSORED INSURANCE.
(a) In General.--Section 36B(c)(2) of the Internal Revenue Code of
1986 is amended--
(1) in subparagraph (B)(i), by inserting ``or section
5000A(f)(1)(B)'', and
(2) by striking subparagraph (C).
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
SEC. 224. INCLUSION IN INCOME OF CERTAIN COSTS OF EMPLOYER-PROVIDED
COVERAGE UNDER HEALTH PLANS.
(a) In General.--Section 106 of the Internal Revenue Code of 1986
is amended by adding at the end the following new subsection:
``(h) Limitation.--
``(1) In general.--Subsection (a) shall not apply to the
extent that employer-provided coverage under health plans for
an employee for a taxable year exceeds--
``(A) $10,200 for self-only coverage, and
``(B) $27,500 for all other coverage.
``(2) In general.--In the case of any calendar year after
2023, the dollar amounts in paragraph (1) shall each 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 such calendar year,
determined--
``(i) by substituting `calendar year 2023'
for `calendar year 2018' in subparagraph
(A)(ii) thereof, and
``(ii) by substituting for the C-CPI-U
referred to in section 1(f)(3)(A) the amount
that such CPI would have been if the annual
percentage increase in CPI with respect to each
year after 2023 and before 2033 had been one
percentage point greater.
``(3) Terms related to cpi.--
``(A) Annual percentage increase.--For purposes of
subparagraph (B)(ii)(II), the term `annual percentage
increase' means the percentage (if any) by which C-CPI-
U for any year exceeds the C-CPI-U for the prior year.
``(B) Other terms.--Terms used in this paragraph
which are also used in section 1(f)(3) shall have the
same meanings as when used in such section.''.
(b) Effective Date.--The amendments made by this section shall
apply with respect to taxable years beginning after December 31, 2023.
SEC. 225. CHANGE IN PERMISSIBLE AGE VARIATION IN HEALTH INSURANCE
PREMIUM RATES.
Section 2701(a)(1)(A)(iii) of the Public Health Service Act (42
U.S.C. 300gg(a)(1)(A)(iii)) is amended by inserting after ``(consistent
with section 2707(c))'' the following: ``or, for plan years beginning
on or after January 1, 2023, as the Secretary may implement through
interim final regulation, 5 to 1 for adults (consistent with section
2707(c))''.
SEC. 226. PREMIUM ASSISTANCE ADJUSTMENT TO REFLECT AGE.
(a) Modification of Applicable Percentage.--Section 36B(b)(3)(A) of
the Internal Revenue Code of 1986 is amended to read as follows:
``(A) Applicable percentage.--
``(i) In general.--The applicable
percentage for any taxable year shall be the
percentage such that the applicable percentage
for any taxpayer whose household income is
within an income tier specified in the
following table shall increase, on a sliding
scale in a linear manner, from the initial
percentage to the final percentage specified in
such table for such income tier with respect to
a taxpayer of the age involved:
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
``In the case of Up to Age 29 Age 30-39 Age 40-49 Age 50-59 Over Age 59
household income ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(expressed as a
percent of the
poverty line)
within the Initial % Final % Initial % Final % Initial % Final % Initial % Final % Initial % Final %
following income
tier:
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Up to 100% 0............... 0............... 0............... 0.............. 0.............. 0.............. 0.............. 0.............. 0.............. 0
100%-133% 2............... 2............... 2............... 2.............. 2.............. 2.............. 2.............. 2.............. 2.............. 2
133%-150% 3............... 4.3............. 3............... 4.3............ 3.............. 4.3............ 3.............. 4.3............ 3.............. 4.3
150%-200% 4.3............. 6.7............. 4.3............. 6.7............ 4.3............ 6.7............ 4.3............ 6.7............ 4.3............ 6.7
200%-250% 6.7............. 6.7............. 6.7............. 7.6............ 6.7............ 8.3............ 6.7............ 8.3............ 6.7............ 8.3
250%-300% 6.7............. 6.7............. 7.6............. 7.6............ 8.3............ 9.8............ 8.3............ 9.8............ 8.3............ 9.8
300%-400% 6.7............. 7............... 7.6............. 8.............. 9.8............ 10............. 9.8............ 10............. 9.8............ 10
400%-600% 7............... 9............... 8............... 10............. 10............. 15............. 10............. 15............. 10............. 15
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
``(ii) Age determinations.--
``(I) In general.--For purposes of
clause (i), the age of the taxpayer
taken into account under clause (i)
with respect to any taxable year is the
age attained by such taxpayer before
the close of such taxable year.
``(II) Joint returns.--In the case
of a joint return, the age of the older
spouse shall be taken into account
under clause (i).
``(iii) Indexing.--In the case of any
taxable year beginning after calendar year
2023, the initial and final percentages
contained in clause (i) shall be adjusted to
reflect--
``(I) the excess (if any) of the
rate of premium growth for the period
beginning with calendar year 2013 and
ending with calendar year 2023, over
the rate of income growth for such
period, and
``(II) in addition to any
adjustment under subclause (I), the
excess (if any) of the rate of premium
growth for calendar year 2023, over the
rate of growth in the consumer price
index for calendar year 2023.
``(iv) Failsafe.--Clause (iii)(II) shall
apply only if the aggregate amount of premium
tax credits under this section and cost-sharing
reductions under section 1402 of the Patient
Protection and Affordable Care Act for the
preceding calendar year exceeds an amount equal
to 0.504 percent of the gross domestic product
for such calendar year.''.
(b) Expansion of Eligibility.--Section 36B of the Internal Revenue
Code of 1986 is amended--
(1) in subsection (c)(1)(A), by striking ``400'' and
inserting ``600''; and
(2) in subsection (f)(2)(B)(i), by striking ``400'' each
place such reference appears and inserting ``600'' in each such
place.
(c) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2023.
SEC. 227. PREMIUM ASSISTANCE.
Notwithstanding any other provision of law, the Secretary of the
Treasury shall calculate the credit allowable under section 36B of the
Internal Revenue Code of 1986 based on the taxpayer's prior year tax
return and the Secretary of Health and Human Services shall provide for
open enrollment periods that end on April 15.
SEC. 228. ADDING COPPER PLANS TO EXCHANGES.
(a) In General.--Section 1302 of the Patient Protection and
Affordable Care Act (42 U.S.C. 18022) is amended--
(1) in subsection (a)(3), by inserting ``copper,'' after
``either the'';
(2) in subsection (c), by adding at the end the following
new paragraph:
``(5) Special rule for copper plans.--A health plan in the
copper level of coverage (as described in subsection (d)(1)(E))
shall be deemed to meet the requirements of this subsection.'';
(3) in subsection (d)--
(A) in paragraph (1), by adding at the end the
following new subparagraph:
``(E) Copper level.--A plan in the copper level
shall provide a level of coverage that is designed to
provide benefits that are actuarially equivalent to 50
percent of the full actuarial value of the benefits
provided under the plan and will have out-of-pocket
limits that are 30 percent higher than bronze plans.'';
and
(B) in paragraph (4)--
(i) by inserting ``copper,'' after ``any
reference to a''; and
(ii) by inserting ``copper,'' after
``providing a''; and
(4) in subsection (e)(1), by inserting ``copper,'' after
``not providing a''.
(b) Effective Date.--The amendments made by this section shall
apply with respect to plan years beginning on or after January 1, 2023.
SEC. 229. COPPER AND BRONZE PLANS.
Notwithstanding any other provision of law, refundable credits for
coverage under a qualified health plan and cost-sharing reductions may
be used to purchase bronze and copper plans.
SEC. 230. WAIVERS FOR STATE INNOVATION.
(a) Streamlining the State Application Process.--Section 1332 of
the Patient Protection and Affordable Care Act (42 U.S.C. 18052) is
amended--
(1) in subsection (a)(1)(C), by striking ``the law'' and
inserting ``a law or has in effect a certification''; and
(2) in subsection (b)(2)--
(A) in the paragraph heading, by inserting ``or
certify'' after ``law'';
(B) in subparagraph (A)--
(i) by striking ``A law'' and inserting the
following:
``(i) Laws.--A law''; and
(ii) by adding at the end the following:
``(ii) Certifications.--A certification
described in this paragraph is a document,
signed by the Governor of the State, that
certifies that such Governor has the authority
under existing Federal and State law to take
action under this section, including
implementation of the State plan under
subsection (a)(1)(B).''; and
(C) in subparagraph (B)--
(i) in the subparagraph heading, by
striking ``of opt out''; and
(ii) by striking ``may repeal a law'' and
all that follows through the period at the end
and inserting the following: ``may terminate
the authority provided under the waiver with
respect to the State by--
``(i) repealing a law described in
subparagraph (A)(i); or
``(ii) terminating a certification
described in subparagraph (A)(ii), through a
certification for such termination signed by
the Governor of the State.''.
(b) Providing Expedited Approval of State Waivers.--Section 1332(d)
of the Patient Protection and Affordable Care Act (42 U.S.C. 18052(d))
is amended--
(1) in paragraph (1) by striking ``180'' and inserting
``90''; and
(2) by adding at the end the following:
``(3) Expedited determination.--
``(A) In general.--With respect to any application
under subsection (a)(1) submitted on or after the date
of this paragraph or any such application submitted
prior to such date of enactment and under review by the
Secretary on such date of enactment, the Secretary
shall make a determination on such application, using
the criteria for approval otherwise applicable under
this section, not later than 45 days after the receipt
of such application, and shall allow the public notice
and comment at the State and Federal levels described
under subsection (a)(4) to occur concurrently if such
State application--
``(i) is submitted in response to an urgent
situation, with respect to areas in the State
that the Secretary determines are at risk for
excessive premium increases or having no health
plans offered in the applicable health
insurance market for the current or following
plan year; or
``(ii) is for a waiver that is the same or
substantially similar to a waiver that the
Secretary already has approved for another
State.
``(B) Approval.--
``(i) Urgent situations.--
``(I) Provisional approval.--A
waiver approved under the expedited
determination process under
subparagraph (A)(i) shall be in effect
for a period of 3 years, unless the
State requests a shorter duration.
``(II) Full approval.--Subject to
the requirements for approval otherwise
applicable under this section, not
later than 1 year before the expiration
of a provisional waiver period
described in subclause (I) with respect
to an application described in
subparagraph (A)(i), the Secretary
shall make a determination on whether
to extend the approval of such waiver
for the full term of the waiver
requested by the State, for a total
approval period not to exceed 6 years.
The Secretary may request additional
information as the Secretary determines
appropriate to make such determination.
``(ii) Approval of same or similar
applications.--An approval of a waiver under
subparagraph (A)(ii) shall be subject to the
terms of subsection (e).
``(C) GAO study.--Not later than 5 years after the
date of enactment of this paragraph, the Comptroller
General of the United States shall conduct a review of
all waivers approved pursuant to an application under
subparagraph (A)(ii) to evaluate whether such waivers
met the requirements of subsection (b)(1) and whether
the applications should have qualified for such
expedited process.''.
(c) Providing Certainty for State-Based Reforms.--Section 1332(e)
of the Patient Protection and Affordable Care Act (42 U.S.C. 18052(e))
is amended by striking ``No waiver'' and all that follows through the
period at the end and inserting the following: ``A waiver under this
section--
``(1) shall be in effect for a period of 6 years unless the
State requests a shorter duration;
``(2) may be renewed, subject to the State meeting the
criteria for approval otherwise applicable under this section,
for unlimited additional 6-year periods upon application by the
State; and
``(3) may not be suspended or terminated, in whole or in
part, by the Secretary at any time before the date of
expiration of the waiver period (including any renewal period
under paragraph (2)), unless the Secretary determines that the
State materially failed to comply with the terms and conditions
of the waiver.''.
(d) Ensuring Patient Access to More Flexible Health Plans.--Section
1332(b)(1)(B) of the Patient Protection and Affordable Care Act (42
U.S.C. 18052(b)(1)(B)) is amended by striking ``at least as
affordable'' and inserting ``of comparable affordability, including for
low-income individuals, individuals with serious health needs, and
other vulnerable populations,''.
(e) Applicability.--The amendments made by this Act to section 1332
of the Patient Protection and Affordable Care Act (42 U.S.C. 18052)--
(1) with respect to applications for waivers under such
section 1332 submitted after the date of enactment of this Act
and applications for such waivers submitted prior to such date
of enactment and under review by the Secretary on the date of
enactment, shall take effect on the date of enactment of this
Act; and
(2) with respect to applications for waivers approved under
such section 1332 before the date of enactment of this Act,
shall not require reconsideration of whether such applications
meet the requirements of such section 1332, except that, at the
request of a State, the Secretary shall recalculate the amount
of funding provided under subsection (a)(3) of such section.
SEC. 231. ENROLLMENT PERIODS.
(a) Exchanges.--Paragraph (7) of section 1311(c) of the Patient
Protection and Affordable Care Act (42 U.S.C. 18031(c)), as added by
section 106, is amended by adding at the end the following new
subparagraph:
``(B) Enrollments other than during initial, open,
and special enrollment periods.--Beginning with plan
year 2023, an Exchange may provide for enrollments
during periods in addition to open enrollment periods
described in subparagraph (A) or paragraph (6) and
special enrollment periods described in paragraph
(6).''.
(b) Health Plans.--Subpart I of part A of title XXVII of the Public
Health Service Act is amended by adding at the end the following new
section:
``SEC. 2710. ENROLLMENT OUTSIDE OF INITIAL, OPEN, AND SPECIAL
ENROLLMENT PERIOD.
``Beginning with plan year 2023, a group health plan and a health
insurance issuer offering group or individual health insurance coverage
may provide for enrollment in such plan or coverage during periods in
addition to initial, open, or special enrollment periods. In the case
that an individual enrolls in such plan or coverage during a period
pursuant to the previous sentence, the plan or issuer may charge the
individual a one-time enrollment fee.''.
SEC. 232. STATE-OPERATED EXCHANGES FLEXIBILITY FOR OPEN ENROLLMENT
PERIODS.
Section 1311(c) of the Patient Protection and Affordable Care Act
(42 U.S.C. 18031(c)) is amended--
(1) in paragraph (6), by striking ``The Secretary'' and
inserting ``Subject to paragraph (7), the Secretary''; and
(2) by adding at the end the following new paragraph:
``(7) Flexibility for enrollment periods.--
``(A) State-operated exchanges open enrollment
periods.--In the case of an Exchange operated by a
State, beginning with plan years of 1 year after the
date of enactment of this Act, the Exchange may provide
for open enrollment periods (after the initial
enrollment period) every 12, 24, or 36 months, as
determined by the State.''.
SEC. 233. PROMOTING HEALTH PLANS THAT COVER INDIVIDUALS IN MORE THAN
ONE STATE.
There are appropriated, out of amounts in the Treasury not
otherwise appropriated, $10,000,000 to be made available by no later
than 1 year after the date of enactment of this Act, to the Center for
Medicare & Medicaid Innovation to fund new research or pilot programs
dedicated to pursuing viable methods of enrolling individuals in health
insurance programs that cross State lines.
TITLE III--COMPETITION, TRANSPARENCY AND ACCOUNTABILITY
Subtitle A--Provider and Insurer Competition
SEC. 301. HOSPITAL CONSOLIDATION.
(a) Authorization of Appropriations.--There is authorized to be
appropriated $160,000,000 to the Federal Trade Commission to hire staff
to investigate, as consistent with the Sherman Antitrust Act and other
relevant Federal laws, anti-competitive mergers and practices under
such laws to the extent such mergers and practices relate to providers
of inpatient and outpatient health care services, as defined by the
Secretary of Health and Human Services.
(b) Medicare Advantage Rates Applied to Certain HHI Hospitals.--
(1) In general.--Section 1866(a) of the Social Security Act
(42 U.S.C. 1395cc(a)) is amended--
(A) in paragraph (1)--
(i) in subparagraph (X), by striking
``and'' at the end;
(ii) in subparagraph (Y), by striking the
period at the end and inserting ``; and''; and
(iii) by inserting after subparagraph (Y)
the following new subparagraph:
``(Z) subject to paragraph (4), in the case of a
hospital located in a county whose population density
is above the median population density for all counties
in the United States with respect to which there is a
Herfindahl-Hirschman Index (HHI) of greater than 4,000,
to apply the average reimbursement rate with respect to
individuals (regardless of whether such an individual
is entitled to or eligible for benefits under this
title, but excluding individuals eligible for medical
assistance under a State plan under title XIX)
furnished items and services at such hospital that
would be billable under this title for such items and
services if furnished by such hospital to an individual
enrolled under part C.''; and
(B) by adding at the end the following new
paragraph:
``(4)(A) The requirement under paragraph (1)(Z) shall not
apply in the case of a hospital in a hospital referral region
if--
``(i) the HRR market share of such hospital (as
determined under subparagraph (B)) is less than 0.15;
or
``(ii) the hospital is located in a rural area (as
defined in section 1886(d)(2)(D)).
``(B) For purposes of subparagraph (A), the HRR market
share of a hospital in a hospital referral region is equal to--
``(i) the total revenue of the hospital, divided by
``(ii) the total revenue of all hospital in the
hospital referral region.''.
(2) Effective date.--The amendments made by this subsection
shall apply with respect to items and services furnished on or
after January 1, 2023.
(c) Grants for Hospital Infrastructure Improvement.--
(1) In general.--The Secretary of Health and Human Services
shall carry out a grant program under which the Secretary shall
provide grants to eligible States, in accordance with this
subsection.
(2) Uses.--An eligible State receiving a grant under this
subsection may use such grant to improve the State hospital
infrastructure and to supplement any other funds provided for a
purpose authorized under a State or local hospital grant
program under State law.
(3) Eligibility.--
(A) In general.--An eligible State may receive not
more than one grant under this subsection with respect
to each qualifying criterion described in subparagraph
(B) that is met by the State.
(B) Eligible state.--For purposes of this
subsection, the term ``eligible State'' means a State
that meets any one or more of the following qualifying
criteria:
(i) The State does not have in effect any
State certificate of need law that requires a
health care provider to provide to a regulatory
body a certification that the community needs
the services provided by the health care
provider.
(ii) The State has in effect State scope of
practice laws that--
(I) allow advanced practice
providers (such as nurse practitioners,
advanced practice registered nurses,
clinical nurse specialists, and
physician assistants) to evaluate
patients; diagnose, order, and
interpret diagnostic tests; and
initiate and manage treatments; or
(II) provide that the only
justification for limiting the scope of
practice of a health care provider is
safety to the public.
(iii) The State does not have in effect any
State laws that require managed care plans to
accept into the network of such plan any
qualified provider who is willing to accept the
terms and conditions of the managed care plan.
(iv) The State does not have in effect any
Certificate of Public Advantage laws that
clearly articulate the State's intent to
displace competition in favor of regulation or
that violate State or Federal antitrust laws.
(v) The State does not have in effect any
network adequacy laws regulating a health
plan's ability to deliver benefits by providing
reasonable access to a sufficient number of in-
network primary care and specialty physicians,
as well as all health care services included
under the terms of an insuree's contract with a
health insurer.
(4) Funding.--There is authorized to be appropriated to
carry out this subsection $1,000,000,000 for each of the fiscal
years 2022 through 2031. Funds appropriated under this
paragraph shall remain available until expended.
(d) Critical Access Hospital Reimbursement Rates.--
(1) Part a.--Section 1814(l)(1) of the Social Security Act
(42 U.S.C. 1395f(l)(1)) is amended by inserting ``(or, for
2023, 102, plus 1 percentage point for each subsequent year
through 2031, and 110 for each subsequent year thereafter)''
after ``101''.
(2) Part b.--Section 1834(g)(1) of such Act (42 U.S.C.
1395m(g)(1)) is amended by inserting ``(or, for 2023, 102, plus
1 percentage point for each subsequent year through 2031, and
110 for each subsequent year thereafter)'' after ``101''.
SEC. 302. AUTHORITY OF FEDERAL TRADE COMMISSION OVER CERTAIN TAX-EXEMPT
ORGANIZATIONS.
Section 4 of the Federal Trade Commission Act (15 U.S.C. 44) is
amended, in the undesignated paragraph relating to the definition of
the term ``Corporation''--
(1) by striking ``, and any'' and inserting ``, any''; and
(2) by inserting before the period at the end the
following: ``, and any organization described in section
501(c)(3) of the Internal Revenue Code of 1986 that is exempt
from taxation under section 501(a) of such Code''.
SEC. 303. LEVELING THE PLAYING FIELD BETWEEN PAYERS AND PROVIDERS.
(a) Exemption.--It shall not be a violation of the antitrust laws
for one or more private health insurer issuers or their designated
agents to jointly negotiate prices of particular hospital services with
a hospital provider with regards to the reimbursement policies of the
insurers for those services.
(b) Definitions.--For purposes of this section:
(1) Antitrust laws.--The term ``antitrust laws'' has the
meaning given it in subsection (a) of the 1st section of the
Clayton Act (15 U.S.C. 12(a)), except that such term includes
section 5 of the Federal Trade Commission Act (15 U.S.C. 45) to
the extent such section 5 applies to unfair methods of
competition.
(2) Health insurance issuer.--The term ``health insurance
issuer'' means an insurance company, insurance service, or
insurance organization (including a health maintenance
organization, as defined in subparagraph (C)) which is licensed
to engage in the business of insurance in a State and which is
subject to State law which regulates insurance (within the
meaning of section 514(b)(2) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1144(b)(2))). Such term does
not include a group health plan.
(3) Health maintenance organization.--The term ``health
maintenance organization'' means--
(A) a Federally qualified health maintenance
organization (as defined in section 300e(a) of title 42
of the United States Code),
(B) an organization recognized under State law as a
health maintenance organization, or
(C) a similar organization regulated under State
law for solvency in the same manner and to the same
extent as such a health maintenance organization.
(c) Effective Date.--This section shall take effect on the date of
the enactment of this Act but shall not apply with respect to conduct
that occurs before such date.
SEC. 304. BANNING ANTICOMPETITIVE TERMS IN FACILITY AND INSURANCE
CONTRACTS THAT LIMIT ACCESS TO HIGHER QUALITY, LOWER COST
CARE.
(a) In General.--Section 2729B of the Public Health Service Act, as
added by section 301, is amended by adding at the end the following:
``(b) Protecting Health Plans Network Design Flexibility.--
``(1) In general.--A group health plan or a health
insurance issuer offering group or individual health insurance
coverage shall not enter into an agreement with a provider,
network or association of providers, or other service provider
offering access to a network of service providers if such
agreement, directly or indirectly--
``(A) restricts the group health plan or health
insurance issuer from--
``(i) directing or steering enrollees to
other health care providers; or
``(ii) offering incentives to encourage
enrollees to utilize specific health care
providers;
``(B) requires the group health plan or health
insurance issuer to enter into any additional contract
with an affiliate of the provider, such as an affiliate
of the provider, as a condition of entering into a
contract with such provider;
``(C) requires the group health plan or health
insurance issuer to agree to payment rates or other
terms for any affiliate not party to the contract of
the provider involved; or
``(D) restricts other group health plans or health
insurance issuers not party to the contract from paying
a lower rate for items or services than the contracting
plan or issuer pays for such items or services.
``(2) Additional requirement for self-insured plans.--A
self-insured group health plan shall not enter into an
agreement with a provider, network or association of providers,
third-party administrator, or other service provider offering
access to a network of providers if such agreement directly or
indirectly requires the group health plan to certify, attest,
or otherwise confirm in writing that the group health plan is
bound by restrictive contracting terms between the service
provider and a third-party administrator that the group health
plan is not party to, without a disclosure that such terms
exist.
``(3) Exception for certain group model issuers.--Paragraph
(1)(A) shall not apply to a group health plan or health
insurance issuer offering group or individual health insurance
coverage with respect to--
``(A) a health maintenance organization (as defined
in section 2791(b)(3)), if such health maintenance
organization operates primarily through exclusive
contracts with multi-specialty physician groups, nor to
any arrangement between such a health maintenance
organization and its affiliates; or
``(B) a value-based network arrangement, such as an
exclusive provider network, accountable care
organization, center of excellence, a provider
sponsored health insurance issuer that operates
primarily through aligned multi-specialty physician
group practices or integrated health systems, or such
other similar network arrangements as determined by the
Secretary through rulemaking.
``(4) Attestation.--A group health plan or health insurance
issuer offering group or individual health insurance coverage
shall annually submit to, as applicable, the applicable
authority described in section 2723 or the Secretary of Labor,
an attestation that such plan or issuer is in compliance with
the requirements of this subsection.
``(c) Maintenance of Existing HIPAA, GINA, and ADA Protections.--
Nothing in this section shall modify, reduce, or eliminate the existing
privacy protections and standards provided by reason of State and
Federal law, including the requirements of parts 160 and 164 of title
45, Code of Federal Regulations (or any successor regulations).
``(d) Regulations.--The Secretary, not later than 1 year after the
date of enactment of the Fair Care Act of 2022, shall promulgate
regulations to carry out this section.
``(e) Rule of Construction.--Nothing in this section shall be
construed to limit network design or cost or quality initiatives by a
group health plan or health insurance issuer, including accountable
care organizations, exclusive provider organizations, networks that
tier providers by cost or quality or steer enrollees to centers of
excellence, or other pay-for-performance programs.
``(f) Clarification With Respect to Antitrust Laws.--Compliance
with this section does not constitute compliance with the antitrust
laws, as defined in subsection (a) of the first section of the Clayton
Act (15 U.S.C. 12(a)).''.
(b) Effective Date.--Section 2729B of the Public Health Service Act
(as added by section 301 and amended by subsection (a)) shall apply
with respect to any contract entered into on or after the date that is
18 months after the date of enactment of this Act. With respect to an
applicable contract that is in effect on the date of enactment of this
Act, such section 2729B shall apply on the earlier of the date of
renewal of such contract or 3 years after such date of enactment.
SEC. 305. REPEALING ELIGIBILITY OF CERTAIN ACOS.
(a) In General.--Section 1899(b)(1) of the Social Security Act (42
U.S.C. 1395jjj(b)(1)) is amended by striking subparagraphs (C) through
(E).
(b) Effective Date.--The amendment made by subsection (a) shall
take effect on January 1, 2023.
SEC. 306. REPEAL OF HEALTH CARE REFORM PROVISIONS LIMITING MEDICARE
EXCEPTION TO THE PROHIBITION ON CERTAIN PHYSICIAN
REFERRALS FOR HOSPITALS.
Sections 6001 and 10601 of the Patient Protection and Affordable
Care Act (Public Law 111-148; 124 Stat. 684, 1005) and section 1106 of
the Health Care and Education Reconciliation Act of 2010 (Public Law
111-152; 124 Stat. 1049) are repealed and the provisions of law amended
by such sections are restored as if such sections had never been
enacted.
SEC. 307. ALTERNATIVE PAYMENT MODEL FOR CERTAIN SHOPPABLE PROCEDURES.
(a) In General.--A group health plan and a health insurance issuer
offering group or individual health insurance coverage (as such terms
are defined in section 2791 of the Public Health Service Act (42 U.S.C.
300gg-91)) may elect, with respect to a plan year, to provide a set
payment amount to an enrollee under such plan or coverage for certain
shoppable procedures (as defined in subsection (b)) in accordance with
the provisions of this section in lieu of otherwise providing coverage
for such a procedure under such plan or coverage, but only if the
enrollee so agrees to such set payment amount.
(b) Definition.--For purposes of this section, the term ``shoppable
procedure'' means a procedure specified by the Secretary of Health and
Human Services (in this section referred to as the ``Secretary'') with
respect to which individuals may be expected to compare prices for such
procedure of health care providers and facilities, including primary
and preventive services, prenatal care and childbirth, common surgeries
that can be scheduled, and other similar services.
(c) Set Payment Rules.--A set payment described in subsection (a)
under a group health plan or group or individual health insurance
coverage offered by a health insurance issuer shall--
(1) be disclosed prior to beginning of each plan year such
payment is in effect and shall not vary during such plan year;
(2) be the same amount with respect to the same shoppable
procedure furnished in a geographic area (as defined by the
Secretary);
(3) not be less than the median negotiated rate for all
group health plans and health insurance coverage offered in
such area for such procedure;
(4) be made available to an enrolled under such plan or
such coverage regardless of the provider or facility furnishing
the shoppable procedure;
(5) represent the entirety of the payment obligation of
such plan or such issuer with respect to such procedure; and
(6) may be retained by such enrollee to the extent that the
amount of such payment exceeds the amount charged by such
provider or facility for such procedure.
(d) Provision of Price Information.--Each health care provider and
facility that may furnish a shoppable procedure during a year shall
post in a public area a notice containing the prices that will be
charged by such provider of facility with respect to each such
procedure to individuals making payment for such services pursuant to a
set payment amount described in subsection (a).
(e) EHB Waiver Authority.--The Secretary may waive such provisions
of section 1302(b) of the Patient Protection and Affordable Care Act
(42 U.S.C. 18022(b)) with respect to a group health plan, health
insurance issuer offering group or individual health insurance
coverage, and a plan year as the Secretary determines necessary to
allow for the provision of set payment amounts described in subsection
(a).
Subtitle B--Price Transparency
SEC. 321. PRICE TRANSPARENCY REQUIREMENTS.
(a) Hospitals.--Section 2718(e) of the Public Health Service Act
(42 U.S.C. 300gg-18(e)) is amended--
(1) by striking ``Each hospital'' and inserting the
following:
``(1) In general.--Each hospital'';
(2) by inserting ``, in a machine-readable format, via open
application program interfaces (APIs)'' after ``a list'';
(3) by inserting ``, along with such additional information
as the Secretary may require with respect to such charges for
purposes of promoting public awareness of hospital pricing in
advance of receiving a hospital item or service'' before the
period; and
(4) by adding at the end the following:
``(2) Definition of standard charges.--Notwithstanding any
other provision of law, for purposes of paragraph (1), the term
`standard charges' means the rates hospitals, including
providers or entities that contract with or practice at a
hospital, charge for all items and services at a minimum,
chargemaster rates, rates that hospitals negotiate with third
party payers across all plans, including those related to a
patient's specific plan, discounted cash prices, and other
rates determined by the Secretary.
``(3) Enforcement.--In addition to any other enforcement
actions or penalties that may apply under subsection (b)(3) or
another provision of law, a hospital that fails to provide the
information required by this subsection and has not completed a
corrective action plan to comply with the requirements of such
subsection shall be subject to a civil monetary penalty of an
amount not to exceed $300 per day that the violation is ongoing
as determined by the Secretary. Such penalty shall be imposed
and collected in the same manner as civil money penalties under
subsection (a) of section 1128A of the Social Security Act are
imposed and collected.''.
(b) Transparency in Coverage.--Section 1311(e)(3) of the Patient
Protection and Affordable Care Act (42 U.S.C. 18031(e)(3)) is amended--
(1) in subparagraph (A)--
(A) in clause (vii), by inserting before the period
the following: ``, including, for all items and
services covered under the plan, aggregate information
on specific payments the plan has made to out-of-
network health care providers on behalf of plan
enrollees'';
(B) by designating clause (ix) as clause (x); and
(C) by inserting after clause (viii), the
following:
``(ix) Information on the specific
negotiated payment rates between the plan and
health care providers for all items and
services covered under the plan.'';
(2) in subparagraph (B)--
(A) in the heading, by striking ``use'' and
inserting ``delivery methods and use'';
(B) by inserting ``, as applicable,'' after
``English proficiency''; and
(C) by inserting after the second sentence, the
following: ``The Secretary shall establish standards
for electronic delivery and access to such information
by individuals, free of charge, in machine readable
format, through an Internet website and via open
APIs.'';
(3) in subparagraph (C)--
(A) in the first sentence, by inserting ``or out-
of-network provider'' after ``item or service by a
participating provider'';
(B) in the second sentence, by striking ``through
an Internet website'' and inserting ``free of charge,
in machine readable format, through an Internet
website, and via open APIs, in accordance with
standards established by the Secretary,''; and
(C) by adding at the end the following: ``Such
information shall include specific negotiated rates
that allow for comparison between providers and across
plans, and related to a patient's specific plan,
including after an enrollee has exceeded their
deductible responsibility.''; and
(4) in subparagraph (D) by striking ``subparagraph (A)''
and inserting ``subparagraphs (A), (B), and (C)''.
SEC. 322. ENSURING ENROLLEE ACCESS TO COST-SHARING INFORMATION.
(a) In General.--Subpart II of part A of title XXVII of the Public
Health Service Act (42 U.S.C. 300gg-11 et seq.), as amended by the
preceding sections, is further amended by adding at the end the
following:
``SEC. 2729F. PROVISION OF COST-SHARING INFORMATION.
``(a) Provider Disclosures.--A provider that is in-network with
respect to a group health plan or a health insurance issuer offering
group or individual health insurance coverage shall provide to an
enrollee in the plan or coverage who submits a request for the
information described in paragraph (1) or (2), together with accurate
and complete information about the enrollee's coverage under the
applicable plan or coverage--
``(1) as soon as practicable and not later than 2 business
days after the enrollee requests such information, a good faith
estimate of the expected enrollee cost-sharing for the
provision of a particular health care service (including any
service that is reasonably expected to be provided in
conjunction with such specific service); and
``(2) as soon as practicable and not later than 2 business
days after an enrollee requests such information, the contact
information for any ancillary providers for a scheduled health
care service.
``(b) Insurer Disclosures.--A group health plan or a health
insurance issuer offering group or individual health insurance coverage
shall provide an enrollee in the plan or coverage with a good faith
estimate of the enrollee's cost-sharing (including deductibles,
copayments, and coinsurance) for which the enrollee would be
responsible for paying with respect to a specific health care service
(including any service that is reasonably expected to be provided in
conjunction with such specific service), as soon as practicable and not
later than 2 business days after a request for such information by an
enrollee.
``(c) Enforcement.--
``(1) In general.--Subject to paragraph (2), a health care
provider that violates a requirement under subsection (a) shall
be subject to a civil monetary penalty of not more than $10,000
for each act constituting such violation.
``(2) Procedure.--The provisions of section 1128A of the
Social Security Act, other than subsections (a) and (b) and the
first sentence of subsection (c)(1) of such section, shall
apply to civil money penalties under this subsection in the
same manner as such provisions apply to a penalty or proceeding
under section 1128A of the Social Security Act.''.
(b) Effective Date.--Section 2729G of the Public Health Service
Act, as added by subsection (a), shall apply with respect to plan years
beginning on or after the date that is 18 months after the date of
enactment of this Act.
SEC. 323. ACCESS OF INDIVIDUALS TO PROTECTED HEALTH INFORMATION.
The provisions of section 164.524 of title 45, Code of Federal
Regulations, as in effect on the day before the date of the enactment
of this Act, shall have the force and effect of law.
SEC. 324. TIMELY BILLS FOR PATIENTS.
(a) In General.--
(1) Amendment.--Part P of title III of the Public Health
Service Act (42 U.S.C. 280g et seq.) is amended by adding at
the end the following:
``SEC. 399V-7. TIMELY BILLS FOR PATIENTS.
``(a) In General.--The Secretary shall require--
``(1) health care facilities, or in the case of
practitioners providing services outside of such a facility,
practitioners, to provide to patients a list of services
rendered during the visit to such facility or practitioner,
and, in the case of a facility, the name of the provider for
each such service, upon discharge or end of the visit or by
postal or electronic communication as soon as practicable and
not later than 5 calendar days after discharge or date of
visit; and
``(2) health care facilities and practitioners to furnish
all adjudicated bills to the patient as soon as practicable,
but not later than 45 calendar days after discharge or date of
visit.
``(b) Payment After Billing.--No patient may be required to pay a
bill for health care services any earlier than 35 days after the
postmark date of a bill for such services.
``(c) Effect of Violation.--
``(1) Notification and refund requirements.--
``(A) Provider lists.--If a facility or
practitioner fails to provide a patient a list as
required under subsection (a)(1), such facility or
practitioner shall report such failure to the
Secretary.
``(B) Billing.--If a facility or practitioner bills
a patient after the 45-calendar-day period described in
subsection (a)(2), such facility or practitioner
shall--
``(i) report such bill to the Secretary;
and
``(ii) refund the patient for the full
amount paid in response to such bill with
interest, at a rate determined by the
Secretary.
``(2) Civil monetary penalties.--
``(A) In general.--The Secretary may impose civil
monetary penalties of up to $10,000 a day on any
facility or practitioner that--
``(i) fails to provide a list required
under subsection (a)(1) more than 10 times,
beginning on the date of such tenth failure;
``(ii) submits more than 10 bills outside
of the period described in subsection (a)(2),
beginning on the date on which such facility or
practitioner sends the tenth such bill;
``(iii) fails to report to the Secretary
any failure to provide lists as required under
paragraph (1)(A), beginning on the date that is
45 calendar days after discharge or visit; or
``(iv) fails to send any bill as required
under subsection (a)(2), beginning on the date
that is 45 calendar days after the date of
discharge or visit, as applicable.
``(B) Procedure.--The provisions of section 1128A
of the Social Security Act, other than subsections (a)
and (b) and the first sentence of subsection (c)(1) of
such section, shall apply to civil money penalties
under this subsection in the same manner as such
provisions apply to a penalty or proceeding under
section 1128A of the Social Security Act.
``(3) Safe harbor.--The Secretary may exempt a practitioner
or facility from the penalties under paragraph (2)(A) or extend
the period of time specified under subsection (a)(2) for
compliance with such subsection if a practitioner or facility--
``(A) makes a good-faith attempt to send a bill
within 30 days but is unable to do so because of an
incorrect address; or
``(B) experiences extenuating circumstances (as
defined by the Secretary), such as a hurricane or
cyberattack, that may reasonably delay delivery of a
timely bill.''.
(2) Rulemaking.--Not later than 1 year after the date of
enactment of this Act, the Secretary shall promulgate final
regulations to define the term ``extenuating circumstance'' for
purposes of section 399V-7(c)(3)(B) of the Public Health
Service Act, as added by paragraph (1).
(b) Group Health Plan and Health Insurance Issuer Requirements.--
Subpart II of part A of title XXVII of the Public Health Service Act
(42 U.S.C. 300gg-11), as amended by the preceding sections, is further
amended by adding at the end the following:
``SEC. 2729D. TIMELY BILLS FOR PATIENTS.
``(a) In General.--A group health plan or health insurance issuer
offering group or individual health insurance coverage shall have in
place business practices with respect to in-network facilities and
practitioners to ensure that claims are adjudicated in order to
facilitate facility and practitioner compliance with the requirements
under section 399V-7(a).
``(b) Clarification.--Nothing in subsection (a) prohibits a
provider and a group health plan or health insurance issuer from
establishing in a contract the timeline for submission by either party
to the other party of billing information, adjudication, sending of
remittance information, or any other coordination required between the
provider and the plan or issuer necessary for meeting the deadline
described in section 399V-7(a)(2).''.
(c) Effective Date.--The amendments made by subsections (a) and (b)
shall take effect 6 months after the date of enactment of this Act.
SEC. 325. ADVISORY GROUP ON REDUCING BURDEN OF HOSPITAL ADMINISTRATIVE
REQUIREMENTS.
(a) In General.--Not later than January 1, 2023, the Secretary of
Health and Human Services shall convene an advisory group to provide,
in accordance with this section, recommendations on ways the Federal
Government could reduce the burden of administrative requirements on
hospitals.
(b) Recommendations.--Not later than January 1, 2024, the advisory
board convened under this section shall--
(1) submit to the Secretary of Health and Human Services
recommendations described under subsection (a) for executive
action and any recommendations for State actions for potential
consideration in making grants under section 2(c) to States;
and
(2) submit to Congress recommendations described under
subsection (a) for legislative proposals.
(c) Membership.--The advisory board under this section shall
consist of the following members:
(1) Three representatives of companies that have--
(A) geographically distributed workforces;
(B) at least 10,000 employees; and
(C) no more than 10 percent of such employees in
any single State.
(2) Three representatives of health insurance issuers and
health plans, consisting of--
(A) one representative of for-profit health
insurance issuers and health plans with at least
20,000,000 enrollees in the employer-sponsored market;
(B) one representative of nonprofit health
insurance issuers and health plans operating in at
least 5 States; and
(C) one representative of nonprofit health
insurance issuers and health plans operating in a rural
State (as defined by the Census Bureau).
(3) Seven public policy experts in the field of hospital
consolidation.
SEC. 326. DATA REPORTING TO IMPROVE THE TRANSPARENCY REGARDING HOW 340B
HOSPITAL COVERED ENTITIES PROVIDE CARE FOR PATIENTS.
Section 340B of the Public Health Service Act (42 U.S.C. 256b) is
amended by adding at the end the following new subsection:
``(f) Data Reporting To Improve the Transparency Regarding How
Hospital Covered Entities Provide Care for Patients.--
``(1) In general.--Beginning on the date that is 14 months
after the date of the enactment of this subsection, and
annually thereafter, subject to subparagraph (C), a covered
entity described in subparagraph (L) or (M) of subsection
(a)(4), unless otherwise indicated, shall report on the
following, with respect to the previous year, in such a manner
and form as specified by the Secretary:
``(A) The following information:
``(i) With respect to such covered entity
and with respect to each child site of such
entity (as referenced in paragraph (11)), the
number and percentage of individuals who are
dispensed or administered drugs that are
subject to an agreement under this section,
organized by form of health insurance coverage
of such individuals (including at least by the
Medicare program under title XVIII of the
Social Security Act, the Medicaid program under
title XIX of such Act, health insurance
coverage offered in the individual or group
market or a group health plan (as such terms
are defined in section 2791), and uninsured).
``(ii) With respect to each such child site
of such entity, the total costs incurred at
each such site and the cost incurred at each
such site for charity care as defined in line
23 of worksheet S-10 to the Medicare cost
report or in any successor form.
``(B) The aggregate amount of gross reimbursement
received by each such covered entity (including child
sites of such entity) described in such subparagraph
(L) or (M) for all drugs purchased that are subject to
an agreement under this section and the entity's
aggregate acquisition cost for such drugs.
``(C) In the case of covered entity described in
subparagraph (L) of subsection (a)(4), at the time of
application and recertification (and at least annually
thereafter), the contract that is the basis for
eligibility under the requirement under clause (i) of
such subparagraph and any modifications to such
contract for purposes of review by the Secretary.
``(D) With respect to such covered entity and with
respect to each child site of such entity, the name of
all third-party vendors or other similar entities that
the covered entity contracts with to provide services
associated with the program under this section.
``(2) Availability of information.--
``(A) In general.--The Secretary shall make data
reported by covered entities under subparagraphs (A),
(C), and (D) of paragraph (1) available on the public
website of the Department of Health and Human Services
in an electronic and searchable format, which may
include the 340B Office of Pharmacy Affairs Information
System or a successor to such system.
``(B) Format.--Data made available under
subparagraph (A) shall be made available in a manner
that shows each category of data reported both in the
aggregate and identified by covered entities described
in subparagraphs (L) and (M) of subsection (a)(4) and
child sites of such covered entities. In carrying out
this paragraph, with respect to data reported pursuant
to paragraph (1)(C), the Secretary shall ensure that
any proprietary information shall be redacted from
contracts submitted pursuant to such paragraph (1)(C)
before posting such data.
``(3) Interim final regulations.--The Secretary shall issue
interim final regulations no later than the date that is 6
months after the date of the enactment of this subsection, to
carry out this subsection and shall finalize such regulations
prior to the end of the moratorium period to which subsection
(a)(11) applies.
``(4) Reports to congress.--
``(A) OIG report.--Not later than 2 years after the
date of the enactment of this subsection, the Office of
the Inspector General shall submit to Congress a final
report on the level of charity care provided by covered
entities described in subparagraphs (L) and (M) of
subsection (a)(4) and separately by child sites of such
covered entities, as reported in paragraph (1)(A).
``(B) GAO reports.--
``(i) Initial report.--Not later than 1
year after the date of the enactment of this
subsection, the Comptroller General of the
United States shall submit to Congress a
report--
``(I) analyzing the State and local
government contracts intended to
satisfy the requirement under
subsection (a)(4)(L)(i) for a covered
entity to qualify as an entity
described in subparagraph (L) of
subsection (a)(4);
``(II) assessing the amount of care
such contracts obligate such entity to
provide to low-income individuals
ineligible for Medicare under title
XVIII of the Social Security Act and
Medicaid under title XIX of such Act;
and
``(III) analyzing how these
contracts define low-income individuals
and whether the Secretary reviews such
determinations.
``(ii) Subsequent report.--Not later than 2
years after the date of the enactment of this
subsection, the Comptroller General of the
United States shall submit to Congress a final
report on the information collected under
paragraph (1)(B) regarding the difference
between the aggregate gross reimbursement and
aggregate acquisition costs received by each
such covered entity (including child sites of
such entity) for drugs subject to an agreement
under this section.''.
SEC. 327. REQUIRING 340B DRUG DISCOUNT PROGRAM REPORTS BY DSH HOSPITAL
COVERED ENTITIES ON LOW-INCOME UTILIZATION RATE OF
OUTPATIENT HOSPITAL SERVICES.
(a) In General.--Section 340B(d)(2) of the Public Health Service
Act (42 U.S.C. 256b(d)(2)) is amended--
(1) in subparagraph (B)(i), by inserting before the period
at the end the following: ``, including, with respect to such
updates made on or after one year after the date of enactment
of the Act, by requiring covered entities described in
subsection (a)(4)(L) to submit (and to so regularly update)
information described in subparagraph (C)''; and
(2) by adding at the end the following new subparagraph:
``(C) Information on low-income utilization rate of
outpatient hospital services.--
``(i) In general.--For purposes of
subparagraph (B)(i), the information described
in this subparagraph, with respect to a covered
entity described in subsection (a)(4)(L) and an
update under such subparagraph (B)(i), is--
``(I) the low-income outpatient
utilization rate of such covered entity
for the most recent fiscal year; and
``(II) the low-income outpatient
utilization rate of off-site outpatient
facilities, clinics, eligible off-site
locations, and associated sites of such
entity identified as child sites of
such entity pursuant to the
identification system under
subparagraph (B)(iv) for the most
recent fiscal year.
``(ii) Low-income outpatient utilization
rate defined.--In this subparagraph, the term
`low-income outpatient utilization rate' has
the meaning given the term `low-income
utilization rate' under paragraph (3) of
section 1923(b) of the Social Security Act,
except that--
``(I) clauses (i) and (ii) of
subparagraph (A) of such paragraph
shall be applied as if--
``(aa) each reference to
`patient services' were a
reference to `patient services
furnished on an outpatient
basis'; and
``(bb) for purposes of
clause (i)(II) of this
subparagraph, each reference to
`hospital' were a reference to
`off-site outpatient
facilities, clinics, eligible
off-site locations, and
associated sites of the
hospital that are identified as
child sites of the hospital
pursuant to the identification
system under section
340B(d)(2)(B)(iv) of the Public
Health Service Act'; and
``(II) clauses (i) and (ii) of
subparagraph (B) of such paragraph
shall be applied as if--
``(aa) each reference to
`inpatient hospital services'
were a reference to `outpatient
hospital services'; and
``(bb) for purposes of
clause (i)(II) each reference
to `hospital's charges' were a
reference to `charges of the
off-site outpatient facilities,
clinics, eligible off-site
locations, and associated sites
of the hospital that are
identified as child sites of
the hospital pursuant to the
identification system under
section 340B(d)(2)(B)(iv) of
the Public Health Service
Act'.''.
(b) Annual Reports.--Not later than 1 year after the date of
enactment of this Act, and annually thereafter, the Administrator of
the Health Resources and Services Administration shall submit to
Congress a report on information submitted by covered entities for the
previous year pursuant to the amendments made by subsection (a).
SEC. 328. EMPLOYER BENEFITS REPORTS.
(a) In General.--Subject to subsection (b), for each plan year
beginning on or after 1 year after the date of enactment of this Act, a
group health plan and a health insurance issuer offering group health
insurance coverage shall provide to each individual enrolled in such
plan or such coverage for such plan year a notification containing the
following:
(1) The amount the sponsor of such group health plan
expended with respect to such individual under such plan for
such plan year (or, in the case of a health insurance issuer
offering group health insurance coverage, the amount the
employer of such individual contributed for such coverage for
such individual for such plan year).
(2) The amount the sponsor of such group health plan
expended with respect to such individual under such plan for
each previous plan year (or, in the case of a health insurance
issuer offering group health insurance coverage, the amount the
employer of such individual contributed for such coverage for
such individual for each previous plan year), if applicable.
(b) Limitation.--Subsection (a) shall not apply to a group health
plan, or a health insurance issuer offering group health insurance
coverage, for a plan year if, for such plan year, the number of
individuals enrolled under such plan or such coverage was less than
100.
(c) Penalty.--In the case that the Secretary of Health and Human
Services determines that a group health plan or a health insurance
issuer offering group health insurance failed to provide the notice
required under subsection (a), the Secretary may impose a civil
monetary penalty on the sponsor of such plan or such issuer, as
applicable, in an amount not to exceed $100 per individual enrolled in
such plan or such coverage per day that such sponsor or issuer failed
to provide such notification to such individual.
(d) Definitions.--In this section, the terms ``group health plan'',
``group health insurance coverage'', ``health insurance issuer'', and
``sponsor'' have the meaning given such terms in section 2791 of the
Public Health Service Act (42 U.S.C. 300gg-91).
SEC. 329. GOVERNMENT ACCOUNTABILITY OFFICE STUDY ON PROFIT- AND
REVENUE-SHARING IN HEALTH CARE.
(a) Study.--Not later than 1 year after the date of enactment of
this Act, the Comptroller General of the United States shall conduct a
study to--
(1) describe what is known about profit- and revenue-
sharing relationships in the commercial health care markets,
including those relationships that--
(A) involve one or more--
(i) physician groups that practice within a
hospital included in the profit- or revenue-
sharing relationship, or refer patients to such
hospital;
(ii) laboratory, radiology, or pharmacy
services that are delivered to privately
insured patients of such hospital;
(iii) surgical services;
(iv) hospitals or group purchasing
organizations; or
(v) rehabilitation or physical therapy
facilities or services; and
(B) include revenue- or profit-sharing whether
through a joint venture, management or professional
services agreement, or other form of gain-sharing
contract;
(2) describe Federal oversight of such relationships,
including authorities of the Department of Health and Human
Services and the Federal Trade Commission to review such
relationships and their potential to increase costs for
patients, and identify limitations in such oversight; and
(3) as appropriate, make recommendations to improve Federal
oversight of such relationships.
(b) Report.--Not later than 1 year after the date of enactment of
this Act, the Comptroller General of the United States shall prepare
and submit a report on the study conducted under subsection (a) to the
Committee on Health, Education, Labor, and Pensions of the Senate and
the Committee on Education and Labor and Committee on Energy and
Commerce of the House of Representatives.
Subtitle C--Prescription Drug Competition and Innovation
SEC. 341. EXPEDITED DEVELOPMENT AND PRIORITY REVIEW FOR GENERIC COMPLEX
DRUG PRODUCTS.
Subchapter A of chapter V of the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 351 et seq.) is amended by adding at the end the
following:
``SEC. 524B. EXPEDITED DEVELOPMENT AND PRIORITY REVIEW FOR GENERIC
COMPLEX DRUG PRODUCTS.
``(a) Establishment of Program.--The Secretary shall establish a
program to expedite the development of, and provide priority review
under section 505(j) for, generic complex drug products.
``(b) Request for Designation.--A sponsor of a generic complex drug
product may request that the Secretary designate such product for
expedited development and priority review under this section.
``(c) Designation Process.--
``(1) In general.--Not later than 60 calendar days after
the receipt of a request under subsection (c), the Secretary
shall determine whether the product that is the subject of the
request meets the criteria under subsection (e) to be
considered a generic complex drug product. If the Secretary
determines that the product meets the criteria, the Secretary
shall designate the product for expedited development and
priority review.
``(2) Review.--Review of a request under subsection (b)
shall be undertaken by a team that is composed of experienced
staff and senior managers of the Food and Drug Administration.
``(3) Withdrawal.--The Secretary may not withdraw a
designation granted under this section on the basis of the
criteria under subsection (e) no longer applying because of the
subsequent clearance or approval of any other product.
``(d) Expedited Development and Priority Review Guidance.--
``(1) Content.--Not later than 1 year after the date of
enactment of this Act, the Secretary shall issue guidance on
the implementation of this section. Such guidance shall--
``(A) set forth the process by which a person may
seek a designation under subsection (c);
``(B) provide a template for requests under
subsection (b);
``(C) identify the criteria the Secretary will use
in evaluating a request for designation under this
section; and
``(D) identify the criteria and processes the
Secretary will use to expedite the development and
review of products designated under this section.
``(2) Process.--Prior to finalizing the guidance under
paragraph (1), the Secretary shall seek public comment on a
draft version of that guidance.
``(e) Generic Complex Drug Product Defined.--In this section, the
term `generic complex drug product' means a product that represents a
complex therapy that consists of or includes a drug for approval under
section 505(j) and that--
``(1)(A) contains complex active ingredients (such as
peptides, polymeric compounds, complex mixtures of active
ingredients, and naturally sourced ingredients);
``(B) is composed of complex formulations (such as
liposomes or colloids);
``(C) requires a complex route of delivery (such as locally
acting drugs such as dermatological products and complex
ophthalmological products and otic dosage forms that are
formulated as suspensions, emulsions, or gels); or
``(D) involves a complex dosage form (such as transdermals,
metered dose inhalers, or extended release injectables);
``(2) presents as a complex drug-device combination product
(such as auto injectors or metered dose inhalers); or
``(3) is a product that would benefit from early scientific
engagement due to complexity or uncertainty concerning the
approval pathway under section 505(j).''.
SEC. 342. PREVENTING BLOCKING OF GENERIC DRUGS.
(a) In General.--Section 505(j)(5)(B)(iv)(I) of the Federal Food,
Drug, and Cosmetic Act (21 U.S.C. 355(j)(5)(B)(iv)(I)) is amended--
(1) by striking ``180 days after the date'' and inserting
``180 days after the earlier of the following:
``(aa) The date''; and
(2) by adding at the end the following:
``(bb) The date on which all of the
following conditions are first met, provided no
application submitted by any first applicant is
approved on or before such date:
``(AA) An application for the drug
submitted by an applicant other than a
first applicant has received tentative
approval and could receive approval, if
no first applicant were eligible for
180-day exclusivity under this clause,
and such applicant has not entered into
an agreement that would prevent
commercial marketing upon approval and
has submitted a notification to the
Secretary documenting that it has not
entered into an agreement that would
prevent commercial marketing.
``(BB) Thirty-three months have
passed since the date of submission of
an application for the drug by one
first applicant, if there is only one
first applicant, or, in the case of
more than one first applicant, 33
months have passed since the date of
submission of all such applications.
``(CC) Approval of an application
for the drug submitted by at least one
first applicant would not be precluded
under clause (iii).''.
(b) Information.--Not later than 60 days of the date of enactment
of this Act, the Secretary of Health and Human Services (referred to in
this subsection as the ``Secretary'') shall publish, as appropriate and
available, information sufficient to allow applicants to assess whether
the conditions described in subitems (AA) through (CC) of section
505(j)(5)(B)(iv)(I)(bb) of the Federal Food, Drug, and Cosmetic Act (as
amended by subsection (a)) have been or will be satisfied for all
applications where the exclusivity period under (iv)(I) of section
505(j)(5)(B) of the Federal Food, Drug, and Cosmetic Act (as so
amended) has not expired, and shall provide updates to reflect the most
recent information available to the Secretary.
SEC. 343. ENSURING TIMELY ACCESS TO GENERICS.
Section 505(q) of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 355(q)) is amended--
(1) in paragraph (1)--
(A) in subparagraph (A)(i), by inserting ``,
10.31,'' after ``10.30'';
(B) in subparagraph (E)--
(i) by striking ``application and'' and
inserting ``application or'';
(ii) by striking ``If the Secretary'' and
inserting the following:
``(i) In general.--If the Secretary''; and
(iii) by striking the second sentence and
inserting the following:
``(ii) Primary purpose of delaying.--
``(I) In general.--In determining
whether a petition was submitted with
the primary purpose of delaying an
application, the Secretary may consider
the following factors:
``(aa) Whether the petition
was submitted in accordance
with paragraph (2)(B), based on
when the petitioner knew or
reasonably should have known
the relevant information relied
upon to form the basis of such
petition.
``(bb) Whether the
petitioner has submitted
multiple or serial petitions or
supplements to petitions
raising issues that reasonably
could have been known to the
petitioner at the time of
submission of the earlier
petition or petitions.
``(cc) Whether the petition
was submitted close in time to
a known, first date upon which
an application under subsection
(b)(2) or (j) of this section
or section 351(k) of the Public
Health Service Act could be
approved.
``(dd) Whether the petition
was submitted without relevant
data or information in support
of the scientific positions
forming the basis of such
petition.
``(ee) Whether the petition
raises the same or
substantially similar issues as
a prior petition to which the
Secretary has responded
substantively already,
including if the subsequent
submission follows such
response from the Secretary
closely in time.
``(ff) Whether the petition
requests changing the
applicable standards that other
applicants are required to
meet, including requesting
testing, data, or labeling
standards that are more onerous
or rigorous than the standards
the Secretary has determined to
be applicable to the listed
drug, reference product, or
petitioner's version of the
same drug.
``(gg) The petitioner's
record of submitting petitions
to the Food and Drug
Administration that have been
determined by the Secretary to
have been submitted with the
primary purpose of delay.
``(hh) Other relevant and
appropriate factors, which the
Secretary shall describe in
guidance.
``(II) Guidance.--The Secretary may
issue or update guidance, as
appropriate, to describe factors the
Secretary considers in accordance with
subclause (II).'';
(C) by adding at the end the following:
``(iii) Referral to the federal trade
commission.--The Secretary shall establish
procedures for referring to the Federal Trade
Commission any petition or supplement to a
petition that the Secretary determines was
submitted with the primary purpose of delaying
approval of an application. Such procedures
shall include notification to the petitioner by
the Secretary.'';
(D) by striking subparagraph (F);
(E) by redesignating subparagraphs (G) through (I)
as subparagraphs (F) through (H), respectively; and
(F) in subparagraph (H), as so redesignated, by
striking ``submission of this petition'' and inserting
``submission of this document'';
(2) in paragraph (2)--
(A) by redesignating subparagraphs (A) through (C)
as subparagraphs (C) through (E), respectively;
(B) by inserting before subparagraph (C), as so
redesignated, the following:
``(A) In general.--A person shall submit a petition
to the Secretary under paragraph (1) before filing a
civil action in which the person seeks to set aside,
delay, rescind, withdraw, or prevent submission,
review, or approval of an application submitted under
subsection (b)(2) or (j) of this section or section
351(k) of the Public Health Service Act. Such petition
and any supplement to such a petition shall describe
all information and arguments that form the basis of
the relief requested in any civil action described in
the previous sentence.
``(B) Timely submission of citizen petition.--A
petition and any supplement to a petition shall be
submitted within 60 days after the person knew, or
reasonably should have known, the information that
forms the basis of the request made in the petition or
supplement.'';
(C) in subparagraph (C), as so redesignated--
(i) in the heading, by striking ``within
150 days'';
(ii) in clause (i), by striking ``during
the 150-day period referred to in paragraph
(1)(F),''; and
(iii) by amending clause (ii) to read as
follows:
``(ii) on or after the date that is 151
days after the date of submission of the
petition, the Secretary approves or has
approved the application that is the subject of
the petition without having made such a final
decision.'';
(D) by amending subparagraph (D), as so
redesignated, to read as follows:
``(D) Dismissal of certain civil actions.--
``(i) Petition.--If a person files a civil
action against the Secretary in which a person
seeks to set aside, delay, rescind, withdraw,
or prevent submission, review, or approval of
an application submitted under subsection
(b)(2) or (j) of this section or section 351(k)
of the Public Health Service Act without
complying with the requirements of subparagraph
(A), the court shall dismiss without prejudice
the action for failure to exhaust
administrative remedies.
``(ii) Timeliness.--If a person files a
civil action against the Secretary in which a
person seeks to set aside, delay, rescind,
withdraw, or prevent submission, review, or
approval of an application submitted under
subsection (b)(2) or (j) of this section or
section 351(k) of the Public Health Service Act
without complying with the requirements of
subparagraph (B), the court shall dismiss with
prejudice the action for failure to timely file
a petition.
``(iii) Final response.--If a civil action
is filed against the Secretary with respect to
any issue raised in a petition timely filed
under paragraph (1) in which the petitioner
requests that the Secretary take any form of
action that could, if taken, set aside, delay,
rescind, withdraw, or prevent submission,
review, or approval of an application submitted
under subsection (b)(2) or (j) of this section
or section 351(k) of the Public Health Service
Act before the Secretary has taken final agency
action on the petition within the meaning of
subparagraph (C), the court shall dismiss
without prejudice the action for failure to
exhaust administrative remedies.''; and
(E) in clause (iii) of subparagraph (E), as so
redesignated, by striking ``as defined under
subparagraph (2)(A)'' and inserting ``within the
meaning of subparagraph (C)''; and
(3) in paragraph (4)--
(A) by striking ``Exceptions'' and all that follows
through ``This subsection does'' and inserting
``Exceptions.--This subsection does'';
(B) by striking subparagraph (B); and
(C) by redesignating clauses (i) and (ii) as
subparagraphs (A) and (B), respectively, and adjusting
the margins accordingly.
SEC. 344. PREEMPTION OF STATE BARRIERS TO THE SUBSTITUTION OF
BIOSIMILAR PRODUCTS.
No State, or any political subdivision thereof, may, under any
circumstances, prohibit a pharmacy or pharmacist from dispensing, in
place of a biological reference product, any biosimilar that the Food
and Drug Administration has designated as an interchangeable product
for that biological reference product.
SEC. 345. INCREASING PHARMACEUTICAL OPTIONS TO TREAT AN UNMET MEDICAL
NEED.
Subsection (b) of section 506 of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 356) is amended by adding at the end the
following:
``(4) Unmet medical need.--For purposes of paragraph (1), a
drug shall be deemed to address an unmet medical need for a
disease or condition if fewer than 3 available drugs exist for
the treatment of such disease or condition.''.
SEC. 346. PROVISIONAL APPROVAL OF NEW HUMAN DRUGS.
(a) In General.--Subchapter A of chapter V of the Federal Food,
Drug, and Cosmetic Act (21 U.S.C. 351 et seq.) is amended by adding at
the end of the following:
``SEC. 524B. PROVISIONAL APPROVAL OF NEW HUMAN DRUGS.
``(a) Priority Review and Evaluation of Applications.--
``(1) In general.--The Secretary shall establish a priority
review system to evaluate applications submitted under this
pathway for provisional approval within 90 days of receipt of a
completed application.
``(2) Review of applications during epidemics and
pandemics.--In the case of an epidemic or pandemic, including
with respect to COVID-19, the Secretary shall accept and review
various portions of an application submitted under the pathway
under this section for provisional approval on a rolling basis,
and the review of any part of an application so submitted shall
be completed not later than 3 weeks after submission.
``(3) Other designations.--If a drug submitted for review
under the pathway under this section is eligible for a special
designation by the Secretary under this Act, including as a
drug for a rare disease or condition under section 526, all
benefits of such other designation shall be available for use
under provisional approval, including any tax credits and
waiving of fees under chapter VII.
``(b) Eligibility.--A drug may be eligible for provisional approval
under this section if the Secretary determines that the drug is
intended for the treatment, prevention, or medical diagnosis of--
``(1) a serious or life-threatening disease or condition
for which there is a reasonable likelihood that premature death
will occur without early medical intervention for an individual
contracting or being diagnosed with such disease or condition;
``(2) a disease or condition that poses a threat of
epidemic or pandemic; or
``(3) a disease or condition associated with morbidity that
has a substantial impact on day-to-day functioning.
``(c) Standard of Review for Approval.--
``(1) Requirements.--An application for provisional
approval under this section may be approved only if the
Secretary determines that--
``(A) there is substantial evidence of safety for
the drug, such that there is evidence consisting of
adequate and well-controlled investigations, including
clinical investigations, by experts qualified by
scientific training and experience to evaluate the
safety of the drug involved, on the basis of which it
could fairly and responsibly be concluded that the drug
will have the effect it purports or is represented to
have under the conditions of use prescribed,
recommended, or suggested in the labeling or proposed
labeling; and
``(B) there is relevant early evidence based on
adequate and well-controlled investigations, including
early-stage clinical investigations, to establish
that--
``(i) the drug provides a positive
therapeutic outcome; and
``(ii) the outcome of the drug is
consistent with or greater than currently
marketed on-label therapies, with equal or
fewer side effects, if there are currently
marketed on-label therapies.
``(2) Protocols.--The Secretary shall promulgate rules that
establish the appropriate protocols for a sponsor of an
application for provisional approval under this section and the
Commissioner to follow to enable rolling, real-time, mid-trial
submission while preserving the integrity of the ongoing trial
and without penalizing the sponsor for making use of this
pathway.
``(3) Real world evidence.--The Secretary shall allow the
use of real world evidence (as defined in section 505F(b)),
including real world data used to generate real world evidence,
to support an application for provisional approval under this
section, and to fulfill the follow-up requirements and support
applications for full approval as described under section 505
or section 351 of the Public Health Service Act, as applicable.
``(4) Use of scientifically substantiated surrogates.--
``(A) In general.--The sponsor of an application
for provisional approval under this section may use
scientifically substantiated surrogates to support such
application.
``(B) Definition.--In subparagraph (A), the term
`scientifically substantiated surrogates' means
surrogate endpoints to predict clinical benefit other
than such endpoints previously validated by the
Secretary, based on--
``(i) epidemiologic, therapeutic,
pathophysiologic, or other evidence; or
``(ii) an effect on a clinical endpoint
other than survival or irreversible morbidity
of interest.
``(d) Transparency and Patient Monitoring Requirements.--
``(1) Registries.--
``(A) In general.--The sponsor of a drug
provisionally approved under this section shall require
that all patients who use such drug participate in an
observational registry and consent to the sponsor's
collection, and submission to the registry, of data
related to the patient's use of such drug until such
drug receives full approval under section 505 or
section 351 of the Public Health Service Act, or the
provisional approval is rescinded.
``(B) Requirements for registries.--An
observational registry described in subparagraph (A)
may be run by a third party, such as a government, for
profit, or non-profit organization, and shall track all
patients who use the provisionally approved drug.
``(C) Accessibility.--An observational registry
described in subparagraph (A) shall be easily
accessible for--
``(i) all patients who are participating in
any registry related to a provisionally
approved drug that allows for easy,
unrestricted (or transparent) access for such
patients to their patient data and related
information regarding their usage of the
provisionally approved drug; and
``(ii) approved researchers and medical
professionals who may access data maintained in
the registry, which access shall be for public
health research and only in a de-identified,
aggregated manner.
``(2) Funding.--An observational registry under this
subsection shall be maintained, as applicable--
``(A) by the sponsor of the drug provisionally
approved under this section that is the subject of the
registry;
``(B) by a third party, such as a government, for
profit, or nonprofit organization; or
``(C) the Federal Government, in the case of any
drug so approved that is intended to treat a disease or
condition associated with an epidemic or pandemic.
``(3) Sponsor requirements.--
``(A) In general.--For any drug application
provisionally approved under this section, the
Secretary shall notify the sponsor of the exact data
such sponsor is required to submit to an observational
registry.
``(B) Annual review of the registry; penalties.--
The Secretary shall conduct an annual review of
observational registries established under this
subsection. If, at such an annual review, less than 90
percent of patients are participating in an
observational registry with respect to a drug approved
under this section, the Secretary shall issue to the
sponsor of such drug a civil monetary penalty of not
more than $100,000. If a violation of this section is
not corrected within the 30-day period following
notification, the sponsor shall, in addition to any
penalty under this subparagraph be subject to a civil
monetary penalty of not more than $10,000 for each day
of the violation after such period until the violation
is corrected. If application patient participation in
an observational registry is not at or above 90 percent
within 6 months of issuance of such penalty, the
provisional approval shall be withdrawn.
``(4) Annual report to congress.--The Secretary shall
submit an annual report to Congress on all drugs granted
provisional approval under this section. Such report shall
include--
``(A) the number of patients treated with each such
drug, and the number of patients tracked in an
observational registry with respect to each such drug;
``(B) a discussion of the minimum amount of data
required in the registries, including patient
treatments and uses, length of use, side effects
encountered, relevant biomarkers or scientifically
substantiated surrogates, scan results, cause of death
and how long the patient lived, and adverse drug
effects;
``(C) a list of all such drugs for which an
application for full approval under section 505 of this
Act or section 351 of the Public Health Service Act, or
an application for an extension of provisional approval
under this section, has been submitted; and
``(D) a list of all applications denied provisional
approval under this section, together with an
explanation for the decisions to deny each such
application.
``(e) Withdrawal of Provisional Approval.--
``(1) In general.--The Secretary shall withdraw provisional
approval under this section if there are a significant number
of patients who experience serious adverse effects, compared to
the other currently marketed on-label therapies that are
available for the applicable disease or condition.
``(2) Effect of withdrawal.--If a provisional approval is
withdrawn under this subsection, the sponsor may not make the
drug available to any new patients, but may be allowed to
continue to make such drug available to patients who started
taking the drug prior to the date of withdrawal, for as long a
period as dictated by patient need, as determined by the
Secretary.
``(f) Transparency.--Any scientific, medical, academic, or health
care journal publishing an article explaining, releasing, conveying or
announcing research findings which were funded by the Department of
Health and Human Services shall be prohibited from publishing such
research unless--
``(1) such article conveying research findings is made
publicly available on the journal's internet website without a
paywall or charge not later than 3 months after the date on
which such article was first provided to subscribers of such
journal (or first made available for purchase); and
``(2) the article's author or researcher or author's
institution (or, in the case of multiple authors, researchers,
or institutions, all such authors, researchers, or
institutions) received less than 30 percent of funding for such
research from the Department of Health and Human Services
throughout the period of time the research was conducted.
``(g) Informed Consent.--Prior to receiving a drug provisionally
approved under this section, the sponsor of the drug shall receive from
each patient, or the patient's representative, informed consent,
through a signed informed consent form, acknowledging that such patient
understands that the drug did not undergo the usual process for full
approval of a drug by the Food and Drug Administration, and that such
patient is willing to accept the risks involved in taking such drug.
``(h) Postmarket Controls and Labeling.--
``(1) FDA annual review of registry data.--The Secretary
shall annually review the data made available through the
observational registries under subsection (d) and make a
determination regarding whether the side effect profile of any
drug approved under this pathway does not support the benefit
provided, or the data shows the benefit is less than the
benefits offered through other, fully approved drugs.
``(2) Labeling.--The sponsor of the provisionally approved
drug shall ensure that all labeling and promotional materials
for the drug bear the statement `provisionally approved by the
FDA pending a full demonstration of effectiveness under
application number ______' (specifying the application number
assigned by the Secretary in place of the blank). All
promotional, educational and marketing materials for
provisionally approved products shall be reviewed and approved
by the Secretary before such materials are distributed.
``(3) Rescission of provisional approval.--If the Secretary
determines that the side effect profile of any drug included in
such observational registries does not support the benefit
provided by such drug, or that the data shows that the benefit
is less than the benefits offered through other, fully approved
drugs, the Secretary shall rescind such provisional approval.
``(i) Duration of Provisional Approval; Requirement To Bring Drug
to Market.--
``(1) Duration; renewals.--The period of provisional
approval for a drug approved under this section is effective
for a 2-year period. The sponsor may request renewal for
provisional approval status for up to 3 subsequent 2-year
periods by the Secretary. Provisional approval status with
respect to a drug shall not exceed a total of 6 years from the
initial date the sponsor was awarded provisional approval
status.
``(2) Marketing requirement.--If any drug that receives
provisional approval status under this section is not brought
to market within 180 days of the approval, such approval shall
be rescinded.
``(j) Limitation on Liability.--With respect to any claim under
State law alleging that a drug sold or otherwise made available
pursuant to a grant of provisional approval under this section is
unsafe or ineffective, no liability in a cause of action shall lie
against a sponsor or manufacturer, unless the relevant conduct
constitutes reckless or willful misconduct, gross negligence, or an
intentional tort under any applicable State law.
``(k) Applying for Full Approval.--
``(1) In general.--Except as provided under paragraph (2),
the sponsor of a drug granted provisional approval pursuant to
this section may, at any point, submit an application for full
approval of such drug under section 505 of this Act or section
351 of the Public Health Service Act, as applicable.
``(2) Effect of recession on approval and automatic
approval.--
``(A) In general.--The sponsor of a drug granted
provisional approval pursuant to this section that has
been rescinded under subsection (h)(3), may submit an
application for full approval of such drug under
section 505 of this Act or section 351 of the Public
Health Service Act at any time.
``(B) Automatic approval.--Such full approval may
be awarded at any time for any drug granted provisional
approval pursuant to this section if the sponsor of the
drug establishes a 15 percent improvement in an
important endpoint, including surrogate endpoints not
validated by the Food and Drug Administration, compared
to a standard drug.
``(3) Real-time epidemic and pandemic vaccine approval.--
``(A) In general.--In the case of a vaccine
developed in response to an epidemic or pandemic,
including COVID-19, the Secretary shall share data
information regarding the approval of the vaccine with
the Advisory Committee on Immunization Practices of the
Centers for Disease Control and Prevention as the
review nears completion.
``(B) Evaluation.--Any vaccine that has been
approved by the Secretary for an epidemic or pandemic-
related disease, including COVID-19, shall be evaluated
by the Advisory Committee on Immunization Practices of
the Centers for Disease Control and Prevention not
later than 1 week after the date of submission to the
Advisory Committee by the Secretary of the vaccine.
``(l) Patient Advocate General.--Not later than 6 months after the
date of enactment of the Promising Pathway Act, the Secretary shall
establish within the Office of the Commissioner, the position of
Patient Advocate General, who shall provide assistance to patients and
their families who use drugs under evaluation in this pathway or drugs
reviewed or approved under section 505 or section 351 of the Public
Health Service Act. Such assistance shall include providing bi-
informational communication about maintaining patient health, delivery
of proper informed consent, participating in clinical investigations,
completing required documentation in order to participate in the
applicable programs, and providing other information.''.
(b) Conforming Amendment.--Section 505(a) of the Federal Food,
Drug, and Cosmetic Act (21 U.S.C. 355(a)) is amended by inserting ``,
or there is in effect a provisional approval under section 524B with
respect to such drug'' before the period.
(c) Reimbursement.--
(1) Private health insurers.--Section 2719A of the Public
Health Service Act (42 U.S.C. 300gg-19a) is amended by adding
at the end the following:
``(e) Treatment of Certain Drugs.--A group health plan or health
insurance issuer of group or individual health insurance coverage shall
not deny coverage of any drug provisionally approved under section 524B
of the Federal Food, Drug, and Cosmetic Act on the basis of such drug
being experimental. In determining coverage under the applicable plan
or coverage, a group health plan or health insurance issuer shall treat
a drug provisionally approved under such section in the same manner as
such plan or coverage would treat a drug approved under section 505 of
the Federal Food, Drug, and Cosmetic Act or section 351 of this Act.
Nothing in this subsection shall be construed to require a group health
plan or health insurance issuer to cover any specific drug
provisionally approved under such section 524B.''.
(2) Federal health care programs.--The requirement under
subsection (e) of section 2719A of the Public Health Service
Act (as added by paragraph (1)) shall apply with respect to
coverage determinations under a Federal health care program (as
defined in section 1128B(f) of the Social Security Act (42
U.S.C. 1320a-7b(f))) in the same manner such requirement
applies under such subsection (e).
(3) Conforming amendment.--Section 1927(k)(2)(A)(i) of the
Social Security Act (42 U.S.C. 1396r-8(k)(2)(A)(i)) is
amended--
(A) by striking ``or which'' and inserting ``,
which''; and
(B) by inserting ``, or which is provisionally
approved under section 524B of such Act'' before the
semicolon.
SEC. 347. CONSOLIDATING EXCLUSIVITY PERIODS FOR DRUGS TREATING RARE
DISEASES AND CONDITIONS.
(a) In General.--Subsection (a) of section 527 of the Federal Food,
Drug, and Cosmetic Act (21 U.S.C. 360cc) is amended to read as follows:
``(a) Exclusivity.--
``(1) In general.--Except as provided in subsection (b), if
the Secretary approves an application filed pursuant to section
505, or issues a license under section 351 of the Public Health
Service Act, for a drug designated under section 526 for a rare
disease or condition, the Secretary may not approve an
application filed pursuant to section 505, or issue a license
under section 351 of the Public Health Service Act, for the
same drug for the same disease or condition for a person who is
not the holder of such approved application or of such license
until the expiration of the exclusivity period described in
paragraph (2).
``(2) Exclusivity period described.--The exclusivity period
described in this paragraph, with respect to a drug designated
under section 526 for a rare disease or condition, is--
``(A) a single 7-year period of exclusivity with
respect to the first designation of such drug under
such section for that rare disease or condition; or
``(B) in the case of a drug that has previously
received a period of exclusivity under paragraph (1), a
single 3-year period of exclusivity with respect to any
subsequent designation of such drug under such section
for any other rare disease or condition.
``(3) Limitation.--In the case of a drug that has received
two periods of exclusivity pursuant to paragraph (1), no
additional exclusivity period under this section is available
with respect to such drug, regardless of whether such drug has
been designated under section 526 for a rare disease or
condition that is distinct from the rare disease or condition
for which such exclusivity periods were granted.''.
(b) Conforming Amendments.--
(1) Section 505(j)(5)(B)(iv)(II)(dd)(AA) of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 360cc) is amended by
striking ``7-year period'' and inserting ``exclusivity
period''.
(2) Section 505A(b)(1)(A)(ii) of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 360cc) is amended by striking
``rather than seven years;'' and inserting ``, or three years
and six months, rather than seven years or three years,
respectively;''.
(3) Section 505A(c)(1)(A)(ii) of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 360cc) is amended by striking
``rather than seven years;'' and inserting ``, or three years
and six months, rather than seven years or three years,
respectively;''.
(4) Section 505E(a) of the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 360cc) is amended by striking ``7-year period''
and inserting ``exclusivity periods''.
(5) Section 527(b) of the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 360cc) is amended by striking ``the 7-year
period'' and inserting ``any exclusivity period''.
(6) Section 351(m)(2)(B) of the Public Health Service Act
(42 U.S.C. 262) is amended by striking ``rather than 7 years''
and inserting ``or 3 years and 6 months, rather than 7 years or
3 years, respectively''.
(7) Section 351(m)(3)(B) of the Public Health Service Act
(42 U.S.C. 262) is amended by striking ``rather than 7 years''
and inserting ``or 3 years and 6 months, rather than 7 years or
3 years, respectively''.
SEC. 348. EXCLUSIVITY PERIOD FOR BRAND NAME BIOLOGICAL PRODUCTS.
(a) In General.--Section 351(k)(7)(A) of the Public Health Service
Act (42 U.S.C. 262(k)(7)(A)) is amended by striking ``12 years'' and
inserting ``5 years''.
(b) Conforming Changes.--Paragraphs (2)(A) and (3)(A) of section
351(m) of the Public Health Service Act (42 U.S.C. 262(m)) is amended
by striking ``12 years'' each place it appears and inserting ``5
years''.
(c) Applicability.--This Act and the amendments made by this Act
apply only with respect to a biological product for which the reference
product (as such term is used in section 351 of the Public Health
Service Act (42 U.S.C. 262)) is licensed under subsection (a) of such
section on or after the date of enactment of this Act.
SEC. 349. REGULATION OF MANUFACTURER-SPONSORED COPAY CONTRIBUTIONS.
Notwithstanding any other provision of law, the Secretary of Health
and Human Services may establish a mechanism to regulate drug
manufacturers' financial contributions to patient out-of-pocket costs,
such as drug co-pays.
SEC. 350. ANTITRUST EXEMPTION FOR PRIVATE HEALTH INSURER ISSUERS TO
NEGOTIATE WHOLESALE ACQUISITION PRICES OF PRESCRIPTION
DRUGS PURCHASED FROM DRUG MANUFACTURERS.
(a) Exemption.--It shall not be a violation of the antitrust laws
for one or more private health insurer issuers or their designated
agents to jointly negotiate wholesale acquisition prices of a
prescription drug with a manufacturer of a prescription drug with
regards to the reimbursement policies of the insurers of the
manufacturer's drugs so long as no one single wholesale acquisition
price is jointly determined between the insurance issuers or their
designated agents.
(b) Definitions.--For purposes of this section:
(1) Antitrust laws.--The term ``antitrust laws'' has the
meaning given it in subsection (a) of the 1st section of the
Clayton Act (15 U.S.C. 12(a)), except that such term includes
section 5 of the Federal Trade Commission Act (15 U.S.C. 45) to
the extent such section 5 applies to unfair methods of
competition.
(2) Health insurance issuer.--The term ``health insurance
issuer'' means an insurance company, insurance service, or
insurance organization (including a health maintenance
organization, as defined in subparagraph (C)) which is licensed
to engage in the business of insurance in a State and which is
subject to State law which regulates insurance (within the
meaning of section 514(b)(2) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1144(b)(2))). Such term does
not include a group health plan.
(3) Health maintenance organization.--The term ``health
maintenance organization'' means--
(A) a Federally qualified health maintenance
organization (as defined in section 300e(a) of title 42
of the United States Code),
(B) an organization recognized under State law as a
health maintenance organization, or
(C) a similar organization regulated under State
law for solvency in the same manner and to the same
extent as such a health maintenance organization.
(4) Manufacturer.--The term ``manufacturer'' means anyone
who is engaged in manufacturing, preparing, propagating,
compounding, processing, packaging, repackaging, or labeling of
a prescription drug.
(5) Prescription drug.--The term ``prescription drug''
means any human drug required by Federal law or regulation to
be dispensed only by a prescription, including finished dosage
forms and active ingredients subject to section 503(b) of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 353(b)).
(c) Effective Date.--This section shall take effect on the date of
the enactment of this Act but shall not apply with respect to conduct
that occurs before such date.
SEC. 351. BIOLOGICAL PRODUCT INNOVATION.
Section 351(j) of the Public Health Service Act (42 U.S.C. 262(j))
is amended--
(1) by striking ``except that a product'' and inserting
``except that--
``(1) a product'';
(2) by striking ``Act.'' and inserting ``Act; and''; and
(3) by adding at the end the following:
``(2) no requirement under such Act regarding an official
compendium (as defined in section 201(j) of such Act), or other
reference in such Act to an official compendium (as so
defined), shall apply with respect to a biological product
subject to regulation under this section.''.
SEC. 352. PROMPT APPROVAL OF DRUGS RELATED TO SAFETY INFORMATION.
Section 505 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C.
355) is amended by adding at the end the following:
``(z) Prompt Approval of Drugs When Safety Information Is Added to
Labeling.--
``(1) General rule.--A drug for which an application has
been submitted or approved under subsection (b)(2) or (j) shall
not be considered ineligible for approval under this section or
misbranded under section 502 on the basis that the labeling of
the drug omits safety information, including contraindications,
warnings, precautions, dosing, administration, or other
information pertaining to safety, when the omitted safety
information is protected by exclusivity under clause (iii) or
(iv) of subsection (j)(5)(F), clause (iii) or (iv) of
subsection (c)(3)(E), or section 527(a), or by an extension of
such exclusivity under section 505A or 505E.
``(2) Labeling.--Notwithstanding clauses (iii) and (iv) of
subsection (j)(5)(F), clauses (iii) and (iv) of subsection
(c)(3)(E), or section 527, the Secretary shall require that the
labeling of a drug approved pursuant to an application
submitted under subsection (b)(2) or (j) that omits safety
information described in paragraph (1) include a statement of
any appropriate safety information that the Secretary considers
necessary to assure safe use.
``(3) Availability and scope of exclusivity.--This
subsection does not affect--
``(A) the availability or scope of exclusivity or
an extension of exclusivity described in subparagraph
(A) or (B) of section 505A(o)(3);
``(B) the question of the eligibility for approval
under this section of any application described in
subsection (b)(2) or (j) that omits any other aspect of
labeling protected by exclusivity under--
``(i) clause (iii) or (iv) of subsection
(j)(5)(F);
``(ii) clause (iii) or (iv) of subsection
(c)(3)(E); or
``(iii) section 527(a); or
``(C) except as expressly provided in paragraphs
(1) and (2), the operation of this section or section
527.''.
SEC. 353. CONGRESSIONAL REVIEW OF THE FOOD AND DRUG ADMINISTRATION
RULEMAKING.
(a) Congressional Review.--Part I of title 5, United States Code,
is amended by adding at the end the following:
``CHAPTER 10--CONGRESSIONAL REVIEW OF FOOD AND DRUG ADMINISTRATION
RULEMAKING
``Sec.
``920. Applicability.
``921. Congressional review.
``922. Congressional approval procedure for major rules.
``923. Congressional disapproval procedure for nonmajor rules.
``924. Definitions.
``925. Judicial review.
``926. Exemption for monetary policy.
``927. Effective date of certain rules.
``928. Regulatory cut-go requirement.
``929. Review of rules currently in effect.
``Sec. 920. Applicability
``This chapter applies in lieu of chapter 8 with respect to the
Food and Drug Administration.
``Sec. 921. Congressional review
``(a)(1)(A) Before a rule may take effect, the Food and Drug
Administration shall satisfy the requirements of section 928 and shall
publish in the Federal Register a list of information on which the rule
is based, including data, scientific and economic studies, and cost-
benefit analyses, and identify how the public can access such
information online, and shall submit to each House of the Congress and
to the Comptroller General a report containing--
``(i) a copy of the rule;
``(ii) a concise general statement relating to the rule;
``(iii) a classification of the rule as a major or nonmajor
rule, including an explanation of the classification
specifically addressing each criteria for a major rule
contained within sections 924(2)(A), 924(2)(B), and 924(2)(C);
``(iv) a list of any other related regulatory actions
intended to implement the same statutory provision or
regulatory objective as well as the individual and aggregate
economic effects of those actions; and
``(v) the proposed effective date of the rule.
``(B) On the date of the submission of the report under
subparagraph (A), the Food and Drug Administration shall submit to the
Comptroller General and make available to each House of Congress--
``(i) a complete copy of the cost-benefit analysis of the
rule, if any, including an analysis of any jobs added or lost,
differentiating between public and private sector jobs;
``(ii) the Food and Drug Administration's actions pursuant
to sections 603, 604, 605, 607, and 609 of this title;
``(iii) the Food and Drug Administration's actions pursuant
to sections 202, 203, 204, and 205 of the Unfunded Mandates
Reform Act of 1995; and
``(iv) any other relevant information or requirements under
any other Act and any relevant Executive orders.
``(C) Upon receipt of a report submitted under subparagraph (A),
each House shall provide copies of the report to the chairman and
ranking member of each standing committee with jurisdiction under the
rules of the House of Representatives or the Senate to report a bill to
amend the provision of law under which the rule is issued.
``(2)(A) The Comptroller General shall provide a report on each
major rule to the committees of jurisdiction by the end of 15 calendar
days after the submission or publication date. The report of the
Comptroller General shall include an assessment of the Food and Drug
Administration's compliance with procedural steps required by paragraph
(1)(B) and an assessment of whether the major rule imposes any new
limits or mandates on private-sector activity.
``(B) The Food and Drug Administration shall cooperate with the
Comptroller General by providing information relevant to the
Comptroller General's report under subparagraph (A).
``(3) A major rule relating to a report submitted under paragraph
(1) shall take effect upon enactment of a joint resolution of approval
described in section 922 or as provided for in the rule following
enactment of a joint resolution of approval described in section 922,
whichever is later.
``(4) A nonmajor rule shall take effect as provided by section 923
after submission to Congress under paragraph (1).
``(5) If a joint resolution of approval relating to a major rule is
not enacted within the period provided in subsection (b)(2), then a
joint resolution of approval relating to the same rule may not be
considered under this chapter in the same Congress by either the House
of Representatives or the Senate.
``(b)(1) A major rule shall not take effect unless the Congress
enacts a joint resolution of approval described under section 922.
``(2) If a joint resolution described in subsection (a) is not
enacted into law by the end of 70 session days or legislative days, as
applicable, beginning on the date on which the report referred to in
section 921(a)(1)(A) is received by Congress (excluding days either
House of Congress is adjourned for more than 3 days during a session of
Congress), then the rule described in that resolution shall be deemed
not to be approved and such rule shall not take effect.
``(c)(1) Notwithstanding any other provision of this section
(except subject to paragraph (3)), a major rule may take effect for one
90-calendar-day period if the President makes a determination under
paragraph (2) and submits written notice of such determination to the
Congress.
``(2) Paragraph (1) applies to a determination made by the
President by Executive order that the major rule should take effect
because such rule is--
``(A) necessary because of an imminent threat to health or
safety or other emergency;
``(B) necessary for the enforcement of criminal laws;
``(C) necessary for national security; or
``(D) issued pursuant to any statute implementing an
international trade agreement.
``(3) An exercise by the President of the authority under this
subsection shall have no effect on the procedures under section 922.
``(d)(1) In addition to the opportunity for review otherwise
provided under this chapter, in the case of any rule for which a report
was submitted in accordance with subsection (a)(1)(A) during the period
beginning on the date occurring--
``(A) in the case of the Senate, 60 session days; or
``(B) in the case of the House of Representatives, 60
legislative days,
before the date the Congress is scheduled to adjourn a session of
Congress through the date on which the same or succeeding Congress
first convenes its next session, sections 922 and 923 shall apply to
such rule in the succeeding session of Congress.
``(2)(A) In applying sections 922 and 923 for purposes of such
additional review, a rule described under paragraph (1) shall be
treated as though--
``(i) such rule were published in the Federal Register on--
``(I) in the case of the Senate, the 15th session
day; or
``(II) in the case of the House of Representatives,
the 15th legislative day,
after the succeeding session of Congress first convenes; and
``(ii) a report on such rule were submitted to Congress
under subsection (a)(1) on such date.
``(B) Nothing in this paragraph shall be construed to affect the
requirement under subsection (a)(1) that a report shall be submitted to
Congress before a rule can take effect.
``(3) A rule described under paragraph (1) shall take effect as
otherwise provided by law (including other subsections of this
section).
``Sec. 922. Congressional approval procedure for major rules
``(a)(1) For purposes of this section, the term `joint resolution'
means only a joint resolution addressing a report classifying a rule as
major pursuant to section 921(a)(1)(A)(iii) that--
``(A) bears no preamble;
``(B) bears the following title (with blanks filled as
appropriate): `Approving the rule submitted by ___ relating to
___.';
``(C) includes after its resolving clause only the
following (with blanks filled as appropriate): `That Congress
approves the rule submitted by ___ relating to ___.'; and
``(D) is introduced pursuant to paragraph (2).
``(2) After a House of Congress receives a report classifying a
rule as major pursuant to section 921(a)(1)(A)(iii), the majority
leader of that House (or his or her respective designee) shall
introduce (by request, if appropriate) a joint resolution described in
paragraph (1)--
``(A) in the case of the House of Representatives, within 3
legislative days; and
``(B) in the case of the Senate, within 3 session days.
``(3) A joint resolution described in paragraph (1) shall not be
subject to amendment at any stage of proceeding.
``(b) A joint resolution described in subsection (a) shall be
referred in each House of Congress to the committees having
jurisdiction over the provision of law under which the rule is issued.
``(c) In the Senate, if the committee or committees to which a
joint resolution described in subsection (a) has been referred have not
reported it at the end of 15 session days after its introduction, such
committee or committees shall be automatically discharged from further
consideration of the resolution and it shall be placed on the calendar.
A vote on final passage of the resolution shall be taken on or before
the close of the 15th session day after the resolution is reported by
the committee or committees to which it was referred, or after such
committee or committees have been discharged from further consideration
of the resolution.
``(d)(1) In the Senate, when the committee or committees to which a
joint resolution is referred have reported, or when a committee or
committees are discharged (under subsection (c)) from further
consideration of a joint resolution described in subsection (a), it is
at any time thereafter in order (even though a previous motion to the
same effect has been disagreed to) for a motion to proceed to the
consideration of the joint resolution, and all points of order against
the joint resolution (and against consideration of the joint
resolution) are waived. The motion is not subject to amendment, or to a
motion to postpone, or to a motion to proceed to the consideration of
other business. A motion to reconsider the vote by which the motion is
agreed to or disagreed to shall not be in order. If a motion to proceed
to the consideration of the joint resolution is agreed to, the joint
resolution shall remain the unfinished business of the Senate until
disposed of.
``(2) In the Senate, debate on the joint resolution, and on all
debatable motions and appeals in connection therewith, shall be limited
to not more than 2 hours, which shall be divided equally between those
favoring and those opposing the joint resolution. A motion to further
limit debate is in order and not debatable. An amendment to, or a
motion to postpone, or a motion to proceed to the consideration of
other business, or a motion to recommit the joint resolution is not in
order.
``(3) In the Senate, immediately following the conclusion of the
debate on a joint resolution described in subsection (a), and a single
quorum call at the conclusion of the debate if requested in accordance
with the rules of the Senate, the vote on final passage of the joint
resolution shall occur.
``(4) Appeals from the decisions of the Chair relating to the
application of the rules of the Senate to the procedure relating to a
joint resolution described in subsection (a) shall be decided without
debate.
``(e) In the House of Representatives, if any committee to which a
joint resolution described in subsection (a) has been referred has not
reported it to the House at the end of 15 legislative days after its
introduction, such committee shall be discharged from further
consideration of the joint resolution, and it shall be placed on the
appropriate calendar. On the second and fourth Thursdays of each month
it shall be in order at any time for the Speaker to recognize a Member
who favors passage of a joint resolution that has appeared on the
calendar for at least 5 legislative days to call up that joint
resolution for immediate consideration in the House without
intervention of any point of order. When so called up a joint
resolution shall be considered as read and shall be debatable for 1
hour equally divided and controlled by the proponent and an opponent,
and the previous question shall be considered as ordered to its passage
without intervening motion. It shall not be in order to reconsider the
vote on passage. If a vote on final passage of the joint resolution has
not been taken by the third Thursday on which the Speaker may recognize
a Member under this subsection, such vote shall be taken on that day.
``(f)(1) If, before passing a joint resolution described in
subsection (a), one House receives from the other a joint resolution
having the same text, then--
``(A) the joint resolution of the other House shall not be
referred to a committee; and
``(B) the procedure in the receiving House shall be the
same as if no joint resolution had been received from the other
House until the vote on passage, when the joint resolution
received from the other House shall supplant the joint
resolution of the receiving House.
``(2) This subsection shall not apply to the House of
Representatives if the joint resolution received from the Senate is a
revenue measure.
``(g) If either House has not taken a vote on final passage of the
joint resolution by the last day of the period described in section
921(b)(2), then such vote shall be taken on that day.
``(h) This section and section 923 are enacted by Congress--
``(1) as an exercise of the rulemaking power of the Senate
and House of Representatives, respectively, and as such is
deemed to be part of the rules of each House, respectively, but
applicable only with respect to the procedure to be followed in
that House in the case of a joint resolution described in
subsection (a) and superseding other rules only where
explicitly so; and
``(2) with full recognition of the Constitutional right of
either House to change the rules (so far as they relate to the
procedure of that House) at any time, in the same manner and to
the same extent as in the case of any other rule of that House.
``Sec. 923. Congressional disapproval procedure for nonmajor rules
``(a) For purposes of this section, the term `joint resolution'
means only a joint resolution introduced in the period beginning on the
date on which the report referred to in section 921(a)(1)(A) is
received by Congress and ending 60 days thereafter (excluding days
either House of Congress is adjourned for more than 3 days during a
session of Congress), the matter after the resolving clause of which is
as follows: `That Congress disapproves the nonmajor rule submitted by
the ___ relating to ___, and such rule shall have no force or effect.'
(The blank spaces being appropriately filled in).
``(b) A joint resolution described in subsection (a) shall be
referred to the committees in each House of Congress with jurisdiction.
``(c) In the Senate, if the committee to which is referred a joint
resolution described in subsection (a) has not reported such joint
resolution (or an identical joint resolution) at the end of 15 session
days after the date of introduction of the joint resolution, such
committee may be discharged from further consideration of such joint
resolution upon a petition supported in writing by 30 Members of the
Senate, and such joint resolution shall be placed on the calendar.
``(d)(1) In the Senate, when the committee to which a joint
resolution is referred has reported, or when a committee is discharged
(under subsection (c)) from further consideration of a joint resolution
described in subsection (a), it is at any time thereafter in order
(even though a previous motion to the same effect has been disagreed
to) for a motion to proceed to the consideration of the joint
resolution, and all points of order against the joint resolution (and
against consideration of the joint resolution) are waived. The motion
is not subject to amendment, or to a motion to postpone, or to a motion
to proceed to the consideration of other business. A motion to
reconsider the vote by which the motion is agreed to or disagreed to
shall not be in order. If a motion to proceed to the consideration of
the joint resolution is agreed to, the joint resolution shall remain
the unfinished business of the Senate until disposed of.
``(2) In the Senate, debate on the joint resolution, and on all
debatable motions and appeals in connection therewith, shall be limited
to not more than 10 hours, which shall be divided equally between those
favoring and those opposing the joint resolution. A motion to further
limit debate is in order and not debatable. An amendment to, or a
motion to postpone, or a motion to proceed to the consideration of
other business, or a motion to recommit the joint resolution is not in
order.
``(3) In the Senate, immediately following the conclusion of the
debate on a joint resolution described in subsection (a), and a single
quorum call at the conclusion of the debate if requested in accordance
with the rules of the Senate, the vote on final passage of the joint
resolution shall occur.
``(4) Appeals from the decisions of the Chair relating to the
application of the rules of the Senate to the procedure relating to a
joint resolution described in subsection (a) shall be decided without
debate.
``(e) In the Senate, the procedure specified in subsection (c) or
(d) shall not apply to the consideration of a joint resolution
respecting a nonmajor rule--
``(1) after the expiration of the 60 session days beginning
with the applicable submission or publication date; or
``(2) if the report under section 921(a)(1)(A) was
submitted during the period referred to in section 921(d)(1),
after the expiration of the 60 session days beginning on the
15th session day after the succeeding session of Congress first
convenes.
``(f) If, before the passage by one House of a joint resolution of
that House described in subsection (a), that House receives from the
other House a joint resolution described in subsection (a), then the
following procedures shall apply:
``(1) The joint resolution of the other House shall not be
referred to a committee.
``(2) With respect to a joint resolution described in
subsection (a) of the House receiving the joint resolution--
``(A) the procedure in that House shall be the same
as if no joint resolution had been received from the
other House; but
``(B) the vote on final passage shall be on the
joint resolution of the other House.
``Sec. 924. Definitions
``For purposes of this chapter:
``(1) The term `major rule' means any rule of the Food and
Drug Administration, including an interim final rule, that the
Administrator of the Office of Information and Regulatory
Affairs of the Office of Management and Budget finds has
resulted in or is likely to result in--
``(A) an annual cost on the economy of $100,000,000
or more, adjusted annually for inflation;
``(B) a major increase in costs or prices for
consumers, individual industries, Federal, State, or
local government agencies, or geographic regions; or
``(C) significant adverse effects on competition,
employment, investment, productivity, innovation, or on
the ability of United States-based enterprises to
compete with foreign-based enterprises in domestic and
export markets.
``(2) The term `nonmajor rule' means any rule of the Food
and Drug Administration that is not a major rule.
``(3) The term `rule' has the meaning given such term in
section 551, except that such term does not include--
``(A) any rule of particular applicability;
``(B) any rule relating to agency management or
personnel; or
``(C) any rule of agency organization, procedure,
or practice that does not substantially affect the
rights or obligations of non-agency parties.
``(4) The term `submission date or publication date',
except as otherwise provided in this chapter, means--
``(A) in the case of a major rule, the date on
which the Congress receives the report submitted under
section 921(a)(1); and
``(B) in the case of a nonmajor rule, the later
of--
``(i) the date on which the Congress
receives the report submitted under section
921(a)(1); and
``(ii) the date on which the nonmajor rule
is published in the Federal Register, if so
published.
``Sec. 925. Judicial review
``(a) No determination, finding, action, or omission under this
chapter shall be subject to judicial review.
``(b) Notwithstanding subsection (a), a court may determine whether
the Food and Drug Administration has completed the necessary
requirements under this chapter for a rule to take effect.
``(c) The enactment of a joint resolution of approval under section
922 shall not be interpreted to serve as a grant or modification of
statutory authority by Congress for the promulgation of a rule, shall
not extinguish or affect any claim, whether substantive or procedural,
against any alleged defect in a rule, and shall not form part of the
record before the court in any judicial proceeding concerning a rule
except for purposes of determining whether or not the rule is in
effect.
``Sec. 926. Exemption for monetary policy
``Nothing in this chapter shall apply to rules that concern
monetary policy proposed or implemented by the Board of Governors of
the Federal Reserve System or the Federal Open Market Committee.
``Sec. 927. Effective date of certain rules
``Notwithstanding section 921, any rule other than a major rule
which the Food and Drug Administration for good cause finds (and
incorporates the finding and a brief statement of reasons therefore in
the rule issued) that notice and public procedure thereon are
impracticable, unnecessary, or contrary to the public interest, shall
take effect at such time as the Food and Drug Administration
determines.
``Sec. 928. Regulatory cut-go requirement
``In making any new rule, the Food and Drug Administration shall
identify a rule or rules that may be amended or repealed to completely
offset any annual costs of the new rule to the United States economy.
Before the new rule may take effect, the Food and Drug Administration
shall make each such repeal or amendment. In making such an amendment
or repeal, the Food and Drug Administration shall comply with the
requirements of subchapter II of chapter 5, but the Food and Drug
Administration may consolidate proceedings under subchapter II (of
chapter 5) with proceedings on the new rule.
``Sec. 929. Review of rules currently in effect
``(a) Annual Review.--Beginning on the date that is 6 months after
the date of enactment of this section and annually thereafter for the 9
years following, the Food and Drug Administration shall designate not
less than 10 percent of eligible rules made by the Food and Drug
Administration for review, and shall submit a report including each
such eligible rule in the same manner as a report under section
921(a)(1). Section 921, section 922, and section 923 shall apply to
each such rule, subject to subsection (c) of this section. No eligible
rule previously designated may be designated again.
``(b) Sunset for Eligible Rules Not Extended.--Beginning after the
date that is 10 years after the date of enactment of this section, if
Congress has not enacted a joint resolution of approval for that
eligible rule, that eligible rule shall not continue in effect.
``(c) Consolidation; Severability.--In applying sections 921, 922,
and 923 to eligible rules under this section, the following shall
apply:
``(1) The words `take effect' shall be read as `continue in
effect'.
``(2) Except as provided in paragraph (3), a single joint
resolution of approval shall apply to all eligible rules in a
report designated for a year, and the matter after the
resolving clause of that joint resolution is as follows: `That
Congress approves the rules submitted by the __ for the year
__.' (The blank spaces being appropriately filled in).
``(3) It shall be in order to consider any amendment that
provides for specific conditions on which the approval of a
particular eligible rule included in the joint resolution is
contingent.
``(4) A member of either House may move that a separate
joint resolution be required for a specified rule.
``(d) Definition.--In this section, the term `eligible rule' means
a rule that is in effect as of the date of enactment of this
section.''.
(b) Budgetary Effects of Rules Subject to Section 922 of Title 5,
United States Code.--Section 257(b)(2) of the Balanced Budget and
Emergency Deficit Control Act of 1985 is amended by adding at the end
the following new subparagraph:
``(E) Budgetary effects of rules subject to section
922 of title 5, united states code.--Any rules subject
to the congressional approval procedure set forth in
section 922 of chapter 8 of title 5, United States
Code, affecting budget authority, outlays, or receipts
shall be assumed to be effective unless it is not
approved in accordance with such section.''.
(c) Government Accountability Office Study of Rules.--
(1) In general.--The Comptroller General of the United
States shall conduct a study to determine, as of the date of
the enactment of this Act--
(A) how many rules (as such term is defined in
section 924 of title 5, United States Code) of the Food
and Drug Administration were in effect;
(B) how many major rules (as such term is defined
in section 924 of title 5, United States Code) of the
Food and Drug Administration were in effect; and
(C) the total estimated economic cost imposed by
all such rules.
(2) Report.--Not later than 1 year after the date of the
enactment of this Act, the Comptroller General of the United
States shall submit a report to Congress that contains the
findings of the study conducted under paragraph (1).
(d) Effective Date.--Subsections (a) and (b), and the amendments
made by such sections, shall take effect beginning on the date that is
1 year after the date of enactment of this Act.
SEC. 354. GOVERNMENT ACCOUNTABILITY OFFICE STUDY OF RULES.
(a) In General.--The Comptroller General of the United States shall
conduct a study to determine, as of the date of the enactment of this
Act--
(1) how many rules (as such term is defined in section 804
of title 5, United States Code) were in effect;
(2) how many major rules (as such term is defined in
section 804 of title 5, United States Code) were in effect; and
(3) the total estimated economic cost imposed by all such
rules.
(b) Report.--Not later than 1 year after the date of the enactment
of this Act, the Comptroller General of the United States shall submit
a report to Congress that contains the findings of the study conducted
under subsection (a).
Subtitle D--Prescription Drug and Pharmacy Benefit Manager Transparency
SEC. 361. PATENT DISCLOSURE REQUIREMENTS.
(a) In General.--Section 351 of the Public Health Service Act (42
U.S.C. 262) is amended by adding at the end the following:
``(o) Additional Requirements With Respect to Patents.--
``(1) Approved application holder listing requirements.--
``(A) In general.--Beginning on the date of
enactment of this subsection, within 30 days of
approval of an application under subsection (a) or (k),
the holder of such approved application shall submit to
the Secretary a list of each patent required to be
disclosed (as described in paragraph (3)).
``(B) Previously approved or licensed biological
products.--
``(i) Products approved under section 351
of the phsa.--Not later than 30 days after the
date of enactment of the Fair Care Act of 2022,
the holder of a biological product license that
was approved under subsection (a) or (k) before
the date of enactment of such Act shall submit
to the Secretary a list of each patent required
to be disclosed (as described in paragraph
(3)).
``(ii) Products approved under section 505
of the ffdca.--Not later than 30 days after
March 23, 2021, the holder of an approved
application for a biological product under
section 505 of the Federal Food, Drug, and
Cosmetic Act that is deemed to be a license for
the biological product under this section on
March 23, 2021, shall submit a list of each
patent required to be disclosed (as described
in paragraph (3)).
``(C) Updates.--The holder of a biological product
license approved under subsection (a) or (k) shall
submit to the Secretary a list that includes--
``(i) any patent first required to be
disclosed (as described in paragraph (3)) after
the submission under subparagraph (A) or (B),
as applicable, within 30 days of the earlier
of--
``(I) the date of issuance of such
patent by the United States Patent and
Trademark Office; or
``(II) the date of approval of a
supplemental application for the
biological product; and
``(ii) any patent, or any claim with
respect to a patent, included on the list
pursuant to this paragraph with respect to the
biological product subsequently determined to
be invalid or unenforceable, within 30 days of
a determination of patent invalidity.
``(2) Publication of information.--
``(A) In general.--Within 1 year of the date of
enactment of the Fair Care Act of 2022, the Secretary
shall publish and make available to the public a
single, easily searchable, list that includes--
``(i) the official and proprietary name of
each biological product licensed under
subsection (a) or (k), and of each biological
product application approved under section 505
of the Federal Food, Drug, and Cosmetic Act and
deemed to be a license for the biological
product under this section on March 23, 2021;
``(ii) with respect to each biological
product described in clause (i), each patent
submitted in accordance with paragraph (1);
``(iii) the date of licensure and
application number for each such biological
product;
``(iv) the marketing status, dosage form,
route of administration, strength, and, if
applicable, reference product, for each such
biological product;
``(v) the licensure status for each such
biological product, including whether the
license at the time of listing is approved,
withdrawn, or revoked;
``(vi) any period of any exclusivity under
subsection (k)(7)(A) or subsection (k)(7)(B) of
this section or section 527 of the Federal
Food, Drug, and Cosmetic Act, and any extension
of such period in accordance with subsection
(m) of this section with respect to each such
biological product, and the date on which such
exclusivity expires;
``(vii) information regarding any
determination related to biosimilarity or
interchangeability for each such biological
product; and
``(viii) information regarding approved
indications for each such biological product,
in such manner as the Secretary determines
appropriate.
``(B) Updates.--Every 30 days after the publication
of the first list under subparagraph (A), the Secretary
shall revise the list to include--
``(i)(I) each biological product licensed
under subsection (a) or (k) during the 30-day
period; and
``(II) with respect to each biological
product described in subclause (I), the
information described in clauses (i) through
(viii) of subparagraph (A); and
``(ii) any updates to information
previously published in accordance with
subparagraph (A).
``(3) Patents required to be disclosed.--In this section, a
`patent required to be disclosed' is any patent for which the
holder of a biological product license approved under
subsection (a) or (k), or a biological product application
approved under section 505 of the Federal Food, Drug, and
Cosmetic Act and deemed to be a license for a biological
product under this section on March 23, 2021, believes a claim
of patent infringement could reasonably be asserted by the
holder, or by a patent owner that has granted an exclusive
license to the holder with respect to the biological product
that is the subject of such license, if a person not licensed
by the holder engaged in the making, using, offering to sell,
selling, or importing into the United States of the biological
product that is the subject of such license.''.
(b) Disclosure of Patents.--Section 351(l)(3)(A)(i) of the Public
Health Service Act (42 U.S.C. 262(l)(3)(A)(i)) is amended by inserting
``included in the list provided by the reference product sponsor under
subsection (o)(1)'' after ``a list of patents''.
(c) Restriction on Claims of Patent Infringement.--Section 271(e)
of title 35, United States Code, is amended by adding at the end the
following:
``(7) The owner of a patent that should have been included
in the list described in section 351(o)(1) of the Public Health
Service Act (42 U.S.C. 262(o)(1)), including any updates
required under subparagraph (C) of that section, but was not
timely included in such list, may not bring an action under
this section for infringement of the patent.''.
(d) Regulations.--The Secretary of Health and Human Services may
promulgate regulations to carry out subsection (o) of section 351 of
the Public Health Service Act (42 U.S.C. 262), as added by subsection
(a).
(e) Rule of Construction.--Nothing in this Act, including an
amendment made by this Act, shall be construed to require or allow the
Secretary of Health and Human Services to delay the licensing of a
biological product under section 351 of the Public Health Service Act
(42 U.S.C. 262).
SEC. 362. REQUIREMENTS WITH RESPECT TO PRESCRIPTION DRUG BENEFITS.
(a) In General.--Subpart II of part A of title XXVII of the Public
Health Service Act (42 U.S.C. 300gg-11 et seq.) is amended by adding at
the end the following:
``SEC. 2729A. REQUIREMENTS WITH RESPECT TO PRESCRIPTION DRUG BENEFITS.
``A group health plan or a health insurance issuer offering group
or individual health insurance coverage shall not, and shall ensure
that any entity that provides pharmacy benefits management services
under a contract with any such health plan or health insurance coverage
does not, receive from a drug manufacturer a reduction in price or
other remuneration with respect to any prescription drug received by an
enrollee in the plan or coverage and covered by the plan or coverage,
unless--
``(1) any such reduction in price is reflected at the point
of sale to the enrollee; and
``(2) any such other remuneration is a flat fee-based
service fee that a manufacturer of prescription drugs pays to a
pharmacy benefit manager for services rendered to the
manufacturer that relate to arrangements by the pharmacy
benefit manager to provide pharmacy benefit management services
to a health plan or health insurance issuer, if certain
conditions established by the Secretary are met, including
requirements that the fees are transparent to the health plan
or health insurance issuer.''.
(b) Effective Date.--Section 2729A of the Public Health Service
Act, as added by subsection (a), shall take effect on January 1, 2023.
SEC. 363. PBM TRANSPARENCY AND ELIMINATION OF DIR FEES.
(a) Prohibiting Medicare PDP Sponsors and MA-PD Organizations From
Retroactively Reducing Payment on Clean Claims Submitted by
Pharmacies.--
(1) In general.--Section 1860D-12(b)(4)(A) of the Social
Security Act (42 U.S.C. 1395w-112(b)(4)(A)) is amended by
adding at the end the following new clause:
``(iv) Prohibiting retroactive reductions
in payments on clean claims.--Each contract
entered into with a PDP sponsor under this part
with respect to a prescription drug plan
offered by such sponsor shall provide that
after the date of receipt of a clean claim
submitted by a pharmacy, the PDP sponsor (or an
agent of the PDP sponsor) may not retroactively
reduce payment on such claim directly or
indirectly through aggregated effective rate or
otherwise except in the case such claim is
found to not be a clean claim (such as in the
case of a claim lacking required substantiating
documentation) during the course of a routine
audit as permitted pursuant to written
agreement between the PDP sponsor (or such an
agent) and such pharmacy. The previous sentence
shall not prohibit any retroactive increase in
payment to a pharmacy pursuant to a written
agreement between a PDP sponsor (or an agent of
such sponsor) and such pharmacy.''.
(2) Effective date.--The amendment made by subsection (a)
shall apply with respect to contracts entered into on or after
January 1, 2023.
(b) Elimination of DIR Fees.--
(1) Pharmacy benefits manager standards under the medicare
program for prescription drug plans and ma-pd plans.--
(A) In general.--Section 1860D-12(b) of the Social
Security Act (42 U.S.C. 1395w-112(b)) is amended by
adding at the end the following new paragraph:
``(7) Pharmacy benefits manager transparency
requirements.--Each contract entered into with a PDP sponsor
under this part with respect to a prescription drug plan
offered by such sponsor or with an MA organization offering an
MA-PD plan under part C shall provide that the sponsor or
organization, respectively, may not enter into a contract with
any pharmacy benefits manager (referred to in this paragraph as
a `PBM') to manage the prescription drug coverage provided
under such plan, or to control the costs of the prescription
drug coverage under such plan, unless the PBM adheres to the
following criteria when handling personally identifiable
utilization and claims data or other sensitive patient data:
``(A) The PBM may not transmit any personally
identifiable utilization, protected health information,
or claims data, with respect to a plan enrollee, to a
pharmacy owned by a PBM if the plan enrollee has not
voluntarily elected in writing or via secure electronic
means to fill that particular prescription at the PBM-
owned pharmacy.
``(B) The PBM may not require that a plan enrollee
use a retail pharmacy, mail order pharmacy, specialty
pharmacy, or other pharmacy entity providing pharmacy
services in which the PBM has an ownership interest or
that has an ownership interest in the PBM, or provide
an incentive to a plan enrollee to encourage the
enrollee to use a retail pharmacy, mail order pharmacy,
specialty pharmacy, or other pharmacy entity providing
pharmacy services in which the PBM has an ownership
interest or that has an ownership interest in the PBM,
if the incentive is applicable only to such
pharmacies.''.
(B) Regular update of prescription drug pricing
standard.--Paragraph (6) of section 1860D-12(b) of the
Social Security Act (42 U.S.C. 1395w-112(b)) is amended
to read as follows:
``(6) Regular update of prescription drug pricing
standard.--
``(A) In general.--If the PDP sponsor of a
prescription drug plan (or MA organization offering an
MA-PD plan) uses a standard for reimbursement (as
described in subparagraph (B)) of pharmacies based on
the cost of a drug, each contract entered into with
such sponsor under this part (or organization under
part C) with respect to the plan shall provide that the
sponsor (or organization) shall--
``(i) update such standard not less
frequently than once every 7 days, beginning
with an initial update on January 1 of each
year, to accurately reflect the market price of
acquiring the drug;
``(ii) disclose to applicable pharmacies
and the contracting entities of such pharmacies
the sources used for making any such update
immediately without requirement of request;
``(iii) if the source for such a standard
for reimbursement is not publicly available,
disclose to the applicable pharmacies and the
respective contracting entities of such
pharmacies all individual drug prices to be so
updated in advance of the use of such prices
for the reimbursement of claims;
``(iv) establish a process to appeal,
investigate, and resolve disputes regarding
individual drug prices that are less than the
pharmacy acquisition price for such drug, which
must be adjudicated within 7 days of the
pharmacy filing its appeal; and
``(v) provide all such pricing data in an
.xml spreadsheet format or a comparable easily
accessible and complete spreadsheet format.
``(B) Prescription drug pricing standard defined.--
For purposes of subparagraph (A), a standard for
reimbursement of a pharmacy is any methodology or
formula for varying the pricing of a drug or drugs
during the term of the pharmacy reimbursement contract
that is based on the cost of the drug involved,
including drug pricing references and amounts that are
based upon average wholesale price, wholesale average
cost, average manufacturer price, average sales price,
maximum allowable cost (MAC), or other costs, whether
publicly available or not.''.
(C) Effective date.--The amendments made by this
section shall apply to plan years beginning on or after
January 1, 2023.
(2) Regular update of prescription drug pricing standard
under tricare retail pharmacy program.--Section 1074g(d) of
title 10, United States Code, is amended by adding at the end
the following new paragraph:
``(3) To the extent practicable, with respect to the TRICARE retail
pharmacy program described in subsection (a)(2)(E)(ii), the Secretary
shall ensure that a contract entered into with a TRICARE managed care
support contractor includes requirements described in section 1860D-
12(b)(6) of the Social Security Act (42 U.S.C. 1395w-112(b)(6)) to
ensure the provision of information regarding the pricing standard for
prescription drugs.''.
(3) Prescription drug transparency in the federal employees
health benefits program.--
(A) In general.--Section 8902 of title 5, United
States Code, is amended by adding at the end the
following new subsections:
``(p) A contract may not be made or a plan approved under this
chapter under which a carrier has an agreement with a pharmacy benefits
manager (in this subsection referred to as a `PBM') to manage
prescription drug coverage or to control the costs of the prescription
drug coverage unless the carrier and PBM adhere to the following
criteria:
``(1) The PBM may not transmit any personally identifiable
utilization, protected health information, or claims data with
respect to an individual enrolled under such contract or plan
to a pharmacy owned by the PBM if the individual has not
voluntarily elected in writing or via secure electronic means
to fill that particular prescription at such a pharmacy.
``(2) The PBM may not require that an individual enrolled
under such contract or plan use a retail pharmacy, mail order
pharmacy, specialty pharmacy, or other pharmacy entity
providing pharmacy services in which the PBM has an ownership
interest or that has an ownership interest in the PBM or
provide an incentive to a plan enrollee to encourage the
enrollee to use a retail pharmacy, mail order pharmacy,
specialty pharmacy, or other pharmacy entity providing pharmacy
services in which the PBM has an ownership interest or that has
an ownership interest in the PBM, if the incentive is
applicable only to such pharmacies.
``(q)(1) If a contract made or plan approved under this chapter
provides for a standard for reimbursement (as described in paragraph
(2)) with respect to a prescription drug plan, such contract or plan
shall provide that the applicable carrier--
``(A) update such standard not less frequently than once
every 7 days, beginning with an initial update on January 1 of
each year, to accurately reflect the market price of acquiring
the drug;
``(B) disclose to applicable pharmacies and the contracting
entities of such pharmacies the sources used for making any
such update immediately without requirement of request;
``(C) if the source for such a standard for reimbursement
is not publicly available, disclose to the applicable
pharmacies and contracting entities of such pharmacies all
individual drug prices to be so updated in advance of the use
of such prices for the reimbursement of claims;
``(D) establish a process to appeal, investigate, and
resolve disputes regarding individual drug prices that are less
than the pharmacy acquisition price for such drug, which must
be adjudicated within 7 days of the pharmacy filing its appeal;
and
``(E) provide all such pricing data in an .xml spreadsheet
format or a comparable easily accessible and complete
spreadsheet format.
``(2) For purposes of paragraph (1), a standard for reimbursement
of a pharmacy is any methodology or formula for varying the pricing of
a drug or drugs during the term of the pharmacy reimbursement contract
that is based on the cost of the drug involved, including drug pricing
references and amounts that are based upon average wholesale price,
wholesale average cost, average manufacturer price, average sales
price, maximum allowable cost, or other costs, whether publicly
available or not.''.
(B) Application.--The amendment made by
subparagraph (A) shall apply to any contract entered
into under section 8902 of title 5, United States Code,
on or after the date of enactment of this section.
SEC. 364. HEALTH PLAN OVERSIGHT OF PHARMACY BENEFIT MANAGER SERVICES.
Subpart II of part A of title XXVII of the Public Health Service
Act (42 U.S.C. 300gg-11 et seq.), as amended by the preceding sections,
is further amended by adding at the end the following:
``SEC. 2729E. HEALTH PLAN OVERSIGHT OF PHARMACY BENEFIT MANAGER
SERVICES.
``(a) In General.--A group health plan or health insurance issuer
offering group health insurance coverage or an entity or subsidiary
providing pharmacy benefits management services shall not enter into a
contract with a drug manufacturer, distributor, wholesaler,
subcontractor, rebate aggregator, or any associated third party that
limits the disclosure of information to plan sponsors in such a manner
that prevents the plan or coverage, or an entity or subsidiary
providing pharmacy benefits management services on behalf of a plan or
coverage from making the reports described in subsection (b).
``(b) Reports to Group Plan Sponsors.--
``(1) In general.--Beginning with the first plan year that
begins after the date of enactment of the Fair Care Act of
2022, not less frequently than once every 6 months, a health
insurance issuer offering group health insurance coverage or an
entity providing pharmacy benefits management services on
behalf of a group health plan shall submit to the plan sponsor
(as defined in section 3(16)(B) of the Employee Retirement
Income Security Act of 1974) of such group health plan or
health insurance coverage a report in accordance with this
subsection and make such report available to the plan sponsor
in a machine-readable format. Each such report shall include,
with respect to the applicable group health plan or health
insurance coverage--
``(A) information collected from drug manufacturers
by such issuer or entity on the total amount of
copayment assistance dollars paid, or copayment cards
applied, that were funded by the drug manufacturer with
respect to the enrollees in such plan or coverage;
``(B) a list of each covered drug dispensed during
the reporting period, including, with respect to each
such drug during the reporting period--
``(i) the brand name, chemical entity, and
National Drug Code;
``(ii) the number of enrollees for whom the
drug was filled during the plan year, the total
number of prescription fills for the drug
(including original prescriptions and refills),
and the total number of dosage units of the
drug dispensed across the plan year, including
whether the dispensing channel was by retail,
mail order, or specialty pharmacy;
``(iii) the wholesale acquisition cost,
listed as cost per days supply and cost per
pill, or in the case of a drug in another form,
per dose;
``(iv) the total out-of-pocket spending by
enrollees on such drug, including enrollee
spending through copayments, coinsurance, and
deductibles; and
``(v) for any drug for which gross spending
of the group health plan or health insurance
coverage exceeded $10,000 during the reporting
period--
``(I) a list of all other available
drugs in the same therapeutic category
or class, including brand name drugs
and biological products and generic
drugs or biosimilar biological products
that are in the same therapeutic
category or class; and
``(II) the rationale for preferred
formulary placement of a particular
drug or drugs in that therapeutic
category or class;
``(C) a list of each therapeutic category or class
of drugs that were dispensed under the health plan or
health insurance coverage during the reporting period,
and, with respect to each such therapeutic category or
class of drugs, during the reporting period--
``(i) total gross spending by the plan,
before manufacturer rebates, fees, or other
manufacturer remuneration;
``(ii) the number of enrollees who filled a
prescription for a drug in that category or
class;
``(iii) if applicable to that category or
class, a description of the formulary tiers and
utilization mechanisms (such as prior
authorization or step therapy) employed for
drugs in that category or class;
``(iv) the total out-of-pocket spending by
enrollees, including enrollee spending through
copayments, coinsurance, and deductibles; and
``(v) for each therapeutic category or
class under which 3 or more drugs are included
on the formulary of such plan or coverage--
``(I) the amount received, or
expected to be received, from drug
manufacturers in rebates, fees,
alternative discounts, or other
remuneration--
``(aa) to be paid by drug
manufacturers for claims
incurred during the reporting
period; or
``(bb) that is related to
utilization of drugs, in such
therapeutic category or class;
``(II) the total net spending,
after deducting rebates, price
concessions, alternative discounts or
other remuneration from drug
manufacturers, by the health plan or
health insurance coverage on that
category or class of drugs; and
``(III) the net price per course of
treatment or 30-day supply incurred by
the health plan or health insurance
coverage and its enrollees, after
manufacturer rebates, fees, and other
remuneration for drugs dispensed within
such therapeutic category or class
during the reporting period;
``(D) total gross spending on prescription drugs by
the plan or coverage during the reporting period,
before rebates and other manufacturer fees or
remuneration;
``(E) total amount received, or expected to be
received, by the health plan or health insurance
coverage in drug manufacturer rebates, fees,
alternative discounts, and all other remuneration
received from the manufacturer or any third party,
other than the plan sponsor, related to utilization of
drug or drug spending under that health plan or health
insurance coverage during the reporting period;
``(F) the total net spending on prescription drugs
by the health plan or health insurance coverage during
the reporting period; and
``(G) amounts paid directly or indirectly in
rebates, fees, or any other type of remuneration to
brokers, consultants, advisors, or any other individual
or firm who referred the group health plan's or health
insurance issuer's business to the pharmacy benefit
manager.
``(2) Privacy requirements.--Health insurance issuers
offering group health insurance coverage and entities providing
pharmacy benefits management services on behalf of a group
health plan shall provide information under paragraph (1) in a
manner consistent with the privacy, security, and breach
notification regulations promulgated under section 264(c) of
the Health Insurance Portability and Accountability Act of 1996
(or successor regulations), and shall restrict the use and
disclosure of such information according to such privacy
regulations.
``(3) Disclosure and redisclosure.--
``(A) Limitation to business associates.--A group
health plan receiving a report under paragraph (1) may
disclose such information only to business associates
of such plan as defined in section 160.103 of title 45,
Code of Federal Regulations (or successor regulations).
``(B) Clarification regarding public disclosure of
information.--Nothing in this section prevents a health
insurance issuer offering group health insurance
coverage or an entity providing pharmacy benefits
management services on behalf of a group health plan
from placing reasonable restrictions on the public
disclosure of the information contained in a report
described in paragraph (1), except that such issuer or
entity may not restrict disclosure of such report to
governmental agencies pursuant to an investigation or
enforcement action.
``(C) Limited form of report.--The Secretary shall
define through rulemaking a limited form of the report
under paragraph (1) required of plan sponsors who are
drug manufacturers, drug wholesalers, or other direct
participants in the drug supply chain, in order to
prevent anti-competitive behavior.
``(c) Limitations on Spread Pricing.--
``(1) Prescription drug transactions with pharmacies
independent of the issuer or pharmacy benefits manager.--If the
pharmacy that dispenses a prescription drug to an enrollee in a
group health plan or group or individual health insurance
coverage is not wholly or partially owned by such plan, such
issuer, or an entity providing pharmacy benefit management
services under such plan or coverage, such plan, issuer, or
entity shall not charge the plan, issuer, or enrollee a price
for such prescription drug that exceeds the price paid to the
pharmacy.
``(2) Intra-company prescription drug transactions.--If the
mail order, specialty, or retail pharmacy that dispenses a
prescription drug to an enrollee in a group health plan or
health insurance coverage is wholly or partially owned by, and
submits claims to, such health insurance issuer or an entity
providing pharmacy benefit management services under a group
health plan or group or individual health insurance coverage,
the price charged for such drug by such pharmacy to such group
health plan or health insurance issuer offering group or
individual health insurance coverage may not exceed the lesser
of--
``(A) the amount paid to the pharmacy for
acquisition of the drug; or
``(B) the median price charged to the group health
plan or health insurance issuer when the same drug is
dispensed to enrollees in the plan or coverage by other
similarly situated pharmacies not wholly or partially
owned by the health insurance issuer or entity
providing pharmacy benefits management services, as
described in paragraph (1).
``(3) Supplementary reporting for intra-company
prescription drug transactions.--A health insurance issuer of
group health insurance coverage or an entity providing pharmacy
benefits management services under a group health plan or group
health insurance coverage that conducts transactions with a
wholly or partially owned pharmacy, as described in paragraph
(2), shall submit, together with the report under subsection
(b), a supplementary report every 6 months to the plan sponsor
that includes--
``(A) an explanation of any benefit design
parameters that encourage enrollees in the plan or
coverage to fill prescriptions at mail order,
specialty, or retail pharmacies that are wholly or
partially owned by that issuer or entity;
``(B) the percentage of total prescriptions charged
to the plan, coverage, or enrollees in the plan or
coverage, that were dispensed by mail order, specialty,
or retail pharmacies that are wholly or partially owned
by the issuer or entity providing pharmacy benefits
management services; and
``(C) a list of all drugs dispensed by such wholly
or partially owned pharmacy and charged to the plan or
coverage, or enrollees of the plan or coverage, during
the applicable quarter, and, with respect to each
drug--
``(i) the amount charged per course of
treatment or 30-day supply with respect to
enrollees in the plan or coverage, including
amounts charged to the plan or coverage and
amounts charged to the enrollee;
``(ii) the median amount charged to the
plan or coverage, per course of treatment or
30-day supply, including amounts paid by the
enrollee, when the same drug is dispensed by
other pharmacies that are not wholly or
partially owned by the issuer or entity and
that are included in the pharmacy network of
that plan or coverage;
``(iii) the interquartile range of the
costs, per course of treatment or 30-day
supply, including amounts paid by the enrollee,
when the same drug is dispensed by other
pharmacies that are not wholly or partially
owned by the issuer or entity and that are
included in the pharmacy network of that plan
or coverage; and
``(iv) the lowest cost per course of
treatment or 30-day supply, for such drug,
including amounts charged to the plan or issuer
and enrollee, that is available from any
pharmacy included in the network of the plan or
coverage.
``(d) Full Rebate Pass-Through to Plan.--
``(1) In general.--A pharmacy benefits manager, a third-
party administrator of a group health plan, a health insurance
issuer offering group health insurance coverage, or an entity
providing pharmacy benefits management services under such
health plan or health insurance coverage shall remit 100
percent of rebates, fees, alternative discounts, and all other
remuneration received from a pharmaceutical manufacturer,
distributor or any other third party, that are related to
utilization of drugs under such health plan or health insurance
coverage, to the group health plan.
``(2) Form and manner of remittance.--Such rebates, fees,
alternative discounts, and other remuneration shall be--
``(A) remitted to the group health plan in a timely
fashion after the period for which such rebates, fees,
or other remuneration is calculated, and in no case
later than 90 days after the end of such period;
``(B) fully disclosed and enumerated to the group
health plan sponsor, as described in (b)(1);
``(C) available for audit by the plan sponsor, or a
third party designated by a plan sponsor no less than
once per plan year; and
``(D) returned to the issuer or entity providing
pharmaceutical benefit management services by the group
health plan if audits by such issuer or entity indicate
that the amounts received are incorrect after such
amounts have been paid to the group health plan.
``(3) Audit of rebate contracts.--A pharmacy benefits
manager, a third-party administrator of a group health plan, a
health insurance issuer offering group health insurance
coverage, or an entity providing pharmacy benefits management
services under such health plan or health insurance coverage
shall make rebate contracts with drug manufacturers available
for audit by such plan sponsor or designated third party,
subject to confidentiality agreements to prevent re-disclosure
of such contracts.
``(e) Enforcement.--
``(1) In general.--The Secretary, in consultation with the
Secretary of Labor and the Secretary of the Treasury, shall
enforce this section.
``(2) Failure to provide timely information.--A health
insurance issuer or an entity providing pharmacy benefit
management services that violates subsection (a), fails to
provide information required under subsection (b), engages in
spread pricing as defined in subsection (c), or fails to comply
with the requirements of subsection (d), or a drug manufacturer
that fails to provide information under subsection (b)(1)(A),
in a timely manner shall be subject to a civil monetary penalty
in the amount of $10,000 for each day during which such
violation continues or such information is not disclosed or
reported.
``(3) False information.--A health insurance issuer, entity
providing pharmacy benefit management services, or drug
manufacturer that knowingly provides false information under
this section shall be subject to a civil money penalty in an
amount not to exceed $100,000 for each item of false
information. Such civil money penalty shall be in addition to
other penalties as may be prescribed by law.
``(4) Procedure.--The provisions of section 1128A of the
Social Security Act, other than subsection (a) and (b) and the
first sentence of subsection (c)(1) of such section shall apply
to civil monetary penalties under this subsection in the same
manner as such provisions apply to a penalty or proceeding
under section 1128A of the Social Security Act.
``(5) Safe harbor.--The Secretary may waive penalties under
paragraph (2), or extend the period of time for compliance with
a requirement of this section, for an entity in violation of
this section that has made a good-faith effort to comply with
this section.
``(f) Rule of Construction.--Nothing in this section shall be
construed to prohibit payments to entities offering pharmacy benefits
management services for bona fide services using a fee structure not
contemplated by this section, provided that such fees are transparent
to group health plans and health insurance issuers.
``(g) Definitions.--In this section--
``(1) the term `similarly situated pharmacy' means, with
respect to a particular pharmacy, another pharmacy that is
approximately the same size (as measured by the number of
prescription drugs dispensed), and that serves patients in the
same geographical area, whether through physical locations or
mail order; and
``(2) the term `wholesale acquisition cost' has the meaning
given such term in section 1847A(c)(6)(B) of the Social
Security Act.''.
SEC. 365. STUDY BY COMPTROLLER GENERAL OF UNITED STATES.
(a) In General.--The Comptroller General of the United States
(referred to in this section as the ``Comptroller General'') shall, in
consultation with appropriate stakeholders, conduct a study on the role
of pharmacy benefit managers.
(b) Permissible Examination.--In conducting the study required
under subsection (a), the Comptroller General may examine various
qualitative and quantitative aspects of the role of pharmacy benefit
managers, such as the following:
(1) The role that pharmacy benefit managers play in the
pharmaceutical supply chain.
(2) The state of competition among pharmacy benefit
managers, including the market share for the Nation's largest
pharmacy benefit managers.
(3) The use of rebates and fees by pharmacy benefit
managers, including--
(A) the extent to which rebates are passed on to
health plans and whether such rebates are passed on to
individuals enrolled in such plans;
(B) the extent to which rebates are kept by such
pharmacy benefit managers; and
(C) the role of any fees charged by such pharmacy
benefit managers.
(4) Whether pharmacy benefit managers structure their
formularies in favor of high-rebate prescription drugs over
lower-cost, lower-rebate alternatives.
(5) The average prior authorization approval time for
pharmacy benefit managers.
(6) Factors affecting the use of step therapy by pharmacy
benefit managers.
(c) Report.--Not later than 3 years after the date of enactment of
this Act, the Comptroller General shall submit to the Secretary of
Health and Human Services, the Committee on Health, Education, Labor,
and Pensions of the Senate, and the Committee on Energy and Commerce of
the House of Representatives a report containing the results of the
study conducted under subsection (a), including policy recommendations.
Subtitle E--Medicare and Medicaid Prescription Drug Reforms
SEC. 371. MEDICARE PART D MODERNIZATION REDESIGN.
(a) Benefit Structure Redesign.--Section 1860D-2(b) of the Social
Security Act (42 U.S.C. 1395w-102(b)) is amended--
(1) in paragraph (2)--
(A) in subparagraph (A), in the matter preceding
clause (i), by inserting ``for a year preceding 2023
and for costs above the annual deductible specified in
paragraph (1) and up to the annual out-of-pocket
threshold specified in paragraph (4)(B) for 2023 and
each subsequent year'' after ``paragraph (3)'';
(B) in subparagraph (C)--
(i) in clause (i), in the matter preceding
subclause (I), by inserting ``for a year
preceding 2023,'' after ``paragraph (4),''; and
(ii) in clause (ii)(III), by striking ``and
each subsequent year'' and inserting ``, 2021,
and 2022''; and
(C) in subparagraph (D)--
(i) in clause (i)--
(I) in the matter preceding
subclause (I), by inserting ``for a
year preceding 2023,'' after
``paragraph (4),''; and
(II) in subclause (I)(bb), by
striking ``a year after 2018'' and
inserting ``each of years 2018 through
2022''; and
(ii) in clause (ii)(V), by striking ``2019
and each subsequent year'' and inserting ``each
of years 2019 through 2022'';
(2) in paragraph (3)(A)--
(A) in the matter preceding clause (i), by
inserting ``for a year preceding 2023,'' after ``and
(4),''; and
(B) in clause (ii), by striking ``for a subsequent
year'' and inserting ``for each of years 2007 through
2022'';
(3) in paragraph (4)--
(A) in subparagraph (A)--
(i) in clause (i)--
(I) by redesignating subclauses (I)
and (II) as items (aa) and (bb),
respectively, and indenting
appropriately;
(II) in the matter preceding item
(aa), as redesignated by subclause (I),
by striking ``is equal to the greater
of--'' and inserting ``is equal to--
``(I) for a year preceding 2023,
the greater of--'';
(III) by striking the period at the
end of item (bb), as redesignated by
subclause (I), and inserting ``; and'';
and
(IV) by adding at the end the
following:
``(II) for 2023 and each succeeding
year, $0.''; and
(ii) in clause (ii)--
(I) by striking ``clause (i)(I)''
and inserting ``clause (i)(I)(aa)'';
and
(II) by adding at the end the
following new sentence: ``The Secretary
shall continue to calculate the dollar
amounts specified in clause (i)(I)(aa),
including with the adjustment under
this clause, after 2022 for purposes of
section 1860D-14(a)(1)(D)(iii).'';
(B) in subparagraph (B)--
(i) in clause (i)--
(I) in subclause (V), by striking
``or'' at the end;
(II) in subclause (VI)--
(aa) by striking ``for a
subsequent year'' and inserting
``for 2021 and 2022''; and
(bb) by striking the period
at the end and inserting a
semicolon; and
(III) by adding at the end the
following new subclauses:
``(VII) for 2023, is equal to
$3,100; or
``(VIII) for a subsequent year, is
equal to the amount specified in this
subparagraph for the previous year,
increased by the annual percentage
increase described in paragraph (6) for
the year involved.''; and
(ii) in clause (ii), by striking ``clause
(i)(II)'' and inserting ``clause (i)'';
(C) in subparagraph (C)(i), by striking ``and for
amounts'' and inserting ``and for a year preceding 2023
for amounts''; and
(D) in subparagraph (E), by striking ``In
applying'' and inserting ``For each of 2011 through
2022, in applying''.
(b) Reduction in Beneficiary Coinsurance.--
(1) In general.--Section 1860D-2(b)(2)(A) of the Social
Security Act (42 U.S.C. 1395w-102(b)(2)(A)), as amended by
subsection (a), is amended--
(A) by redesignating clauses (i) and (ii) as
subclauses (I) and (II) and moving such subclauses 2
ems to the right;
(B) by striking ``25 percent coinsurance.--Subject
to'' and inserting ``Coinsurance.--
``(i) In general.--Subject to'';
(C) in each of subclauses (I) and (II), as
redesignated by subparagraph (A), by striking ``25
percent'' and inserting ``the applicable percentage (as
defined in clause (ii))''; and
(D) by adding at the end the following new clause:
``(ii) Applicable percentage defined.--For
purposes of clause (i), the term `applicable
percentage' means--
``(I) for a year preceding 2023, 25
percent; and
``(II) for 2023 and each subsequent
year, 20 percent.''.
(2) Conforming amendment.--Section 1860D-14(a)(2)(D) of the
Social Security Act (42 U.S.C. 1395w-114(a)(2)(D)) is amended
by striking ``25 percent'' and inserting ``the applicable
percentage''.
(c) Decreasing Reinsurance Payment Amount.--Section 1860D-15(b) of
the Social Security Act (42 U.S.C. 1395w-115(b)) is amended--
(1) in paragraph (1)--
(A) by striking ``equal to 80 percent'' and
inserting ``equal to--
``(A) for a year preceding 2023, 80 percent'';
(B) in subparagraph (A), as added by paragraph (1),
by striking the period at the end and inserting ``;
and''; and
(C) by adding at the end the following new
subparagraph:
``(B) for 2023 and each subsequent year, the sum
of--
``(i) an amount equal to the applicable
percentage specified in paragraph (5)(A) of
such allowable reinsurance costs attributable
to that portion of gross prescription drug
costs as specified in paragraph (3) incurred in
the coverage year after such individual has
incurred costs that exceed the annual out-of-
pocket threshold specified in section 1860D-
2(b)(4)(B) with respect to applicable drugs (as
defined in section 1860D-14B(g)(2)); and
``(ii) an amount equal to the applicable
percentage specified in paragraph (5)(B) of
allowable reinsurance costs attributable to
that portion of gross prescription drug costs
as specified in paragraph (3) incurred in the
coverage year after such individual has
incurred costs that exceed the annual out-of-
pocket threshold specified in section 1860D-
2(b)(4)(B) with respect to covered part D drugs
that are not applicable drugs (as so
defined).''; and
(2) by adding at the end the following new paragraph:
``(5) Applicable percentage specified.--For purposes of
paragraph (1)(B), the applicable percentage specified in this
paragraph is--
``(A) with respect to applicable drugs (as defined
in section 1860D-14B(g)(2))--
``(i) for 2023, 60 percent;
``(ii) for 2024, 40 percent; and
``(iii) for 2025 and each subsequent year,
20 percent; and
``(B) with respect to covered part D drugs that are
not applicable drugs (as so defined)--
``(i) for 2023, 80 percent;
``(ii) for 2024, 60 percent; and
``(iii) for 2025 and each subsequent year,
40 percent.''.
(d) Manufacturer Discount Program During Initial and Catastrophic
Phases of Coverage.--
(1) In general.--Part D of title XVIII of the Social
Security Act is amended by inserting after section 1860D-14A
(42 U.S.C. 1495w-114) the following new section:
``SEC. 1860D-14B. MANUFACTURER DISCOUNT PROGRAM.
``(a) Establishment.--The Secretary shall establish a manufacturer
discount program (in this section referred to as the `program'). Under
the program, the Secretary shall enter into agreements described in
subsection (b) with manufacturers and provide for the performance of
the duties described in subsection (c). The Secretary shall establish a
model agreement for use under the program by not later than January 1,
2022, in consultation with manufacturers, and allow for comment on such
model agreement.
``(b) Terms of Agreement.--
``(1) In general.--
``(A) Agreement.--An agreement under this section
shall require the manufacturer to provide applicable
beneficiaries access to discounted prices for
applicable drugs of the manufacturer that are dispensed
on or after January 1, 2023.
``(B) Provision of discounted prices at the point-
of-sale.--The discounted prices described in
subparagraph (A) shall be provided to the applicable
beneficiary at the pharmacy or by the mail order
service at the point-of-sale of an applicable drug.
``(2) Provision of appropriate data.--Each manufacturer
with an agreement in effect under this section shall collect
and have available appropriate data, as determined by the
Secretary, to ensure that it can demonstrate to the Secretary
compliance with the requirements under the program.
``(3) Compliance with requirements for administration of
program.--Each manufacturer with an agreement in effect under
this section shall comply with requirements imposed by the
Secretary or a third party with a contract under subsection
(d)(3), as applicable, for purposes of administering the
program, including any determination under subparagraph (A) of
subsection (c)(1) or procedures established under such
subsection (c)(1).
``(4) Length of agreement.--
``(A) In general.--An agreement under this section
shall be effective for an initial period of not less
than 12 months and shall be automatically renewed for a
period of not less than 1 year unless terminated under
subparagraph (B).
``(B) Termination.--
``(i) By the secretary.--The Secretary may
provide for termination of an agreement under
this section for a knowing and willful
violation of the requirements of the agreement
or other good cause shown. Such termination
shall not be effective earlier than 30 days
after the date of notice to the manufacturer of
such termination. The Secretary shall provide,
upon request, a manufacturer with a hearing
concerning such a termination, and such hearing
shall take place prior to the effective date of
the termination with sufficient time for such
effective date to be repealed if the Secretary
determines appropriate.
``(ii) By a manufacturer.--A manufacturer
may terminate an agreement under this section
for any reason. Any such termination shall be
effective, with respect to a plan year--
``(I) if the termination occurs
before January 30 of a plan year, as of
the day after the end of the plan year;
and
``(II) if the termination occurs on
or after January 30 of a plan year, as
of the day after the end of the
succeeding plan year.
``(iii) Effectiveness of termination.--Any
termination under this subparagraph shall not
affect discounts for applicable drugs of the
manufacturer that are due under the agreement
before the effective date of its termination.
``(iv) Notice to third party.--The
Secretary shall provide notice of such
termination to a third party with a contract
under subsection (d)(3) within not less than 30
days before the effective date of such
termination.
``(5) Effective date of agreement.--An agreement under this
section shall take effect on a date determined appropriate by
the Secretary, which may be at the start of a calendar quarter.
``(c) Duties Described.--The duties described in this subsection
are the following:
``(1) Administration of program.--Administering the
program, including--
``(A) the determination of the amount of the
discounted price of an applicable drug of a
manufacturer;
``(B) the establishment of procedures under which
discounted prices are provided to applicable
beneficiaries at pharmacies or by mail order service at
the point-of-sale of an applicable drug;
``(C) the establishment of procedures to ensure
that, not later than the applicable number of calendar
days after the dispensing of an applicable drug by a
pharmacy or mail order service, the pharmacy or mail
order service is reimbursed for an amount equal to the
difference between--
``(i) the negotiated price of the
applicable drug; and
``(ii) the discounted price of the
applicable drug;
``(D) the establishment of procedures to ensure
that the discounted price for an applicable drug under
this section is applied before any coverage or
financial assistance under other health benefit plans
or programs that provide coverage or financial
assistance for the purchase or provision of
prescription drug coverage on behalf of applicable
beneficiaries as the Secretary may specify; and
``(E) providing a reasonable dispute resolution
mechanism to resolve disagreements between
manufacturers, applicable beneficiaries, and the third
party with a contract under subsection (d)(3).
``(2) Monitoring compliance.--
``(A) In general.--The Secretary shall monitor
compliance by a manufacturer with the terms of an
agreement under this section.
``(B) Notification.--If a third party with a
contract under subsection (d)(3) determines that the
manufacturer is not in compliance with such agreement,
the third party shall notify the Secretary of such
noncompliance for appropriate enforcement under
subsection (e).
``(3) Collection of data from prescription drug plans and
ma-pd plans.--The Secretary may collect appropriate data from
prescription drug plans and MA-PD plans in a timeframe that
allows for discounted prices to be provided for applicable
drugs under this section.
``(d) Administration.--
``(1) In general.--Subject to paragraph (2), the Secretary
shall provide for the implementation of this section, including
the performance of the duties described in subsection (c).
``(2) Limitation.--In providing for the implementation of
this section, the Secretary shall not receive or distribute any
funds of a manufacturer under the program.
``(3) Contract with third parties.--The Secretary shall
enter into a contract with 1 or more third parties to
administer the requirements established by the Secretary in
order to carry out this section. At a minimum, the contract
with a third party under the preceding sentence shall require
that the third party--
``(A) receive and transmit information between the
Secretary, manufacturers, and other individuals or
entities the Secretary determines appropriate;
``(B) receive, distribute, or facilitate the
distribution of funds of manufacturers to appropriate
individuals or entities in order to meet the
obligations of manufacturers under agreements under
this section;
``(C) provide adequate and timely information to
manufacturers, consistent with the agreement with the
manufacturer under this section, as necessary for the
manufacturer to fulfill its obligations under this
section; and
``(D) permit manufacturers to conduct periodic
audits, directly or through contracts, of the data and
information used by the third party to determine
discounts for applicable drugs of the manufacturer
under the program.
``(4) Performance requirements.--The Secretary shall
establish performance requirements for a third party with a
contract under paragraph (3) and safeguards to protect the
independence and integrity of the activities carried out by the
third party under the program under this section.
``(5) Administration.--Chapter 35 of title 44, United
States Code, shall not apply to the program under this section.
``(6) Funding.--For purposes of carrying out this section,
the Secretary shall provide for the transfer, from the Federal
Supplementary Medical Insurance Trust Fund under section 1841
to the Centers for Medicare & Medicaid Services Program
Management Account, of $4,000,000 for each of fiscal years 2020
through 2023, to remain available until expended.''.
``(e) Enforcement.--
``(1) Audits.--Each manufacturer with an agreement in
effect under this section shall be subject to periodic audit by
the Secretary.
``(2) Civil money penalty.--
``(A) In general.--The Secretary shall impose a
civil money penalty on a manufacturer that fails to
provide applicable beneficiaries discounts for
applicable drugs of the manufacturer in accordance with
such agreement for each such failure in an amount the
Secretary determines is commensurate with the sum of--
``(i) the amount that the manufacturer
would have paid with respect to such discounts
under the agreement, which will then be used to
pay the discounts which the manufacturer had
failed to provide; and
``(ii) 25 percent of such amount.
``(B) Application.--The provisions of section 1128A
(other than subsections (a) and (b)) shall apply to a
civil money penalty under this paragraph in the same
manner as such provisions apply to a penalty or
proceeding under section 1128A(a).
``(f) Clarification Regarding Availability of Other Covered Part D
Drugs.--Nothing in this section shall prevent an applicable beneficiary
from purchasing a covered part D drug that is not an applicable drug
(including a generic drug or a drug that is not on the formulary of the
prescription drug plan or MA-PD plan that the applicable beneficiary is
enrolled in).
``(g) Definitions.--In this section:
``(1) Applicable beneficiary.--The term `applicable
beneficiary' means an individual who, on the date of dispensing
a covered part D drug--
``(A) is enrolled in a prescription drug plan or an
MA-PD plan;
``(B) is not enrolled in a qualified retiree
prescription drug plan; and
``(C) has incurred costs for covered part D drugs
in the year that are above the annual deductible
specified in section 1860D-2(b)(1) for such year.
``(2) Applicable drug.--The term `applicable drug' means,
with respect to an applicable beneficiary, a covered part D
drug--
``(A) approved under a new drug application under
section 505(c) of the Federal Food, Drug, and Cosmetic
Act or, in the case of a biologic product, licensed
under section 351 of the Public Health Service Act
(including a product licensed under subsection (k) of
such section 351); and
``(B)(i) if the PDP sponsor of the prescription
drug plan or the MA organization offering the MA-PD
plan uses a formulary, which is on the formulary of the
prescription drug plan or MA-PD plan that the
applicable beneficiary is enrolled in;
``(ii) if the PDP sponsor of the prescription drug
plan or the MA organization offering the MA-PD plan
does not use a formulary, for which benefits are
available under the prescription drug plan or MA-PD
plan that the applicable beneficiary is enrolled in; or
``(iii) is provided through an exception or appeal.
``(3) Applicable number of calendar days.--The term
`applicable number of calendar days' means--
``(A) with respect to claims for reimbursement
submitted electronically, 14 days; and
``(B) with respect to claims for reimbursement
submitted otherwise, 30 days.
``(4) Discounted price.--
``(A) In general.--The term `discounted price'
means--
``(i) with respect to an applicable drug
dispensed for an applicable beneficiary who has
incurred costs that are below the annual out-
of-pocket threshold specified in section 1860D-
2(b)(4)(B) for the year, 93 percent of the
negotiated price of the applicable drug of a
manufacturer; and
``(ii) with respect to an applicable drug
dispensed for an applicable beneficiary who has
incurred costs for covered part D drugs in the
year that are equal to or exceed the annual
out-of-pocket threshold specified in section
1860D-2(b)(4)(B) for the year, 86 percent of
the negotiated price of the applicable drug of
a manufacturer.
``(B) Clarification.--Nothing in this section shall
be construed as affecting the responsibility of an
applicable beneficiary for payment of a dispensing fee
for an applicable drug.
``(C) Clarification for certain claims.--With
respect to the amount of the negotiated price of an
individual claim for an applicable drug with respect to
an applicable beneficiary, the manufacturer of the
applicable drug shall provide--
``(i) the discounted price under clause (i)
of subparagraph (A) only on the portion of the
negotiated price of the applicable drug that
falls above the deductible specified in section
1860D-2(b)(1) for the year and below the annual
out-of-pocket threshold specified in section
1860D-2(b)(4)(B) for the year; and
``(ii) the discounted price under clause
(ii) of subparagraph (A) only on the portion of
the negotiated price of the applicable drug
that falls at or above such annual out-of-
pocket threshold.
``(5) Manufacturer.--The term `manufacturer' means any
entity which is engaged in the production, preparation,
propagation, compounding, conversion, or processing of
prescription drug products, either directly or indirectly by
extraction from substances of natural origin, or independently
by means of chemical synthesis, or by a combination of
extraction and chemical synthesis. Such term does not include a
wholesale distributor of drugs or a retail pharmacy licensed
under State law.
``(6) Negotiated price.--The term `negotiated price' has
the meaning given such term in section 1860D-2(d)(1)(B), except
that such negotiated price shall not include any dispensing fee
for the applicable drug.
``(7) Qualified retiree prescription drug plan.--The term
`qualified retiree prescription drug plan' has the meaning
given such term in section 1860D-22(a)(2).''.
(2) Sunset of medicare coverage gap discount program.--
Section 1860D-14A of the Social Security Act (42 U.S.C. 1395-
114a) is amended--
(A) in subsection (a), in the first sentence, by
striking ``The Secretary'' and inserting ``Subject to
subsection (h), the Secretary''; and
(B) by adding at the end the following new
subsection:
``(h) Sunset of Program.--
``(1) In general.--The program shall not apply to
applicable drugs dispensed on or after January 1, 2023, and,
subject to paragraph (2), agreements under this section shall
be terminated as of such date.
``(2) Continued application for applicable drugs dispensed
prior to sunset.--The provisions of this section (including all
responsibilities and duties) shall continue to apply after
January 1, 2023, with respect to applicable drugs dispensed
prior to such date.''.
(3) Inclusion of actuarial value of manufacturer discounts
in bids.--Section 1860D-11 of the Social Security Act (42
U.S.C. 1395w-111) is amended--
(A) in subsection (b)(2)(C)(iii)--
(i) by striking ``assumptions regarding the
reinsurance'' and inserting ``assumptions
regarding--
``(I) the reinsurance''; and
(ii) by adding at the end the following:
``(II) for 2023 and each subsequent
year, the manufacturer discounts
provided under section 1860D-14B
subtracted from the actuarial value to
produce such bid; and''; and
(B) in subsection (c)(1)(C)--
(i) by striking ``an actuarial valuation of
the reinsurance'' and inserting ``an actuarial
valuation of--
``(i) the reinsurance'';
(ii) in clause (i), as added by clause (i)
of this subparagraph, by adding ``and'' at the
end; and
(iii) by adding at the end the following:
``(ii) for 2023 and each subsequent year,
the manufacturer discounts provided under
section 1860D-14B;''.
(4) Clarification regarding exclusion of manufacturer
discounts from troop.--Section 1860D-2(b)(4) of the Social
Security Act (42 U.S.C. 1395w-102(b)(4)) is amended--
(A) in subparagraph (C), by inserting ``and subject
to subparagraph (F)'' after ``subparagraph (E)''; and
(B) by adding at the end the following new
subparagraph:
``(F) Clarification regarding exclusion of
manufacturer discounts.--In applying subparagraph (A),
incurred costs shall not include any manufacturer
discounts provided under section 1860D-14B.''.
(e) Determination of Allowable Reinsurance Costs.--Section 1860D-
15(b) of the Social Security Act (42 U.S.C. 1395w-115(b)) is amended--
(1) in paragraph (2)--
(A) by striking ``costs.--For purposes'' and
inserting ``costs.--
``(A) In general.--Subject to subparagraph (B), for
purposes''; and
(B) by adding at the end the following new
subparagraph:
``(B) Inclusion of manufacturer discounts on
applicable drugs.--For purposes of applying
subparagraph (A), the term `allowable reinsurance
costs' shall include the portion of the negotiated
price (as defined in section 1860D-14B(g)(6)) of an
applicable drug (as defined in section 1860D-14B(g)(2))
that was paid by a manufacturer under the manufacturer
discount program under section 1860D-14B.''; and
(2) in paragraph (3)--
(A) in the first sentence, by striking ``For
purposes'' and inserting ``Subject to paragraph (2)(B),
for purposes''; and
(B) in the second sentence, by inserting ``or, in
the case of an applicable drug, by a manufacturer''
after ``by the individual or under the plan''.
(f) Updating Risk Adjustment Methodologies To Account for Part D
Modernization Redesign.--Section 1860D-15(c) of the Social Security Act
(42 U.S.C. 1395w-115(c)) is amended by adding at the end the following
new paragraph:
``(3) Updating risk adjustment methodologies to account for
part d modernization redesign.--The Secretary shall update the
risk adjustment methodologies used to adjust bid amounts
pursuant to this subsection as appropriate to take into account
changes in benefits under this part pursuant to the amendments
made by section 371 of the Fair Care Act of 2022.''.
(g) Conditions for Coverage of Drugs Under This Part.--Section
1860D-43 of the Social Security Act (42 U.S.C. 1395w-153) is amended--
(1) in subsection (a)--
(A) in paragraph (2), by striking ``and'' at the
end;
(B) in paragraph (3), by striking the period at the
end and inserting a semicolon; and
(C) by adding at the end the following new
paragraphs:
``(4) participate in the manufacturer discount program
under section 1860D-14B;
``(5) have entered into and have in effect an agreement
described in subsection (b) of such section 1860D-14B with the
Secretary; and
``(6) have entered into and have in effect, under terms and
conditions specified by the Secretary, a contract with a third
party that the Secretary has entered into a contract with under
subsection (d)(3) of such section 1860D-14B.'';
(2) by striking subsection (b) and inserting the following:
``(b) Effective Date.--Paragraphs (1) through (3) of subsection (a)
shall apply to covered part D drugs dispensed under this part on or
after January 1, 2011, and before January 1, 2023, and paragraphs (4)
through (6) of such subsection shall apply to covered part D drugs
dispensed on or after January 1, 2023.''; and
(3) in subsection (c), by striking paragraph (2) and
inserting the following:
``(2) the Secretary determines that in the period beginning
on January 1, 2011, and ending on December 31, 2011 (with
respect to paragraphs (1) through (3) of subsection (a)), or
the period beginning on January 1, 2023, and ending December
31, 2023 (with respect to paragraphs (4) through (6) of such
subsection), there were extenuating circumstances.''.
(h) Conforming Amendments.--
(1) Section 1860D-2 of the Social Security Act (42 U.S.C.
1395w-102) is amended--
(A) in subsection (a)(2)(A)(i)(I), by striking ``,
or an increase in the initial'' and inserting ``or for
a year preceding 2023 an increase in the initial'';
(B) in subsection (c)(1)(C)--
(i) in the subparagraph heading, by
striking ``at initial coverage limit''; and
(ii) by inserting ``for a year preceding
2023 or the annual out-of-pocket threshold
specified in subsection (b)(4)(B) for the year
for 2023 and each subsequent year'' after
``subsection (b)(3) for the year'' each place
it appears; and
(C) in subsection (d)(1)(A), by striking ``or an
initial'' and inserting ``or for a year preceding 2023
an initial''.
(2) Section 1860D-4(a)(4)(B)(i) of the Social Security Act
(42 U.S.C. 1395w-104(a)(4)(B)(i)) is amended by striking ``the
initial'' and inserting ``for a year preceding 2023, the
initial''.
(3) Section 1860D-14(a) of the Social Security Act (42
U.S.C. 1395w-114(a)) is amended--
(A) in paragraph (1)--
(i) in subparagraph (C), by striking ``The
continuation'' and inserting ``For a year
preceding 2023, the continuation'';
(ii) in subparagraph (D)(iii), by striking
``1860D-2(b)(4)(A)(i)(I)'' and inserting
``1860D-2(b)(4)(A)(i)(I)(aa)''; and
(iii) in subparagraph (E), by striking
``The elimination'' and inserting ``For a year
preceding 2023, the elimination''; and
(B) in paragraph (2)--
(i) in subparagraph (C), by striking ``The
continuation'' and inserting ``For a year
preceding 2023, the continuation''; and
(ii) in subparagraph (E)--
(I) by inserting ``for a year
preceding 2023,'' after ``subsection
(c)''; and
(II) by striking ``1860D-
2(b)(4)(A)(i)(I)'' and inserting
``1860D-2(b)(4)(A)(i)(I)(aa)''.
(4) Section 1860D-21(d)(7) of the Social Security Act (42
U.S.C. 1395w-131(d)(7)) is amended by striking ``section 1860D-
2(b)(B)(4)(B)(i)'' and inserting ``section 1860D-
2(b)(B)(4)(C)(i)''.
(5) Section 1860D-22(a)(2)(A) of the Social Security Act
(42 U.S.C. 1395w-132(a)(2)(A)) is amended--
(A) by striking ``the value of any discount'' and
inserting the following: ``the value of--
``(i) for years prior to 2023, any
discount'';
(B) in clause (i), as inserted by subparagraph (A)
of this paragraph, by striking the period at the end
and inserting ``; and''; and
(C) by adding at the end the following new clause:
``(ii) for 2023 and each subsequent year,
any discount provided pursuant to section
1860D-14B.''.
(6) Section 1860D-41(a)(6) of the Social Security Act (42
U.S.C. 1395w-151(a)(6)) is amended--
(A) by inserting ``for a year before 2023'' after
``1860D-2(b)(3)''; and
(B) by inserting ``for such year'' before the
period.
(i) Effective Date.--The amendments made by this section shall
apply to plan year 2023 and subsequent plan years.
SEC. 372. MAXIMUM MONTHLY CAP ON COST-SHARING PAYMENTS UNDER
PRESCRIPTION DRUG PLANS AND MA-PD PLANS.
(a) In General.--Section 1860D-2(b) of the Social Security Act (42
U.S.C. 1395w-102(b)), as amended by section 121, is amended--
(1) in paragraph (2)--
(A) in subparagraph (A), by striking ``and (D)''
and inserting ``, (D), and (E)''; and
(B) by adding at the end the following new
subparagraph:
``(E) Maximum monthly cap on cost-sharing
payments.--
``(i) In general.--For plan years beginning
on or after January 1, 2023, the Secretary
shall, through notice and comment rulemaking,
establish a process under which each PDP
sponsor offering a prescription drug plan and
each MA organization offering an MA-PD plan
shall provide to any enrollee, including an
enrollee who is a subsidy eligible individual
(as defined in paragraph (3) of section 1860D-
14(a)), the option to elect with respect to a
plan year to have their monthly cost-sharing
payments under the plan capped in accordance
with this subparagraph.
``(ii) Determination of maximum monthly
cap.--For each month in the plan year after an
enrollee in a prescription drug plan or an MA-
PD plan has made an election pursuant to clause
(i), the PDP sponsor or MA organization shall
determine a maximum monthly cap (as defined in
clause (iv)) for such enrollee.
``(iii) Beneficiary monthly payments.--With
respect to an enrollee who has made an election
pursuant to clause (i), for each month
described in clause (ii), the PDP sponsor or MA
organization shall bill such enrollee an amount
(not to exceed the maximum monthly cap) for the
out-of-pocket costs of such enrollee in such
month.
``(iv) Maximum monthly cap defined.--In
this subparagraph, the term `maximum monthly
cap' means, with respect to an enrollee--
``(I) for the first month in which
this subparagraph applies, an amount
determined by calculating--
``(aa) the annual out-of-
pocket threshold specified in
paragraph (4)(B) minus the
incurred costs of the enrollee
as described in paragraph
(4)(C); divided by
``(bb) the number of months
remaining in the plan year; and
``(II) for a subsequent month, an
amount determined by calculating--
``(aa) the sum of any
remaining out-of-pocket costs
owed by the enrollee from a
previous month that have not
yet been billed to the enrollee
and any additional costs
incurred by the enrollee;
divided by
``(bb) the number of months
remaining in the plan year.
``(v) Additional requirements.--The
following requirements shall apply with respect
to the option to make an election pursuant to
clause (i) under this subparagraph:
``(I) Secretarial
responsibilities.--The Secretary shall
provide information to part D eligible
individuals on the option to make such
election through educational materials,
including through the notices provided
under section 1804(a).
``(II) Timing of election.--An
enrollee in a prescription drug plan or
an MA-PD plan may make such an
election--
``(aa) prior to the
beginning of the plan year; or
``(bb) in any month during
the plan year.
``(III) PDP sponsor and ma
organization responsibilities.--Each
PDP sponsor offering a prescription
drug plan or MA organization offering
an MA-PD plan--
``(aa) may not limit the
option for an enrollee to make
such an election to certain
covered part D drugs;
``(bb) shall, prior to the
plan year, notify prospective
enrollees of the option to make
such an election in promotional
materials;
``(cc) shall include
information on such option in
enrollee educational materials;
``(dd) shall have in place
a mechanism to notify a
pharmacy during the plan year
when an enrollee incurs out-of-
pocket costs with respect to
covered part D drugs that make
it likely the enrollee may
benefit from making such an
election;
``(ee) shall provide that a
pharmacy, after receiving a
notification described in item
(dd) with respect to an
enrollee, informs the enrollee
of such notification;
``(ff) shall ensure that
such an election by an enrollee
has no effect on the amount
paid to pharmacies (or the
timing of such payments) with
respect to covered part D drugs
dispensed to the enrollee; and
``(gg) shall have in place
a financial reconciliation
process to correct inaccuracies
in payments made by an enrollee
under this subparagraph with
respect to covered part D drugs
during the plan year.
``(IV) Failure to pay amount
billed.--If an enrollee fails to pay
the amount billed for a month as
required under this subparagraph, the
election of the enrollee pursuant to
clause (i) shall be terminated and
enrollee shall pay the cost-sharing
otherwise applicable for any covered
part D drugs subsequently dispensed to
the enrollee up to the annual out-of-
pocket threshold specified in paragraph
(4)(B).
``(V) Clarification regarding past
due amounts.--Nothing in this
subparagraph shall be construed as
prohibiting a PDP sponsor or an MA
organization from billing an enrollee
for an amount owed under this
subparagraph.
``(VI) Treatment of unsettled
balances.--Any unsettled balances with
respect to amounts owed under this
subparagraph shall be treated as plan
losses and the Secretary shall not be
liable for any such balances outside of
those assumed as losses estimated in
plan bids.''; and
(2) in paragraph (4)--
(A) in subparagraph (C), by striking ``and subject
to subparagraph (F)'' and inserting ``and subject to
subparagraphs (F) and (G)''; and
(B) by adding at the end the following new
subparagraph:
``(G) Inclusion of costs paid under maximum monthly
cap option.--In applying subparagraph (A), with respect
to an enrollee who has made an election pursuant to
clause (i) of paragraph (2)(E), costs shall be treated
as incurred if such costs are paid by a PDP sponsor or
an MA organization under the process provided under
such paragraph.''.
(b) Application to Alternative Prescription Drug Coverage.--Section
1860D-2(c) of the Social Security Act (42 U.S.C. 1395w-102(c)) is
amended by adding at the end the following new paragraph:
``(4) Same maximum monthly cap on cost-sharing.--For plan
years beginning on or after January 1, 2023, the maximum
monthly cap on cost-sharing payments under the process provided
under subsection (b)(2)(E) shall apply to such coverage.''.
SEC. 373. MEDICARE PART B REBATE BY MANUFACTURERS FOR DRUGS OR
BIOLOGICALS WITH PRICES INCREASING FASTER THAN INFLATION.
(a) In General.--Section 1847A of the Social Security Act (42
U.S.C. 1395w-3a) is amended by adding at the end the following new
subsection:
``(h) Rebate by Manufacturers for Drugs or Biologicals With Prices
Increasing Faster Than Inflation.--
``(1) Requirements.--
``(A) Secretarial provision of information.--Not
later than 6 months after the end of each rebate period
(as defined in paragraph (2)(A)) beginning on or after
January 1, 2023, the Secretary shall, for each
rebatable drug (as defined in paragraph (2)(B)), report
to each manufacturer of such rebatable drug the
following for such rebate period:
``(i) Information on the total number of
units of the billing and payment code described
in subparagraph (A)(i) of paragraph (3) with
respect to such rebatable drug and rebate
period.
``(ii) Information on the amount (if any)
of the excess average sales price increase
described in subparagraph (A)(ii) of such
paragraph for such rebatable drug and rebate
period.
``(iii) The rebate amount specified under
such paragraph for such rebatable drug and
rebate period.
``(B) Manufacturer rebate.--
``(i) In general.--Subject to clause (ii),
for each rebate period beginning on or after
January 1, 2023, the manufacturer of a
rebatable drug shall, for such drug, not later
than 30 days after the date of receipt from the
Secretary of the information and rebate amount
pursuant to subparagraph (A) for such rebate
period, provide to the Secretary a rebate that
is equal to the amount specified in paragraph
(3) for such drug for such rebate period.
``(ii) Exemption for shortages.--The
Secretary may reduce or waive the rebate under
this subparagraph with respect to a rebatable
drug that is listed on the drug shortage list
maintained by the Food and Drug Administration
pursuant to section 506E of the Federal Food,
Drug, and Cosmetic Act.
``(C) Request for reconsideration.--The Secretary
shall establish procedures under which a manufacturer
of a rebatable drug may request a reconsideration by
the Secretary of the rebate amount specified under
paragraph (3) for such rebatable drug and rebate
period, as reported to the manufacturer pursuant to
subparagraph (A)(iii).
``(2) Rebate period and rebatable drug defined.--In this
subsection:
``(A) Rebate period.--The term `rebate period'
means a calendar quarter beginning on or after January
1, 2023.
``(B) Rebatable drug.--The term `rebatable drug'
means a single source drug or biological (other than a
biosimilar biological product)--
``(i) described in section 1842(o)(1)(C)
for which the payment amount is provided under
this section; or
``(ii) for which payment is made separately
under section 1833(i) or section 1833(t) and
for which the payment amount is calculated
based on the payment amount under this section.
``(3) Rebate amount.--
``(A) In general.--For purposes of paragraph
(1)(B), the amount specified in this paragraph for a
rebatable drug assigned to a billing and payment code
for a rebate period is, subject to paragraph (4), the
amount equal to the product of--
``(i) subject to subparagraph (B), the
total number of units of the billing and
payment code for such rebatable drug furnished
during the rebate period; and
``(ii) the amount (if any) by which--
``(I) the amount determined under
subsection (b)(4) for such rebatable
drug during the rebate period; exceeds
``(II) the inflation-adjusted base
payment amount determined under
subparagraph (C) of this paragraph for
such rebatable drug during the rebate
period.
``(B) Excluded units.--For purposes of subparagraph
(A)(i), the total number of units of the billing and
payment code for rebatable drugs furnished during a
rebate period shall not include units with respect to
which the manufacturer provides a discount under the
program under section 340B of the Public Health Service
Act or a rebate under section 1927.
``(C) Determination of inflation-adjusted payment
amount.--The inflation-adjusted payment amount
determined under this subparagraph for a rebatable drug
for a rebate period is--
``(i) the amount determined under
subsection (b)(4) for such rebatable drug in
the payment amount benchmark quarter (as
defined in subparagraph (D)); increased by
``(ii) the percentage by which the rebate
period CPI-U (as defined in subparagraph (F))
for the rebate period exceeds the benchmark
period CPI-U (as defined in subparagraph (E)).
``(D) Payment amount benchmark quarter.--The term
`payment amount benchmark quarter' means the calendar
quarter beginning July 1, 2019.
``(E) Benchmark period cpi-u.--The term `benchmark
period CPI-U' means the consumer price index for all
urban consumers (United States city average) for July
2019.
``(F) Rebate period cpi-u.--The term `rebate period
CPI-U' means, with respect to a rebate period, the
consumer price index for all urban consumers (United
States city average) for the last month of the calendar
quarter that is two calendar quarters prior to the
rebate period.
``(4) Application to new drugs.--In the case of a rebatable
drug first approved or licensed by the Food and Drug
Administration after July 1, 2021, the following shall apply:
``(A) During initial period.--For quarters during
the initial period in which the payment amount for such
drug is determined using the methodology described in
subsection (c)(4)--
``(i) clause (ii)(I) of paragraph (3)(A)
shall be applied as if the reference to `the
amount determined under subsection (b)(4),'
were a reference to `the wholesale acquisition
cost applicable under subsection (c)(4)';
``(ii) clause (i) of paragraph (3)(C) shall
be applied--
``(I) as if the reference to `the
amount determined under subsection
(b)(4),' were a reference to `the
wholesale acquisition cost applicable
under subsection (c)(4)'; and
``(II) as if the term `payment
amount benchmark quarter' were defined
under paragraph (3)(D) as the first
full calendar quarter after the day on
which the drug was first marketed; and
``(iii) clause (ii) of paragraph (3)(C)
shall be applied as if the term `benchmark
period CPI-U' were defined under paragraph
(4)(E) as if the reference to `July 2019' under
such paragraph were a reference to `the first
month of the first full calendar quarter after
the day on which the drug was first marketed'.
``(B) After initial period.--For quarters beginning
after such initial period--
``(i) clause (i) of paragraph (3)(C) shall
be applied as if the term `payment amount
benchmark quarter' were defined under paragraph
(3)(D) as the first full calendar quarter for
which the Secretary is able to compute an
average sales price for the rebatable drug; and
``(ii) clause (ii) of paragraph (3)(C)
shall be applied as if the term `benchmark
period CPI-U' were defined under paragraph
(4)(E) as if the reference to `July 2019' under
such paragraph were a reference to `the first
month of the first full calendar quarter for
which the Secretary is able to compute an
average sales price for the rebatable drug'.
``(5) Rebate deposits.--Amounts paid as rebates under
paragraph (1)(B) shall be deposited into the Federal
Supplementary Medical Insurance Trust Fund established under
section 1841.
``(6) Enforcement.--
``(A) Civil money penalty.--
``(i) In general.--The Secretary shall
impose a civil money penalty on a manufacturer
that fails to comply with the requirements
under paragraph (1)(B) with respect to
providing a rebate for a rebatable drug for a
rebate period for each such failure in an
amount equal to the sum of--
``(I) the rebate amount specified
pursuant to paragraph (3) for such drug
for such rebate period; and
``(II) 25 percent of such amount.
``(ii) Application.--The provisions of
section 1128A (other than subsections (a) (with
respect to amounts of penalties or additional
assessments) and (b)) shall apply to a civil
money penalty under this subparagraph in the
same manner as such provisions apply to a
penalty or proceeding under section 1128A(a).
``(B) No payment for manufacturers who fail to pay
penalty.--If the manufacturer of a rebatable drug fails
to pay a civil money penalty under subparagraph (A)
with respect to the failure to provide a rebate for a
rebatable drug for a rebate period by a date specified
by the Secretary after the imposition of such penalty,
no payment shall be available under this part for such
rebatable drug for calendar quarters beginning on or
after such date until the Secretary determines the
manufacturer has paid the penalty due under such
subparagraph.''.
(b) Implementation.--Section 1847A(g) of the Social Security Act
(42 U.S.C. 1395w-3(g)) is amended--
(1) in paragraph (4), by striking ``and'' at the end;
(2) in paragraph (5), by striking the period at the end and
inserting ``; and''; and
(3) by adding at the end the following new paragraph:
``(6) determination of the rebate amount for a rebatable
drug under paragraph (3) of subsection (h), including with
respect to a new drug pursuant to paragraph (4) of such
subsection, including--
``(A) a decision by the Secretary with respect to a
request for reconsideration under paragraph (1)(C); and
``(B) the determination of--
``(i) the total number of units of the
billing and payment code under paragraph
(3)(A)(i); and
``(ii) the inflation-adjusted payment
amount under paragraph (3)(C).''.
(c) Conforming Amendment to Part B ASP Calculation.--Section
1847A(c)(3) of the Social Security Act (42 U.S.C. 1395w-3a(c)(3)) is
amended by inserting ``or subsection (h)'' after ``section 1927''.
SEC. 374. MARKET BASED PART B PRICING INDEX.
Notwithstanding any provision of part B of title XVIII of the
Social Security Act, the Secretary of Health and Human Services may
make payments for drugs payable under such part based on an
international pricing index. In using such an index, the Secretary
shall take into account whether the market of each country included in
such index is a price-controlled or free market and give more weight
under such index to countries with market-based drug policies.
SEC. 375. INNOVATION MODEL TESTING OF MEDICARE DRUG PAYMENTS.
Notwithstanding any provision of section 1115A, the Secretary of
Health and Human Services may, under such section, test a model to
integrate benefits provided for drugs under parts A, B, and D of title
XVIII of the Social Security Act.
SEC. 376. MODIFICATION OF MAXIMUM REBATE AMOUNT UNDER MEDICAID DRUG
REBATE PROGRAM.
(a) In General.--Subparagraph (D) of section 1927(c)(2) of the
Social Security Act (42 U.S.C. 1396r-8(c)(2)) is amended to read as
follows:
``(D) Maximum rebate amount.--
``(i) In general.--Except as provided in
clause (ii), in no case shall the sum of the
amounts applied under paragraph (1)(A)(ii) and
this paragraph with respect to each dosage form
and strength of a single source drug or an
innovator multiple source drug for a rebate
period exceed--
``(I) for rebate periods beginning
after December 31, 2009, and before
September 30, 2023, 100 percent of the
average manufacturer price of the drug;
and
``(II) for rebate periods beginning
on or after October 1, 2023, 125
percent of the average manufacturer
price of the drug.
``(ii) No maximum amount for drugs if amp
increases outpace inflation.--
``(I) In general.--If the average
manufacturer price with respect to each
dosage form and strength of a single
source drug or an innovator multiple
source drug increases on or after
October 1, 2022, and such increased
average manufacturer price exceeds the
inflation-adjusted average manufacturer
price determined with respect to such
drug under subclause (II) for the
rebate period, clause (i) shall not
apply and there shall be no limitation
on the sum of the amounts applied under
paragraph (1)(A)(ii) and this paragraph
for the rebate period with respect to
each dosage form and strength of the
single source drug or innovator
multiple source drug.
``(II) Inflation-adjusted average
manufacturer price defined.--In this
clause, the term `inflation-adjusted
average manufacturer price' means, with
respect to a single source drug or an
innovator multiple source drug and a
rebate period, the average manufacturer
price for each dosage form and strength
of the drug for the calendar quarter
beginning July 1, 1990 (without regard
to whether or not the drug has been
sold or transferred to an entity,
including a division or subsidiary of
the manufacturer, after the 1st day of
such quarter), increased by the
percentage by which the consumer price
index for all urban consumers (United
States city average) for the month
before the month in which the rebate
period begins exceeds such index for
September 1990.''.
(b) Treatment of Subsequently Approved Drugs.--Section
1927(c)(2)(B) of the Social Security Act (42 U.S.C. 1396r-8(c)(2)(B))
is amended by inserting ``and clause (ii)(II) of subparagraph (D)''
after ``clause (ii)(II) of subparagraph (A)''.
(c) Technical Amendments.--Section 1927(c)(3)(C)(ii)(IV) of the
Social Security Act (42 U.S.C. 1396r-9(c)(3)(C)(ii)(IV)) is amended--
(1) by striking ``subparagraph (A)'' and inserting
``paragraph (3)(A)''; and
(2) by striking ``this subparagraph'' and inserting
``paragraph (3)(C)''.
Subtitle F--Medical Malpractice Reform
SEC. 381. DEFINITIONS.
In this Act:
(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) 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.
(5) Economic damages.--The term ``economic damages'' means
objectively verifiable monetary losses incurred as a result of
the provision or use of (or failure to provide or use) 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, unless otherwise defined
under applicable State law. In no circumstances shall damages
for health care services or medical products exceed the amount
actually paid or incurred by or on behalf of the claimant.
(6) Future damages.--The term ``future damages'' means any
damages that are incurred after the date of judgment,
settlement, or other resolution (including mediation, or any
other form of alternative dispute resolution).
(7) Health care lawsuit.--The term ``health care lawsuit''
means any health care liability claim concerning the provision
of goods or services for which coverage was provided in whole
or in part via a Federal program, subsidy or tax benefit, or
any health care liability action concerning the provision of
goods or services for which coverage was provided in whole or
in part via a Federal program, subsidy or tax benefit, brought
in a State or Federal court or pursuant to an alternative
dispute resolution system, against a health care provider
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. Such
term does not include a claim or action which is based on
criminal liability; which seeks civil fines or penalties paid
to Federal, State, or local government; or which is grounded in
antitrust.
(8) 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 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.
(9) 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, including, but
not limited to, third-party claims, cross-claims, counter-
claims, or contribution claims, which are based upon the
provision or use of (or the failure to provide or use) health
care services or medical products, 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.
(10) Health care provider.--The term ``health care
provider'' means any person or entity required by State or
Federal laws or regulations to be 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, as well as any
other individual or entity defined as a health care provider,
health care professional, or health care institution under
State law.
(11) Health care services.--The term ``health care
services'' means the provision of any goods or services
(including safety, professional, or administrative services
directly related to health care) by a health care provider, or
by any individual working under the supervision of a health
care provider, that relates to the diagnosis, prevention, or
treatment of any human disease or impairment, or the assessment
or care of the health of human beings.
(12) Medical product.--The term ``medical product'' means a
drug, device, or biological product intended for humans, and
the terms ``drug'', ``device'', and ``biological product'' 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(g)(1)
and (h)) and section 351(a) of the Public Health Service Act
(42 U.S.C. 262(a)), respectively, including any component or
raw material used therein, but excluding health care services.
(13) 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 incurred as a result
of the provision or use of (or failure to provide or use)
health care services or medical products, unless otherwise
defined under applicable State law.
(14) 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.
(15) Representative.--The term ``representative'' means a
legal guardian, attorney, person designated to make decisions
on behalf of a patient under a medical power of attorney, or
any person recognized in law or custom as a patient's agent.
(16) 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. 382. ENCOURAGING SPEEDY RESOLUTION OF CLAIMS.
(a) Statute of Limitations.--
(1) In general.--Except as provided in paragraph (2), the
time for the commencement of a health care lawsuit shall be,
whichever occurs first of the following:
(A) Three years after the date of the occurrence of
the breach or tort.
(B) Three years after the date the medical or
health care treatment that is the subject of the claim
is completed.
(C) One year after the claimant discovers, or
through the use of reasonable diligence should have
discovered, the injury.
(2) Tolling.--In no event shall the time for commencement
of a health care lawsuit exceed 3 years after the date of the
occurrence of the breach or tort or 3 years after the date the
medical or health care treatment that is the subject of the
claim is completed (whichever occurs first) unless tolled for
any of the following--
(A) upon proof of fraud;
(B) intentional concealment; or
(C) the presence of a foreign body, which has no
therapeutic or diagnostic purpose or effect, in the
person of the injured person.
(3) Actions by a minor.--Actions by a minor shall be
commenced within 3 years after the date of the occurrence of
the breach or tort or 3 years after the date of the medical or
health care treatment that is the subject of the claim is
completed (whichever occurs first) except that actions by a
minor under the full age of 6 years shall be commenced within 3
years after the date of the occurrence of the breach or tort, 3
years after the date of the medical or health care treatment
that is the subject of the claim is completed, or 1 year after
the injury is discovered, or through the use of reasonable
diligence should have been discovered, or prior to the minor's
8th birthday, 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 have
committed fraud or collusion in the failure to bring an action
on behalf of the injured minor.
(b) State Flexibility.--No provision of subsection (a) shall be
construed to preempt any State law (whether effective before, on, or
after the date of the enactment of this Act) that--
(1) specifies a time period of less than 3 years after the
date of injury or less than 1 year after the claimant
discovers, or through the use of reasonable diligence should
have discovered, the injury, for the filing of a health care
lawsuit;
(2) that specifies a different time period for the filing
of lawsuits by a minor;
(3) that triggers the time period based on the date of the
alleged negligence; or
(4) establishes a statute of repose for the filing of a
health care lawsuit.
SEC. 383. COMPENSATING PATIENT INJURY.
(a) Unlimited Amount of Damages for Actual Economic Losses in
Health Care Lawsuits.--In any health care lawsuit, nothing in this Act
shall limit a claimant's recovery of the full amount of the available
economic damages, notwithstanding the limitation in subsection (b).
(b) Additional Noneconomic Damages.--In any health care lawsuit,
the amount of noneconomic damages, if available, shall not exceed
$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 injury.
(c) No Discount of Award for Noneconomic Damages.--For purposes of
applying the limitation in subsection (b), future noneconomic damages
shall not be discounted to present value. The jury shall not be
informed about the maximum award for noneconomic damages. An award for
noneconomic damages in excess of $250,000 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. If separate awards
are rendered for past and future noneconomic damages and the combined
awards exceed $250,000, 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. Whenever a judgment of
liability is rendered as to any party, 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.
(e) State Flexibility.--No provision of this section 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 economic or noneconomic 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 section.
SEC. 384. MAXIMIZING PATIENT RECOVERY.
(a) Court Supervision of Share of Damages Actually Paid to
Claimants.--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. In particular, 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. In no
event shall the total of all contingent fees for representing all
claimants in a health care lawsuit exceed the following limits:
(1) Forty percent of the first $50,000 recovered by the
claimant(s).
(2) Thirty-three and one-third percent of the next $50,000
recovered by the claimant(s).
(3) Twenty-five percent of the next $500,000 recovered by
the claimant(s).
(4) Fifteen percent of any amount by which the recovery by
the claimant(s) is in excess of $600,000.
(b) Applicability.--The limitations in this section shall apply
whether the recovery is by judgment, settlement, mediation,
arbitration, or any other form of alternative dispute resolution. 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. The requirement for court
supervision in the first two sentences of subsection (a) applies only
in civil actions.
(c) State Flexibility.--No provision of this section 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 lesser
percentage or lesser total value of damages which may be claimed by an
attorney representing a claimant in a health care lawsuit.
SEC. 385. 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 Act.
(c) State Flexibility.--No provision of this section shall be
construed to preempt any State law (whether effective before, on, or
after the date of the enactment of this Act) that specifies periodic
payments for future damages at any amount other than $50,000 or that
mandates such payments absent the request of either party.
SEC. 386. PRODUCT LIABILITY FOR HEALTH CARE PROVIDERS.
A health care provider who prescribes, or who dispenses pursuant to
a prescription, a medical product approved, licensed, or cleared by the
Food and Drug Administration shall not be named as a party to a product
liability lawsuit involving such product and shall not be liable to a
claimant in a class action lawsuit against the manufacturer,
distributor, or seller of such product.
SEC. 387. EFFECT ON OTHER LAWS.
(a) Vaccine Injury.--
(1) 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 Act does 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) 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) Other Federal Law.--Except as provided in this section, nothing
in this subtitle shall be deemed to affect any defense available to a
defendant in a health care lawsuit or action under any other provision
of Federal law.
SEC. 388. LIMITATION ON EXPERT WITNESS TESTIMONY.
(a) In General.--No person in a health care profession requiring
licensure under the laws of a State shall be competent to testify in
any court of law to establish the following facts--
(1) the recognized standard of acceptable professional
practice and the specialty thereof, if any, that the defendant
practices, which shall be the type of acceptable professional
practice recognized in the defendant's community or in a
community similar to the defendant's community that was in
place at the time the alleged injury or wrongful action
occurred;
(2) that the defendant acted with less than or failed to
act with ordinary and reasonable care in accordance with the
recognized standard; and
(3) that as a proximate result of the defendant's negligent
act or omission, the claimant suffered injuries which would not
otherwise have occurred,
unless the person was licensed to practice, in the State or a
contiguous bordering State, a profession or specialty which would make
the person's expert testimony relevant to the issues in the case and
had practiced this profession or specialty in one of these States
during the year preceding the date that the alleged injury or wrongful
act occurred.
(b) Applicability.--The requirements set forth in subsection (a)
shall also apply to expert witnesses testifying for the defendant as
rebuttal witnesses.
(c) Waiver Authority.--The court may waive the requirements in this
subsection if it determines that the appropriate witnesses otherwise
would not be available.
SEC. 389. EXPERT WITNESS QUALIFICATIONS.
(a) In General.--In any health care lawsuit, an individual shall
not give expert testimony on the appropriate standard of practice or
care involved unless the individual is licensed as a health
professional in one or more States and the individual meets the
following criteria:
(1) If the party against whom or on whose behalf the
testimony is to be offered is or claims to be a specialist, the
expert witness shall specialize at the time of the occurrence
that is the basis for the lawsuit in the same specialty or
claimed specialty as the party against whom or on whose behalf
the testimony is to be offered. If the party against whom or on
whose behalf the testimony is to be offered is or claims to be
a specialist who is board certified, the expert witness shall
be a specialist who is board certified in that specialty or
claimed specialty.
(2) During the 1-year period immediately preceding the
occurrence of the action that gave rise to the lawsuit, the
expert witness shall have devoted a majority of the
individual's professional time to one or more of the following:
(A) The active clinical practice of the same health
profession as the defendant and, if the defendant is or
claims to be a specialist, in the same specialty or
claimed specialty.
(B) The instruction of students in an accredited
health professional school or accredited residency or
clinical research program in the same health profession
as the defendant and, if the defendant is or claims to
be a specialist, in an accredited health professional
school or accredited residency or clinical research
program in the same specialty or claimed specialty.
(3) If the defendant is a general practitioner, the expert
witness shall have devoted a majority of the witness's
professional time in the 1-year period preceding the occurrence
of the action giving rise to the lawsuit to one or more of the
following:
(A) Active clinical practice as a general
practitioner.
(B) Instruction of students in an accredited health
professional school or accredited residency or clinical
research program in the same health profession as the
defendant.
(b) Lawsuits Against Entities.--If the defendant in a health care
lawsuit is an entity that employs a person against whom or on whose
behalf the testimony is offered, the provisions of subsection (a) apply
as if the person were the party or defendant against whom or on whose
behalf the testimony is offered.
(c) Power of Court.--Nothing in this section shall limit the power
of the trial court in a health care lawsuit to disqualify an expert
witness on grounds other than the qualifications set forth under this
subsection.
(d) Limitation.--An expert witness in a health care lawsuit shall
not be permitted to testify if the fee of the witness is in any way
contingent on the outcome of the lawsuit.
(e) State Flexibility.--No provision of this section shall be
construed to preempt any State law (whether effective before, on, or
after the date of the enactment of this Act) that places additional
qualification requirements upon any individual testifying as an expert
witness.
SEC. 390. COMMUNICATIONS FOLLOWING UNANTICIPATED OUTCOME.
(a) Provider Communications.--In any health care liability action,
any and all statements, affirmations, gestures, or conduct expressing
apology, fault, sympathy, commiseration, condolence, compassion, or a
general sense of benevolence which are made by a health care provider
or an employee of a health care provider to the patient, a relative of
the patient, or a representative of the patient and which relate to the
discomfort, pain, suffering, injury, or death of the patient as the
result of the unanticipated outcome of medical care shall be
inadmissible for any purpose as evidence of an admission of liability
or as evidence of an admission against interest.
(b) State Flexibility.--No provision of this section shall be
construed to preempt any State law (whether effective before, on, or
after the date of the enactment of this Act) that makes additional
communications inadmissible as evidence of an admission of liability or
as evidence of an admission against interest.
SEC. 391. AFFIDAVIT OF MERIT.
(a) Required Filing.--Subject to subsection (b), the plaintiff in a
health care lawsuit alleging negligence or, if the plaintiff is
represented by an attorney, the plaintiff's attorney shall file
simultaneously with the health care lawsuit an affidavit of merit
signed by a health professional who meets the requirements for an
expert witness under section 242 of this Act. The affidavit of merit
shall certify that the health professional has reviewed the notice and
all medical records supplied to him or her by the plaintiff's attorney
concerning the allegations contained in the notice and shall contain a
statement of each of the following:
(1) The applicable standard of practice or care.
(2) The health professional's opinion that the applicable
standard of practice or care was breached by the health
professional or health facility receiving the notice.
(3) The actions that should have been taken or omitted by
the health professional or health facility in order to have
complied with the applicable standard of practice or care.
(4) The manner in which the breach of the standard of
practice or care was the proximate cause of the injury alleged
in the notice.
(5) A listing of the medical records reviewed.
(b) Filing Extension.--Upon motion of a party for good cause shown,
the court in which the complaint is filed may grant the plaintiff or,
if the plaintiff is represented by an attorney, the plaintiff's
attorney an additional 28 days in which to file the affidavit required
under subsection (a).
(c) State Flexibility.--No provision of this section shall be
construed to preempt any State law (whether effective before, on, or
after the date of the enactment of this Act) that establishes
additional requirements for the filing of an affidavit of merit or
similar pre-litigation documentation.
SEC. 392. NOTICE OF INTENT TO COMMENCE LAWSUIT.
(a) Advance Notice.--A person shall not commence a health care
lawsuit against a health care provider unless the person has given the
health care provider 90 days written notice before the action is
commenced.
(b) Exceptions.--A health care lawsuit against a health care
provider filed within 6 months of the statute of limitations expiring
as to any claimant, or within 1 year of the statute of repose expiring
as to any claimant, shall be exempt from compliance with this section.
(c) State Flexibility.--No provision of this section shall be
construed to preempt any State law (whether effective before, on, or
after the date of the enactment of this Act) that establishes a
different time period for the filing of written notice.
SEC. 393. LIMITATION ON LIABILITY FOR VOLUNTEER HEALTH CARE
PROFESSIONALS.
(a) In General.--Title II of the Public Health Service Act (42
U.S.C. 202 et seq.) is amended by inserting after section 224 the
following:
``SEC. 224A. LIMITATION ON LIABILITY FOR VOLUNTEER HEALTH CARE
PROFESSIONALS.
``(a) Limitation on Liability.--A physician shall not be liable
under Federal or State law in any civil action for any harm caused by
an act or omission of such physician, or attending medical personnel
supporting such physician, if such act or omission--
``(1) occurs in the course of furnishing qualified charity
care (as such term is defined in section 199B of the Internal
Revenue Code of 1986); and
``(2) was not grossly negligent.
``(b) Preemption.--This section preempts the laws of a State or any
political subdivision of a State to the extent that such laws are
inconsistent with this section, unless such laws provide greater
protection from liability for a defendant.
``(c) Definitions.--In this section:
``(1) Physician.--The term `physician' has the meaning
given such term by section 1861(r) of the Social Security Act.
``(2) Attending medical personnel.--The term `attending
medical personnel' means an individual who is licensed to
directly support a physician in furnishing medical services.''.
(b) Effective Date.--The amendments made by this section shall
apply to any claim filed to the extent that it is with respect to acts
or omissions occurring after the date of the enactment of this Act.
SEC. 394. RULES OF CONSTRUCTION.
(a) Health Care Lawsuits.--Unless otherwise specified in this
subtitle, the provisions governing health care lawsuits set forth in
this subtitle 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, or mandates or permits subrogation
or a lien on collateral source benefits.
(b) Protection of States' Rights and Other Laws.--Any issue that is
not governed by any provision of law established by or under this
subtitle (including State standards of negligence) shall be governed by
otherwise applicable State or Federal law.
(c) State Flexibility.--No provision of this subtitle shall be
construed to preempt any defense available to a party in a health care
lawsuit under any other provision of State or Federal law.
SEC. 395. 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
subtitle, except that any health care lawsuit arising from an injury
occurring prior to the date of the enactment of this subtitle shall be
governed by the applicable statute of limitations provisions in effect
at the time the cause of action accrued.
TITLE IV--MEDICARE AND MEDICAID REFORMS
Subtitle A--Medicaid Reforms
SEC. 401. MEDICAID PAYMENT REFORM.
(a) In General.--Title XIX of the Social Security Act (42 U.S.C.
1396 et seq.) is amended by inserting after section 1903 the following
section:
``SEC. 1903A. REFORMED PAYMENT TO STATES.
``(a) Reformed Payment System.--
``(1) In general.--For quarters beginning on or after the
implementation date (as defined in subsection (k)(1)), in the
case of a State that elects (in a time and manner specified by
the Secretary) to apply this section, in lieu of amounts
otherwise payable to such State under this title (including any
payments attributable to section 1923), except as otherwise
provided in this section, the amount payable to such State
shall be equal to the sum of the following:
``(A) Adjusted aggregate beneficiary-based
amount.--The aggregate beneficiary-based amount
specified in subsection (b) for the quarter and the
State, adjusted under subsection (e).
``(B) Chronic care quality bonus.--The amount (if
any) of the chronic care quality bonus payment
specified in subsection (f) for the quarter for the
State.
``(2) Requirement of state share.--
``(A) In general.--A State shall make, from non-
Federal funds, expenditures in an amount equal to its
State share (as determined under subparagraph (B)) for
a quarter for items, services, and other costs for
which, but for paragraph (1), Federal funds would have
been payable under this title.
``(B) State share.--The State share for a State for
a quarter in a fiscal year is equal to the product of--
``(i) the aggregate beneficiary-based
amount specified in subsection (b) for the
quarter and the State; and
``(ii) the ratio of--
``(I) the State percentage
described in subparagraph (D)(ii) for
such State and fiscal year; to
``(II) the Federal percentage
described in subparagraph (D)(i) for
such State and fiscal year.
``(C) Nonpayment for failure to pay state share.--
``(i) In general.--If a State fails to
expend the amount required under subparagraph
(A) for a quarter in a fiscal year, the amount
payable to the State under paragraph (1) shall
be reduced by the product of the amount by
which the State payment is less than the State
share and the ratio of--
``(I) the Federal percentage
described in subparagraph (D)(i) for
such State and fiscal year; to
``(II) the State percentage
described in subparagraph (D)(ii) for
such State and fiscal year.
``(ii) Grace period.--A State shall not be
considered to have failed to provide payment of
its required State share for a quarter under
subparagraph (A) if the aggregate State payment
towards the State's required State share for
the 4-quarter period beginning with such
quarter exceeds the required State share amount
for such 4-quarter period.
``(D) Federal and state percentages.--In this
paragraph, with respect to a State and a fiscal year:
``(i) Federal percentage.--The Federal
percentage described in this clause is 75
percent or, if higher, the Federal medical
assistance percentage for such State for such
fiscal year.
``(ii) State percentage.--The State
percentage described in this clause is 100
percent minus the Federal percentage described
in clause (i).
``(E) Rules for crediting toward state share.--
``(i) General limitation to matchable
expenditures.--A payment for expenditures shall
not be counted toward the State share under
subparagraph (A) unless Federal payments may be
used for such expenditures consistent with
paragraph (3)(B).
``(ii) Further limitations on allowable
expenditures.--A payment for expenditures shall
not be counted towards the State share under
subparagraph (A) if the expenditure is for any
of the following:
``(I) Abortion.--Expenditures for
an abortion.
``(II) Intergovernmental
transfers.--An expenditure that is
attributable to an intergovernmental
transfer.
``(III) Certified public
expenditures.--An expenditure that is
attributable to certified public
expenditures.
``(iii) Crediting fraud and abuse
recoveries.--Amounts recovered by a State
through the operation of its Medicaid fraud and
abuse control unit described in section 1903(q)
shall be fully counted toward the State share
under subparagraph (A).
``(F) Construction.--Nothing in the paragraph shall
be construed as preventing a State from expending, from
non-Federal funds, an amount under this title in excess
of the amount of the State share.
``(G) Determination based upon submitted claims.--
In applying this paragraph with respect to expenditures
of a State for a quarter, the determination of the
expenditures for such State for such quarter shall be
made after the end of the period (which, as of the date
of the enactment of this section, is 2 years) for which
the Secretary accepts claims for payment under this
title with respect to such quarter.
``(3) Use of federal payments.--
``(A) Application of medicaid limitations.--A State
may only use Federal payments received under subsection
(a) for expenditures for which Federal funds would have
been payable under this title but for this section.
``(B) Limitation for certain eligibles.--
``(i) Application of 100 percent federal
poverty line limit on eligibility.--Subject to
clause (iii), a State may not use such Federal
payments to provide medical assistance for an
individual who has an income (as determined
under clause (ii)) that exceeds 100 percent of
the poverty line (as defined in section
2110(c)(5)) applicable to a family of the size
involved.
``(ii) Determination of income using
modified adjusted gross income without any 5
percent increase.--In determining income for
purposes of clause (i) under section
1902(e)(14) (relating to modified adjusted
gross income), the following rules shall apply:
``(I) Application of spend down.--
The State shall take into account the
costs incurred for medical care or for
any other type of remedial care
recognized under State law in the same
manner and to the same extent that such
State takes such costs into account for
purposes of section 1902(a)(17).
``(II) Disregard of 5 percent
increase.--Subparagraph (I) of section
1902(e)(14) (relating to a 5 percent
reduction) shall not apply.
``(iii) Exception.--Clause (i) shall not
apply to an individual who is--
``(I) a woman described in clause
(i) of section 1903(v)(4)(A);
``(II) a child who is an individual
described in clause (i) of section
1905(a);
``(III) enrolled in a State plan
under this title as of the date of the
enactment of this section for the
period of continuous enrollment; or
``(IV) described in section
1902(e)(14)(D) (relating to modified
adjusted gross income).
``(iv) Clarification related to community
spouse.--Nothing in this subparagraph shall
supersede the application of section 1924
(related to community spouse income and
assets).
``(4) Exceptions for pass-through payments.--
``(A) In general.--Paragraph (1) shall not apply,
and amounts shall continue to be payable under this
title (and not under subsection (a)), in the case of
the following payments (and related administrative
costs and expenditures):
``(i) Payments to territories.--Payments to
a State other than the 50 States and the
District of Columbia.
``(ii) Medicare cost-sharing.--Payments
attributable to Medicare cost-sharing under
section 1905(p).
``(iii) Pediatric vaccines.--Payments
attributable to section 1928.
``(iv) Emergency services for certain
individuals.--Payments for treatment of
emergency medical conditions attributable to
the application of section 1903(v)(2).
``(v) Indian health care facilities.--
Payments for medical assistance described in
the third sentence of section 1905(b).
``(vi) Employer-sponsored insurance
(esi).--Payments for medical assistance
attributable to payments to employers for
employer-sponsored health benefits coverage.
``(vii) Other populations with limited
benefit coverage.--Other payments that are
determined by the Secretary to be related to a
specified population for which the medical
assistance under this title is limited and does
not include any inpatient, nursing facility, or
long-term care services.
``(B) Certain expenses.--Paragraph (1) shall not
apply, and amounts shall continue to be payable under
this title (and not under subsection (a)), in the case
of the following:
``(i) Administration of medicare
prescription drug benefit.--Expenditures
described in section 1935(b) (relating to
administration of the Medicare prescription
drug benefit).
``(ii) Payments for hit bonuses.--Payments
under section 1903(a)(3)(F) (relating to
payments to encourage the adoption and use of
certified EHR technology).
``(iii) Payments for design, development,
and installation of mmis and eligibility
systems.--Payments under subparagraphs (A)(i)
and (H)(i) of section 1903(a)(3) for
expenditures for design, development, and
installation of the Medicaid management
information systems and mechanized verification
and information retrieval systems (related to
eligibility).
``(5) Payment of amounts.--
``(A) In general.--Except as the Secretary may
otherwise provide, amounts shall be payable to a State
under subsection (a) in the same manner as amounts are
payable under subsection (d) of section 1903 to a State
under subsection (a) of such section.
``(B) Information and forms.--
``(i) Submission.--As a condition of
receiving payment under subsection (a), a State
shall submit such information, in such form,
and manner, as the Secretary shall specify,
including information necessary to make the
computations under subsections (c)(2)(C) and
(e).
``(ii) Uniform reporting.--The Secretary
shall develop such forms as may be needed to
assure a system of uniform reporting of such
information across States.
``(C) Required reporting of information on medical
loss ratios for managed care.--The information required
to be reported under subparagraph (B)(i) shall include
information on the medical loss ratio with respect to
coverage provided under each Medicaid managed care plan
with a contract with the State under section 1903(m) or
1932.
``(b) Aggregate Beneficiary-Based Amount.--
``(1) In general.--The aggregate beneficiary-based amount
specified in this subsection for a State for a quarter is equal
to the sum of the products, for each of the categories of
Medicaid beneficiaries specified in paragraph (2), of the
following:
``(A) Beneficiary-based quarterly amount.--The
beneficiary-based quarterly amount for such category
computed under subsection (c) for such State for such
quarter.
``(B) Number of individuals in category.--Subject
to subsection (d), the average number of Medicaid
beneficiaries enrolled in such category in the State in
such quarter.
``(2) Categories.--The categories specified in this
paragraph are the following:
``(A) Elderly.--A category of Medicaid
beneficiaries who are 65 years of age or older.
``(B) Blind or disabled.--A category of Medicaid
beneficiaries not described in subparagraph (A) who are
described in section 1937(a)(2)(B)(ii).
``(C) Children.--A category of Medicaid
beneficiaries not described in subparagraph (B) who are
under 21 years of age.
``(D) Other adults.--A category of any Medicaid
beneficiaries who are not described in a previous
subparagraph of this paragraph.
``(c) Computation of Per Beneficiary, Per Category Quarterly
Amount.--
``(1) In general.--For a State, for each category of
beneficiary for a quarter--
``(A) First reform year.--For quarters in the first
reform year (as defined in subsection (k)(2)), the
beneficiary-based quarterly amount is equal to \1/4\ of
the base average per beneficiary Federal payments for
such State for such category determined under paragraph
(2), increased by a factor that reflects the sum of the
following:
``(i) Historical medical care component of
cpi through previous reform year.--The
percentage increase in the historical medical
care component of the Consumer Price Index for
all urban consumers (U.S. city average) from
the midpoint of the base fiscal year (as
defined in paragraph (6)) to the midpoint of
the fiscal year preceding the first reform
year.
``(ii) Projected medical care component of
cpi for the first reform year.--The percentage
increase in the projected medical care
component of the Consumer Price Index for all
urban consumers (U.S. city average) from the
midpoint of the previous fiscal year referred
to in clause (i) to the midpoint of the first
reform year.
``(B) Second and third reform years.--The
beneficiary-based quarterly amount for a State for a
category for quarters in the second reform year or the
third reform year is equal to the beneficiary-based
quarterly amount under this paragraph for such State
and category for the previous reform year increased by
the per beneficiary percentage increase (as defined in
subparagraph (E)) for such category and reform year.
``(C) Fourth through tenth reform years.--The
beneficiary-based quarterly amount for a State for a
category for quarters in a reform year beginning with
the fourth reform year and ending with the tenth reform
year is--
``(i) in the case of a State that is a high
per beneficiary State or a low per beneficiary
State (as defined in paragraph (4)(B)(iii)) for
the category, the amount determined under
clause (i) or (ii) of paragraph (4)(B) for such
State, category, and reform year; or
``(ii) in the case of any other State, the
beneficiary-based quarterly amount under this
paragraph for such State and category for the
previous reform year increased by the per
beneficiary percentage increase for such
category and reform year.
``(D) Eleventh reform year and subsequent reform
years.--The beneficiary-based quarterly amount for a
State for a category for quarters in a reform year
beginning with the eleventh reform year is equal to the
beneficiary-based quarterly amount under this paragraph
for such State and category for the previous reform
year increased by the per beneficiary percentage
increase for such category and reform year.
``(E) Annual percentage increase beginning with
second reform year.--For purposes of this subsection,
the term `per beneficiary percentage increase' means,
for a reform year, the sum of--
``(i) the projected percentage change in
nominal gross domestic product from the
midpoint of the previous reform year to the
midpoint of the reform year for which the
percentage increase is being applied; and
``(ii) one percentage point.
``(2) Base per beneficiary, per category amount for each
state.--
``(A) Average per category.--
``(i) In general.--The Secretary shall
determine, consistent with this paragraph and
paragraph (3), a base per beneficiary, per
category amount for each of the 50 States and
the District of Columbia equal to the average
amount, per Medicaid beneficiary, of Federal
payments under this title, including payments
attributable to disproportionate share hospital
payments under section 1923, for each of the
categories of beneficiaries under subsection
(b)(2) for the base fiscal year for each of the
50 States and the District of Columbia.
``(ii) Best available data.--The
determination under clause (i) shall initially
be estimated by the Secretary, based upon the
best available data at the time the
determination is made.
``(iii) Updates.--The determination under
clause (i) shall be updated by the Secretary on
an annual basis based upon improved data. The
Secretary shall adjust the amounts under
subsection (a)(1)(A) to reflect changes in the
amounts so determined based on such updates.
``(B) Exclusion of pass-through payments.--In
computing base per beneficiary, per category amounts
under subparagraph (A)(i) the Secretary shall exclude
payments described in subsection (a)(4).
``(C) Standardization.--
``(i) In general.--In computing each such
amount, the Secretary shall standardize the
amount in order to remove the variation
attributable to the following:
``(I) Risk factors.--Such risk
factors as age, health and disability
status (including high cost medical
conditions), gender, institutional
status, and such other factors as the
Secretary determines to be appropriate,
so as to ensure actuarial equivalence.
``(II) Geographic.--Variations in
costs on a county-by-county basis.
``(ii) Method of standardization.--
``(I) Consultation in development
of risk standardization.--In developing
the methodology for risk
standardization for purposes of clause
(i)(I), the Secretary shall consult
with the Medicaid and CHIP Payment and
Access Commission, the Medicare Payment
Advisory Commission, and the National
Association of Medicaid Directors.
``(II) Method for risk
standardization.--In carrying out
clause (i)(I), the Secretary may apply
the hierarchal condition category
methodology under section
1853(a)(1)(C). If the Secretary uses
such methodology, the Secretary shall
adjust the application of such
methodology to take into account the
differences in services provided under
this title compared to title XVIII,
such as the coverage of long term care,
pregnancy, and pediatric services.
``(III) Method for geographic
standardization.--The Secretary shall
apply the standardization under clause
(i)(II) in a manner similar to that
applied under section
1853(c)(4)(A)(iii).
``(iii) Application on a national, budget
neutral basis.--The standardization under
clause (i) shall be designed and implemented on
a uniform national basis and shall be budget
neutral so as to not result in any aggregate
change in payments under subsection (a).
``(iv) Response to new risk.--Subject to
clause (iii), the Secretary may adjust the
standardization under clause (i) to respond
promptly to new instances of communicable
diseases and other public health hazards.
``(v) Reference to application of risk
adjustment.--For rules related to the
application of risk adjustment to amounts under
subsection (a)(1)(A), see subsection (e).
``(D) Adjustment for temporary fmap increases.--In
computing each base per beneficiary, per category
amounts under subparagraph (A)(i) the Secretary shall
disregard portions of payments that are attributable to
a temporary increase in the Federal matching rates,
including those attributable to the following:
``(i) PPACA disaster fmap.--Section
1905(aa).
``(ii) ARRA.--Section 5001 of the American
Recovery and Reinvestment Act of 2009 (42
U.S.C. 1396d note).
``(iii) Extraordinary employer pension
contribution.--Section 614 of the Children's
Health Insurance Program Reauthorization Act of
2009 (42 U.S.C. 1396d note).
``(3) Allocation of nonmedical assistance payments.--The
Secretary shall establish rules for the allocation of payments
under this title (other than those payments described in
paragraph (1) or (5) of section 1903(a) and including such
payments attributable to section 1923)--
``(A) among different categories of beneficiaries;
and
``(B) between payments included under subsection
(a)(1) and payments described in subsection (a)(4).
``(4) Transition to a corridor around the national
average.--
``(A) Determination of national average base per
beneficiary, per category amount.--Subject to
subparagraph (C), the Secretary shall determine a
national average base per beneficiary, per category
amount equal to the average of the base per
beneficiary, per category amounts for each of the 50
States and the District of Columbia determined under
paragraph (2), weighted by the average number of
beneficiaries in each such category and State as
determined by the Secretary consistent with subsection
(d) for the base fiscal year.
``(B) Transition adjustment.--
``(i) High per beneficiary states.--In the
case of a high per beneficiary State (as
defined in clause (iii)(I)) for a category, the
beneficiary-based quarterly amount for such
State and category for a quarter in a reform
year (beginning with the fourth reform year and
ending with the tenth reform year) is equal to
the sum of--
``(I) the product of the State-
specific factor for such reform year
(as defined in clause (iv)) and the
beneficiary-based quarterly amount that
would otherwise be determined under
paragraph (1) for such State and
category if the State were a State
described in clause (ii) of paragraph
(1)(C), instead of a State described in
clause (i) of such paragraph; and
``(II) the product of 1 minus the
State-specific factor for such reform
year and the beneficiary-based
quarterly amount that would otherwise
be determined under paragraph (1) for a
State and category if the base per
beneficiary, per category amount
determined under paragraph (2) for the
State and category were equal to 110
percent of the national average base
per beneficiary, per category amount
determined under subparagraph (A) for
such category.
``(ii) Low per beneficiary states.--In the
case of a low per beneficiary State (as defined
in clause (iii)(II)) for a category, the
beneficiary-based quarterly amount for such
State and category for a quarter in a reform
year (beginning with the fourth reform year and
ending with the tenth reform year) is equal to
the sum of--
``(I) the product of the State-
specific factor for such reform year
and the beneficiary-based quarterly
amount that would otherwise be
determined under paragraph (1) for such
State and category if the State were a
State described in clause (ii) of
paragraph (1)(C), instead of a State
described in clause (i) of such
paragraph; and
``(II) the product of 1 minus the
State-specific factor for such reform
year and the beneficiary-based
quarterly amount that would otherwise
be determined under paragraph (1) for a
State and category if the base per
beneficiary, per category amount
determined under paragraph (2) for the
State and category were equal to 90
percent of the national average base
per beneficiary, per category amount
determined under subparagraph (A) for
such category.
``(iii) High and low per beneficiary states
defined.--In this subparagraph:
``(I) High per beneficiary state.--
The term `high per beneficiary State'
means, with respect to a category, a
State for which the base per
beneficiary, per category amount
determined under paragraph (2) for such
category is greater than 110 percent of
the national average base per
beneficiary, per category amount
determined under subparagraph (A) for
such category.
``(II) Low per beneficiary state.--
The term `low per beneficiary State'
means, with respect to a category, a
State for which the base per
beneficiary, per category amount
determined under paragraph (2) for such
category is less than 90 percent of the
national average base per beneficiary,
per category amount determined under
subparagraph (A) for such category.
``(iv) State-specific factor.--In this
subparagraph, the term `State-specific factor'
means--
``(I) for the fourth reform year,
\7/8\; and
``(II) for a subsequent reform
year, the State-specific factor under
this clause for the previous reform
year minus \1/8.\
``(C) No additional expenditures.--
``(i) Determination of increase in federal
expenditures.--For each category for each
reform year (beginning with the fourth reform
year and ending with the tenth reform year),
the Secretary shall determine whether the
application of this paragraph--
``(I) to the category for the
reform year will result in an aggregate
increase in the aggregate Federal
expenditures under subsection (a); and
``(II) to all the categories for
the reform year will result in a net
aggregate increase in the aggregate
Federal expenditures under subsection
(a).
``(ii) Adjustment.--If the Secretary
determines under clause (i)(II) that the
application of this paragraph to all the
categories for a reform year will result in a
net aggregate increase in the aggregate Federal
expenditures under subsection (a), the
Secretary shall reduce the national average
base per beneficiary, per category amount
computed under subparagraph (A) for each of the
categories determined under clause (i)(I) for
which there will be an aggregate increase in
the aggregate Federal expenditures under
subsection (a) by such uniform percentage as
will ensure that there is no net aggregate
Federal expenditure increase described in
clause (i)(II) for the reform year.
``(5) Reports on per beneficiary rates; appeals.--
``(A) Report to states.--Not later than 8 months
after the date of the enactment of this section, the
Secretary shall submit to each State the Secretary's
initial determination of--
``(i) the base per beneficiary, per
category amounts under paragraph (2) for such
State; and
``(ii) the national average base per
beneficiary, per category amounts under
paragraph (4)(A).
``(B) Opportunity to appeal.--Not later than 3
months after the date a State receives notice of the
Secretary's initial determination of such base per
beneficiary, per category amounts for such State under
subparagraph (A)(i), the State may file with the
Secretary, in a form and manner specified by the
Secretary, an appeal of such determination.
``(C) Determination on appeal.--Not later than 3
months after receiving such an appeal, the Secretary
shall make a final determination on such amounts for
such State. If no such appeal is received for a State,
the Secretary's initial determination under
subparagraph (A)(i) shall become final.
``(6) Base fiscal year defined.--In this section, the term
`base fiscal year' means the latest fiscal year, ending before
the date of the enactment of this section, for which the
Secretary determines that adequate data are available to make
the computations required under this subsection.
``(d) Not Counting Individuals To Account for Excluded Payments.--
Under rules specified by the Secretary, individuals shall not be
counted as Medicaid beneficiaries for purposes of subsection (b)(1)(B)
and subsection (c)(2)(A) to the extent that such individuals--
``(1) are receiving medical assistance for which payments
described under subsection (a)(4)(A) are made; or
``(2) would not have been eligible to enroll under the
State plan (or waiver of such plan) in the State in which such
individual is so enrolled if the rules for eligibility for
enrollment under such plan (or waiver) were the same as such
rules for eligibility in effect as of January 1, 2009.
``(e) Risk Adjustment.--
``(1) In general.--The amount under subsection (a)(1)(A)
shall be adjusted under this subsection in an appropriate
manner, specified by the Secretary and consistent with
paragraph (2), to take into account--
``(A) the factors described in subsection
(c)(2)(C)(i)(I) within a category of beneficiaries; and
``(B) variations in costs on a county-by-county
basis for medical assistance and administrative
expenses.
``(2) Method of adjustment.--
``(A) In general.--The adjustments under paragraph
(1) shall be made in a manner similar to the manner in
which similar adjustments are made under subsection
(c)(2)(C) and consistent with the requirements of
clause (iii) of such subsection and subparagraph (B).
``(B) Biannual update of risk adjustment
methodology.--In applying clause (i)(I) of subsection
(c)(2)(C) for purposes of subparagraph (A), the
Secretary shall, in consultation with the entities
described in clause (ii)(I) of such subsection, update
the risk adjustment methodology applied as appropriate
not less often than every 2 years.
``(f) Chronic Care Quality Bonus Payments.--
``(1) Determination of bonus payments.--If the Secretary
determines that, based on the reports under paragraph (5), with
respect to categories of chronic disease for which chronic care
performance targets had been established under paragraph (3)
for each category of Medicaid beneficiaries specified under
subsection (b)(2) such targets have been met by a State for a
reform year, the Secretary shall make an additional payment to
such State in the amount specified in paragraph (6) for each
quarter in the succeeding reform year. Such payments shall be
made in a manner specified by the Secretary and may only be
used consistent with subsection (a)(3).
``(2) Identification of categories of chronic disease.--The
Secretary shall determine the categories of chronic disease for
which bonus payments may be available under this subsection for
each category of Medicaid beneficiaries.
``(3) Adoption of quality measurement system and
identification of performance targets.--
``(A) System and data.--With respect to the
categories of chronic disease under paragraph (2), the
Secretary shall adopt a quality measurement system that
uses data described in paragraph (4) and is similar to
the Five-Star Quality Rating System used to indicate
the performance of Medicare Advantage plans under part
C of title XVIII.
``(B) Targets.--Using such system and data, the
Secretary shall establish for each reform year the
chronic care performance targets for purposes of the
payments under paragraph (1). Such performance targets
shall be established in consultation with States,
associations representing individuals with chronic
illnesses, entities providing treatment to such
individuals for such chronic illnesses, and other
stakeholders, including the National Association of
Medicaid Directors and the National Governors
Association.
``(4) Data to be used.--The data to be used under paragraph
(3) shall include--
``(A) data collected through methods such as--
``(i) the `Healthcare Effectiveness Data
and Information Set' (also known as `HEDIS')
(or an appropriate successor performance
measurement tool);
``(ii) the `Consumer Assessment of
Healthcare Providers and Systems' (also known
as `CAHPS') (or an appropriate successor
performance measurement tool); and
``(iii) the `Health Outcomes Survey' (also
known as `HOS') (or an appropriate successor
performance measurement tool); and
``(B) other data collected by the State.
``(5) Reports.--
``(A) In general.--Each State shall collect,
analyze, and report to the Secretary, at a frequency
and in a manner to be established by the Secretary,
data described in paragraph (4) that permit the
Secretary to monitor the State's performance relative
to the chronic care performance targets established
under paragraph (3).
``(B) Review and verification.--The Secretary may
review the data collected by the State under
subparagraph (A) to verify the State's analysis of such
data with respect to the performance targets under
paragraph (3).
``(6) Amount of bonus payments.--
``(A) In general.--Subject to subparagraphs (B) and
(C), with respect to each category of Medicaid
beneficiaries, in the case of a State that the
Secretary determines, based on the chronic care
performance targets set under paragraph (3) for a
reform year for such category, performs--
``(i) in the top five States in such
category, subject to subparagraph (C)(ii), the
amount of the bonus for each quarter in the
succeeding reform year shall be 10 percent of
the payment amount otherwise paid to the State
under subsection (a) for individuals enrolled
under the plan within such category;
``(ii) in the next five States in such
category, subject to subparagraph (C)(ii), the
amount of the bonus for each such quarter shall
be 5 percent of the payment amount otherwise
paid to the State under subsection (a) for
individuals enrolled under the plan within such
category;
``(iii) in the next five States in such
category, subject to clauses (i) and (iii) of
subparagraph (C), the amount of the bonus for
each such quarter shall be 3 percent of the
payment amount otherwise paid to the State
under subsection (a) for individuals enrolled
under the plan within such category;
``(iv) in the next five States in such
category, subject to clauses (i) and (iii) of
subparagraph (C), the amount of the bonus for
each such quarter shall be 2 percent of the
payment amount otherwise paid to the State
under subsection (a) for individuals enrolled
under the plan within such category; and
``(v) in the next five States in such
category, subject to clauses (i) and (iii) of
subparagraph (C), the amount of the bonus for
each such quarter shall be 1 percent of the
payment amount otherwise paid to the State
under subsection (a) for individuals enrolled
under the plan within such category.
``(B) Aggregate annual limit for each category of
medicaid beneficiaries.--
``(i) In general.--In no case may the
aggregate amount of bonuses under this
subsection for quarters in a reform year for a
category of Medicaid beneficiaries exceed the
limit specified in clause (ii) for the reform
year.
``(ii) Limit.--The limit specified in this
clause--
``(I) for the second reform year is
equal to $250,000,000; or
``(II) for a subsequent reform year
is equal to the limit specified in this
clause for the previous reform year
increased by the per beneficiary
percentage increase determined under
paragraph (1)(E) of subsection (c).
``(C) Limitation and proration of bonuses based on
application of aggregate limit.--
``(i) No bonus for third or subsequent
tiers unless aggregate limit not reached on
first two tiers.--No bonus shall be payable
under clause (iii), (iv), or (v) of
subparagraph (A) for a category of Medicaid
beneficiaries for a quarter in a reform year
unless the aggregate amount of bonuses under
clauses (i) and (ii) of such subparagraph for
such category and reform year is less than the
limit specified in subparagraph (B)(ii) for the
reform year.
``(ii) Proration for first two tiers.--If
the aggregate amount of bonuses under clauses
(i) and (ii) of subparagraph (A) for a category
of Medicaid beneficiaries for quarters in a
reform year exceeds the limit specified in
subparagraph (B)(ii) for the reform year, the
amount of each such bonus shall be prorated in
a manner so the aggregate amount of such
bonuses is equal to such limit.
``(iii) Proration for next three tiers.--If
the aggregate amount of bonuses under clauses
(i) and (ii) of subparagraph (A) for a category
of Medicaid beneficiaries for quarters in a
reform year is less than the limit specified in
subparagraph (B)(ii) for the reform year, but
the aggregate amount of bonuses under clauses
(i) through (v) of subparagraph (A) for the
category and such quarters in the reform year
exceeds the limit specified in subparagraph
(B)(ii) for the reform year, the amount of each
bonus in clauses (iii), (iv), and (v) of
subparagraph (A) shall be prorated in a manner
so the aggregate amount of all the bonuses
under subparagraph (A) is equal to such limit.
``(g) State Option for Receiving Medicare Payments for Full-Benefit
Dual Eligible Individuals.--
``(1) In general.--Under this subsection a State may elect
for quarters beginning on or after the implementation date in a
reform year to receive payment from the Secretary under
paragraph (3). As a condition of receiving such payment, the
State shall agree to provide to full-benefit dual eligible
individuals eligible for medical assistance under the State
plan--
``(A) the medical assistance to which such eligible
individuals would otherwise be entitled under this
title; and
``(B) any items and services which such eligible
individuals would otherwise receive under title XVIII.
``(2) Provider payment requirement.--
``(A) In general.--A State electing the option
under this subsection shall provide payment to health
care providers for the items and services described
under paragraph (1)(B) at a rate that is not less than
the rate at which payments would be made to such
providers for such items and services under title
XVIII.
``(B) Flexibility in payment methods.--Nothing in
subparagraph (A) shall be construed as preventing a
State from using alternative payment methodologies
(such as bundled payments or the use of accountable
care organizations (as such term is used in section
1899)) for purposes of making payments to health care
providers for items and services provided to dual
eligible individuals in the State under the option
under this subsection.
``(3) Payments to states in lieu of medicare payments.--
With respect to a full-benefit dual eligible individual, in the
case of a State that elects the option under paragraph (1) for
quarters in a reform year--
``(A) the Secretary shall not make any payment
under title XVIII for items and services furnished to
such individual for such quarters; and
``(B) the Secretary shall pay to the State, in
addition to the amounts paid to such State under
subsection (a), the amount that the Secretary would,
but for this subsection, otherwise pay under title
XVIII for items and services furnished to such an
individual in such State for such quarters.
``(4) Full-benefit dual eligible individual defined.--In
this subsection, the term `full-benefit dual eligible
individual' means an individual who meets the requirements of
section 1935(c)(6)(A)(ii).
``(h) Audits.--The Secretary shall conduct such audits on the
number and classification of Medicaid beneficiaries under such
subsections and expenditures under this section as may be necessary to
ensure appropriate payments under this section.
``(i) Treatment of Waivers.--
``(1) No impact on current waivers.--In the case of a
waiver of requirements of this title pursuant to section 1115
or other law that is in effect as of the date of the enactment
of this section, nothing in this section shall be construed to
affect such waiver for the period of the waiver as approved as
of such date.
``(2) Application of budget neutrality to subsequent
waivers and renewals taking section into account.--In the case
of a waiver of requirements of this title pursuant to section
1115 or other law that is approved or renewed after the date of
the enactment of this section, to the extent that such approval
or renewal is conditioned upon a demonstration of budget
neutrality, budget neutrality shall be determined taking into
account the application of this section.
``(j) Report to Congress.--Not later than January 1 of the second
reform year, the Secretary shall submit to Congress a report on the
implementation of this section.
``(k) Definitions.--In this section:
``(1) Implementation date.--The term `implementation date'
means--
``(A) July 1, 2023, if this section is enacted on
or before July 1, 2022; or
``(B) July 1, 2024, if this section is enacted
after July 1, 2022.
``(2) Reform years.--
``(A) The term `reform year' means a fiscal year
beginning with the first reform year.
``(B) The term `first reform year' means the fiscal
year in which the implementation date occurs.
``(C) The terms `second', `third', and successive
similar terms mean, with respect to a reform year, the
second, third, or successive reform year, respectively,
succeeding the first reform year.''.
(b) Conforming Amendments.--
(1) Continued application of clawback provisions.--
(A) Continued application.--Subsections (a) and
(c)(1)(C) of section 1935 of such Act (42 U.S.C. 1396u-
5) are each amended by inserting ``or 1903A(a)'' after
``1903(a)''.
(B) Technical amendment.--Section 1935(d)(1) of the
Social Security Act (42 U.S.C. 1396u-5(d)(1)) is
amended by inserting ``except as provided in section
1903A(g)'' after ``any other provision of this title''.
(2) Payment rules under section 1903.--
(A) Section 1903(a) of the Social Security Act (42
U.S.C. 1396b(a)) is amended, in the matter before
paragraph (1), by inserting ``and section 1903A'' after
``except as otherwise provided in this section''.
(B) Section 1903(d) of such Act (42 U.S.C.
1396b(d)) is amended--
(i) in paragraph (1), by inserting ``and
under section 1903A'' after ``subsections (a)
and (b)'';
(ii) in paragraph (2)--
(I) in subparagraph (A), by
inserting ``or section 1903A'' after
``was made under this section''; and
(II) in subparagraph (B), by
inserting ``or section 1903A'' after
``under subsection (a)'';
(iii) in paragraph (4)--
(I) by striking ``under this
subsection'' and inserting ``, with
respect to this section or section
1903A, under this subsection''; and
(II) by striking ``under this
section'' and inserting ``under the
respective section''; and
(iv) in paragraph (5), by inserting ``or
section 1903A'' after ``overpayment under this
section''.
(3) Conforming waiver authority.--Section 1115(a)(2)(A) of
the Social Security Act (42 U.S.C. 1315(a)(2)(A)) is amended by
striking ``or 1903'' and inserting ``1903, or 1903A''.
(4) Report on additional conforming amendments needed.--Not
later than 6 months after the date of the enactment of this
Act, the Secretary of Health and Human Services shall submit to
Congress a report that includes a description of any additional
technical and conforming amendments to law that are required to
properly carry out this Act.
SEC. 402. INCOME LIMITATIONS FOR REFUNDABLE CREDITS FOR COVERAGE UNDER
A QUALIFIED HEALTH PLAN.
(a) In General.--Subparagraphs (A) and (B) of section 36B(c)(1) of
the Internal Revenue Code of 1986 are amended by inserting after ``100
percent'' each place such term appears the following: ``(or, in the
case of a taxpayer enrolled through an Exchange utilized by such State
that makes the election described in section 1903A of the Social
Security Act, the percentage established by such State under part A of
title IV of such Act for purposes of eligibility under title XIX of
such Act as of January 1, 2009)''.
(b) Effective Date.--The amendments made by this section shall
apply with respect to taxable years beginning after the date of the
enactment of this Act.
SEC. 403. MEDICAID ELIGIBILITY DETERMINATIONS.
(a) State Flexibility To Use Contractors To Make Eligibility
Determinations on Behalf of State.--Section 1902(a)(5) of the Social
Security Act (42 U.S.C. 1396a(a)(5)) is amended by inserting before the
semicolon at the end the following: ``, but such determinations of
eligibility may be made, at the option of a State, under a contract
with another State or local agency or a contractor so long as the
contract does not provide incentives for the agency or contractor to
delay eligibility determinations or to deny eligibility for individuals
otherwise eligible for medical assistance''.
(b) Frequency of Eligibility Redeterminations.--Section 1902(e)(14)
of the Social Security Act (42 U.S.C. 1396a(e)(14)) is amended by
adding at the end the following:
``(L) Frequency of eligibility redeterminations.--
Beginning on October 1, 2022, and notwithstanding
subparagraph (H), in the case of an individual whose
eligibility for medical assistance under the State plan
under this title (or a waiver of such plan) is
determined based on the application of modified
adjusted gross income under subparagraph (A) and who is
so eligible on the basis of clause (i)(VIII), (ii)(XX),
or (ii)(XXIII) of subsection (a)(10)(A), at the option
of the State, the State plan may provide that the
individual's eligibility shall be redetermined every 6
months (or such shorter number of months as the State
may elect).''.
SEC. 404. LOWERING SAFE HARBOR THRESHOLD WITH RESPECT TO STATE TAXES ON
HEALTH CARE PROVIDERS.
Section 1903(w)(4)(C)(ii) of the Social Security Act (42 U.S.C.
1396b(w)(4)(C)(ii)) is amended--
(1) by striking ``of fiscal years beginning'' and inserting
``of fiscal years--
``(I) beginning''; and
(2) by striking ``it appears.'' and inserting the
following: ``it appears;
``(II) beginning on or after January 1, 2021, and
before January 1, 2030, `4 percent' shall be
substituted for `6 percent' each place it appears;
``(III) beginning on or after January 1, 2030, and
before January 1, 2035, `3 percent' shall be
substituted for `6 percent' each place it appears;
``(IV) beginning on or after January 1, 2035, and
before January 1, 2040, `2 percent' shall be
substituted for `6 percent' each place it appears;
``(V) beginning on or after January 1, 2040, and
before January 1, 2045, `1 percent' shall be
substituted for `6 percent' each place it appears; and
``(VI) beginning on or after January 1, 2045, `0
percent' shall be substituted for `6 percent' each
place it appears.''.
SEC. 405. PROVIDING FOR STATE APPROVAL AND IMPLEMENTATION OF SPECIFIED
WAIVERS UNDER THE MEDICAID PROGRAM.
Section 1115 of the Social Security Act (42 U.S.C. 1315) is
amended--
(1) in subsection (d)--
(A) in paragraph (1), by striking ``An
application'' and inserting ``Subject to paragraph (4),
an application''; and
(B) by adding at the end the following new
paragraph:
``(4)(A) An experimental, pilot, or demonstration project
undertaken under subsection (a) may be approved or renewed by a
State if such project is described in subparagraph (B).
``(B) An experimental, pilot, or demonstration project is
described in this subparagraph if such project provides for a
waiver of requirements with respect to a State plan (or a
waiver of such plan) under title XIX such that--
``(i) individuals enrolled under such plan (or such
waiver) may elect to participate in such project with
respect to a year; and
``(ii) such individuals who elect to so participate
are furnished with primary care services (as described
in section 223(c)(1)(D)(ii)(I) of the Internal Revenue
Code of 1986) through a direct primary care service
arrangement (as defined in such section).
``(C) For purposes of a State's approval or renewal of an
experimental, pilot, or demonstration project under
subparagraph (A), each reference to `the Secretary' in
subsection (a) shall be deemed to be a reference to `the
State'.''; and
(2) in subsection (e), by inserting ``(other than such a
project that is described in paragraph (4)(B))'' before the
period at the end.
SEC. 406. DEDUCTION FOR QUALIFIED CHARITY CARE.
(a) In General.--Part VI of subchapter B of chapter 1 of the
Internal Revenue Code of 1986 is amended by adding at the end the
following new section:
``SEC. 199B. QUALIFIED CHARITY CARE.
``(a) In General.--There shall be allowed as a deduction for the
taxable year an amount equal to--
``(1) in the case of a direct primary care physician, an
amount equal to the sum of--
``(A) the fee (as published on a publicly available
website of such physician) for physicians' services
that are qualified charity care furnished by such
taxpayer during such year, and
``(B) for each visit by a patient to such physician
during which qualified charity care is furnished, half
of so much of the lowest subscription fee of such
physician that is attributable to a month, and
``(2) in the case of any other individual, the unreimbursed
Medicare-based value of qualified charity care furnished by
such taxpayer during such year.
``(b) Definitions.--For purposes of this section:
``(1) Unreimbursed medicare-based value.--The term
`unreimbursed Medicare-based value' means, with respect to
physicians' services, the amount payable for such services
under the physician fee schedule established under section 1848
of the Social Security Act.
``(2) Qualified charity care.--The term `qualified charity
care' means physicians' services that are furnished--
``(A) without expectation of reimbursement, and
``(B) to an individual enrolled--
``(i) under a State plan under title XIX of
the Social Security Act (or a waiver of such
plan), or
``(ii) under a State child health plan
under title XXI of the Social Security Act (or
a waiver of such plan).
``(3) Direct primary care physician.--The term `direct
primary care physician' means a physician (as defined in
section 1861(r) of the Social Security Act) who provides
primary care--
``(A) to individuals who have paid a periodic
subscription fee, and
``(B) in exchange for a fee that is published on a
publicly available website of such physician.
``(4) Physicians' services.--The term `physicians'
services' has the meaning given such term by section 1861(q) of
the Social Security Act.
``(c) Limitation.--The amount allowed as a deduction under
subsection (a) for a taxable year shall not exceed the gross receipts
attributable to physicians' services furnished by the taxpayer during
the taxable year.''.
(b) Clerical Amendment.--The table of sections for part VI of
subchapter B of chapter 1 of the Internal Revenue Code of 1986 is
amended by adding at the end the following new item:
``Sec. 199B. Qualified charity care.''.
Subtitle B--Medicare Reforms
SEC. 411. OFF-CAMPUS PROVIDER-BASED DEPARTMENT MEDICARE SITE NEUTRAL
PAYMENT.
(a) In General.--Section 1834 of the Social Security Act (42 U.S.C.
1395m) is amended by adding at the end the following new subsection:
``(x) Off-Campus Provider-Based Department Medicare Site Neutral
Payment.--
``(1) In general.--With respect to items and services
furnished in an off-campus provider-based department, payment
under this section for such items and services shall be the
amount determined under the fee schedule under section 1848 for
such items and services furnished if furnished in a physician
office setting.
``(2) Off-campus provider-based department.--For purposes
of this subsection, the term `off-campus provider-based
department' has such meaning as specified by the Secretary.''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply with respect to items and services furnished on or after January
1, 2023.
SEC. 412. ELIMINATING FEHBP ELIGIBILITY FOR ANNUITANTS.
Section 8905(b) of title 5, United States Code, is amended--
(1) in the matter preceding paragraph (1), by striking
``An'' and inserting ``Consistent with the last sentence of
this subsection, an''; and
(2) by adding at the end the following: ``. An individual
who is entitled to benefits under part A of title XVIII of the
Social Security Act (42 U.S.C. 1395c et seq.) by reason of
section 226 or 226A of such Act (42 U.S.C. 426, 426-1), or
otherwise eligible to enroll under such part pursuant to
section 1818 or 1818A of such Act (42 U.S.C. 1395i-2, 1395i-
2a), and who first becomes an annuitant after the date of
enactment of this sentence may not continue enrollment in any
health benefits plan under this chapter.''.
SEC. 413. ELIMINATION OF MEDICARE ELIGIBILITY FOR CERTAIN INDIVIDUALS.
(a) Enrollment Prohibition.--
(1) Part b.--Section 1836 of the Social Security Act (42
U.S.C. 1395o) is amended by striking the period at the end and
inserting ``, except that an individual who attains age 65 on
or after January 1, 2032, and is an individual who, upon
attaining such age, has earned $10,000,000 or more in lifetime
wages, shall not be eligible to so enroll.''.
(2) Part d.--Section 1860D-1(a)(3)(A) of such Act (42
U.S.C. 1395w-101(a)(3)(A)) is amended by striking the period at
the end and inserting ``, excluding an individual who, upon
attaining age 65, has earned $10,000,000 or more in lifetime
wages.''.
(b) Medigap.--Section 1882 of the Social Security Act (42 U.S.C.
1395ss) is amended by adding at the end the following new subsection:
``(aa) Additional Limitation on Newly Eligible Beneficiaries.--
``(1) In general.--Notwithstanding any other provision of
this section, on or after January 1, 2032, a medicare
supplemental policy may not be sold or issued to a targeted
newly eligible Medicare beneficiary.
``(2) Targeted newly eligible medicare beneficiary.--For
purposes of this subsection, the term `targeted newly eligible
Medicare beneficiary' means an individual who, upon attaining
the age of 65, has earned $10,000,000 or more in lifetime
wages.''.
SEC. 414. MEDICARE PART D TAX DEDUCTION.
(a) In General.--Section 139A of the Internal Revenue Code of 1986
is amended by adding at the end the following: ``This section shall not
be taken into account for purposes of determining whether any deduction
is allowable with respect to any cost taken into account in determining
such payment.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2022.
SEC. 415. REPEAL OF NET INVESTMENT INCOME TAX.
(a) In General.--Subtitle A of the Internal Revenue Code of 1986 is
amended by striking chapter 2A.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2022.
SEC. 416. MEDICARE COVERAGE OF BAD DEBT.
Section 1861(v)(1) of the Social Security Act (42 U.S.C.
1395(v)(1)) is amended--
(1) in subparagraph (T)--
(A) in clause (iv), by striking ``and'' at the end;
(B) in clause (v)--
(i) by striking ``during fiscal year'' and
inserting ``during fiscal years'';
(ii) by striking ``or a subsequent fiscal
year'' and inserting ``through 2023''; and
(iii) by striking the period at the end and
inserting ``, and''; and
(C) by adding at the end the following new clause:
``(vi) for cost reporting periods beginning during fiscal
year 2023 or a subsequent fiscal year, by the percent
applicable for cost reporting periods beginning during the
previous fiscal year, increased (through fiscal year 2026) by
10 percentage points.'';
(2) in subparagraph (V)--
(A) in clause (i)--
(i) in subclause (III), by striking ``and''
at the end;
(ii) in subclause (IV)--
(I) by striking ``during fiscal
year'' and inserting ``during fiscal
years 2017 through 2023''; and
(II) by striking the period at the
end and inserting ``; and''; and
(iii) by adding at the end the following
new subclause:
``(V) for cost reporting periods beginning during
fiscal year 2021 or a subsequent fiscal year, the
percent applicable for cost reporting periods beginning
during the previous fiscal year, increased (through
fiscal year 2024) by 10 percentage points.''; and
(B) in clause (ii)--
(i) in subclause (III), by striking ``and''
at the end; and
(ii) in subclause (IV)--
(I) by striking ``a subsequent
fiscal year'' and inserting ``fiscal
years 2015 through 2021'';
(II) by striking the period at the
end and inserting ``; and''; and
(III) by adding at the end the
following new subclause:
``(V) for cost reporting periods beginning during
fiscal year 2021 or a subsequent fiscal year, shall be
reduced by the percent applicable for cost reporting
periods beginning during the previous fiscal year,
increased (through fiscal year 2024) by 10 percentage
points.''; and
(3) in subparagraph (W)(i)--
(A) in subclause (II), by striking ``and'' at the
end;
(B) in subclause (III)--
(i) by striking ``during a subsequent
fiscal year'' and inserting ``during fiscal
years 2015 through 2021''; and
(ii) by striking the period at the end and
inserting ``; and''; and
(C) by adding at the end the following new
subclause:
``(IV) for cost reporting periods beginning during fiscal
year 2021 or a subsequent fiscal year, by the percent
applicable for cost reporting periods beginning during the
previous fiscal year, increased (through fiscal year 2024) by
10 percentage points.''.
Subtitle C--Medicare Choice and Competition
SEC. 421. COMPETITIVE BIDDING AND PREMIUMS UNDER UNIFIED MEDICARE.
(a) In General.--Part E of title XVIII of the Social Security Act,
as added by section 101 and amended by section 103, is further amended
by adding at the end the following:
``Subpart 3--Competitive Bidding and Premiums
``SEC. 1860E-31. APPLICATION OF COMPETITIVE BIDDING IN ENROLLMENT.
``(a) In General.--Notwithstanding any other provision of this
title, the Secretary shall, beginning with plan year 2023, establish a
method whereby individuals enrolling under this title so enroll through
an online process designed to highlight enrollment options for such
individuals and allow such individuals to compare costs of enrollment
in such options.
``(b) Enrollment Options.--For purposes of subsection (a), the
Secretary shall make the following options available to individuals for
enrollment under this title:
``(1) Traditional fee-for-service coverage.
``(2) Provider-led risk-bearing plans (also known as ACOs).
``(3) Medicare Advantage plans.
``(c) Medicare Advantage Plan Actuarial Value Requirement.--Each
Medicare Advantage plan offered through the process described in
subsection (a) shall have an actuarial value equal to traditional fee-
for-service coverage under parts A and B.
``(d) MA Direct Deposit of Certain Rebates.--In the case of an
Medicare Advantage plan with a bid for a year that involves a premium
differential between such bid and the benchmark for such year and plan,
such plan shall provide for a direct deposit of such differential if
the applicable enrollee in such plan does not elect any supplemental
coverage under such plan.
``(e) Enrollment in Prescription Drug Coverage.--As part of the
method described in subsection (a), the Secretary shall establish a
process to allow an individual to enroll in prescription drug coverage.
In the case of an individual who enrolls in a Medicare Advantage plan,
such coverage shall be provided under such plan. In a case of an
individual who enrolls in an ACO, such coverage shall be provided under
such network. In the case of an individual who enrolls under
traditional fee-for-service coverage, such drug coverage shall be
provided through a prescription drug plan.
``(f) Supplemental Benefits.--
``(1) MA plans.--An MA plan is allowed to offer two
different packages of supplemental benefits (these packages are
available only to individuals who select such plans).
``(2) ACOs.--ACOs may limit supplemental options for their
enrollees to Medigap plans with contractual ties.
``(3) Fee-for-service.--Fee-for-service individuals may
select supplemental coverage from Medigap policies.
``SEC. 1860E-32. COMPETITION.
``(a) Bid Areas.--Market areas used for bid submissions for
Medicare Advantage plans, ACOs, and for calculation per person fee-for-
services costs shall be metropolitan statistical regions plus
associated regions.
``(b) Premiums.--Medicare payment benchmark by market area shall be
calculated based on weighted average (by enrollment in previous year)
of the premium bids from MA plans, ACOs, and the per person costs of
fee-for-service, less the statutory part B premium.
``(c) Beneficiary Responsibility.--Beneficiaries shall pay the
difference between Medicare payment and required premium of the plan
they choose, and get 100 percent of the savings by choosing a plan with
a premium below the benchmark.
``(d) Transition.--For beneficiaries who are in fee-for-service at
the time of the enactment of this section, there shall be a limit on
the amount of a premium increase allowable by year of no more than $20
per month compared to what such premium would have otherwise been if
this subpart had not been enacted for each year through the fifth year.
``(e) Multiyear Contracts.--A Medicare Advantage plan may offer to
beneficiaries multiyear contracts with guaranteed premiums over such
years, bearing the risk of any change in payments from the Secretary in
subsequent years. A beneficiary enrolling under such a contract shall
be exempt from the method described in subsection (a).''.
(b) Conforming Amendments.--
(1) Section 1853(a)(1)(A) of the Social Security Act is
amended by striking ``and section 1859(e)(4)'' and inserting
``, section 1859(e)(4), and subpart 3 of part E''.
(2) Section 1853(j) of such Act is amended by inserting
``and subpart 3 of part E'' after ``subsection (o)''.
(3) Section 1854 of such Act is amended--
(A) in subsection (a), after the heading, by
inserting ``Subject to subpart 3 of part E:'';
(B) in subsection (b), after the heading, by
inserting ``Subject to subpart 3 of part E:'';
(C) in subsection (d), after the heading, by
inserting ``Subject to subpart 3 of part E:''; and
(D) in subsection (e), after the heading, by
inserting ``Subject to subpart 3 of part E:''.
SEC. 422. NEW UNIFIED ELIGIBILITY AND ENROLLMENT RULES.
(a) In General.--Title XVIII of the Social Security Act is
amended--
(1) by redesignating part E as part F; and
(2) by inserting after part D the following new part:
``PART E--MEDICARE WITH CHOICE AND COMPETITION
``Subpart 1--Opt-Out and Auto-Enrollment
``SEC. 1860E-11. PART A OPT-OUT AND MA AUTO-ENROLLMENT.
``(a) Permitting Individuals To Opt Out of Part A Coverage Without
Losing Social Security Benefits.--
``(1) In general.--The Secretary shall establish--
``(A) a process by which an individual otherwise
entitled to benefits under part A may elect (at a time
and in a manner specified under the process) to waive
such entitlement; and
``(B) a process by which an individual who elects
to waive such entitlement may revoke (at a time and in
a manner specified under the process) such waiver.
The process under subparagraph (B) shall be coordinated with
the enrollment process under section 1837 for part B.
``(2) Application of late enrollment penalty.--An
individual who revokes a waiver under paragraph (1)(B) shall be
subject to a late enrollment penalty as applied under section
1860E-32(c)(2)(C).
``(3) No impact on title ii benefits.--Notwithstanding any
other provision of law, an election of an individual to waive
entitlement to benefits under part A under paragraph (1)(A)
shall not result in any loss of benefits under title II.
``(4) Deemed opt-out.--
``(A) An election of an individual to waive
entitlement to benefits under part A under paragraph
(1)(A) is also deemed the filing of a notice of
termination of benefits under part B pursuant to
section 1838(b)(1).
``(B) The termination of benefits under part B
pursuant to section 1838(b) is also deemed to be a
waiver of any entitlement to benefits under part A.
``(b) Special Open Enrollment Period Without Late Enrollment
Penalty for Current Part A Only or Part B Only Enrollees.--
Notwithstanding any other provision of law, in the case of an
individual who as of the general effective date, is entitled to
benefits under part A but not enrolled under part B, or who is enrolled
under part B but not entitled to benefits (or enrolled) under part A,
beginning as of such date, such individual shall be deemed to be
enrolled under part B or part A, respectively, unless such individual
elects to be enrolled (or entitled to benefits) under neither of such
parts during a special open enrollment period specified by the
Secretary. No increase in the monthly premium of an individual pursuant
to section 1839(b) or section 1818(c) shall be effected in the case of
any such individual who is deemed enrolled under part B or part A
pursuant to the previous sentence with respect to any period prior to
the date of such enrollment.
``(c) Auto Enrollment of Dual Eligible Individuals Under Medicare
Advantage Plans.--
``(1) In general.--Except in the case of a State that has
elected the maintenance of effort option described in section
1944(b)(2), in the case of an individual described in
subparagraph (A)(ii) of section 1935(c)(6) (taking into account
the application of subparagraph (B) of such section), the
Secretary shall establish a process for the enrollment in an
MA-PD plan that is a managed care plan under part C that has a
monthly beneficiary premium that does not exceed the premium
assistance available under section 1860E-41(b)(1)(A). If there
is more than one such plan available, the Secretary shall
enroll such an individual on a random basis among all such
plans in the PDP region.
``(2) Right to disenroll.--Nothing in paragraph (1) shall
prevent such an individual from declining enrollment in any
such plan (and thereby obtaining coverage under Medicare fee-
for-service) or from changing enrollment in such a plan to
another MA-PD plan.
``SEC. 1860E-12. COORDINATION WITH PART D.
``(a) Deemed Enrollment Under Part D.--
``(1) In general.--The Secretary shall establish a process
that, beginning as of the general effective date, provides for
the enrollment in a prescription drug plan that has a monthly
base beneficiary premium that does not exceed the weighted
average of premiums for such plans that provide standard
prescription drug coverage (as defined in section 1860D-2(b))
with respect to the area involved (on a random basis among all
such plans in the applicable PDP region) of each Medicare
enrollee (as defined in section 1860E-51) who--
``(A) failed to enroll in such a prescription drug
plan during the applicable enrollment or coverage
election period under section 1860D-1(b); and
``(B) failed to elect not to enroll in such a
prescription drug plan during an applicable opt-out
period described in paragraph (2).
Nothing in the previous sentence shall prevent such an
individual from declining or changing such enrollment. Such
process shall be carried out in the same manner as the process
described in section 1860D-1(b)(1)(C).
``(2) Opt-out periods.--The process under paragraph (1)
shall provide for the opportunity to make an election described
in subparagraph (B) of such paragraph during an opt-out period
that is coordinated with the relevant enrollment or coverage
election period under section 1860D-1.
``(3) Late enrollment penalties.--In the case of an
individual who makes an election described in paragraph (1)(B)
and then enrolls in a prescription drug plan, the late
enrollment penalty under section 1860D-13(b) shall apply to the
monthly beneficiary premium of such individual, except that in
applying such section, any reference to the initial enrollment
period of such individual shall be deemed to be a reference to
the opt-out period under paragraph (2) during which the
individual elected not to enroll in a prescription drug plan.
``(4) No late enrollment penalty for current fee-for-
service beneficiaries without drug coverage.--In the case of an
individual who is a Medicare enrollee before the date of
enactment of this section and who was not enrolled under a
prescription drug plan before being enrolled under such a plan
pursuant to paragraph (1), there shall be no increase in the
base beneficiary premium of an individual under section 1860D-
13 by a late enrollment penalty under subsection (b) of such
section with respect to any period prior to the date of such
enrollment.
``(b) Reference to Required Prescription Drug Coverage Under Part
C.--For provision requiring coverage under MA plans to include
prescription drug coverage, see section 1860E-26.''.
(b) Limitation on Medicaid Benefits for Full-Benefit Dual Eligible
Individuals.--Section 1902 of the Social Security Act (42 U.S.C. 1396a)
is amended by adding at the end the following new subsection:
``(ll) Limitation on Benefits for Full-Benefit Dual Eligible
Individuals.--Effective as of the general effective date (as specified
in section 1860E-62), except in the case of a State which has elected
the option described in section 1944(b)(2), in the case of an
individual described in subparagraph (A)(ii) of section 1935(c)(6)
(taking into account the application of subparagraph (B) of such
section), notwithstanding any other provision of law, medical
assistance shall not be available under this title for any items and
services for which payment may be made under title XVIII.''.
(c) Medicaid Maintenance of Effort and Alternatives.--Title XIX of
the Social Security Act is amended by inserting after section 1943 the
following new section:
``maintenance of effort options for full-benefit dual eligible
individuals
``Sec. 1944. (a) In General.--Effective as of the general
effective date (as specified in section 1860E-62), a State shall elect,
in a form and manner specified by the Secretary, a maintenance of
effort option described in subsection (b). In the case of a State that
fails to make such an election, the State shall be deemed to have
elected the option described in subsection (b)(3).
``(b) Maintenance of Effort Options Described.--The following are
maintenance of effort options described in this subsection for a State,
which shall apply to all individuals described in subparagraph (A)(ii)
of section 1935(c)(6) (taking into account the application of
subparagraph (B) of such section) for such State:
``(1) Enrollment of dual eligibles in comprehensive
medicaid managed care plan.--
``(A) In general.--The State enrolls all such
individuals in a comprehensive Medicaid managed care
plan offered by a managed care entity under section
1932.
``(B) Payment of subsidy amount to state.--In the
case of a State that elects the option under this
paragraph with respect to an individual, the Secretary
established under section 1860E-51 shall pay to the
State the same amount that the individual would be
entitled to have paid as an income-related premium
subsidy under section 1860E-41(b)(1)(A) plus the amount
that the Secretary estimates would have been paid with
respect to the individual under part D (including the
actuarial value of subsidy payments under sections
1860D-13 and 1860D-14). Such payment shall be made in
appropriate part from the Federal Hospital Insurance
Trust Fund under section 1817 and the Federal
Supplementary Medical Insurance Trust Fund under
section 1841.
``(C) Relation to part d rules.--In the case of a
State that has elected the option under this paragraph,
notwithstanding any other provision of law--
``(i) the coverage provided under this
option shall be in lieu of any coverage that
may otherwise be provided under part D; and
``(ii) the payment to the State under
subparagraph (B) shall be in lieu of any
payments otherwise made with respect to such
individual under such part.
``(2) Other innovative alternatives.--
``(A) In general.--The State submits to the
Secretary, and has approved by the Secretary, an
innovative alternative proposal relating to
coordinating coverage of such individuals under
Medicare and the State plan under title XIX.
``(B) Process for review.--With respect to
proposals submitted to the Secretary under subparagraph
(A), the Secretary shall approve such a proposal if the
State demonstrates with respect to the proposal that--
``(i) there would be no increased cost to
the Federal Government if it were approved; and
``(ii) there would be no reduction in the
quality of care provided to such individuals if
the proposal were approved.''.
(d) Conforming Amendments.--
(1) Section 226.--Section 226 of the Social Security Act
(42 U.S.C. 426) is amended--
(A) in subsection (a), in the matter preceding
paragraph (1), by inserting ``, subject to section
1860E-11(a)'' after ``individual who'';
(B) in subsection (b), in the matter preceding
paragraph (1), by inserting ``, subject to section
1860E-11(a)'' after ``individual who''; and
(C) in subsection (c), in the matter preceding
paragraph (1), by inserting ``, subject to section
1860E-11(a)'' after ``subsection (a)''.
(2) Section 226A.--Section 226A(a) of such Act (42 U.S.C.
426-1(a)) is amended, in the matter preceding paragraph (1), by
inserting ``and subject to section 1860E-11(a)'' after ``or
title XVIII''.
(3) Section 1932.--Section 1932(a)(2)(B) of the Social
Security Act (42 U.S.C. 1396u-2(a)(2)(B)) is amended by
striking ``A State'' and inserting ``Except in the case of a
State that has elected the maintenance of effort option
described in section 1944(b)(2), a State''.
SEC. 423. NEW BENEFIT STRUCTURE UNDER UNIFIED MEDICARE.
(a) In General.--Part E of title XVIII of the Social Security Act,
as added by section 251, is amended by adding at the end the following:
``Subpart 2--Out-of-Pocket Limit
``SEC. 1860E-21. OUT-OF-POCKET LIMIT.
``(a) In General.--Beginning with 2023, in the case of a Medicare
enrollee, if the amount of the out-of-pocket cost-sharing of such
enrollee for a calendar year equals or exceeds the catastrophic limit
under subsection (b) for that year--
``(1) the enrollee shall not be responsible for additional
out-of-pocket cost-sharing incurred during that year; and
``(2) the Secretary shall establish procedures under which
the Secretary shall, in appropriate part from the Part A
Medicare FFS Account under section 1817 and the Part B Medicare
FFS Account under section 1841--
``(A) pay on behalf of the enrollee the amount of
the additional out-of-pocket cost-sharing described in
paragraph (1) attributable to deductibles and
coinsurance described in subsection (c)(1); and
``(B) reimburse the enrollee the amount of the
additional out-of-pocket cost-sharing described in
paragraph (1) attributable to deductibles and
coinsurance described in subsection (c)(2).
``(b) Catastrophic Limit.--The amount of the catastrophic limit
under this subsection for a year shall be the dollar amount in effect
under section 223(c)(2)(A)(ii) of the Internal Revenue Code of 1986 for
self-only coverage for taxable years beginning in such year.
``(c) Out-of-Pocket Cost-Sharing Defined.--In this section, the
term `out-of-pocket cost-sharing' means, with respect to an individual,
the amount of costs incurred by the individual that are attributable
to--
``(1) deductibles and coinsurance imposed under part A or
part B; and
``(2) deductibles and coinsurance imposed under standard
prescription drug coverage pursuant to section 1860D-2(b) or
alternative prescription drug coverage pursuant to section
1860D-2(c) offered by a prescription drug plan.''.
(b) Application of Out-of-Pocket Limit to MA-PD Plans.--
(1) In general.--Section 1852(a)(1)(B) of the Social
Security Act (42 U.S.C. 1395w-22(a)(1)(B)) is amended--
(A) in clause (i), by striking ``clause (iii)'' and
inserting ``clauses (iii) and (vi)''; and
(B) by adding at the end the following new clause:
``(vi) Out-of-pocket limit.--The provisions
of section 1860E-21--
``(I) shall apply to individuals
enrolled under an MA-PD plan in the
same manner as such provisions apply to
Medicare enrollees under such section,
except that in lieu of the application
of subsection (a)(2) of such section
the MA-PD plan shall establish
procedures to provide for payment of
any additional out-of-pocket cost-
sharing described in subsection (a)(1)
of such section incurred by individuals
enrolled under the MA-PD plan; and
``(II) as applied under subclause
(I), may not be waived by application
of this subparagraph.
In applying subsection (b) of section 1860E-21
pursuant to the previous sentence, an MA-PD
plan may substitute a dollar amount that is
less than the dollar amount specified under
such subsection.''.
(2) Exempting ma-pd plans offering alternative prescription
drug coverage from part d deductible and out-of-pocket limit
requirements.--Section 1860D-2(c) of the Social Security Act
(42 U.S.C. 1395w-102(c)) is amended--
(A) in paragraph (2), by striking ``The
deductible'' and inserting ``In the case of a
prescription drug plan, the deductible''; and
(B) in paragraph (3), by striking ``The coverage
provides'' and inserting ``In the case of a
prescription drug plan, the coverage provides''.
(c) Prescription Drug Plans Required To Report Enrollees' Out-of-
Pocket Cost-Sharing.--Section 1860D-12(b) of the Social Security Act
(42 U.S.C. 1395w-112(b)) is amended by adding at the end the following
new paragraph:
``(7) Out-of-pocket cost-sharing reports.--Each contract
entered into with a PDP sponsor under this part with respect to
a prescription drug plan offered by such sponsor shall require
that, with respect to each claim submitted for items or
services furnished to an individual enrolled under the plan
pursuant to the contract, the sponsor submits to the Secretary
information on the amount of out-of-pocket cost-sharing (as
defined in section 1860E-23(c)) applicable to such enrollee for
such items or services.''.
(d) Conforming Amendments.--
(1) Section 1813 of the Social Security Act (42 U.S.C.
1395e) is amended--
(A) in subsection (a), by inserting ``Subject to
subpart 2 of part E:'' before paragraph (1); and
(B) in subsection (b), by inserting ``Subject to
subpart 2 of part E:'' before paragraph (1).
(2) Section 1833 of such Act (42 U.S.C. 1395l) is amended--
(A) in subsection (a), in the matter preceding
paragraph (1), by inserting ``and subpart 2 of part E''
after ``succeeding provisions of this section'';
(B) in subsection (b), in the first sentence, by
striking ``Before applying'' and inserting ``Subject to
subpart 2 of part E, before applying'';
(C) in subsection (c)(1), in the matter preceding
subparagraph (A), by inserting ``subject to subpart 2
of part E,'' after ``this part,'';
(D) in subsection (f), by striking ``In
establishing'' and inserting ``Subject to subpart 2 of
part E, in establishing''; and
(E) in subsection (g)(1), by inserting ``and
subpart 2 of part E'' and ``paragraphs (4) and (5)''.
(3) Section 1882(a)(2) of such Act is amended by striking
``No medicare'' and inserting ``Subject to section 1860E-24(c),
no medicare''.
SEC. 424. LATE ENROLLMENT PENALTY NOT TO APPLY FOR MONTHS OF ANY HEALTH
COVERAGE.
(a) In General.--Section 1839(b) of the Social Security Act (42
U.S.C. 1395r) is amended in the second sentence, by inserting before
the period at the end the following: ``or months during which the
individual has any other health coverage''.
(b) Effective Date.--The amendment made by paragraph (1) shall
apply for months of coverage beginning after the date of the enactment
of this Act.
SEC. 425. MEDIGAP REFORM.
Notwithstanding any provision of section 1882 of the Social
Security Act (42 U.S.C. 1395ss), as of the date of the enactment of
this Act, no policy may be offered under such section that does not
provide guaranteed coverage (without regard to an individual's
preexisting conditions, if any) to all individuals eligible to enroll
under such policy.
SEC. 426. ACO REVISION.
(a) Enrollment.--Enrollment in such an ACO under such title shall
be based on the method established under part E of such title. Such a
network shall bear full risk in the event payments under such title do
not equal or exceed liabilities under such network.
(b) Direction of Payment.--An ACO may direct that any payments
under such title be made to a centralized entity rather than to an
individual provider or supplier.
(c) Bids.--The Secretary of Health and Human Services shall
establish a process whereby such networks compete using a bidding
process similar to that described in part E of such title for Medicare
Advantage plans.
SEC. 427. PRIMARY CARE OPTIONS.
(a) Selection of Primary Care Physician.--The Secretary shall
establish a mechanism under which an individual enrolled under part B
of title XVIII of the Social Security Act may select such individual's
primary care physician. Such an individual shall not be liable for more
than $5 for each visit to such selected physician.
(b) Payment to Physician.--A physician selected under subsection
(a) shall receive a monthly fee in lieu of any other payment under such
part B for evaluation and monitoring of such individual. The Secretary
shall provide a list of standardized benefits that are included in such
payment, including telephone and email communications, office visits,
preventive care, and vaccinations.
SEC. 428. GENERAL PROVISIONS; EFFECTIVE DATE.
Part E of title XVIII of the Social Security Act, as inserted by
section 101(a)(2) and as previously amended, is further amended by
adding at the end the following new subpart:
``Subpart 5.--General Provisions
``SEC. 1860E-51. APPLICABILITY; DEFINITIONS.
``(a) In General.--The provisions of this Act are superseded to the
extent inconsistent with the provisions of this part.
``(b) Terminology.--For purposes of this part:
``(1) Medicare enrollee.--
``(A) In general.--The term `Medicare enrollee'
means--
``(i) an individual entitled to (or
enrolled for benefits) under part A and
enrolled under part B; and
``(ii) except as otherwise specified, an
individual described in section 1860E-11(a)(3).
``(B) Treatment.--Any reference in this Act (or any
other Act) in effect before the date of the enactment
of this part, to an individual entitled to benefits
under part A or enrolled under part B shall be deemed a
reference to a Medicare enrollee.
``(2) Medicare fee-for-service.--The term `Medicare fee-
for-service' means the original Medicare fee-for-service
program under parts A and B, as modified by this part, and does
not include part C or part D.
``(3) Medicare fee-for-service enrollee.--The term
`Medicare fee-for-service enrollee' means a Medicare enrollee
who is not enrolled under a Medicare Advantage plan under part
C.
``SEC. 1860E-61. GENERAL EFFECTIVE DATE.
``Except as otherwise specified, the provisions of this part shall
apply to items and services furnished on or after January 1, 2023, and
to plan years beginning on or after such date (referred to in this
title as the `general effective date').''.
Subtitle D--Telehealth Improvements and Expansion
SEC. 431. EXPANSION OF COVERAGE OF TELEHEALTH SERVICES.
(a) Covered Services.--Section 1834(m)(4)(F)(i) of the Social
Security Act (42 U.S.C. 1395m(m)(4)(F)(i)) is amended--
(1) by striking ``and office'' and inserting ``office'';
and
(2) by inserting: ``respiratory services, audiology
services (as defined in section 1861(ll)), outpatient therapy
services (including physical therapy, occupational therapy, and
speech-language pathology services)'' after ``the
Secretary)),''.
(b) Providers.--Subsection (m) of section 1834 of such Act (42
U.S.C. 1395m) is amended--
(1) in paragraph (1), by striking ``or a practitioner
(described in section 1842(b)(18)(C))'' and inserting ``, a
practitioner (described in section 1842(b)(18)(C)), or an
applicable professional (as defined in paragraph (4)(G))'';
(2) by striking ``physician or practitioner'' each time it
appears in such subsection and inserting ``physician,
practitioner, or applicable professional'';
(3) in paragraph (3)(A)--
(A) in the heading, by striking ``Physician and
practitioner'' and inserting ``Physician, practitioner,
and applicable professional''; and
(B) by striking ``physicians or practitioners'' and
inserting ``physicians, practitioners, or applicable
professionals''; and
(4) in paragraph (4), by adding at the end the following
new subparagraph:
``(G) Applicable professional.--The term
`applicable professional' means, with respect to
services furnished on or after the date that is 6
months after the date of the enactment of this
subparagraph, a certified diabetes educator or
licensed--
``(i) respiratory therapist;
``(ii) audiologist;
``(iii) occupational therapist;
``(iv) physical therapist; or
``(v) speech language pathologist.''.
(c) Home-Based Monitoring Services for Congestive Heart Failure and
Chronic Obstructive Pulmonary Disease.--
(1) Coverage of remote patient monitoring services for
certain chronic health conditions.--Section 1861(s)(2) of the
Social Security Act (42 U.S.C. 1395x(s)(2)) is amended--
(A) in subparagraph (GG), by striking ``and'' at
the end;
(B) in subparagraph (HH), by inserting ``and'' at
the end; and
(C) by inserting after subparagraph (HH) the
following new subparagraph:
``(II) applicable remote patient monitoring
services (as defined in paragraph (1)(A) of subsection
(iii));''.
(2) Services described.--Section 1861 of the Social
Security Act (42 U.S.C. 1395x) is amended by adding at the end
the following new subsection:
``(kkk) Remote Patient Monitoring Services for Chronic Health
Conditions.--
``(1)(A) The term `applicable remote patient monitoring
services' means remote patient monitoring services (as defined
in subparagraph (B)) furnished to provide for the monitoring,
evaluation, and management of an individual with a covered
chronic condition (as defined in paragraph (2)), insofar as
such services are for the management of such chronic condition.
``(B) The term `remote patient monitoring services' means
services furnished through remote patient monitoring technology
(as defined in subparagraph (C)).
``(C) The term `remote patient monitoring technology' means
a coordinated system that uses one or more home-based or mobile
monitoring devices that automatically transmit vital sign data
or information on activities of daily living and may include
responses to assessment questions collected on the devices
wirelessly or through a telecommunications connection to a
server that complies with the Federal regulations (concerning
the privacy of individually identifiable health information)
promulgated under section 264(c) of the Health Insurance
Portability and Accountability Act of 1996, as part of an
established plan of care for that patient that includes the
review and interpretation of that data by a health care
professional.
``(2) For purposes of paragraph (1), the term `covered
chronic health condition' means applicable conditions (as
defined in and applied under section 1886(q)(5)) when under
chronic care management (identified as of July 1, 2015, by
HCPCS code 99490 (and as subsequently modified by the
Secretary)).
``(3)(A) Payment may be made under this part for applicable
remote patient monitoring services provided to an individual
during a period of up to 90 days and such additional period as
provided for under subparagraph (B).
``(B) The 90-day period described in subparagraph (A), with
respect to an individual, may be renewed by the physician who
provides chronic care management to such individual if the
individual continues to qualify for such management.''.
(3) Payment under the physician fee schedule.--Section 1848
of the Social Security Act (42 U.S.C. 1395w-4) is amended--
(A) in subsection (c)--
(i) in paragraph (2)(B)--
(I) in clause (ii)(II), by striking
``and (v)'' and inserting ``(v), and
(vii)''; and
(II) by adding at the end the
following new clause:
``(vii) Budgetary treatment of certain
services.--The additional expenditures
attributable to services described in section
1861(s)(2)(II) shall not be taken into account
in applying clause (ii)(II).''; and
(ii) by adding at the end the following new
paragraph:
``(7) Treatment of applicable remote patient monitoring
services.--
``(A) In determining relative value units for
applicable remote patient monitoring services (as
defined in section 1861(iii)(1)(A)), the Secretary, in
consultation with appropriate physician groups,
practitioner groups, and supplier groups, shall take
into consideration--
``(i) physician or practitioner resources,
including physician or practitioner time and
the level of intensity of services provided,
based on--
``(I) the frequency of evaluation
necessary to manage the individual
being furnished the services;
``(II) the complexity of the
evaluation, including the information
that must be obtained, reviewed, and
analyzed; and
``(III) the number of possible
diagnoses and the number of management
options that must be considered;
``(ii) practice expense costs associated
with such services, including the direct costs
associated with installation and information
transmission, costs of remote patient
monitoring technology (including equipment and
software), device delivery costs, and resource
costs necessary for patient monitoring and
followup (but not including costs of any
related item or non-physician service otherwise
reimbursed under this title); and
``(iii) malpractice expense resources.
``(B) Using the relative value units determined in
subparagraph (A), the Secretary shall provide for
separate payment for such services and shall not adjust
the relative value units assigned to other services
that might otherwise have been determined to include
such separately paid remote patient monitoring
services.''; and
(B) in subsection (j)(3), by inserting ``(2)(II),''
after ``health risk assessment),''.
SEC. 432. EXPANDING THE USE OF TELEHEALTH THROUGH THE WAIVER OF CERTAIN
REQUIREMENTS.
(a) In General.--Section 1834(m) of the Social Security Act (42
U.S.C. 1395m(m)) is amended--
(1) in paragraph (4)(C)(i), by striking ``and (7)'' and
inserting ``(7), and (8)''; and
(2) by adding at the end the following:
``(8) Authority to waive requirements and limitations if
certain conditions met.--
``(A) In general.--Notwithstanding the preceding
provisions of this subsection, in the case of
telehealth services furnished on or after January 1,
2023, the Secretary may waive any restriction
applicable to payment for telehealth services under
this subsection that is described in subparagraph (B),
but only if the Secretary determines that such waiver
would not deny or limit the coverage or provision of
benefits under this title, and--
``(i) the Secretary determines that the
waiver is expected to reduce spending under
this title without reducing the quality of care
or improve the quality of patient care without
increasing spending; or
``(ii) the waiver would apply to telehealth
services furnished in originating sites located
in a high-need health professional shortage
area (as designated pursuant to section
332(a)(1)(A) of the Public Health Service Act
(42 U.S.C. 254e(a)(1)(A))).
``(B) Restrictions described.--For purposes of this
paragraph, restrictions applicable to payment for
telehealth services under paragraph (1) are--
``(i) requirements relating to
qualifications for an originating site under
paragraph (4)(C)(ii);
``(ii) any geographic limitations under
paragraph (4)(C)(i) (other than applicable
State law requirements, including State
licensure requirements);
``(iii) any limitation on the type of
technology used to furnish telehealth services;
``(iv) any limitation on the type of
provider of services or supplier who may
furnish telehealth services (other than the
requirement that the provider of services or
supplier is enrolled under this title);
``(v) any limitation on specific services
designated as telehealth services pursuant to
this subsection (provided the Secretary
determines that such services are clinically
appropriate to furnish remotely); or
``(vi) any other limitation relating to the
furnishing of telehealth services under this
title identified by the Secretary.
``(C) Public comment.--The Secretary shall
establish a process by which stakeholders may (on at
least an annual basis) provide public comment for
waivers under this paragraph.
``(D) Periodic review of waivers.--The Secretary
shall periodically, but not more often than every 3
years, reassess each waiver under this paragraph to
determine whether the waiver continues to meet the
conditions applicable under subparagraph (A).''.
(b) Posting of Information.--Not later than 2 years after the date
on which a waiver under section 1834(m)(8) of the Social Security Act,
as added by subsection (a), first becomes effective, and at least
biennially thereafter, the Secretary of Health and Human Services shall
post on the internet website of the Centers for Medicare & Medicaid
Services--
(1) the number of Medicare beneficiaries receiving
telehealth services by reason of each waiver under such
section;
(2) the impact of such waivers on expenditures and
utilization under title XVIII of the Social Security Act (42
U.S.C. 1395 et seq.); and
(3) other outcomes, as determined appropriate by the
Secretary.
SEC. 433. EXPANDING THE USE OF TELEHEALTH FOR MENTAL HEALTH SERVICES.
(a) In General.--Section 1834(m) of the Social Security Act (42
U.S.C. 1395m(m)), as amended by the preceding sections, is amended--
(1) in paragraph (4)(C)(i), by striking ``and (8)'' and
inserting ``(8), and (9)''; and
(2) by adding at the end the following:
``(9) Treatment of mental health services furnished through
telehealth.--The geographic requirements described in paragraph
(4)(C)(i) (other than applicable State law requirements,
including State licensure requirements) shall not apply with
respect to telehealth services that are mental health services
(as determined by the Secretary) furnished on or after January
1, 2023, to an eligible telehealth individual at an originating
site described in paragraph (4)(C)(ii) (other than an
originating site described in subclause (IX) of such
paragraph).''.
(b) Inclusion of the Home as an Originating Site.--Section
1834(m)(4)(C)(ii)(X) of such Act (42 U.S.C. 1395m(m)(4)(C)(ii)(X)) is
amended by striking ``paragraph (7)'' and inserting ``paragraphs (7)
and (9)''.
(c) Additional Services.--As part of the implementation of the
amendments made by this section, the Secretary of Health and Human
Services shall consider whether additional services should be added to
the services specified in paragraph (4)(F)(i) of section 1834(m) of
such Act (42 U.S.C. 1395m) for authorized payment under paragraph (1)
of such section.
SEC. 434. USE OF TELEHEALTH IN EMERGENCY MEDICAL CARE.
(a) In General.--Section 1834(m) of the Social Security Act (42
U.S.C. 1395m(m)), as amended by the preceding sections, is amended--
(1) in paragraph (4)(C)(i), by striking ``and (9)'' and
inserting ``(9), and (10)''; and
(2) by adding at the end the following:
``(10) Treatment of emergency medical care furnished
through telehealth.--The geographic requirements described in
paragraph (4)(C)(i) (other than applicable State law
requirements, including State licensure requirements) shall not
apply with respect to telehealth services that are services for
emergency medical care (as determined by the Secretary)
furnished on or after January 1, 2023, to an eligible
telehealth individual at an originating site described in
subclause (II), (V), or (VII) of paragraph (4)(C)(ii).''.
(b) Additional Services.--As part of the implementation of the
amendments made by this section, the Secretary of Health and Human
Services shall consider whether additional services should be added to
the services specified in paragraph (4)(F)(i) of section 1834(m) of
such Act (42 U.S.C. 1395m) for authorized payment under paragraph (1)
of such section.
SEC. 435. IMPROVEMENTS TO THE PROCESS FOR ADDING TELEHEALTH SERVICES.
The Secretary shall undertake a review of the process established
pursuant to section 1834(m)(4)(F)(ii) of the Social Security Act (42
U.S.C. 1395m(m)(4)(F)(ii)), and based on the results of such review--
(1) implement revisions to the process so that the criteria
to add services prioritizes, as appropriate, improved access to
care through telehealth services; and
(2) provide clarification on what requests to add
telehealth services under such process should include.
SEC. 436. RURAL HEALTH CLINICS AND FEDERALLY QUALIFIED HEALTH CENTERS.
(a) Expansion of Originating Sites.--Section 1834(m)(4)(C) of the
Social Security Act (42 U.S.C. 1395m(m)(4)(C)), as amended by the
preceding sections, is amended--
(1) in clause (i), by striking ``and (10)'' and inserting
``and (10), and subject to clause (iii),''; and
(2) by adding at the end the following new clause:
``(iii) Rural health clinics and federally
qualified health centers.--The term
`originating site' shall also include any
Federally qualified health center and any rural
health clinic (as such terms are defined in
section 1861(aa)) at which the eligible
telehealth individual is located at the time
the service is furnished via a
telecommunications system, whether or not the
individual is located in an area described in
clause (i), insofar as such sites are not
otherwise included in the definition of
originating site under such clause, subject to
applicable State law requirements, including
State licensure requirements.''.
(b) Expansion of Distant Sites.--Section 1834(m) of the Social
Security Act (42 U.S.C. 1395m(m)) is amended--
(1) in the first sentence of paragraph (1)--
(A) by striking ``or a practitioner (described in
section 1842(b)(18)(C))'' and inserting ``, a
practitioner (described in section 1842(b)(18)(C)), a
Federally qualified health center, or a rural health
clinic''; and
(B) by striking ``or practitioner'' and inserting
``, practitioner, Federally qualified health center, or
rural health clinic'';
(2) in paragraph (2)(A)--
(A) by inserting ``or to a Federally qualified
health center or rural health clinic that serves as a
distant site'' after ``a distant site''; and
(B) by striking ``such physician or practitioner''
and inserting ``such physician, practitioner, Federally
qualified health center, or rural health clinic''; and
(3) in paragraph (4)--
(A) in subparagraph (A), by inserting ``and
includes a Federally qualified health center or rural
health clinic that furnishes a telehealth service to an
eligible individual'' before the period at the end; and
(B) in subparagraph (F), by adding at the end the
following new clause:
``(iii) Inclusion of rural health clinic
services and federally qualified health center
services furnished using telehealth.--For
purposes of this subparagraph, the term
`telehealth services' includes a rural health
clinic service or Federally qualified health
center service that is furnished using
telehealth to the extent that payment codes
corresponding to services identified by the
Secretary under clause (i) or (ii) are listed
on the corresponding claim for such rural
health clinic service or Federally qualified
health center service.''.
(c) Effective Date.--The amendments made by this section shall
apply to services furnished on or after January 1, 2023.
SEC. 437. NATIVE AMERICAN HEALTH FACILITIES.
(a) In General.--Section 1834(m)(4)(C) of the Social Security Act
(42 U.S.C. 1395m(m)(4)(C)), as amended by the preceding sections, is
amended--
(1) in clause (i), by striking ``clause (iii)'' and
inserting ``clauses (iii) and (iv)''; and
(2) by adding at the end the following new clause:
``(iv) Native american health facilities.--
The originating site requirements described in
clauses (i) and (ii) shall not apply with
respect to a facility of the Indian Health
Service, whether operated by such Service, or
by an Indian tribe (as that term is defined in
section 4 of the Indian Health Care Improvement
Act (25 U.S.C. 1603)) or a tribal organization
(as that term is defined in section 4 of the
Indian Self-Determination and Education
Assistance Act (25 U.S.C. 5304)), or a facility
of the Native Hawaiian health care systems
authorized under the Native Hawaiian Health
Care Improvement Act (42 U.S.C. 11701 et
seq.).''.
(b) No Originating Site Facility Fee for New Sites.--Section
1834(m)(2)(B)(i) of the Social Security Act (42 U.S.C.
1395m(m)(2)(B)(i)) is amended, in the matter preceding subclause (I),
by inserting ``(other than an originating site that is only described
in clause (iv) of paragraph (4)(C), and does not meet the requirement
for an originating site under clause (i) of such paragraph)'' after
``the originating site''.
(c) Effective Date.--The amendments made by this section shall
apply to services furnished on or after January 1, 2023.
SEC. 438. WAIVER OF TELEHEALTH RESTRICTIONS DURING NATIONAL
EMERGENCIES.
Section 1135(b) of the Social Security Act (42 U.S.C. 1320b-5(b))
is amended--
(1) in paragraph (6), by striking ``and'' after the
semicolon;
(2) in paragraph (7), by striking the period at the end and
inserting ``; and''; and
(3) by adding at the end the following:
``(8) requirements for payment for telehealth services
under section 1834(m).''.
SEC. 439. USE OF TELEHEALTH IN RECERTIFICATION FOR HOSPICE CARE.
(a) In General.--Section 1814(a)(7)(D)(i) of the Social Security
Act (42 U.S.C. 1395f(a)(7)(D)(i)) is amended by inserting ``(including
through use of telehealth, notwithstanding the requirements in section
1834(m)(4)(C))'' after ``face-to-face encounter''.
(b) GAO Report.--Not later than 3 years after the date of enactment
of this Act, the Comptroller General of the United States shall submit
a report to Congress evaluating the impact of the amendment made by
subsection (a) on--
(1) the number and percentage of beneficiaries recertified
for the Medicare hospice benefit at 180 days and for subsequent
benefit periods;
(2) the appropriateness for hospice care of the patients
recertified through the use of telehealth; and
(3) any other factors determined appropriate by the
Comptroller General.
SEC. 440. CLARIFICATION FOR FRAUD AND ABUSE LAWS REGARDING TECHNOLOGIES
PROVIDED TO BENEFICIARIES.
Section 1128A(i)(6) of the Social Security Act (42 U.S.C. 1320a-
7a(i)(6)) is amended--
(1) in subparagraph (I), by striking ``; or'' and inserting
a semicolon;
(2) in subparagraph (J), by striking the period at the end
and inserting ``; or''; and
(3) by adding at the end the following new subparagraph:
``(K) the provision of technologies (as defined by
the Secretary) on or after the date of the enactment of
this subparagraph, by a provider of services or
supplier (as such terms are defined for purposes of
title XVIII) directly to an individual who is entitled
to benefits under part A of title XVIII, enrolled under
part B of such title, or both, for the purpose of
furnishing telehealth services, remote patient
monitoring services, or other services furnished
through the use of technology (as defined by the
Secretary), if--
``(i) the technologies are not offered as
part of any advertisement or solicitation; and
``(ii) the provision of the technologies
meets any other requirements set forth in
regulations promulgated by the Secretary.''.
SEC. 441. STUDY AND REPORT ON INCREASING ACCESS TO TELEHEALTH SERVICES
IN THE HOME.
(a) MedPAC Study.--The Medicare Payment Advisory Commission (in
this section referred to as the ``Commission'') shall conduct a study
on increasing access under the Medicare program under title XVIII of
the Social Security Act (42 U.S.C. 1395 et seq.) to telehealth services
in the home. Such study shall include an analysis of the following:
(1) How different payers allow the home to be an
originating site for telehealth services.
(2) Particular types of telehealth services or subgroups of
beneficiaries with respect to which allowing the home to be an
originating site under the Medicare program would be suitable.
(b) Report.--Not later than 24 months after the date of the
enactment of this Act, the Commission 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 Commission determines appropriate.
SEC. 442. ANALYSIS OF TELEHEALTH WAIVERS IN ALTERNATIVE PAYMENT MODELS.
The second sentence of section 1115A(g) of the Social Security Act
(42 U.S.C. 1315a(g)) is amended by inserting ``an analysis of waivers
under section (d)(1) related to telehealth and the impact on quality
and spending under the applicable titles of such waivers,'' after
``subsection (c),''.
SEC. 443. MODEL TO ALLOW ADDITIONAL HEALTH PROFESSIONALS TO FURNISH
TELEHEALTH SERVICES.
Section 1115A(b)(2)(B) of the Social Security Act (42 U.S.C.
1315a(b)(2)(B)) is amended by adding at the end the following new
clause:
``(xxviii) Allowing health professionals
who are not otherwise eligible under section
1834(m) to furnish telehealth services to
furnish such services.''.
SEC. 444. TESTING OF MODELS TO EXAMINE THE USE OF TELEHEALTH UNDER THE
MEDICARE PROGRAM.
Section 1115A(b)(2) of the Social Security Act (42 U.S.C.
1315a(b)(2)) is amended by adding at the end the following new
subparagraph:
``(D) Testing models to examine use of telehealth
under medicare.--The Secretary shall consider testing
under this subsection models to examine the use of
telehealth under title XVIII.''.
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